Template-Type: ReDIF-Paper 1.0
Author-Name: Sebastian Doerr
Author-X-Name-First: Sebastian 
Author-X-Name-Last: Doerr
Author-Name: Stefan Gissler
Author-X-Name-First: Stefan 
Author-X-Name-Last: Gissler
Author-Name: Jose-Luis Peydro
Author-X-Name-First: Jose-Luis
Author-X-Name-Last: Peydro
Author-Name: Hans-Joachim Voth
Author-X-Name-First: Hans-Joachim
Author-X-Name-Last: Voth
Title: Financial crises and political radicalization: How failing banks paved Hitler's path to power
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.
Length: 50 pages
Creation-Date: 2021-11
File-URL: https://www.bis.org/publ/work978.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work978.htm
File-Format: text/html
Number: 978
Keywords: financial crisis, political extremism, populism, anti-Semitism, culture, Great Depression
Classification-JEL: E44, G01, G21, N20, P16
Handle: RePEc:bis:biswps:978