ONCE BITTEN, TWICE SHY: EXPERIENCES OF A BANKING CRISIS AND EXPECTATIONS OF FUTURE CRISES

Shannon Mudd () and Neven Valev ()

No wp969, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: Survey data from Bulgaria show that people who had experienced a loss during a banking crisis are significantly more likely to expect a new crisis. This result holds despite 12 years between the earlier crisis and the survey, and the dramatically improved performance of the financial sector and the economy in the meantime. However, we find that earlier experiences affect expectations only for less informed individuals. Individuals who are more informed about the economy are unaffected by their prior experiences.

Keywords: banking crisis; trust; expectations (search for similar items in EconPapers)
JEL-codes: D8 G2 (search for similar items in EconPapers)
Pages: pages
Date: 2009-09-01
New Economics Papers: this item is included in nep-cba
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Citations: View citations in EconPapers (4)

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