Scarred and scared

Chris Dillow

Chris Dillow

Temporary events can have permanent effects. People who experience joblessness when they are young are more likely to suffer unemployment and low wages in later life – and might even turn to crime. Those who experience hard times in their formative years are less likely to hold shares even decades later, and when they do they prefer value stocks. Even whole nations can suffer from such scarring effects: Germans' experience of hyper-inflation in the 1920s helps explain why they are sticklers for monetary rectitude now.

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