About Depression Babies and Red Diaper Babies: Do Macroeconomic Experiences Affect Everybody’s Risk Taking in the Same Way?

Journal of Behavioral and Experimental Finance, Vol. 13, pp. 25-27, 2017

Posted: 5 Jul 2019 Last revised: 9 Jul 2019

See all articles by Henning Cordes

Henning Cordes

University of Muenster - Finance Center

Maik Dierkes

Leibniz University Hannover

Date Written: March 1, 2017

Abstract

We study how macroeconomic growth experienced throughout a person’s lifetime affects the decision to participate in the stock market, and how this interacts with political education. For people who have been raised in the market economy of the Federal Republic of Germany, we find that macroeconomic growth experienced throughout the lifetime predicts the likelihood of holding stocks and recent experiences have a higher impact. These findings do not extend to people who have been raised under the communistic regime of the former German Democratic Republic and thus have experienced a market economy only since the German reunification in 1989.

Keywords: Behavioral finance, Household finance, Portfolio choice

JEL Classification: D14, D83, E21, G11

Suggested Citation

Cordes, Henning and Dierkes, Maik, About Depression Babies and Red Diaper Babies: Do Macroeconomic Experiences Affect Everybody’s Risk Taking in the Same Way? (March 1, 2017). Journal of Behavioral and Experimental Finance, Vol. 13, pp. 25-27, 2017, Available at SSRN: https://ssrn.com/abstract=3414247

Henning Cordes (Contact Author)

University of Muenster - Finance Center ( email )

Universitätsstr. 14-16
Muenster, 48143
Germany
+49 251 83 22058 (Phone)

Maik Dierkes

Leibniz University Hannover ( email )

Koenigsworther Platz 1
Hannover, 30167
Germany

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