Why Europeans Lost Trust in the ECB

by David Herok and Andreas Hoffmann*

Since the financial crisis, trust in the European Central Bank (ECB) has declined substantially among Europeans. We argue that the decline in trust is worrisome and can be both a cause and a consequence of the ECB’s policy failure.

Continue reading

On confidence and/or trust

by Sandy Ikeda

In English we often use the words “trust” and “confidence” interchangeably and it usually doesn’t matter. I can say either “I’m confident that this ladder won’t collapse” or more simply “I trust this ladder.” However, I think the second way of stating it, apart from being a little less specific than the first, is actually metaphorical. It treats the ladder as if it were a person whom we can trust or distrust.

Robert J. Shiller’s article in the Wall Street Journal of a couple of weeks ago, “Animal spirits depend on trust,” in addition to being highly problematic in other ways, offers good examples of this ambiguous usage, to wit:

A critical aspect of animal spirits is trust, an emotional state that dismisses doubts about others. In talking about animal spirits, Keynes sought to convey the message that swings in confidence are not always logical. (Emphasis added)

Of course it’s not the words but the concepts behind them that are important, and when we’re talking about a particular politico-economic system, such as the political capitalism of the United States, or a subset of that system, such as the financial sector, the distinction can matter, as I think it does now. Continue reading