Banks and development: : Jewish communities in the italian renaissance and current economic performance

• Autores: Luigi Pascali
• Localización: The Review of economics and statistics, ISSN 0034-6535, Vol. 98, Nº 1, 2016, págs. 140-158
• Idioma: inglés
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• Resumen

  • Are differences in local banking development long lasting? Do they affect economic performance? I answer these questions by relying on a historical development that occurred in Italian cities during the Renaissance. A change in Catholic doctrine led to the development of modern banks in cities hosting Jewish communities. Using Jewish demography in 1500 as an instrument, I provide evidence of extraordinary persistence in the level of banking development across Italian cities and substantial effects of local banks on per capita income. Additional firm-level analyses suggest that banks exert large effects on aggregate productivity by reallocating resources toward more efficient firms.