Author(s):	Michael Haliassos, Thomas Jansson, Yigitcan Karabulut
Publication Date:	June 2014
Keyword(s):	culture, household finance, household portfolios, institutions
JEL(s):	E21, G11, Z1
Programme Areas:	Financial Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=10039

The Eurozone fiscal crisis has created pressure for institutional harmonization, but skeptics argue that cultural predispositions can prevent convergence in behavior. Our paper derives a robust cultural classification of European countries and utilizes unique data on natives and immigrants. Classification based on genetic distance or on Hofstede?s cultural dimensions fails to identify a single ?southern? culture but points to a ?northern? culture. Our findings support the relevance of cultural predispositions for financial behavior; and convergence of behavior over time in the face of common institutions, even for countries with great cultural distance from the country that created those institutions.