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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title From finance to fascism: the real effect of Germany's 1931 banking crisis
Organization Unit
Authors
  • Hans-Joachim Voth
  • Sebastian Klaus Dörr
  • Stefan Gissler
  • José Luis Peydró
Language
  • English
Institution Centre for Economic Policy Research
Series Name CEPR Discussion Papers
Number 12806
ISSN 0265-8003
Number of Pages 50
Date 2020
Abstract Text Do financial crises radicalize voters? We study Germany's banking crisis of 1931, when two major banks collapsed and voting for radical parties soared. We collect new data on bank branches and firm-bank connections of 5,610 firms. Incomes plummeted in cities affected by the bank failures; connected firms curtailed payrolls. Nazi votes surged in locations exposed to Danatbank, led by a Jewish manager - but not in those suffering from the other bank's failure. Unobservables or pretrends do not explain the results. Danatbank's collapse boosted Nazi support, especially in cities with deep-seated anti-Semitism, suggesting a synergy between cultural and economic channels.
Official URL https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12806
Other Identification Number merlin-id:19192
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Keywords Financial crises, real effects, extremism, polarisation, Nazi Party, Great Depression, Germany
Additional Information Revised version