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Trust dynamics after financial distress: evidence from Euro member countries

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  • Markus Leibrecht
  • Johann Scharler

Abstract

We investigate the dynamic adjustment of trust in the European Central Bank and the European Commission to financial distress using aggregate data from the Eurobarometer surveys and the financial distress indicator of Romer and Romer (2017). Financial distress has a pronounced negative impact on trust and the dynamic adjustment of trust is similar to the response of real GDP to financial distress. Weak labour market conditions prior to financial distress prolong the adjustment process.

Suggested Citation

  • Markus Leibrecht & Johann Scharler, 2022. "Trust dynamics after financial distress: evidence from Euro member countries," Applied Economics Letters, Taylor & Francis Journals, vol. 29(2), pages 91-96, January.
    • Handle: RePEc:taf:apeclt:v:29:y:2022:i:2:p:91-96
    DOI: 10.1080/13504851.2020.1855308
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