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

63 Pages Posted: 28 Oct 2013

See all articles by Vasiliki Fouka

Vasiliki Fouka

Stanford University

Hans-Joachim Voth

University of Zurich - UBS International Center of Economics in Society; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: October 2013

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 decision making.

Keywords: boycott, Car sales, German-Greek relations, political conflict, sovereign debt crisis

JEL Classification: D12, D74, F14, N14, N44

Suggested Citation

Fouka, Vasiliki and Voth, Hans-Joachim, Reprisals Remembered: German-Greek Conflict and Car Sales During the Euro Crisis (October 2013). CEPR Discussion Paper No. DP9704. Available at SSRN: https://ssrn.com/abstract=2346221

Vasiliki Fouka (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

Hans-Joachim Voth

University of Zurich - UBS International Center of Economics in Society ( email )

Raemistrasse 71
Zuerich, 8006
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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