​​​Creating Expectations: Propaganda and the Economic Recovery in Nazi Germany

with Alexander Kriwoluzky, Andrea Papadia, and Moritz Schularick

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​We study the little-understood recovery of the German economy from the Great Depression under the Nazis starting in 1933. Our project asks if the role of fiscal policy as a driver of the recovery has to be fundamentally reassessed once the effects of expectation creation are considered. The central hypothesis we explore is that Nazi communication and propaganda efforts created the perception of large present and future fiscal spending and thereby boosted the effectiveness of the fiscal stimulus much beyond its actual size. We empirically test this hypothesis using a panel model framework and a newly compiled regional dataset that includes monthly unemployment figures and an exogenous measure of fiscal radio propaganda.

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Crisis and Inequality
with Òscar Jordá, Alan Taylor, Moritz Schularick, and Nadezhda Zhuravleva

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We conduct an empirical investigation into the distributional impacts of financial crises. Our research aims to quantify how these crises shape both wealth and income distributions. To this end, we are synthesizing longitudinal data on income and wealth inequality with macro-financial datasets. Our analysis encompasses a panel of countries and extends back to the early 20th century, offering a comprehensive historical perspective on the relationship between financial crises and economic inequality.

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Fiscal Capacity in the Euro Area

with Chi Hyun Kim 

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We leverage financial market data to empirically examine the impact of participating in a currency union on the fiscal capacity of individual countries. We assemble a comprehensive dataset encompassing corporate and sovereign bonds from all member countries within the euro area and extract factors that reflect both currency-union-specific and country-specific risks.We document how these risks vary throughout the euro area's history and along the yield curve, and correlate with monetary policy milestones of the currency union.

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When Disaster Triggers Crisis

with Moritz Schularick, and Petr Sedláček 

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This paper studies the effect of natural disasters on financial stability and quantifies the economic costs when disasters trigger financial crises. We construct a novel dataset spanning 120 years across 18 advanced economies and find that natural disasters increase financial crisis probability with a 2-3 year delay. Natural disasters increase crisis probability by 16 percentage points at the 2-year horizon. Our results suggest that financial crises roughly double the economic impact of natural disasters and provide the first clean estimate of financial disruption costs using quasi-random variation. The difference between disasters with and without subsequent crises isolates the pure cost of financial instability, addressing the endogeneity problem that plagues existing crisis cost studies.

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Wealth Inequality in Finland

with Ciprian Domnisoru, Chi Hyun Kim, Timm Prein, and Oskari Vähämaa

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We adopt a historical perspective to chart the evolution of wealth in Finland from the late 19th century to the present. By synthesizing historical survey data with tax records, we construct a comprehensive timeline of wealth dynamics. Our research specifically illuminates the persistent wealth disparity between Finland's Finnish-speaking and Swedish-speaking populations, offering insights into the long-term socioeconomic structures of the country.

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I have been awarded the Add-on Fellowship for Interdisciplinary Economics from the Joachim Herz Stiftung for 2024/2025 for this project.

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