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

See all articles by Felix Roth

Felix Roth

University of Goettingen (Gottingen)

Daniel Gros

Centre for European Policy Studies, Brussels; CESifo (Center for Economic Studies and Ifo Institute)

Felicitas Nowak-Lehmann

University of Goettingen (Gottingen) - Department of Economics

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

Roth, Felix and Gros, Daniel and Nowak-Lehmann, Felicitas, Has the Financial Crisis Eroded Citizens’ Trust in the European Central Bank? Panel Data Evidence for the Euro Area 1999-2011 (March 20, 2012). CESifo Working Paper Series, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1847465 or http://dx.doi.org/10.2139/ssrn.1847465

Felix Roth (Contact Author)

University of Goettingen (Gottingen) ( email )

Wilhelmsplatz 1
Göttingen, 37073
Germany

Daniel Gros

Centre for European Policy Studies, Brussels ( email )

1 Place du Congres
B-1000 Brussels, 1000
Belgium

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Felicitas Nowak-Lehmann

University of Goettingen (Gottingen) - Department of Economics ( email )

Platz der Goettinger Sieben 3
Goettingen, 37073
Germany

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