prone to equilibrium multiplicity. A drop in confidence can drive the economy into a liquidity trap without any change in … from declining in the face of a confidence shock insulate the economy from such expectations-driven liquidity traps. …

Trust in the central bank is an essential ingredient for a successful conduct of monetary policy. However, for many … central banks trust has recently declined, for instance in the wake of the post-pandemic inflation surge, due to large errors … persistent erosion of trust makes it clear that trust needs to be earned continuously. This paper reviews why trust is important …

We explore how fiscal consolidations affect private sector confidence, a possible channel for the fiscal transmission …) show that consolidations, and in particular their unanticipated components affect confidence negatively. The effects are … accurate picture of how consolidations affect confidence, we construct a monthly dataset of consolidation announcements based …

predictions from a formal model, we present evidence that households’ trust in financial advice only matters when their perceived …

We study the determinants of trust in the ECB as measured by the European Commission's Eurobarometer survey. The … formulation of the corresponding question in this survey is very general, and compatible with very different notions of "trust" by … respondents. In particular, the survey does not ask whether respondents trust that the ECB delivers on its mandate. Still, the ECB …