nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2006‒12‒04
thirty papers chosen by
Bernardo Batiz-Lazo
Bristol Business School

  2. From the Washington towards a Vienna Consensus? A quantitative analysis on globalization, development and global governance By Tausch, Arno
  3. Explicit Evidence on an Implicit Contract By Young, Andrew; Levy, Daniel
  4. Development of Industrial Cluster By Kumar, Sudesh
  5. Mahatma Gandhi and the Prisoner’s Dilemma: Strategic Civil Disobedience and Great Britain’s Great Loss of Empire in India By Siddiky, Chowdhury Irad Ahmed
  6. Anarchy, State, and Dystopia: Venezuelan Economic Institutions before the Advent of Oil. By Francisco Rodríguez; Adam J. Gomolin
  7. Other People’s Money: The Evolution of Bank Capital in the Industrialized World By Richard S. Grossman
  8. Stories of Error and Vice Matter: Path Dependence, Paul David, and Efficiency and Optimality in Economics By Yalcintas, Altug
  9. SOBRE A FILOSOFIA MORAL DE ADAM SMITH By Hugo E. A. da Gama Cerqueira
  10. Monetary Policy Neglect and the Great Inflation in Canada, Australia, and New Zealand. By Nelson, Edward
  11. Cluster dynamics and innovation in SMEs: the role of culture By Callegati Enrico; Grandi Silvia
  12. Decomposing violence: terrorist murder in the twentieth century in the U.S. By Gomez-sorzano, Gustavo
  15. Evolving Economics: Synthesis By Stanton, Angela A.
  16. The Status of Women Economists in the U.S. — and the World By Joyce P. Jacobsen
  17. Entrepreneurship and market order: Some historical evidence By Bitros, George; Minoglou, Ioanna
  18. Domestic and International Knowledge Spillovers in the South Korean Manufacturing Industries. By Singh, Lakhwinder
  19. ARAXÁ, 1816-1888: POSSE DE ESCRAVOS, ATIVIDADES PRODUTIVAS, RIQUEZA By Déborah Oliveira Martins dos Reis
  20. A model of cyclical terrorist murder in Colombia, 1950-2004. Forecasts 2005-2019 By Gomez-Sorzano, Gustavo
  23. Teoria economica,filosofia e matematica. La riflessione a Vienna nel Wiener Kreis e nel Mathematische Kolloquium, 1922-1938 By Becchio Giandomenica; Marchionatti Roberto
  25. INSTITUIÇÕES E DIFERENÇAS DE RENDA ENTRE OS ESTADOS BRASILEIROS: UMA ANÁLISE HISTÓRICA By Naércio Menezes-Filho; Renato Leite Marcondes; Elaine Toldo Pazello; Luiz Guilherme Scorzafave
  26. Growth and inequalities of height in Brazil (1939-1981) By Monasterio, Leonardo M; Noguerol, Luiz Paulo
  28. ALFRED MARSHALL ON BIG BUSINESS By Jaques Kerstenetzky
  29. East Asian Financial Crisis of 1997 Revisited: Is it Possible to Devise an Early Warning System? By Feridun, Mete
  30. Computer equipment as general purpose technologies: the effects on productivity in the italian case, 1995-2002 By Quatraro Francesco

  1. By: Ignacio Briones; André Villela
    Date: 2006
  2. By: Tausch, Arno
    Abstract: This publication empirically evaluates and develops core aspects of the literature on global governance. Analyzing world social, gender, ecological and economic development on the basis of the main 9 predictors, compatible with the majority of the more than 240 published studies on the cross-national determinants of the “human condition” around the globe, it presents the results of 32 equations about development performance from 131 countries. We come to the conclusion that while there is some confirmation for the “blue”, market paradigm as the best and most viable way of world systems governance concerning economic growth, re-distribution and gender issues, the “red-green” counter-position is confirmed concerning such vital and basic indicators as life expectancy and the human development index. This work also challenges the neo-liberal consensus about democracy and the pure market economy as the way to development, equality, a good environment and peace by showing that selected market interventions and the fairly regulated regime of the early post-war years assured stability in Europe and Japan and contributed to social and economic recovery from the Great Depression and the Second World War. Present attempts to stabilize the world order by bringing in the major western industrialized countries plus Russia (the so-called G-8, composed by France; United States; United Kingdom; Russian Federation; Germany; Japan; Italy; Canada; European Union) must face up to the fact that these countries represent a declining part of world purchasing power. The rise of Asia makes the present G7/G8 structure increasingly irrelevant. This publication also re-establishes the notion that capitalist development is of cyclical nature, with strong fluctuations every 50 years. For us 1756, 1832, 1885, 1932 and 1975 are the beginnings of new Kondratiev waves, while 1756, 1774, 1793, 1812, 1832, 1862, 1885, 1908, 1932, 1958, 1975, and 1992 are the turning points (troughs) of the Kuznets cycles. So, where are we now? 1870? 1913? 1938? World systems theory is full of speculation about the future, and much of world systems research writing projects a major global war by around 2020 or 2030. The danger arises that instability and not democratization will triumph in the end in the countries of the periphery and the semi-periphery, especially in countries like those of the former USSR. We also show that Europe’s crisis is not caused by what the neo-liberals term a “lack of world economic openness” but rather, on the contrary, by the enormous amount of passive globalization that Europe – together with Latin America – experienced over recent years. The “wider Europe” of the EU-25 is not too distantly away from the social realities of the more advanced Latin American countries. So, what should be done? By the governments of the world, and by the globalization critical social movements? Only a movement towards global democracy is the valid answer to the fact that the peoples of the world live in a single global social system. The establishment of a European democratic federal state would be the first and most important step in the direction of a socio-liberal world democracy.
