Suchergebnisse

The paper investigates the role of economic indicators as determinants of trust in the European Central Bank (ECB), the European Commission (EC) and the European Parliament (EP) in eleven countries of the Eurozone, from 1999 to 2013, using country level data from the European Commission's Eurobarometer survey. This paper aims to shed light particularly on the role played by income distribution, together with standard economic indicators such as unemployment and inflation, in the consolidation of supranational institutions. The empirical analysis also controls for financial market shocks, including domestic bond yields and stock market returns. The additional contribution is to analyze whether the sensitiveness of trust is strengthen during the recent crisis, associating binary dummies to explanatory variables. The main conclusions can be summarized as follows: a) income inequality negatively affects trust in the EC and the EP in normal times; in crisis times, this relation is strengthened and extended to the ECB for one of the two indexes of trust considered; b) inflation and unemployment significantly affect trust in all European Institutions after the crisis DOI: http://dx.doi.org/10.5755/j01.ee.27.1.12581

The recent dynamics characterizing the Eurozone economy suggest the existence of a new policy trilemma faced by its member countries. According to this policy trilemma, there is a trade-off between free capital mobility, financial stability and fiscal policy flexibility. In this paper, we analyze the foundations of such a trade-off and, based on the data for 11 Eurozone countries, present an empirical investigation on the existence of the trilemma. The results highlight the existence of the trade-off, with some differences between member countries. The existence of this trilemma in the Eurozone provides arguments for implementing centralized financial supervision together with fiscal and monetary reforms that should strengthen the currency union.