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March 11, 2016 5:20 pm

European Cities See Financial Boon Due to Jewish Communities, Researcher Says

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An illuminated manuscript of Jewish moneylenders. Credit: Wikimedia Commons.

An illuminated manuscript of Jewish moneylenders. Credit: Wikimedia Commons. – A research paper written by an Italian academic claims that European cities that were tolerant toward Jews during the Renaissance are reaping financial benefits from such tolerance to this day.

The paper—penned by economist Luigi Pascali, who teaches at the University of Warwick and Pompeu Fabra University in Barcelona, Spain—was published in The Review of Economics and Statistics journal. It states that Jews who worked in financial professions not typically open to Christians during that time, such as moneylenders, were instrumental in developing banking and lending systems in the towns where they lived. The areas from which Jews were expelled in the Middle Ages are today still suffering from economic problems, Pascali writes.

As an example, Pascali cites his own country, Italy. Jews were expelled in 1503 from the southern part of Italy, an area that is traditionally financially depressed. In the north of the country, where Jews were allowed to stay, banking and moneylending flourished and benefited the entire population.

“I argue that cities, in which the local Jewish community in 1500 caused an early development of the banking sector, have more banks today and, because of this, are more developed today,” Pascali told the U.K.’s Daily Mail.

“Local banking development has a large causal impact on economic development. In particular, using firm-level data, I show that a higher density of local banks increases aggregate productivity in the manufacturing sector, by reallocating resources towards the most productive firms. This is the main channel through which local banks have an effect on economic development,” he said.

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  • Saba

    Good article however, as Jews today begin to leave Europe because of Anti-Semitism, a decline will occur in the arts, in medicine, academia, science and in financial institutions. What happened to Spain five hundred plus years ago is beginning to happen today. A real brain drain is happening in Europe and the world is silent. Jews leaving for Israel will be a blessing to Israel.They will benefit greatly and it will be no surprise to see Israel continue in advancing in medicine, science and technology.

  • It is and always has been a fact that where ever the Jews are G_D blesses the place.

  • stevenl

    But the barbarians are so jealous that they want to repeat what the Nazi did..

  • The tolerance exhibited by certain communities may have been a reflection of their more advanced moral development, and I would like to think that this contributed to their success at least as much as their banks did.