    Keywords: Key words: Cross-Section Models; Income Distribution; Prices; Business Fluctuations; and Cycles – General; International Economic Order; Inequality; Economic Integration: General
    JEL: F02 D31 E00 C21 F5
    Date: 2006
  3. By: Young, Andrew; Levy, Daniel
    Abstract: We offer the first direct evidence of an implicit contract in a goods market. The evidence we offer comes from the market for Coca-Cola. We demonstrate that the Coca-Cola Company left a substantial amount of written evidence of its implicit contract with its consumers—a very explicit form of an implicit contract. In general, observing implicit contracts directly is difficult because of their implicit nature. To overcome the difficulty, we adopt a narrative approach. Based on the analysis of a large number of historical documents obtained from the Coca-Cola Archives and other sources, we offer evidence of the Coca-Cola Company not only saying that it had an important implicit contract with its consumers, but also acting on it. This study makes an additional and unique contribution by exploring quality as a margin of adjustment available to Coca-Cola. We present evidence that the implicit contract included a promise not only of a constant nominal price but also a constant quality. We document the dedication to a 6.5oz serving of the "Secret Formula." Indeed, during a period of over 70 years, we find evidence of only a single case of true quality change. By studying the margin of adjustment the Coca-Cola Company chose in response to changes in market conditions, we demonstrate that the perceived costs of breaking the implicit contract were large. In addition, we are able to offer one piece of direct evidence on the magnitude of these costs by studying the events surrounding the failed introduction of the New Coke in 1985.
    Keywords: E12; E31; L14; L16; L66; M30; N80; A14
    JEL: L16 L14 E31
    Date: 2006–10–18
  4. By: Kumar, Sudesh
    Abstract: After the 18th century India has been creating a ground for the SSI industry and they started taking shape of clusters. Headings Introduction and Background provides a bird’s eye view on the background of SSI clusters in India. Chapter one sets forth the literature that is relevant to understand the concept behind successful industry clusters. An effort is made to take a look at factors embedded in regional economies of and concept behind the SSIs clusters. Chapter Two focuses on the peculiarity of sickness in Indian SSI clusters taking an example of UNIDO’s cluster reformation program. Next Chapter Three is based on research and findings on famous Textile cluster of India, Tirupur. Later, Chapter Four of this paper integrates discussions on various elements of the Tirupur industry cluster based on interviews findings with entrepreneurs, using one particular industry cluster in achieving development. It deals with the some elements of Tirupur Cluster that is not paid attention to under the common cluster development program. Chapter Five highlights the selected and major policy implications affecting the SSIs clusters and finally there is the conclusion.
    Keywords: Industry Cluster; Development; Economics; Small Scale Industry
    JEL: O10
    Date: 2005–09–28
  5. By: Siddiky, Chowdhury Irad Ahmed
    Abstract: This paper examines the relationship between statutory monopoly and collective action as a multi-person assurance game culminating in an end to British Empire in India. In a simple theoretical model, it is demonstrated whether or not a collective good enjoys (or is perceived to enjoy) pure jointness of production and why the evolutionary stable strategy of non-violence was supposed to work on the principle that the coordinated reaction of a ethnically differentiated religious crowd to a conflict between two parties (of colonizer and colonized) over confiscatory salt taxation would significantly affect its course. Following Mancur Olson (1965) and Dennis Chong (1991), a model of strategic civil disobedience is created which is used to demonstrate how collective action can be used to produce an all-or-nothing public good to achieve economic and political independence.
