Reprisals Remembered: German-Greek Conflict and Car Sales During the Euro Crisis

Abstract

During the Greek debt crisis after 2010, the German government insisted on harsh austerity measures. This led to a rapid cooling of relations between the Greek and German governments. We compile a new index of public acrimony between Germany and Greece based on newspaper reports and internet search terms. This information is combined with historical maps on German war crimes during the occupation between 1941 and 1944. During months of open conflict between German and Greek politicians, German car sales fell markedly more than those of cars from other countries. This was especially true in areas affected by German reprisals during World War II: areas where German troops committed massacres and destroyed entire villages curtailed their purchases of German cars to a greater extent during conflict months than other parts of Greece. We conclude that cultural aversion was a key determinant of purchasing behavior, and that memories of past conflict can affect economic choices in a time-varying fashion. These findings are compatible with behavioral models emphasizing the importance of salience for individual decisionmaking.JEL: D12, D74, F14, N14, N44

Mass Repression and Political Loyalty: Evidence from Stalin’s ‘Terror by Hunger’

“…Recent research, however, suggests that changes to the threat or retribution -or political opportunity structure more generally -can help explain patterns in other, vastly different environments. Studies in democratic settingswhere threats of coercion are generally low -tend to document inflammatory effects of past repression (Balcells, 2012;Costalli and Ruggeri, 2015;Fouka and Voth, 2016). Meanwhile, studies in less permissive environments suggest deterrent effects of mass repression (Byman, 2016;Lyall, 2009;García-Ponce and Wantchekon, 2011).…”

“…Otherwise, it will have the opposite of its intended effect. This insight advances our understanding of historical legacies (Beissinger and Kotkin, 2014;Simpser, Slater and Wittenberg, 2018) and why they vary (Charnysh, 2015;Wittenberg, 2006;Fouka and Voth, 2016), by showing that the effects of the past are dynamic and contingent on a changing contemporary context.…”

Historical Roots of Political Extremism: The Effects of Nazi Occupation of Italy

“…Voigtländer and Voth (2012) find strong persistence in anti-Semitism within Germany over more than five centuries. Fouka and Voth (2013) find evidence suggesting that Nazi occupation had persistent cultural effects in Greece: during the recent Greek financial crisis, sales of German cars fell more in the areas where German troops committed war crimes against civilians. Avdeenko and Siedler (2016) study German longitudinal data and document the importance of intergenerational transmission of political extremism from fathers to sons.…”

Boycott or Buycott?: Internal Politics and Consumer Choices

“…-01 P7-01 P13-01 P6-02 P12-02 P5-03 P11-03 P4-04 P10-04 P3-05 P9-05 P2-06 P8-06 P1-07 P7-07 P13-07 P6-08 P12-08 P5-09 P11-09 P4-10 P10-10 P3-11 P9-11 P2-12 sentiment there. Fouka and Voth (2013) look at German car sales in Greece during the Euro crisis when Greek and German governments clashed over the terms of the European Union bailout of Greece. 9 A different approach is taken in Michaels and Zhi (2010), Meunier (2011), andFuchs andKlann (2013) which focus on how political conflict and the worsening of public attitudes in different countries (sometimes even implying calls for boycotts) affect aggregate bilateral economic relationships (trade, investment flows, etc.).…”