The Review of Economics and Statistics Vol. 98 No. 1 2016
Banks and Development: Jewish Communities in the Italian Renaissance and Current Economic Performance
Abstract
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.
- DOI
- 10.1162/rest_a_00481
- Volume
- 98
- Issue
- 1
- Pages
- 140-158
- Language
- en
- Sources
- openalex crossref