2014

Social Trust and Central-Bank Independence

Reprint No. 2014:25

Author(s): Niclas Berggren, Sven-Olov Daunfeldt and Jörgen HellströmYear: 2014 Title: European Journal of Political Economy Volume (No.): 34 (June) Pages: 425–439
Online article (restrictions may apply)
Preliminary version


Central banks have become more independent in many countries. A common rationale has been the existence of a credibility (or lack-of-trust) problem for monetary policy. This indicates a possible and until now unexplored link between social trust and central-bank independence. Our empirical findings, based on data from 149 countries, confirm such a link, in the form of a u-shaped relationship. We suggest that two factors help explain this finding: the need for this kind of reform and the ability with which it can be implemented. At low trust, the need for central-bank independence is sufficiently strong to bring it about, in spite of a low ability to undertake reform. At high trust, the ability to undertake reform is sufficiently strong to bring high independence about, in spite of a low need for it. At intermediate trust levels, lastly, neither need nor ability is strong enough to generate very independent central banks.


Reference:
Berggren, Niclas, Sven-Olov Daunfeldt and Jörgen Hellström (2014), "Social Trust and Central-Bank Independence". European Journal of Political Economy 34(June), 425–439.

Niclas Berggren

Contact

Ph: +46 8 665 4520
niclas.berggren@ifn.se

Integrating Immigrants into the Nordic Labour Markets

An Overall Perspective

Pages-from-2019-Calmfors-Gassen---Integrating-Immigrants-into-the-Nordic-Labour-Markets.gif

Denmark, Finland, Norway and Sweden face similar problems of integrating large groups of immigrants, especially low-educated ones from outside the EU, into their labour markets. In this volume, edited by Lars Calmfors, IFN, and Nora Sánchez Gassen in cooperation with researchers from across the Nordic Region analyse how labour market integration of immigrants can be promoted. 

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