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

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  • Vasiliki Fouka
  • Hans-Joachim Voth

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.

Suggested Citation

  • Vasiliki Fouka & Hans-Joachim Voth, 2013. "Reprisals Remembered: German-Greek Conflict and Car Sales during the Euro Crisis," Working Papers 726, Barcelona Graduate School of Economics.
  • Handle: RePEc:bge:wpaper:726
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    Cited by:

    1. Fontana, Nicola & Nannicini, Tommaso & Tabellini, Guido, 2017. "Historical Roots of Political Extremism: The Effects of Nazi Occupation of Italy," IZA Discussion Papers 10551, Institute for the Study of Labor (IZA).
    2. Fontana, Nicola & Nannicini, Tommaso & Tabellini, Guido, 2017. "Historical Roots of Political Extremism: The Effects of Nazi Occupation of Italy," IZA Discussion Papers 10551, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Consumer boycott; cultural aversion; political conflict; memory; salience; car sales; Euro crisis; German-Greek relations;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-

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