|
on Business, Economic and Financial History |
|
Issue of 2006‒01‒01
fifteen papers chosen by |
| By: | David Galenson |
| Abstract: | Pablo Picasso was by far the greatest artist of the 20th century: textbooks of art history contain more than twice as many illustrations of his work as of that of his closest rival, Henri Matisse. A survey of textbooks also identifies Jackson Pollock as the greatest American artist, by a narrow margin over Andy Warhol. The 15 greatest artists of the century include nine conceptual innovators, who made their greatest contributions early in their lives, in their 20s and 30s, and six experimental innovators, who generally did their greatest work in their 40s and 50s - and even, in the case of Mondrian, in his 70s. Contrary to the belief of many humanists, the textbooks show that in art, as in all intellectual activities, importance is determined by innovation. |
| JEL: | J0 J1 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11899&r=his |
| By: | Lee J. Alston; Jeffrey A. Jenkins; Tomas Nonnenmacher |
| Abstract: | We examine the politics of the “Salary Grab” of 1873, legislation that increased congressional salaries retroactively by 50 percent. A group of New England and Midwestern elites opposed the Salary Grab, along with congressional franking and patronage-based civil service appointments, as part of reform effort to reshape “who should govern Congress.” Our analyses of congressional voting confirm the existence of this non-party elite coalition. While these elites lost many legislative battles in the short-run, their efforts kept reform on the legislative agenda throughout the late-nineteenth century and ultimately set the stage for the Progressive movement in the early-twentieth century. |
| JEL: | D23 D72 D73 N41 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11908&r=his |
| By: | Michael D. Bordo; Christopher M. Meissner |
| Abstract: | What is the role of foreign currency debt in precipitating financial crises? In this paper we compare the 1880 to 1913 period to recent experience. We examine debt crises, currency crises, banking crises and the interrelation between these varieties of crises. We pay special attention to the role of hard currency debt, currency mismatches and debt intolerance. We find fairly robust evidence that high exposure to foreign currency debt does not necessarily lead to a high chance of having a debt crisis, currency crisis, or a banking crisis. A key finding is some countries do not suffer from great financial fragility despite high exposure to original sin. In the nineteenth century, the British offshoots and Scandinavia generally avoided severe financial meltdowns while today many advanced countries have high original sin but have had few financial crises. The common denominator in both periods is that currency mismatches matter. A strong reserve position or high exports relative to hard currency liabilities helps decrease the likelihood of a debt crisis, currency crisis or a banking crisis. This strengthens the evidence for the hypothesis that foreign currency debt is dangerous when mis-managed. We discuss the robustness of these results and make some general comparisons based on this evidence from over 60 years of intense international capital market integration. |
| JEL: | N1 N2 E5 F3 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11897&r=his |
| By: | Kevin H. O'Rourke; Jeffrey G. Williamson |
| Abstract: | In his seminal publications between the 1930s and 1960s, Frederick Lane offered three hypotheses regarding the impact of the Voyages of Discovery that have guided debate ever since. First, pepper and other spice prices did not rise in European markets in the century before the 1490s, and thus could not have ‘pulled in’ the oceanic explorations by their rising scarcity. Second, Portuguese circumnavigation of Africa did not lower European spice prices across the 16th century, implying that the discovery of the Cape route had no permanent effect on Euro-Asian market integration. Third, 15th century Venetian spice markets were already well integrated with those in Iberia and northern Europe, implying that Portugal could not have had an intra-European market integrating influence in the 16th century. Lane developed these influential hypotheses by relying heavily on nominal spice prices from Venice and the Levant. This paper revisits Lane’s hypotheses by using instead relative spice prices, that is, accounting for inflation. It also draws on evidence from Iberia and northern Europe. In addition, it explores European market integration before and after 1503, the year when da Gama returned from his financially successful second voyage. Lane’s three hypotheses are rejected: the impact of the Portuguese was profound on all fronts. We conclude by using a simple model of monopoly and oligopoly to decompose the sources of the Cape route’s impact on European markets. |
| JEL: | F14 N7 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11884&r=his |
| By: | Gauti B. Eggertsson |
| Abstract: | This paper argues that the U.S. economy's recovery from the Great Depression was driven by a shift in expectations brought about by the policy actions of President Franklin Delano Roosevelt. On the monetary policy side, Roosevelt abolished the gold standard and-even more important-announced the policy objective of inflating the price level to pre-depression levels. On the fiscal policy side, Roosevelt expanded real and deficit spending. Together, these actions made his policy objective credible; they violated prevailing policy dogmas and introduced a policy regime change such as that described in work by Sargent and by Temin and Wigmore. The economic consequences of Roosevelt's policies are evaluated in a dynamic stochastic general equilibrium model with sticky prices and rational expectations. |
