Financial crises and political radicalization: how failing banks paved Hitler’s path to power

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Title: Financial crises and political radicalization: how failing banks paved Hitler’s path to power
Authors: Peydro, J-L
Voth, J
Doerr, S
Gissler, S
Item 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.
Date of Acceptance: 1-Jun-2022
URI: http://hdl.handle.net/10044/1/97604
ISSN: 0022-1082
Publisher: Wiley
Journal / Book Title: The Journal of Finance
Copyright Statement: Copyright reserved
Keywords: Finance
1502 Banking, Finance and Investment
Publication Status: Accepted
Embargo Date: Embargoed for 24 months after publication date
Appears in Collections:Imperial College Business School