Trust is an essential part of a functioning economy, yet it is often one of the least understood variables in economics. That’s why the Institute for New Economic Thinking is supporting the Thomson Reuters TRust index, which provides concrete metrics for understanding the level of trust in the financial system using a benchmark of the top 50 global financial institutions as a proxy for the sector as a whole.
While trust is difficult to understand and measure in the context of economics, this type of innovative work enables new and important conversations about trust and how it affects the economy. The Institute has explored this issue and the new economic thinking it facilitates In a series of essays over the last week. You can check out the previous contributions from Institute President Rob Johnson and Advisory Board member Andy Haldane on our blog.
A prominent American banker – Gary Cohn, chief operating officer of Goldman Sachs – opined recently to Politico:
We need to go from pure paranoia to just scared. Just scared would be a big improvement. I’m not asking for good I’m asking for just scared. And we could get there through a variety of things, whether it be corporate tax reform, immigration reform, repatriation, getting a budget in place, funding the government, entitlement reform. All these things, each and every one, can move confidence two degrees. Get two of them, you move four degrees and you go from scared to just a little concerned. (more…)