Financial Crisis and Polarization of Politics

Funke, Manuel/ Schularick, Moritz/ Trebesch, Christoph (2015), Goeing to the Extremes: Politics after Financial Crisis, 1870-2014: Center for Economic Studies & Ifo Institute, CESIfo Working Papers 5553 München: Center for Economic Studies & Ifo Institute. This publication shows how financial crisis historically generated political polarization and a drift of voters to far right parties. Moreover, polarization and fragmentation of politics decreases the much needed ability to govern after a financial crisis has hit.