| Keywords: | Depressions ; Gold standard ; Price levels ; Rational expectations (Economic theory) ; Economic policy |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:234&r=his |
| By: | Peter N. Ireland |
| Abstract: | This paper estimates a New Keynesian model to draw inferences about the behavior of the Federal Reserve’s unobserved inflation target. The results indicate that the target rose from 1- 1/4 percent in 1959 to over 8 percent in the mid-to-late 1970s before falling back below 2-1/2 percent in 2004. The results also provide some support for the hypothesis that over the entire postwar period, Federal Reserve policy has systematically translated short-run price pressures set off by supply-side shocks into more persistent movements in inflation itself, although considerable uncertainty remains about the true source of shifts in the inflation target. |
| Keywords: | Inflation (Finance) ; Monetary policy |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:05-13&r=his |
| By: | Farley Grubb |
| Abstract: | The War for Independence left the National Government deeply in debt. The spoils from winning that war also gave it an empire of land. So, post-1783, was the National Government solvent? Was its net asset position, land assets minus debt liabilities, positive or negative? Evidence is gathered to answer this question by constructing a yearly time series of its net asset position, including time series of the subcomponents of that position, from 1784 through 1802. The answer to this question may help explain the constraints that determined why the National Debt was funded in the particular way that it was. The results from the data series constructed indicate that the National Government was solvent, had more than enough land assets to cover its debt liabilities, in this period but only if it maintained the default on the Continental Dollar (its non-interest-bearing debt). To do this and not ruin its creditworthiness it had to distinguish, legally and in the marketplace, between its interest-bearing and its non-interest-bearing debt. It did this, in part, by only paying interest and no principal on its debts and by curtailing direct swaps of land for debt. |
| JEL: | E62 F34 G18 H60 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11868&r=his |
| By: | Alan Ahearne; Finn Kydland; Mark A. Wynne |
| Abstract: | We argue that Ireland experienced a great depression in the 1980s comparable in severity to the better known and more studied depression episodes of the interwar period. Using the business cycle accounting framework of Chari, Kehoe and McGrattan (2005), we examine the factors that lead to the depression and the subsequent recovery in the 1990s. We calculate efficiency, labor, investment and government wedges, and evaluate the contribution of each to the downturn and subsequent recovery. We find that the efficiency wedge on its own can account for a significant portion of the downturn, but predicts a stronger recovery in output. The labor wedge also helps account for what happened during the depression episode. We also find that the investment wedge played no role in the depression. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:05-10&r=his |
| By: | Ariel Mendez (LEST - Laboratoire d'économie et de sociologie du travail - http://www.univ-aix.fr/lest - CNRS : UMR6123 - Université de Provence - Aix-Marseille I;Université de la Méditerranée - Aix-Marseille II) |
| Abstract: | Cet article se propose de réfléchir, à partir d'un cas français, aux effets de la mondialisation sur l'organisation et la compétitivité des districts industriels. A la fin des années 80, les districts industriels et le modèle de la spécialisation flexible popularisé par Piore et Sabel ont été considérés comme une alternative au modèle de la grande entreprise intégrée. Mais, dans les années 90, les conditions de la concurrence internationale se sont durcies, et ce modèle a été mis à mal. Des zones géographiques florissantes quelques années plus tôt ont perdu des emplois, des activités ont été délocalisées. La concurrence internationale requiert aujourd'hui des caractéristiques que ne possèdent pas nécessairement les districts (niveau des volumes à produire, savoir codifié, standardisable, innovation radicale...). De plus, ces zones ont été investies par des entreprises extérieures qui y introduisent de nouvelles relations et qui n'hésitent pas à délocaliser la production, une fois captées les compétences qu'elles étaient venues chercher. Tout l'enjeu pour ces zones est de renouveler leurs compétences clés, de construire des ressources spécifiques intransférables qui résistent aussi bien à la concurrence des nouveaux pays producteurs qu'au « nomadisme » des entreprises multinationales. En prenant l'exemple de l'industrie aromatique et de la parfumerie de Grasse dans le sud est de la France, il s'agit ici de montrer que ce passage vers de nouveaux facteurs de compétitivité fait appel à de nouveaux modes de régulation ou de gouvernance de ces zones. Ces nouveaux modes de régulation suivent une double logique conjointe d'encastrement et de désencastrement. Désencastrement car l'évolution du district passe par une codification des savoirs, une formalisation des relations qui met à l'épreuve l'enracinement des relations économiques dans l'organisation sociale traditionnelle ; encastrement car de nouveaux acteurs se mobilisent pour maintenir l'activité, valoriser les compétences clés, en construire de nouvelles, souvent en capitalisant à partir des anciennes. |
