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Incompatible European Partners? Cultural Predispositions and Household Financial Behavior

Author

Listed:
  • Haliassos, Michael

    (Goethe University Frankfurt)

  • Jansson, Thomas

    (Research Department, Central Bank of Sweden)

  • Karabulut, Yigitcan

    (Goethe University Frankfurt)

Abstract

The Eurozone fiscal crisis has created pressure for institutional harmonization, but skeptics argue that cultural predispositions can prevent convergence in behavior. Our paper derives a robust cultural classification of European countries and utilizes unique data on natives and immigrants. Classification based on genetic distance or on Hofstede’s cultural dimensions fails to identify a single ‘southern’ culture but points to a ‘northern’ culture. Our findings support the relevance of cultural predispositions for financial behavior; and convergence of behavior over time in the face of common institutions, even for countries with great cultural distance from the country that created those institutions.

Suggested Citation

  • Haliassos, Michael & Jansson, Thomas & Karabulut, Yigitcan, 2014. "Incompatible European Partners? Cultural Predispositions and Household Financial Behavior," Working Paper Series 285, Sveriges Riksbank (Central Bank of Sweden), revised 01 Jan 2015.
  • Handle: RePEc:hhs:rbnkwp:0285
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    More about this item

    Keywords

    Household Portfolios; Household Finance; Cultural Influences on Economic Behavior;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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