nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2005‒11‒19
eleven papers chosen by
Bernardo Batiz-Lazo
Bristol Business School

  1. The Transformation of Hunger: The Demand for Calories Past and Present By Trevon D. Logan
  2. Globalisation, inequality and Swedish catch up in the late nineteenth century. Williamson’s real wage comparisons under scrutiny By Larsson, Svante
  3. Inside the Economist's Mind: The History of Modern Economic Thought, as Explained by Those Who Produced It By William A. Barnett; Paul A. Samuelson; E. Roy Weintraub
  4. Linking Strategic Interaction and Bargaining Theory. The Harsanyi - Schelling Debate on the Axiom of Symmetry By Alessandro Innocenti
  5. Origen y evolucion de la manufactura en el interior. El caso de Bahía Blanca By Viego Valentina
  6. Dynamic Limited Dependent Variable Modeling and US Monetary Policy By George Monokroussos
  7. Thy neighbour’s property. Communal property rights and institutional change in an iron producing forest district of Sweden 1630-1750 By Granér, Staffan
  8. Cantillon, Quesnay, and the Tableau Economique. By Anthony Brewer
  9. Parallel Monies, Parallel Debt: Lessons from the EMU and Options for the New EU By Giorgio Basevi; Lorenzo Pecchi
  10. Institutional Economics at the Micro Level? What Transaction Costs Theory Could Listen From Original Institutionalism (In the Spirit of Building Bridges) By Huascar Pessali; Ramon Fernandez
  11. The national varieties of capitalism: the cases of Wal-mart and Ikea By Suzanne Konzelmann; Charles Craypo; Rabih Aridi; Frank Wilkinson

  1. By: Trevon D. Logan
    Abstract: According to conventional income measures, nineteenth century American and British industrial workers were two to four times as wealthy as poor people in developing countries today. Surprisingly, however, today's poor are less hungry than yesterday's wealthy industrial workers. I estimate the demand for calories of American and British industrial workers using the 1888 Cost of Living Survey and find that the estimated calorie elasticities for both American and British households are greater than calorie elasticity estimates for households in present day developing countries. The results are robust to measurement error, unreported food consumption, and indirect estimation bias. This finding implies substantial nutritional improvements among the poor in the twentieth century. Using the Engel curve implied by the historical calorie elasticities, I derive new income estimates for developing countries which yield income estimates that are six to ten times greater than those derived using purchasing power parity or GDP deflators.
    JEL: D12 I12 I31 J10 N31
    Date: 2005–11
  2. By: Larsson, Svante (Department of Economic History, School of Economics and Commercial Law, Göteborg University)
    Abstract: The idea of rapid factor price convergence in the latter half of the nineteenth century stems from an article from 1995 by Jeffrey Williamson. That article presented real wage comparisons of unskilled urban workers for seventeen countries. Sweden, along with the rest of Scandinavia, appeared to be an influential case in accounting for much of the alleged factor price convergence taking place. This paper takes a closer look at all the three steps that have to be accomplished in order to establish real wage comparisons focusing on Sweden in relation to the US and the UK. The most important finding is twofold. First, that the US-Sweden wage gap is considerably smaller for industrial than for building workers, and second, that the rate at which Sweden’s real wages approached the American and the British has been overestimated. Swedish real wages did grow rapidly, but not as rapidly as Williamson’s comparison will have us to believe, because his real wage series does not constitute a representative account of the Swedish real wage experience. I argue that as we suffer from a serious paucity of data for narrow and thereby comparable selections of unskilled workers resorting to encompassing wage measures is a more viable option. <p>
    Keywords: Economic History; Globalisation; Real wage; Convergence; Inequality
    JEL: F31 J31
    Date: 2005–11–08
  3. By: William A. Barnett (University of Kansas); Paul A. Samuelson (MIT); E. Roy Weintraub (Duke University)
    Abstract: This is the front matter from a book of interviews to be published by Blackwell. The book is coedited by W. A. Barnett and P. A. Samuelson. The front matter includes the Table of Contents, Coeditor Preface by W. A. Barnett, Coeditor Foreword by Paul A. Samuelson, and History of Thought Introduction by E. Roy Weintraub. The front matter highlights some of the more startling and controversial statements contained in the interviews and puts the interviews into context relative to the history of modern economic thought. The interviews reprinted in this book include: (1) Wassily Leontief interviewed by Duncan Foley. (2) David Cass interviewed jointly by Steven Spear and Randall Wright. (3) Robert E. Lucas interviewed by Bennett T. McCallum. (4) Janos Kornai interviewed by Olivier Blanchard. (5) Franco Modigliani interviewed by William Barnett and Robert Solow. (6) Milton Friedman interviewed by John Taylor. (7) Paul A. Samuelson interviewed by William A. Barnett. (8) Paul Volcker interviewed by Perry Mehrling. (9) Martin Feldstein interviewed by James Poterba. (10) Christopher Sims interviewed by Lars Peter Hansen. (11) Robert Shiller interviewed by John Campbell. (12) Stanley Fischer interviewed by Olivier Blanchard. (13) Jacques Drèze interviewed by Pierre Dehez and Omar Licandro. (14) Tom Sargent interviewed by George Evans and Seppo Honkapohja. (15) Robert Aumann interviewed by Sergiu Hart. (16) James Tobin and Robert Shiller interviewed by David Colander.
