The The 1870-1913 period marked the birth of the first era of trade globalization. As shown in Figure 1, between 1820 and 1913, the world experienced an unprecedented increase in world trade, with a marked acceleration that began in 1870. This increase in trade cannot simply be explained by increased global GDP or population. In fact, between 1870 and 1913, the world export-to-GDP ratio increased from 5 percent to 9 percent, while per capita volumes more than tripled. The determinants and consequences of this first wave of globalization have been of substantial interest to both economists and historians. This study employs new trade data and a novel identification strategy to empirically investigate (i) the role of the adoption of the

Are di¤erences in local banking development long-lasting? Do they a¤ect long-term economic performance? I answer these questions by relying on an historical development that occurred in Italian cities during the 15th century. A sudden change in the Catholic doctrine had driven the Jews toward money lending. Cities that were hosting Jewish communities developed complex banking institutions for two reasons: …rst, the Jews were the only people in Italy who were allowed to lend for a pro…t and, second, the Franciscan reaction to Jewish usury led to the creation of charity lending institutions, the Monti di Pietà, that have survived until today and have become the basis of the Italian banking system. Using Jewish demography in 1500 as an instrument, I provide evidence of (1) an extraordinary persistence in the level of banking development across Italian cities (2) large e¤ects of current local banking development on per-capita income. Additional …rm-level analyses suggest that well-functioning local banks exert large e¤ects on aggregate productivity by reallocating resources toward more e¢ cient …rms. I exploit the expulsion of the Jews from the Spanish territories in Italy in 1541 to argue that my results are not driven by omitted institutional, cultural and geographical characteristics. In particular, I show that, in Central Italy, the di¤erence in current income between cities that hosted Jewish communities and cities that did not exists only in those regions that were not Spanish territories in the 16th century.JEL: O43, G21, O10

We study the role of economic incentives in shaping the coexistence of Jews, Catholics, and Protestants, using novel data from Germany for 1,000+ cities. The Catholic usury ban and higher literacy rates gave Jews a specific advantage in the moneylending sector. Following the Protestant Reformation (1517), the Jews lost these advantages in regions that became Protestant. We show (i) a change in the geography of anti-Semitism with persecutions of Jews and anti-Jewish publications becoming more common in Protestant areas relative to Catholic areas; (ii) a more pronounced change in cities where Jews had already established themselves as moneylenders. These findings are consistent with the interpretation that, following the Protestant Reformation, Jews living in Protestant regions were exposed to competition with the Christian majority, especially in moneylending, leading to an increase in anti-Semitism. (JEL D74, J15, N33, N43, N93)