Exposure to Danat predicted worsening unemployment only after the bank’s failure.

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: The Danat-radicalization result survives many robustness checks. — Sebastian Doerr et al., Financial Crises and Political…, 39; Danat exposure caused worsening unemployment only after the bank failed — Sebastian Doerr et al., Financial Crises and Political…, 146; Danat-exposed cities had no pre-crisis unemployment divergence from other cities — Sebastian Doerr et al., Financial Crises and Political…, 144 (+1 more)

Broader Connections

• Danat exposure caused worsening unemployment only after the bank failed #corroborates (0.98) — Sebastian Doerr et al., Financial Crises and Political…, 146
• Danat-exposed cities had no pre-crisis unemployment divergence from other cities #qualifies (0.85) — Sebastian Doerr et al., Financial Crises and Political…, 144
• Pre-1921 Danat exposure predicts identical effects to later connections. #complicates (0.78) — Sebastian Doerr et al., Financial Crises and Political…, 35