    Keywords: history of economic thought, Samuelson, macroeconomics, microeconomics, policy, interviews
    JEL: B
    Date: 2005–11–17
  4. By: Alessandro Innocenti
    Abstract: This paper analyses the early contributions of John Harsanyi and Thomas C. Schelling to bargaining theory. In his work, Harsanyi (1956) draws Nash’s solution to two-person cooperative games from the bargaining model proposed by Zeuthen (1930). Whereas Schelling (1960) proposes a multi-faceted theory of conflict that, without dismissing the assumption of rational behaviour, points out some of its paradoxical consequences. Harsanyi and Schelling’s contrasting views on the axiom of symmetry, as postulated by Nash (1950), are then presented. The analysis of this debate illustrates that, although in the early 1960s two different approaches to link strategic interaction and bargaining theory were proposed, only Harsanyi’s insights were fully developed later. Lastly, the causes of this evolution are assessed.
    Keywords: bargaining, game theory, symmetry
    JEL: B21 B41 C78
    Date: 2005–11
  5. By: Viego Valentina (UNSUR)
    Abstract: Bahía Blanca has been posed as the main Southern city of the country (both in population and economic terms) by various works in the field of economic geography. In particular, it has been emphasized its leading manufacturing sector (historically oriented to exports) and its role as center of supply for most Patagonian towns. This economic function has been spreaded by the slogan “Bahía Blanca, port and door of Argentinian South”, targeted to unify heterogeneous visions about the city role in the hierarchy of urban spaces at national scale. In some way, these elements have driven the hypothesis –especially between local bourgeoisie and politicians- that local economic development process has surpassed a critical threshold, avoiding thus future drawbacks. This presentation offers a review of main factors that contributed, a hundred years ago, to the emergence of manufacturing firms in Bahía Blanca and of the elements that explain its ongoing evolution. Perspectives on local industrial growth derived from this analysis will be compared with former vision. During the exposition, it will be reveled that the initial role attributed by local bourgeoisie to Bahía Blanca has been more a transitory than a permanent feature.
    Keywords: local development, industrialization, industrial history
    JEL: N
    Date: 2005–11–15
  6. By: George Monokroussos (Economics UCSD)
    Abstract: I estimate, using real-time data, a forward-looking monetary policy reaction function that is dynamic and that also accounts for the fact that there are substantial restrictions in the period-to-period changes of the Fed's policy instrument. I find a substantial contrast between the periods before and after Paul Volcker's appointment as Fed Chairman in 1979, both in terms of the Fed's response to expected inflation and in terms of its response to the (perceived) output gap: In the pre-Volcker era the Fed's response to inflation was substantially weaker than in the Volcker-Greenspan era; conversely, the Fed seems to have been more responsive to real activity in the pre-Volcker era than later
    JEL: C25 E52 E58
    Date: 2005–11–11
  7. By: Granér, Staffan (Department of Economic History, School of Economics and Commercial Law, Göteborg University)
    Abstract: This paper focuses on the development of property rights to village com-mons, as they appear in the court rolls of a legal district in Sweden in the late 17th and the early 18th century. A development of agrarian property rights, from comparably attenuated towards more exclusive and private ones, has been considered one of the most important and crucial aspects of economic modernisation. To explain and analyse this development two, not necessarily incompatible, theoretical approaches can be identified. The neo-institutional property rights approach focuses on economising behav-iour among individual agents in relation to factors such as enforcement and transaction costs, relative prices, market integration and contracts. A more sociological, or class based, property relations approach focuses on factors such as power structure, distribu-tion, exploitation and social networks. In this area the regulation and privatisation of access to commonly controlled woodlands and pastures plays an important role. Immi-gration, population growth, colonisation, and a rapid establishment of iron mills in the 1690’s, contributed to a commercialisation of economic relations, and to an increased scarcity of commonly managed resources such as wood, charcoal and waterpower. This put considerable strain on traditional local conceptions of rights. A significant part of the legal cases reflects disputes over rights to village commons and the resources that they contain. The long-run result of this process could be described as a kind of enclosure where communal and socially embedded rights were gradually redefined. <p>
    Keywords: Economic History; Sweden; Property Rights; Common Rights; Institutional Change; Enclosure; Forest History
    JEL: K11 N23 N43 N53 Q15
    Date: 2005–11–08
  8. By: Anthony Brewer
    Abstract: Schumpeter argued, long ago, that Quesnay's tableau economique was based on Cantillon, but this claim has never been spelled out in detail and seems not to have been generally accepted, since many writers still write of the tableau economique as though it were Quesnay's alone. This paper examines the relation between Cantillon and Quesnay in more detail than before and argues (a) that the relation between Cantillon's analysis of circulation and Quesnay's tableau is too close to be a coincidence, but (b) that the use Quesnay put it to is quite different from its role in Cantillon's system.
