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Trust and Growth

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Author Info

  • Oguzhan Dincer

    (Illinois State University)

  • Eric Uslaner

    (University of Maryland-College Park)

Abstract

Using data from US states, we find a positive relationship between trust and growth. According to our results, a 10 percentage point increase in trust increases the growth rate of per capita income by 0.5 percentage point, growth rate of housing prices by 1.25 percentage points, and the growth rate of employment by 2.5 percentage points over a decade.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2007.73.

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Date of creation: Jul 2007
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Handle: RePEc:fem:femwpa:2007.73

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Keywords: Trust; Economic Growth;

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References

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  1. John F. Helliwell & Robert D. Putnam, 1995. "Economic Growth and Social Capital in Italy," Eastern Economic Journal, Eastern Economic Association, vol. 21(3), pages 295-307, Summer.
  2. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
  3. John F. Helliwell, 1996. "Economic Growth and Social Capital in Asia," NBER Working Papers 5470, National Bureau of Economic Research, Inc.
  4. Alberto Alesina & Eliana La Ferrara, 2004. "Ethnic Diversity and Economic Performance," Development Working Papers 193, Centro Studi Luca d\'Agliano, University of Milano.
  5. Glaeser, Edward L. & Saks, Raven E., 2006. "Corruption in America," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1053-1072, August.
  6. Beugelsdijk, Sjoerd & van Schaik, Ton, 2005. "Social capital and growth in European regions: an empirical test," European Journal of Political Economy, Elsevier, vol. 21(2), pages 301-324, June.
  7. repec:aea:jeclit:v:43:y:2005:i:3:p:762-800 is not listed on IDEAS
  8. Håkan J. Holm & Anders Danielson, 2005. "Tropic Trust Versus Nordic Trust: Experimental Evidence From Tanzania And Sweden," Economic Journal, Royal Economic Society, vol. 115(503), pages 505-532, 04.
  9. Alesina, Alberto & La Ferrara, Eliana, 2005. "Ethnic Diversity and Economic Performance," Scholarly Articles 4553005, Harvard University Department of Economics.
  10. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  11. Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
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Citations

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Cited by:
  1. Fabio Sabatini, 2009. "Does Social Capital Create Trust? Evidence from a Community of Entrepreneurs," Working Papers 2009.44, Fondazione Eni Enrico Mattei.
  2. Marc Sangnier, 2009. "Does trust favor macroeconomic stability?," Working Papers halshs-00575021, HAL.
  3. Marc Sangnier, 2011. "The co-evolution of social capital and financial development," Working Papers halshs-00585008, HAL.
  4. Wahl, Fabian, 2012. "Why it matters what people think: Beliefs, legal origins and the deep roots of trust," FZID Discussion Papers 52-2012, University of Hohenheim, Center for Research on Innovation and Services (FZID).
  5. Bohdan Kukharskyy & Michael Pflüger, 2011. "Relational Contracts and the Economic Well-Being of Nations," Working Papers 095, Bavarian Graduate Program in Economics (BGPE).
  6. Berggren, Niclas & Elinder, Mikael, 2010. "Is Tolerance Good or Bad for Growth?," Working Paper Series 846, Research Institute of Industrial Economics.
  7. Yamamura, Eiji, 2012. "Atomic bombs and the long-run effect on trust: Experiences in Hiroshima and Nagasaki," MPRA Paper 36805, University Library of Munich, Germany.
  8. Marc Sangnier, 2011. "The co-evolution of social capital and financial development," PSE Working Papers halshs-00585008, HAL.
  9. Kiridaran Kanagaretnam & Stuart Mestelman & Khalid Nainar & Mohamed Shehata, 2009. "The Impact of Social Value Orientation and Risk Attitudes on Trust and Reciprocity," Department of Economics Working Papers 2008-06, McMaster University.
  10. Dincer, Oguzhan C., 2011. "Trust and schooling in the United States," Economics of Education Review, Elsevier, vol. 30(5), pages 1097-1102, October.
  11. Ulrich Thiessen, 2010. "The Shadow Economy in International Comparison: Options for Economic Policy Derived from an OECD Panel Analysis," International Economic Journal, Korean International Economic Association, vol. 24(4), pages 481-509.
  12. Marc Sangnier, 2012. "Does Trust Favor Macroeconomic Stability?," AMSE Working Papers 1227, Aix-Marseille School of Economics, Marseille, France.
  13. Bergh, Andreas & Henrekson, Magnus, 2011. "Government Size and Growth: A Survey and Interpretation of the Evidence," Working Paper Series 858, Research Institute of Industrial Economics.
  14. Özcan, Burcu & Bjørnskov, Christian, 2011. "Social trust and human development," The Journal of Socio-Economics, Elsevier, vol. 40(6), pages 753-762.

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