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Betsey A Stevenson

Want to Help the Economy? Learn to Trust.

People are losing faith in institutions and in one another. That's bad for growth.
Meeting new people is good for growth.

Meeting new people is good for growth.

Photograph: Fox Photos/Getty Images

It's hard to know whom you can trust anymore -- at least that's the attitude of many Americans today. Therein lies a crucial challenge for the world's largest economy.

Five years ago, Justin Wolfers and I examined data showing that trust in institutions such as Congress, banks and big business had plummeted during the recession, hitting an all-time low. Because historically trust had fallen as unemployment rose, we argued that it would increase as unemployment declined.