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on Business, Economic and Financial History |
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Issue of 2006‒11‒04
sixteen papers chosen by |
| By: | Rafael Dobado González (Universidad Complutense de Madrid. Facultad de Ciencias Económicas y Empresariales. Dept. de Historia Económica); Aurora Gómez Galvarriato (CIDE. Division of Economics. México); Jeffrey G. Williamson (Harvard University. Department of Economics) |
| Abstract: | Like the rest of the poor periphery, Mexico had to deal with de-industrialization forces between 1750 and 1913, those critical 150 years when the economic gap between the industrial core and the primary-product-producing periphery widened to such huge dimensions. Yet, from independence to mid-century Mexico did better on this score than did most countries around the periphery. This paper explores the sources of Mexican exceptionalism with de-industrialization. It decomposes those sources into those attributable to productivity events in the core and to globalization forces connecting core to periphery, and to those attributable to domestic forces specific to Mexico. It uses a neo-Ricardian model (with non-tradable foodstuffs) to implement the decomposition, and advocates a price dual approach, and develops a new price and wage data base 1750-1878. There were three forces at work that account for Mexican exceptionalism: first,the terms of trade and Dutch disease effects were much weaker; second, Mexico maintained secular wage competitiveness with the core; and third, Mexico had the autonomy to devise effective ways to foster industry. The first appears to have been the most important. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doctra:06-03&r=his |
| By: | David S. Jacks; Christopher M. Meissner; Dennis Novy |
| Abstract: | We use a new measure of total trade costs at the bilateral country level to examine the change in international trade integration between 1870 and 1913. Trade costs are lowest amongst the most developed countries and highest in the peripheral and poor countries. On average, our measure declined by roughly ten percent during the period declining most slowly in the richest countries. Core-periphery dyads saw the fastest declines. We sort the determinants of trade costs into four main categories: geographic, political, transportation/communications and institutional/cultural. We find that all of these factors play a role in explaining the variation in the data. Transportation costs and other factors related to proximity seem to explain the largest fraction of the variance. Membership in the British Empire and a shared language are also of great importance. Tariffs, and increased exchange rate regime coordination play a strong role too. Finally we find that reductions in trade costs explain roughly 40 percent of the global trade boom. Economic expansion accounts for the rest. |
| JEL: | F15 N70 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12602&r=his |
| By: | Hatton, Timothy J.; Williamson, Jeffrey G |
| Abstract: | This paper asks whether history can shed light on the modern debate about immigration's labour market impact in high wage economies. It examines the relationship between migration and capital flows in the age of mass migration before 1914, the so-called first global century. It then assesses the effects of immigration on wages and employment with and without international capital mobility in first global century and today, that is, the second global century. The paper then explores the links between these economic relationships and immigration policy. It concludes with an explanation for the apparent difference in immigration's impact in the two global centuries, and thus on policy. |
| Keywords: | capital mobility; history; immigration; labour market impact; policy |
| JEL: | F22 J1 O15 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5885&r=his |
| By: | Gary Richardson; William Troost |
| Abstract: | The Federal Reserve Act of 1913 divided Mississippi between the 6th (Atlanta) and 8th (St. Louis) Federal Reserve Districts. Before and during the Great Depression, these districts' policies differed. The Atlanta Fed championed monetary activism and the extension of credit to troubled banks. The St. Louis Fed adhered to the doctrine of real bills and eschewed expansionary initiatives. Outcomes differed across districts. In the 6th District, banks failed at lower rates than in the 8th District, particularly during the banking panic in the fall of 1930. The pattern suggests that discount lending reduced failure rates during periods of panic. Historical evidence and statistical analysis corroborates this conclusion. |
| JEL: | E5 E6 E65 N1 N2 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12591&r=his |
| By: | Robert H. Bates; John H. Coatsworth; Jeffrey G. Williamson |
| Abstract: | Africa and Latin America secured their independence from European colonial rule a century and half apart: most of Latin America after 1820 and most of Africa after 1960. Despite the distance in time and space, they share important similarities. In each case independence was followed by political instability, violent conflict and economic stagnation lasting for about a half-century (lost decades). The parallels suggest that Africa might be exiting from a period of post-imperial collapse and entering a period of relative political stability and economic growth, as did Latin America a century and a half earlier. |
| JEL: | N0 O10 O54 O55 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12610&r=his |
| By: | Genesove, David |
