New Economics Papers
on Business, Economic and Financial History
Issue of 2005‒04‒24
five papers chosen by

  1. All in the Family: A Dynasty Approach to Household Migration Evidence from the 19th Century Austro-Hungarian Empire By Alexander Klein
  2. British Investment Overseas 1870-1913: A Modern Portfolio Theory Approach By William N. Goetzmann; Andrey Ukhov
  3. Manufacturing Growth and Liberalisation in India (1960-1999): A Demand Side Analysis By Rahul Shastri
  4. Will History Rhyme? The Past as Financial Future By WILLIAM N. GOETZMANN
  5. AN INTERVIEW WITH FRANCO MODIGLIANI By William Barnett; Robert Solow

  1. By: Alexander Klein
    Abstract: This paper deals with the rural-urban migration of families in the last decades of the 19th century in one of the most developed regions of the Austro-Hungarian monarchy – the Pilsen region. The analysis indicates that the household head’s expected real rural-urban wage gap was not the main factor behind migration. Instead, the observed behavior is consistent with families maximizing a dynastic utility function such that it was the future prospects of children which triggered migration. The results are not based on tracing of families in time but rely on identifying a control group of stayers. Specifically, I compare the structure of migrant families at the time of arrival to an urban area with that of families who stayed in the hinterlands and to decipher migration motifs.
    Date: 2005–03
  2. By: William N. Goetzmann; Andrey Ukhov
    Abstract: Many scholars have asked whether British investors benefited from overseas investment investing in the 19th century and whether this export of capital had negative effects. We re-visit the issue using modern portfolio theory. We examine the set of investment opportunities available to British investors, the developments in information transmission technology, and advances in financial and investment theory at the time. We use mean-variance optimization techniques ot take into account the risk and return characteristics of domestic and international investments available to a British investor, and to quantify the beneifts from international diversification. Evidence suggests that capital export was a consequence of both the opportunity and the understanding of diversification. foreign assets offered higher rates of return, but equally important, they offered significant diversification benefits. Even when--by setting expected return on each foreign asset class equal to that of the corresponding UK asset class--we put foreign assets at a disadvantage, we find that it was rational for a British investor to include foreign debts and equity in the portfolio.
    JEL: F0
    Date: 2005–04
  3. By: Rahul Shastri (National Akademi of Development)
    Abstract: The trend in manufacturing has not shifted post-91. Liberalisation shares in the high trend phase in manufacturing, that was ushered in after 1981, which continued even after 1991. Liberalisation however, seems to have changed the structure of demand responses of manufacturing output. In contrast to pre-liberalisation years, after 1991, manufacturing growth seems to have become highly sensitive to growth in personal consumption expenditure. After 1991, a one percentage point increase in personal consumption expenditure seems to change manufacturing growth by nearly 2 percentage points! Liberalisation also seems to have increased the responsiveness of manufacturing growth to fluctuations in growth of gross capital formation and exports. However, the increase in responsiveness to changes in export growth is not statistically significant.
    Keywords: Liberalisation, Indian Manufacturing, Demand-side analysis, personal consumption, exports, Keynesian Economics
    JEL: A E L N
    Date: 2005–04–15
  4. By: WILLIAM N. GOETZMANN (Yale School of Management - International Center for Finance)
    Abstract: History demonstrates that global capital markets can contract as well as expand. A long-term view of finance suggests that we should prepare for periodic segmentation as well as integration of markets in the 21st Century. Anti-capitalist ideologies have historically been the vectors of attack on the cross-border flow of capital, however the fundamental cause may actually be domestic hostility towards foreign ownership and control. The roots of the conflict between domestic interests and foreign investors may be inherent in global equilibrium models. In a frictionless capital market, foreigners will always own a greater proportion of a small economy\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\'s assets. By the same token, domestic investors in small economies will always seek to export most of their capital. This equilibrium is at odds with a stable condition of national ownership and control of assets.
    JEL: N23 N24 F3
    Date: 2005–04–14
  5. By: William Barnett (Department of Economics, The University of Kansas); Robert Solow (MIT)
    Date: 2004–06

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