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Algann, Y., Cahuc, P. (2010). Inherited Trust and Growth. American Economic Review, 100(5): 2060–92.

This paper develops a new method to uncover the causal e¤ect of trust on economic growth, by focusing on the inherited component of trust and its time variation. We show that inherited trust of descendants of US-immigrants is signi…cantly influenced by the country of origin and the timing of arrival of their forbears. We thus use the inherited trust of descendants of US-immigrants as a time-varying measure of inherited trust in their country of origin. This strategy allows to identify the sizeable causal impact of inherited trust on worldwide growth during the 20th century by controlling for country fi…xed effects.

Authors

Algan, Yann

Yann Algan is Professor of Economics at Sciences Po Paris. He is affiliated to CEPR, IZA and CEPREMAP (Co-head Macroeconomic program). Awards and grants European Starting Grant (ERC) 2010-2014 - Project "Trust" Best French Young Economist 2009 Best French economic book and...

Cahuc, Pierre

Pierre Cahuc is Professor of Economics Ecole Polytechnique and Research fellow CREST-INSEE, IZA,CEPR Selected publications Is short-time work a good method to keep unemployment down? with Stéphane Carcillo, forthcoming in the Nordic Economic Policy Review Civil Society and...

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