Has the Financial Crisis Eroded Citizens’ Trust in the European Central Bank? Panel Data Evidence for the Euro Area 1999-2011
33 Pages Posted: 27 May 2011 Last revised: 10 Apr 2012
Date Written: March 20, 2012
Abstract
In the aftermath of the financial crisis trust, in the European Central Bank (ECB) has reached an historical low. Taking panel data and using a fixed effects DFGLS estimation for a 12–country sample over the time period 1999 to 2011 with a total of 312 observations, this paper detects a structural break in citizens’ trust in the ECB. The paper confirms that during the pre-crisis period, citizens’ trust in the ECB was driven by economic growth. In crisis time, however, trust in the ECB is both driven by inflation and unemployment.
Keywords: Financial Crisis, Trust, European Central Bank
JEL Classification: E58, G21, Z13
Suggested Citation: Suggested Citation
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