Trust in Public Institutions over the Business Cycle
- (pp. 281-87)
Abstract
We document that trust in public institutions—and particularly trust in banks, business and government—has declined over recent years. US time series evidence suggests that this partly reflects the pro-cyclical nature of trust in institutions. Cross-country comparisons reveal a clear legacy of the Great Recession, and those countries whose unemployment grew the most suffered the biggest loss in confidence in institutions, particularly in trust in government and the financial sector. Finally, analysis of several repeated cross-sections of confidence within US states yields similar qualitative patterns, but much smaller magnitudes in response to state-specific shocks.Citation
Stevenson, Betsey, and Justin Wolfers. 2011. "Trust in Public Institutions over the Business Cycle." American Economic Review, 101 (3): 281-87. DOI: 10.1257/aer.101.3.281JEL Classification
- E32 Business Fluctuations; Cycles
- G20 Financial Institutions and Services: General
- H11 Structure, Scope, and Performance of Government
- Z13 Economic Sociology; Economic Anthropology; Social and Economic Stratification