| Abstract: | A firm that introduces a new good enjoys monopoly profits for some initial period of time. What happens subsequently depends upon the relative strength of knowledge diffusion and increasing dominance. The first effect enhances challengers’ ability to develop the product, erodes the incumbent’s monopoly power, while the second, which concerns the relative net cost of the incumbent to challengers in production, strengthens it. This paper exploits the near total disruption of imports of German dyes to the United States during World War I and the immediate post-War period, and the subsequent re-entry of the Germans to the market, to separately estimate the first effect. The results show that while (a) the probability of a dye was imported in 1913-1914 bore no relation to its year of discovery, (b) the probability it was produced in 1917 by the new American manufacturers was greater by one and a half percent per year, the earlier the year of discovery. Coupled with the estimated semi-elasticity of the probability of production with respect to the volume of imports in 1914, and assuming prospective profits were proportional to that volume, one obtains that every additional year since discovery decreased the expected cost of developing the dye by 19 to 25%. The paper shows, additionally, that after German imports were able to resume, the probability of a dye being imported in 1923, given that the Americans were already producing it, was independent of the year of discovery – implying that the discovery year is an appropriate proxy for the amount of development relevant knowledge that had diffused through the industry. |
| Keywords: | dyes; increasing dominance; innovation; knowledge diffusion |
| JEL: | L65 O31 O33 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5890&r=his |
| By: | Gary Richardson |
| Abstract: | During the contraction from 1929 through 1933, the Federal Reserve System tracked changes in the status of all banks operating in the United States and determined the cause of each bank suspension. This essay introduces that hitherto dormant data and analyzes chronological patterns in aggregate series constructed from it. The analysis demonstrates both illiquidity and insolvency were substantial sources of bank distress. Contagion (via correspondent networks and bank runs) propagated the initial banking panics. As the depression deepened and asset values declined, insolvency loomed as the principal threat to depository institutions. These patterns corroborate some and question other conjectures concerning the causes and consequences of the financial crisis during the Great Contraction. |
| JEL: | E42 E5 E65 N1 N12 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12590&r=his |
| By: | Han Kim, E; Morse, Adair; Zingales, Luigi |
| Abstract: | We compile the list of articles published in major refereed economics journals during the last 35 years that have received more than 500 citations. We document major shifts in the mode of contribution and in the importance of different sub-fields: Theory loses out to empirical work, and micro and macro give way to growth and development in the 1990s. While we do not witness any decline in the primacy of production in the United States over the period, the concentration of institutions within the U.S. hosting and training authors of the highly-cited articles has declined substantially. |
| Keywords: | citations; innovations in economics |
| JEL: | A11 B20 O33 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5873&r=his |
| By: | Reuben Gronau |
| Abstract: | An important part of the literature on regulatory economics is based on the US experience, where a well-established regulator faces a privately owned monopoly. It is sometimes forgotten that this model does not apply in many places where a newly established regulator faces a government owned, or a newly privatized, company. It definitely does not apply to the case of the Israeli communication industry where the government serves as regulator and at the same time is the owner of the wireline monopolist. The paper follows the regulatory experience of the Israeli communication industry over the last 20 years, analyzing its impact on consumers' welfare, the monopoly's profitability and its productivity. Though the Israeli institutions may look to a Western observer today as unique they were quite common in most of the developed economies prior to the wave of privatizations and deregulation in the 90s. The lessons learned from the Israeli experience have, however, more than a historic interest, and may be relevant for the regulatory process in general. |
| JEL: | K2 L43 L5 L51 L96 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12617&r=his |
| By: | Andrea Kutinova (University of Canterbury) |
| Abstract: | During the conflict in Vietnam, married men with dependents could obtain a deferment from the draft. In 1965, following President Johnson's Executive Order 11241 and a subsequent Selective Service System announcement, the particulars of this policy changed substantially in a way which provided strong incentives for childless American couples to conceive a first-born child. This study examines the effects of the intervention on the decision to start a family. In my empirical analysis, I extract data from the Vital Statistics for the period 1963-1968 and employ a difference-in-differences methodology. The estimated magnitude of the effect is substantial. |
| Keywords: | Timing of Births; Draft; Vietnam War |
| JEL: | J18 |
| Date: | 2006–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:06/10&r=his |
| By: | Fabio Sánchez; Andrés Fernández; Armando Armenta |
