Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
We analyse determinants of trust in the European Central Bank (ECB). Our main finding is that when households have pessimistic expectations, aggressive cuts in interest rates have an adverse effect on their trust in central bank. This result is in accordance with the 'lack-of-confidence shock' hypothesis developed by Schmitt-Groh頡nd Uribe (2012) and in contrast with the 'fundamental shock' hypothesis which implies positive effects of aggressive cuts for trust in the ECB. The result is robust to various changes in the modelling approach.