Trust in Public Institutions over the Business Cycle
American Economic Review
no. 3, May 2011
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.
Stevenson, Betsey, and Justin Wolfers.
"Trust in Public Institutions over the Business Cycle."
American Economic Review,
Business Fluctuations; Cycles
Financial Institutions and Services: General
Structure, Scope, and Performance of Government
Economic Sociology; Economic Anthropology; Social and Economic Stratification