| Abstract: | Between 1938 and 1967, including the Bretton Woods period after 1947, Colombia pegged its currency to the dollar. Although the exchange rate was fixed, the peso was devaluated more than 12% on six occasions. The devaluation episodes were complex, traumatic, highly politicized and had costly macroeconomic effects. The Bretton Woods agreement stated that countries could only devalue their exchange rate in the presence of fundamental imbalances driven, for example, by structural terms of trade deterioration. However, this paper states that in Colombia, the imbalance in the money market was a key factor in explaining the exchange rate crises during the period. The paper is organized as follows: first, a simple theoretical model of a small open economy with imperfect capital mobility is described in order to examine the possible causes of nominal devaluations; second, a narrative approach is used to describe the economic circumstances that surrounded each of the devaluation episodes; finally, a set of econometric tests are used in order to identify the key variables behind the macroeconomic imbalances that preceded each exchange rate crisis. The results show that the external imbalances were mainly associated with the imbalances in the money market. Terms of trade deterioration account for just a small part of current account crises |
| Date: | 2006–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:col:001049:002684&r=his |
| By: | Pamela Kaval (University of Waikato) |
| Abstract: | The results of outdoor recreation consumer surplus studies for national parks, national forests, state parks and state forests in the United States from 1968 through 2003 are compared and analyzed across activity type, locational region, and park designation. The resulting data set includes 1,229 observations, spanning 36 years, 28 types of activities, and 106 locations. All consumer surplus data were converted to 2006 United States dollars per person per day for comparison purposes. It was discovered that activity and park type played a significant role in consumer surplus values. Activities such as mountain biking, windsurfing, and rock-climbing were among the highest valued activities while visiting environmental education centers was the lowest. When comparing park types, it was found that on average, activities at National Parks had higher values than national forests, state parks, or state forests. This meta-analysis is the most extensive literature review in the history of non-market consumer surplus values for outdoor recreation in the United States ever conducted and should prove beneficial to anyone seeking information on outdoor recreation studies as well as those wishing to conduct a benefit transfer analysis for their own land management area. |
| Keywords: | consumer surplus values; non-market valuation; Outdoor recreation; benefit transfer |
| JEL: | Q26 |
| Date: | 2006–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:06/11&r=his |
| By: | Philippe, LEDENT (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics); Isabelle, CASSIERS |
| Abstract: | This paper analyses the Belgian monetary and exchange rate policies at the time of Bretton Woods. It sheds light on the groping adjustment process by which internal economic policies are hit by or adapt to the external constraints. In 1944, an ambitious monetary reform laid down the economic policy objectives that remained in force for two decades, namely price stability and strong currency. However, we point out different incompatibilities between these objectives and the economic context of the 1950s and 1960s that could have negative consequences on Belgian economic growth?. More precisely, the long lasting European currencies inconvertibility (1944-1958) contradicted the orthodox approach of the monetary policy favoured by the Central Bank. When total convertability was finally achieved, the huge increase of capital movements led to a progressive loss of the monetary policy autonomy, despite the setting up of a two-tier exchange market, which can be viewed as an institutional innovation responding to new constraints. |
| Keywords: | Monetary policy, Bretton Woods, Currency inconvertibility, Capital movements, Two-tier exchange market |
| JEL: | N14 N24 E58 E65 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2006032&r=his |
| By: | Lönnroth, Johan (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Göteborgarna har alltid känt sig mer eller mindre missgynnade av staten, det gäller inte minst den högre utbildningen alltsedan Lund konkurrerade ut Göteborg vid tillkomsten av landets andra universitet. Nästan alla skolor och kulturinstitutioner tillkom här efter privata initiativ och donationer från i första hand stadens ekonomiska makthavare. Inspiratörer var också kulturidealisterna Grundtvig och SA Hedlund, som ville ha en ”(examens)fri akademi” som skulle vända sig till en bredare publik än de traditionella universiteten. Inriktningen på ekonomutbildningen kom därmed att präglas av folkbildningsambitioner, socialpolitik och praktiskt hantverk. Stadens första professurer i nationalekonomi, Gustaf Steffen och Gunnar Silverstolpe, passade väl in i detta mönster. Traditionen fördes vidare av den nya vänster som en period på 70-talet satte sin prägel på ämnet. <p> |
| Keywords: | Göteborgsskolan; Steffen; Silverstolpe |
| JEL: | B00 |
| Date: | 2006–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0235&r=his |
| By: | Thomas Sargent; Noah Williams; Tao Zha |
| Abstract: | We infer determinants of Latin American hyperinflations and stabilizations by using the method of maximum likelihood to estimate a hidden Markov model that potentially assigns roles both to fundamentals in the form of government deficits that are financed by money creation and to destabilizing expectations dynamics that can occasionally divorce inflation from fundamentals. Our maximum likelihood estimates allow us to interpret observed inflation rates in terms of variations in the deficits, sequences of shocks that trigger temporary episodes of expectations driven hyperinflations, and occasional superficial reforms that cut inflation without reforming deficits. Our estimates also allow us to infer the deficit adjustments that seem to have permanently stabilized inflation processes. |
| JEL: | D83 E31 E52 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12606&r=his |
| By: | Fernando Méndez Ibisate |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doctra:06-04&r=his |