    Keywords: Cantillon, Quesnay, Tableau Economique
    JEL: B11
    Date: 2005–10
  9. By: Giorgio Basevi (University of Bologna - Department of Economics); Lorenzo Pecchi (University of Rome II; University of Rome II)
    Abstract: In 1975 Niels Thygesen, together with eight other economists - one of us among them - published in The Economist a "manifesto" proposing a new common currency for Europe (Basevi et al., 1975). His co-operation on this subject was pursued within a smaller group, and resulted in the publication of two reports for the EU Commission (Optica Report '75, Optica Report 1976). The proposal in the "manifesto" was ironically re-titled, by The Economist, "The All Saints' day manifesto for European monetary union". In fact it had been published on 1st November, and the "Saints" should have been, according to The Economist, the European Governments if they had adopted and adhered to the proposal. This amounted to launching a new currency that should have circulated in parallel to the national ones, related to them by flexible exchange rates, due to the constraint that such new currency, the "Europa", had to be kept by an automatic formula at fixed purchasing power. In fact the Europa was to be indexed to the inflation rates in the participating countries, according to the weights of their national currencies in what at that time was called the European Unit of Account. As for the two other reports, Optica '75 proposed again a parallel currency, but less than fully inflation-proof, since its standing in terms of purchasing power would have been the same as that of the currency of the member country with the lowest inflation rate. In the Optica 1976 Report, while reiterating the proposal of a parallel currency along the lines of Optica '75, the focus was on designing a joint management of intra-European exchange rates on the basis of inflation differentials. The proposals contained in the three documents where premature, perhaps visionary. On 7 July 1978 the European Council met in Bremen and drew the lines of the European Monetary System, which started on 13 March 1979, on the basis, among other things, of a new quasi-currency - the European Currency Unit (ECU) - composed of a basket of national currencies. Since then, it took almost twenty years before the euro was introduced, replacing the ECU on 1st January 1999. Comparing the euro to such proposals, we note at least two differences. The euro (a) did not start as a parallel currency, but replaced with a pre-announced schedule the national currencies of the countries participating in the monetary union, and (b) it was not conceived as an automatically inflation-proof currency, but one issued by a Central Bank bound by a monetary policy aimed at price stability.
    Date: 2005–04–04
  10. By: Huascar Pessali (Universidade Federal do Parana); Ramon Fernandez (Universidade Federal do Parana)
    Abstract: Inertia in academia sometimes obstructs the development of important insights. That is one reason for the specially long gap separating Coase's seminal paper [1937] that laid the foundations of current Transaction Cost Economics (TCE) and the efforts of scholars to develop his ideas. But as TCE evolved and merged with the name of Oliver Williamson, it has absorbed a tension 'between an intuitive commitment to realism...and his commitment to some core presumptions of mainstream economics' [Hodgson 1998]. Most TCE scholars seem to rely on the latter commitment, and this could mean losing a chance of enriching economics in its methodological and theoretical foundations. This paper regroups and comments criticisms from 'Original' Institutional Economics (OIE) to TCE in the spirit of building bridges on: i) discrepancies among TCE’s and Commons’ concepts of transaction; ii) TCE’s use of efficiency as a status quo rationalization; iii) the static analysis that ignores institutional feed-backs; iv) the assumption of opportunism; and v) the incompatibility of bounded rationality and optimizing behavior.
    Keywords: Transaction cost economics, institutional economics, Oliver Williamson, new institutional economics, institutionalism, transaction costs, theories of the firm, economic organisation
    JEL: L
    Date: 2005–11–14
  11. By: Suzanne Konzelmann; Charles Craypo; Rabih Aridi; Frank Wilkinson
    Abstract: Using the cases of Wal-Mart and IKEA, this paper takes a productive systems approach to examine Ôvarieties of capitalismÕ from the perspective of the ways by which production and market relations are structured and prioritised. It considers the nature of these relations and their interaction within the domestic economy and the ways that firms and national systems interact with each other in the global economy. It examines the processes by which trading standards are transported via supply chain relationships, which ultimately become embedded in products and recognized by consumers at various stages. In this analysis, the cases of Wal-Mart and IKEA provide insight into the ways by which national systems extend themselves globally, their contrasting effects on the business environments in host localities, and the impact of the resulting supply chain relations on organizational performance.
    Keywords: varieties of capitalism, supply chain relations, employment relations, globalisation, retail sector, IKEA and Wal-Mart
    JEL: J80 L10 L20 L81 M14 M50

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