The Cost of Banking Crises: New Evidence from Life Satisfaction Data

31 Pages Posted: 23 Apr 2018

See all articles by Alberto Montagnoli

Alberto Montagnoli

University of Stirling - Department of Economics

Mirko Moro

University of Stirling

Date Written: May 2018

Abstract

It is known that banking crises produce large economic costs. Yet might their consequences be even more far‐reaching? We investigate an issue as yet largely unexplored and provide some of the first evidence that banking crises also lead to major, widespread, and lasting psychological losses. We estimate the costs of banking crises with individual life satisfaction; we show that these extend beyond GDP declines and other macroeconomic and financial leakages. For the 2007‐8 financial crisis, we find some evidence that the losses are larger for those countries that had previously experienced a credit boom.

Suggested Citation

Montagnoli, Alberto and Moro, Mirko, The Cost of Banking Crises: New Evidence from Life Satisfaction Data (May 2018). Kyklos, Vol. 71, Issue 2, pp. 279-309, 2018. Available at SSRN: https://ssrn.com/abstract=3166350 or http://dx.doi.org/10.1111/kykl.12170

Alberto Montagnoli (Contact Author)

University of Stirling - Department of Economics ( email )

Stirling, Scotland FK9 4LA
United Kingdom
+44-0 1786-46-7478 (Phone)
+44-0 1786-46-7469 (Fax)

HOME PAGE: http://www.staff.stir.ac.uk/alberto.montagnoli/

Mirko Moro

University of Stirling

Stirling, Scotland FK9 4LA
United Kingdom

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