2006–2010

Trust and Growth: A Shaky Relationship

Reprint No. 2008:18

Author(s): Niclas Berggren, Mikael Elinder and Henrik JordahlYear: 2008 Title: Empirical Economics Volume (No.): 35 (2) Pages: 251–274


We conduct an extensive robustness analysis of the relationship between trust and growth by investigating a later time period and a bigger sample than in previous studies. In addition to robustness tests that focus on model uncertainty, we systematize the investigation of outlier influence on the results by using the robust estimation technique Least Trimmed Squares. We find that when outliers (especially China) are removed, the trust-growth relationship is no longer robust. On average, the trust coefficient is half as large as in previous findings.


Reference:
Berggren, Niclas, Mikael Elinder and Henrik Jordahl (2008), "Trust and Growth: A Shaky Relationship". Empirical Economics 35(2), 251–274.

Niclas Berggren

Contact

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

Henrik Jordahl

Contact

Ph: +46 8 665 4533
Mob: +46 70 938 3858
henrik.jordahl@ifn.se

Mikael Elinder

Contact

Ph: +46 18 471 1565
Mob: +46 70 769 0976
mikael.elinder@ifn.se

Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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