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Jewish Persecution and Investments

Francesco D'Acunto, Marcel Propopczuk and Michael Weber have a paper which looks at how persecution of Jews in the past affects stock-market participation in the present. Their paper is here and the VOX column on their article is here.

The abstract of their paper is as follows:
We look at the geography of historical Jewish persecution to proxy for localized distrust in finance. Households in German counties where Jewish persecution was one standard deviation higher are 7.5% to 12% less likely to invest in stocks. The results hold when comparing only geographically close counties, and counties that hosted documented Jewish communities in the distant past. Current antisemitism, discriminatory beliefs, generalized trust, or supply-side forces do not explain the effect, which instead is consistent with a norm of distrust in finance, transmitted across generations. The forced migrations of Jewish communities across the German lands in the Middle Ages help assess if the effect of Jewish persecution on stockholdings is causal.

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