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α: calibrated so average coauthorship-adjusted count equals average raw count
This paper investigates how inflation influences an individual’s trust in banks. Using individual data covering 72 countries, we find that inflation, both recent and experienced throughout life, exerts a detrimental influence on trust in banks. Even if recent inflation has a stronger impact, these results support the view that inflation has both short- and long-term effects on trust in banks. Additional estimations show that individual characteristics like education and access to information can affect the negative impact of inflation on trust in banks. Overall, our results indicate that fighting against inflation prevents a lasting reduction of trust in banks.