Once Burned, Twice Shy? Intergenerational Distrust After Ghana’s 1982 Currency Recall

This paper examines the long run and intergenerational effects of Ghana’s January 1982 currency recall on financial behavior using nationally representative microdata from the Ghana Socioeconomic Panel for 2018 to 2019. Logit estimates show that directly exposed adults are 8.9 percentage points less likely to obtain a formal loan, 5.5 percentage points more likely to save cash at home, and 10.0 percentage points more likely to participate in susu groups. A regression discontinuity at the 1964 birth year cutoff shows a discrete decline in formal loan use for adults relative to adjacent younger cohorts. For the second generation, parental exposure is associated with a 7.1 percentage point decline in bank account ownership and a 10.4 percentage point increase in the preference for saving cash at home, with larger effects when the link between parent and child is tightened. The evidence points to persistent trust scars from a one off confiscatory monetary policy that shift households toward informal, cash-based mechanisms even decades later.