Banks and Development: Jewish Communities in the Italian Renaissance and Current Economic Performance

Luigi Pascali

The Review of Economics and Statistics, 2016, vol. 98, issue 1, 140-158

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.

Keywords: Banks; Economic development; Persistence; Jewish demography (search for similar items in EconPapers)
JEL-codes: G21 O10 O43 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (77)

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Working Paper: Banks and Development: Jewish Communities in the Italian Renaissance and Current Economic Performance (2013)
Working Paper: Banks and Development: Jewish Communities in the Italian Renaissance and Current Economic Performance (2012)
Working Paper: Banks and development: Jewish communities in the Italian Renaissance and current economic performance (2012)
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