This paper examines the relationship between trust and economic growth. With the help of panel data I conclude that economic growth is negatively related to an increase in trust. My result is contrary to works taking a cross section design in which trust is positively related to growth. The relationship is tested in the context of EU countries, OECD countries, transition countries and developing countries. Interpersonal trust and systemic trust is differentiated.
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Paper provided by The Ratio Institute in its series Ratio Working Papers with number
102.
Length: 22 pages Date of creation: 30 Aug 2006 Date of revision:
15 Nov 2006 Publication status: Forthcoming in Kyklos. Handle: RePEc:hhs:ratioi:0102
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Find related papers by JEL classification: C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology
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