However, it is hard to imagine the opposite situation of a central bank fully engaged in the management of expectations without trust from the public.1 This also applies to communication. We can discuss alternative strategies to make sure that the message issued by a central bank is adequately understood and internalized. However, there is little that a good communication strategy can do if the public does not trust the central bank.2 1  Christelis et al. (2016) have formally explored this for the Europe using micro data, finding that higher trust in the ECB lowers inflation expectations on average, and significantly reduces uncertainty about future inflation, even after controlling for people’s knowledge about the objectives of the ECB. Similarly, Mellina and Schmidt (2018) find that having greater trust increases the probability of expecting unchanged prices and decreases the likelihood of expecting either slightly or sharply rising prices over the medium term. 2  Through behavioral insights, Bholat et al. (2018) show that public’s trust in the Bank of England can be further improved by enhancing the communication with the public, particularly at times when trust in public institutions has fallen and responsibilities delegated to central banks have increased. Page 3 of 8  Central Bank of Chile July 2019  Approaching institutional credibility from stakeholders’ trust has a number of conceptual and operational advantages. First, there is a large body of research assessing its value: trust is at the heart of societies and a major component of social capital.
As a component of trust, fairness involves being aware of such differences and to find ways to prevent, mitigate or compensate redistributive effects that are particularly undesired. Within an institution, fairness also involves the creation of a working environment that fosters productive exchange of ideas, free of harassment and discrimination. Fostering trust in a Central Bank The OECD taxonomy may be useful in providing a conceptual basis to go beyond generalizations on public trust and to take a more proactive approach to nurture it. In particular, it provides a good framework to develop ways to assess trust and to identify concrete levers that an institution can use to foster trust. However, can this framework be applied to a central bank? In my view, this is not only possible, but necessary as well. Assessing trust on a central bank by inserting a question in an opinion survey suffers from the same limitations as with government institutions and a few more. Answers to a broad question may be more reflective of prejudice than of attitudes that may shape the response to future policy decisions or incoming information and may come too late in a process of social or market change to make any difference. In addition,  Page 5 of 8  Central Bank of Chile July 2019  experience with opinion surveys in different countries has shown that no more than half of respondents have some basic knowledge of central banks.