Who Supports the ECB? Evidence from Eurobarometer Survey Data

Abstract

In a nutshell, if people trust the ECB, then its legitimacy as a supranational institution and the credibility of its monetary policy will be higher. 2 It can furthermore be argued that trust in the ECB and support for its policy could be enhanced by active communication (explaining its objectives, constraints, instruments and effects) with the European polities. A clear and transparent communication strategy is even needed more if the population's support for a central bank's policy declines, as it seems to be the case post-GFC, and not just in the Euro area. But, as Blinder et al. (2008) show, no consensus has shaped out on an optimal communication strategy of a central bank.Although some papers have attempted to check how ECB's communication is received by the markets, very few have been able to ascertain the width of the support for the ECB in the European population at large. It can certainly be affirmed that monetary policy impacts everyone's everyday life. Starting from such a premise, the study of attitudes and values is now recognised as an important source of information for economists, and the availability of the Eurobarometer survey data has put the European integration process under the magnifying glass (see, e.g., Gabel, 1998 or Nelsen andGuth, 2000). Concerning monetary issues in particular, G€ artner (1997), Hayo (1999) and Jonung (2004) examine the emergence of the euro as a currency and its popular support.But the trust of the Europeans in the ECB and its evolution over time has not yet been exhaustively explored. In fact, such a literature is only emerging. Moreover, research has mostly looked one-sidedly either at the typical macroeconomic (country level) indicators determining trust in a central bank, such as inflation, unemployment, real GDP growth and fiscal measures, or at the standard sociodemographic (individual level) determinants of central bank trust. By contrast, the present paper is among the first to examine micro-level sociodemographic factors from the Eurobarometer surveys jointly with alternative macroeconomic indicators of trust in the ECB over the whole span of the EMU across time (survey waves) and space (member countries). Our purpose with such an approach is to evaluate and compare the relative importance of these two major types of determinants of trust in the ECB, as well as to study their evolution as the EMU membership has been expanding. Kaltenthaler and Anderson (2001) analyse the support for a European monetary policy, but in a very early and short sample, 1994-97, that is when the single currency was not yet born. Hudson (2006) provides some evidence on trust in the ECB, showing that the usual sociodemographic variables are significant. However, the data used are for the year 2001 only. Banducci et al. (2009) examine the evolution of trust in the euro, analysing how Europeans have perceived the inflationary effects of the transition to the new currency. Kaltenthaler et al. (2010) have evaluated the distrust of the public opinion in the ECB. They find that the distru...

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