    Keywords: confiscatory taxation; multi-person assurance game; strategic civil disobedience
    JEL: N45
    Date: 2005–05–02
  6. By: Francisco Rodríguez (Department of Economics, Wesleyan University); Adam J. Gomolin (School of Public Policy, University of California, Berkeley)
    Abstract: This paper studies the evolution of Venezuelan economic institutions before the emergence of oil exploitation in 1920. We argue that by 1920 Venezuela had developed a highly centralized state and a professionalized military. These two institutions ensured that growing oil revenues would strengthen the state structure and protected Venezuela from the resource-conflict trap into which many oil-abundant countries have fallen. We also argue that the failure to develop institutions that could mediate between sectoral demands and the state, the subordination of property rights to political imperatives and the political dominance of the commercial-financial elite conditioned the nation’s response to the post-1920 influx of oil revenues.
    Date: 2006–05
  7. By: Richard S. Grossman (Department of Economics, Wesleyan University)
    Date: 2006–04
  8. By: Yalcintas, Altug
    Abstract: Abstract: History books are full of success stories. Intellectuals are interested in such stories because they are important in human history – they are important especially for those who are willing to know more about how we have reached the peak points of human civilization. History books, however, do not always credit issues of human failure and error. The social element – that is, the set of undesirable consequences of the imperfect character of human doings – are thus left out as irrelevant. Oddities and wrongheadedness, for instance, are not at the forefronts of human notice. They are seen only as peculiarities to be corrected sooner or later. Human failure and error are important as they are often left uncorrected in time. That is to say, we keep repeating the same errors through time. Uncorrected errors of the past sometimes generate undesirability, dissatisfaction, and disappointment in the future, because such errors prevent us from producing pragmatic solutions to practical problems in the economy and society. They prevent us from reaching “the general equilibrium.” They prevent us from getting at “the fundamental truth.” The world is, therefore, not the best of all possible worlds. The world, unlike the portrayals of neo-classical economics in general and Paul Samuelson in particular, is a world of transaction costs, as Ronald Coase argued, in the form of human failure and error. Consequences of such errors, which do not disappear easily and without causing further trouble, make the idea impossible – the idea that perfection in the world of humans is achievable. I illustrate in the paper that there are such errors in human history that cause path dependence in the economy and society. Many errors in the past, I argue, are not corrected – they linger. History is therefore not only a bunch of success stories in the form of efficiencies and optimizations. History is also the stories of error – stories of path dependence. And such errors, too, should matter for historical economists.
    Keywords: Path dependence; Paul David; Efficiency and Optimality
    JEL: B52 B25 B41
    Date: 2006–11
  9. By: Hugo E. A. da Gama Cerqueira
    Date: 2006
  10. By: Nelson, Edward
    Abstract: This paper studies the Great Inflation in Canada, Australia, and New Zealand. Newspaper coverage and policymakers’ statements are used to analyze the views on the inflation process that led to the 1970s macroeconomic policies, and the different movement in each country away from 1970s views. I argue that to understand the course of policy in each country, it is crucial to use the monetary policy neglect hypothesis, which claims that the Great Inflation occurred because policymakers delegated inflation control to nonmonetary devices. This hypothesis helps explain why, unlike Canada, Australia and New Zealand continued to suffer high inflation in the mid-1980s. The delayed disinflation in these countries reflected the continuing importance accorded to nonmonetary views of inflation.
    JEL: G00 G0
    Date: 2005–01–25
  11. By: Callegati Enrico; Grandi Silvia
    Abstract: The territorial agglomeration of interdependent enterprises has a positive influence on the competitiveness, the performance and the development of national economies. This is a widely accepted intuition in economie theory, and it dates back to the works of Alfred Marshall. In particular, these phenomena have been depicted through the theoretical framework of the "IndustriaI Districts". Another signifieant impulse to the debate was provided by the GREMI (Groupe de Recherche Européen sur les Milieux Innovateurs), through the concepì of milieu innovateur. Later, Michael Porter's studies and dissemination works granted great visibility to the dynamics of agglomeration of industries, which since then afe better known among policy makers as "clusters". At any rate, the importance of the cultural element in the concepts of "cluster", milieu, and "district" is undeniable. This is evident also when observing the phenomenon from a historieal perspective. Evidence shows that the strength of a loeal economie system, and its eapacity to grow and 10 innovate, afe closely related 10 the pattern of knowledge (thus cultural) stratifieation, to the territory itself and to learning eapacity. Moreover, one can observe that cultural socio­economie elements afe embedded in technology, thus they play a key role when considering the dynamics of innovation process and growth opportunities for Small and Medium Enterprises (SMEs). With this respect, the paper wìll present some relevant case studies of technical assistance earried out by in the field of industriai cooperation with several non-ED Mediterranean countries. In particular, the paper will present those case studies where initiatives were sei up with a view 10 encourage cluster dynamics in regions (i.e. Aleppo, Syria or Yazd, Iran), where the main sector of activity (textile and clothing industry) is his1orically and culturally based. In particular, several factors were involved, such as the cohesion of stakeholders for the creation of innovation, the development of new products, and the competìtive advantages for the loeal productìve system. The project approach and its conclusions confirm the fundamental role of culture and culture-based activities in the process of economie development, especially when considering SMEs, where culture represents both an embedded strategie foundatìon for the creation of cluster dynamics, and a signifieant potential for their future development affecting innovation trajectories.
