Tabea Bucher?Koenen|Michael Ziegelmeyer
Once Burned, Twice Shy? Financial Literacy and Wealth Losses during the Financial Crisis*
Central Bank of Luxembourg|Central Bank of Luxembourg
recent financial crisis caused shock private wealthhouseholds low financial literacy less likely risky assets directlytherefore fewer report financial lossesmore importantly financially illiterate households prone sell assets lost valuethereby losses become permanent households participate markets resurgencethis flight risky assets persistentthe financial crisis may prove traumatic experience shapes investment behavior gives rise serious distributional consequences households lower financial literacy face lower returns long run