Trust in Public Institutions over the Business Cycle


Betsey Stevenson

Justin Wolfers

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2011-11 | March 1, 2011

We document that trust in public institutions—and particularly trust in banks, business and government—has declined over recent years. U.S. time series evidence suggests that this partly reflects the pro-cyclical nature of trust in institutions. Cross-country comparisons reveal a clear legacy of the Great Recession, and those countries whose unemployment grew the most suffered the biggest loss in confidence in institutions, particularly in trust in government and the financial sector. Finally, analysis of several repeated cross-sections of confidence within U.S. states yields similar qualitative patterns, but much smaller magnitudes in response to state-specific shocks.

Article Citation

Stevenson, Betsey, and Justin Wolfers. 2011. “Trust in Public Institutions over the Business Cycle,” Federal Reserve Bank of San Francisco Working Paper 2011-11. Available at