Creating Expectations: Propaganda and the Economic Recovery in Nazi Germany

Résumé

Germany recovered from the Great Depression faster than any comparable economy - a gap that standard monetary and fiscal channels cannot explain. We provide causal evidence from a natural experiment: Nazi radio propaganda. Using quasi-random variation in radio signal strength across German labor districts, we find that stronger propaganda exposure causally reduced local unemployment. The effect is zero before Hitler's consolidation of power in mid-1934 and grows sharply thereafter, despite no corresponding change in propaganda content. It is largest where military rearmament, secret nationally but observable locally, was concentrated. joint work with Alexander Kriwoluzky (DIW Berlin), Andrea Papadia (University of York), and Moritz Schularick (IfW Kiel & Sciences Po)