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One of the primary costs of compassion

Hot, hot topic in economics research

Hotter even than--still--what got us out of the Great Depression.


Here's Paulo Sapienza and Luigi Zingales: "Anti-Trust America: A trust deficit is driving our economy down".

Bruce Yandle: "Lost Trust: The Real Cause of the Financial Meltdown".

Robert J. Shiller was one of the first on the recent bandwagon with his Wall Street Journal piece about a month ago, "Animal Spirits Depend on Trust".

(Trend-spotter David Brooks is on board, too: "An Economy of Faith and Trust".)

The bad news is that trust is hard to study. The good news is that economists have been looking at it for a while. Paul J. Zak is one of the leaders. His 2001 Economic Journal paper (with Stephen Knack), "Trust and Growth" is interesting and already well-cited. (Working paper version.) Here's an application by Oguzhan C. Dincer and Eric M. Uslaner to data on U.S. states,