The association of high perceived inflation with trust in national politics and central banks✰

Abstract

Using a survey in the Netherlands, we find that high inflation perceptions are associated with low trust in Dutch politics and the Dutch central bank, also if we control for a broad array of potential confounding factors. The higher individuals’ perceived inflation is and the harder it is for them to make ends meet, the lower their trust in Dutch politics, the Dutch central bank, and the European Central Bank. We also find that trust in an authority is lower when it is considered responsible for bringing inflation down. Quite remarkably, most people think the government is responsible for maintaining price stability.