Danat exposure caused worsening unemployment only after the bank failed

Evidence

To further investigate whether exposure to Danat could have had differential effects based on cities’ pre-banking crisis economic trajectory, columns (4) and (5) interact danat with the 1929 to 1930 and 1930 to 1931 change in the unemployment rate. In both columns, the coefficient on danat remains economically and statistically significant and positive. The interaction effects of the measures of economic activity with danat have no significant effect on support for the NSDAP. Finally, we investigate to what extent exposure to Danat affected economic outcomes in 1931 and 1932. While there are no data on city incomes in 1930 or 1931, there is data on the unemployment rate for 1931 and 1932. Column (6) shows that exposure to Danat has a significant positive effect on the change in the unemployment rate from 1931 to 1932. In other words, not only did cities exposed to Danatbank see a decline in incomes, but they also experienced an increase in unemployment. Taken together, these results suggest that the presence of Danat in a city was not associated with worse initial economic conditions, but a steeper economic decline only after Danat failed. — Sebastian Doerr et al., Financial Crises and Political…, 146

Categorization

• XREF: connects to: Danat’s 1920s lending expansion did not select riskier borrowers; Danat-exposed cities had no pre-crisis unemployment divergence from other cities — Sebastian Doerr et al., Financial Crises and Political…, 144; Systemic bank failure would have halted paychecks for a paycheck-to-paycheck workforce — Mark Blyth, Austerity: The History of a Dangerous…, 143

Related

• Exposure to Danat predicted worsening unemployment only after the bank’s failure. (similarity 0.97)
• Danat’s 1920s lending expansion did not select riskier borrowers (similarity 0.94)
• Danat-exposed cities had no pre-crisis unemployment divergence from other cities (similarity 0.92)
• Danat-exposed cities showed no sharper pre-July-1931 unemployment downturn than other cities. (similarity 0.90)
• Nazi gains in exposed cities appeared only after the banking crisis, not before. (similarity 0.85)
• Danat-exposed cities did not differ systematically on observable characteristics. (similarity 0.83)
• Pre-1921 Danat exposure predicts identical effects to later connections. (similarity 0.82)
• Nazi gains in Danat-exposed cities emerged only after the bank’s collapse (similarity 0.82)
• Income effects rely on long differences plus a parallel-trends unemployment check. (similarity 0.82)
• Exposure to Danatbank failure raised Nazi vote shares by roughly 3 percentage points (similarity 0.81)
• Danat exposure raised Nazi voting 1.7 to 2.5 percentage points across robustness checks. (similarity 0.80)
• Danatbank-exposed cities saw a 2.9-percentage-point extra rise in Nazi vote share. (similarity 0.80)
• Both failing banks hurt local incomes identically, isolating framing as the differentiator (similarity 0.79)
• The Danat collapse boosted Nazi votes beyond nationwide crisis effects (similarity 0.79)
• Continuous exposure measures confirm Danat exposure boosted Nazi voting (similarity 0.79)

Broader Connections

• Systemic bank failure would have halted paychecks for a paycheck-to-paycheck workforce #corroborates (0.72) — Mark Blyth, Austerity, 143