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The impact of high inflation on trust in national politics and central banks

Working paper 762
Working Papers

Published: 17 January 2023

By: Carin van der Cruijsen Jakob de Haan Maarten van Rooij

Little is known about the impact of high inflation on public trust. Using a survey in the Netherlands, we find that the recent increase in inflation is associated with a decline in trust in the Dutch central bank and Dutch politics. The higher individuals’ perceived inflation is and the harder it is for them to make ends meet, the lower their trust in the European Central Bank, the Dutch central bank, and Dutch politics. We also find that people trust authorities considered responsible for bringing inflation down less. Quite remarkably, most people think government is responsible for maintaining price stability.

Keywords: inflation; trust; financial stress; central banks; national politics
JEL codes D12; D83; E31; E58

Working paper no. 762

762 - The impact of high inflation on trust in national politics and central banks

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Research highlights

  • Using a survey in the Netherlands, we find that the recent increase in inflation is associated with a decline in trust in the Dutch central bank and Dutch politics.  
  • The higher individuals’ perceived inflation is and the harder it is for them to make ends meet, the lower their trust in the European Central Bank, the Dutch central bank, and Dutch politics.  
  • People trust especially authorities they consider responsible for bringing inflation down less.
  • Quite remarkably, most people think the government is responsible for maintaining price stability.

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