| Keywords: | District industriel; Système productif localisé; Mondialisation; Compétitivité, Industrie aromatique et de la parfumerie; Grasse; France |
| Date: | 2005–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00007324_v1&r=his |
| By: | Leo van grunsven; Floor Smakman |
| Abstract: | This article aims to contribute to an understanding of the industrial dynamics/evolution of mature export production complexes in the first generation Asian NICs, employing an evolutionary economic perspective. Over the past decade and longer the first generation Asian NICs, Singapore included, have been confronted with imperatives necessitating deep restructuring. We observe that industrial decline, associated with failed restructuring caused by lock-in, does not fit these countries, its industrial regions and early industries. Yet research has hardly begun to look at adjustment and address deeper evolution from tenets in the framework of evolutionary economics although such an approach is made not less but rather more relevant by continued resilience. We analyse the pathway(s) of one early industry, i.c. the apparel industry, in Singapore, through the 1980s and 1990s. The withering away in the Singapore context of an industry such as apparel is not inevitable. From a juxtaposition of the line of thinking in evolutionary economics emphasizing hindrance and decline due to path dependency and lock-ins with an alternative line emphasizing the possibility to adjust through renewal and the limited operation of lock-ins, we argue why the latter rather than the former has been the case. |
| Keywords: | evolutionary economics, industrial restruction, Asia, NICs |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:0507&r=his |
| By: | David Laidler (University of Western Ontario) |
| Abstract: | Milton Friedman's contributions to macroeconomics are evaluated, with particular emphasis given to: the central role played by his work on the consumption function, money and monetary history in undermining "Keynesian" economics; the connection between his treatment of the macro-economy as an essentially dynamic system and his preference for policy rules; and the ambiguity of his views on the potential of the expectations-augmented Phillips curve to become the "missing equation" in his macro-economics. His longer run influence on both the actual conduct of monetary policy and the development of macro-economic theory is also assessed. |
| Keywords: | Friedman; macroeconomics; money; inflation; monetary policy; consumption; Keynesianism; monetarism |
| JEL: | B22 E20 E30 E40 E50 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:epuwoc:200511&r=his |
| By: | Ron A. Boschma; Rik Wenting |
| Abstract: | This paper aims to describe and explain the spatial evolution of the automobile sector in Great Britain from an evolutionary perspective. This analysis is based on a unique database of all entries and exits in this sector during the period 1895-1968, collected by the authors. Cox regressions show that spinoff dynamics, localization economies and time of entry have had a significant effect on the survival rate of automobile firms during the period 1895-1968. |
| Keywords: | evolutionary economics, automobile industry, entry, exit |
| Date: | 2004–08 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:0504&r=his |
| By: | Ludwig van den Hauwe |
| Abstract: | This paper is the sequel to chapter 30 of the 1999 first edition of The Elgar Companion to Law and Economics (ed. J. Backhaus). A new section has been added entitled 'An application of Hayekian law and economics: the comparative analysis of alternative monetary and banking regimes'. |
| Keywords: | Hayek, Law and Economics, business cycle theory, monetary and banking regimes, law-based macroeconomics |
| JEL: | K |
| Date: | 2005–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwple:0512004&r=his |
| By: | Dominique Finon (CIRED - Centre International de Recherche sur l'Environnement et le Développement - http://www.centre-cired.fr - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales;Ecole Nationale du Génie Rural des Eaux et des Forêts;Ecole Nationale des Ponts et Chaussées) |
| Abstract: | Une analyse de l'histoire de l'électrification des pays développés montre qu'il n'y a pas eu de voie institutionnelle et financière unique pour structurer et organiser l'industrie électrique et l'étendre ensuite aux zones rurales. Une variété des trajectoires de cinq décennies riche en enseignements pour les pays émergents et en développement qui doivent aujourd'hui assurer l'achèvement de leur programme d'électrification. |
| Keywords: | électrification; régime institutionnel; OCDE |
| Date: | 2005–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00007216_v1&r=his |
| By: | Frederic Mishkin |
| Abstract: | This lecture examines whether financial globalization is beneficial to developing countries by first examining the evidence on financial development and economic growth and concludes that financial development is indeed a key element in promoting economic growth. It then asks why if financial development is so beneficial, it often doesn't occur. It then goes on to examine whether globalization, particularly of the financial kind, can help encourage financial and economic development and argues that it can. However, financial globalization does not always work to encourage economic development because it often leads to devastating financial crises. The issue is thus not whether financial globalization is inherently good or bad, but whether it can be done right. |
| JEL: | F02 O10 O16 G20 |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11891&r=his |