Financial crises and political radicalization: how failing banks paved Hitler’s path to power
File(s)
Accepted version
Author(s)
Peydro, Jose-Luis
Voth, joachim
Doerr, Sebastian
Gissler, Stefan
Type
Journal Article
Abstract
Do financial crises radicalize voters? We study Germany’s 1931 banking crisis, collecting new data on bank branches and firm-bank connections. Exploiting cross-sectional variation in pre-crisis exposure to
the bank at the center of the crisis, we show that Nazi votes surged
in locations more affected by its failure. Radicalization in response to
the shock was exacerbated in cities with a history of anti-Semitism.
After the Nazis seized power, both pogroms and deportations were
more frequent in places affected by the banking crisis. Our results
suggest an important synergy between financial distress and cultural
predispositions, with far-reaching consequences.
the bank at the center of the crisis, we show that Nazi votes surged
in locations more affected by its failure. Radicalization in response to
the shock was exacerbated in cities with a history of anti-Semitism.
After the Nazis seized power, both pogroms and deportations were
more frequent in places affected by the banking crisis. Our results
suggest an important synergy between financial distress and cultural
predispositions, with far-reaching consequences.
Date Issued
2022-12-01
Date Acceptance
2022-06-01
Citation
The Journal of Finance, 2022, 77 (6), pp.3339-3372
ISSN
0022-1082
Publisher
Wiley
Start Page
3339
End Page
3372
Journal / Book Title
The Journal of Finance
Volume
77
Issue
6
Copyright Statement
© 2022 the American Finance Association. This is the peer reviewed version of the following article, which has been published in final form at https://onlinelibrary.wiley.com/doi/10.1111/jofi.13166. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.
Subjects
Social Sciences
Business, Finance
Economics
Business & Economics
1930S
GERMANY
ORIGINS
Finance
1502 Banking, Finance and Investment
Publication Status
Published
Date Publish Online
2022-06-22