Trust in Economics

Priesemeister, Juliane

In the ongoing debates about the reasons and impacts of the financial crisis 2008, trust is supposed to play a relevant role. Unaware of this future happening the economic researchers Paul J. Zak and Stephen Knack published a paper in the late 90's, where they tried to find a correlation between economic growth and trust. Their applied model proved that there is a connection between the level of confidence and the economic wellbeing, represented by GDP growth. If this is still the case, after the dramatic damages of the worlds financial systems, and if the model is adoptable to prove again the correlation with today's data, is the content of this thesis. With the help of a regression calculation not all the findings of Zak and Knack could be confirmed. Some show an opposite development, some have still the same impact and others are not statistical significant. But nevertheless it demonstrates that trust, and its determinants, are correlated to the economic progress of a country. Moreover is proved that trust can be influenced - negatively, by high degree of inequality, and positively, with a low degree of bribery and economic discrimination.

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