    Date: 2005–03
  12. By: Gomez-sorzano, Gustavo
    Abstract: Abstract: I apply the Beveridge-Nelson business cycle decomposition method to the time series of murder in the United States (1900-2004). Separating out “permanent” from “cyclical” murder, I hypothesize that the cyclical part coincides with documented waves of organized crime, internal tensions, breakdowns in social order, crime legislation, alternation in power, social, and political unrest overseas as wars, and recently with the periodic terrorist attacks in the country. The cyclical component estimated shows that, 9/11 2001 terrorist attacks occurred, two years after the end of the last declining cycle of 1994-1999. The estimated cyclical terrorist murder component warns, that terrorist attacks in U.S., soil from 1923 to 2004, historically occur in, and around the vicinity of the turning points, of whether a declining, or ascending cycle, and so, it must be used in future research to construct a model for explaining the causal reasons for its movement across time, and for forecasting cyclical terrorist murder, and terrorist attacks.
    Keywords: Keywords: United States; Colombia; murder; Beveridge-Nelson; business cycle; decomposition; time-series; domestic terrorism; cyclical terrorist murder; cyclical terrorist attacks; cyclical terrorist murder and attacks indicator.
    JEL: C22 N41 O51 K42 C13 K14
    Date: 2006–06–13
  13. By: Maria Teresa Ribeiro de Oliveira
    Date: 2006
  14. By: Luciana Suarez Lopes
    Date: 2006
  15. By: Stanton, Angela A.
    Abstract: This paper reviews the literature of behavioral-, experimental-, and neuro-economics research with the ultimatum and the dictator games. “One may wonder whether Adam Smith, were he working today, would not be a neuroeconomi[st]” Aldo Rustichini 2005
    Keywords: Literature Review of behavioral-; experimental- and neuro-economics using ultimatum and dictator game
    JEL: D01 A10
    Date: 2006–04–26
  16. By: Joyce P. Jacobsen (Economics Department, Wesleyan University)
    Abstract: This paper gives an overview of the current (and recent past) status of women economists in the United States and describes what American economists have done to promote gender equality in the economics profession. Initiatives include in large part what the American Economic Association, through its Committee on the Status of Women in the Economics Profession has done. It also discusses the creation and subsequent activities of the International Association for Feminist Economics and the activities of several other groups and committees recently formed in other parts of the world. It closes by considering what needs to be done worldwide to improve the status and increase the participation of women in the economics profession.
    Keywords: academic labor markets, economics profession, women in economics
    JEL: J16 J44 J49 J70
    Date: 2005–11
  17. By: Bitros, George; Minoglou, Ioanna
    Abstract: Our objective here is to establish the proposition that creative entrepreneurship gives rise to a market order which is optimally adjusted to facilitate the introduction and the diffusion of innovations, particularly those that take the form of new markets, new organizational schemes, new management devices and new methods and means of doing business. To substantiate this claim we extract from the existing historical literature and employ the ideal type entrepreneurial method of the Greek diaspora network. The interpretation we offer is that this method showed a high degree of operational flexibility and institutional adaptability and that it is these two proper-ties that explain its marked tenacity over time. The key ingredient for its success is traced to the self-regulatory robustness of the network, which was secured by the commitment of its partners to a moral order based on the triptych of ‘trust, reliability and reciprocity’ as well as to their ac-ceptance in advance of the sanctions in case of transgressions. Moreover, the embeddedness of the branches of the network in the Greek communities abroad, called Paroikies, where the Greek Orthodox Church provided moral leadership and maintained the community ties, reinforced the adherence of network partners to the rules of ethical business conduct. But in our view the domi-nant force in the design of the core mechanism that made the Greek diaspora network such a suc-cess was entrepreneurship.
    Keywords: Entrepreneurship; Institutions; Networks; International Business Organizations
    JEL: N84 L22 N83 L14
    Date: 2006–10–24
  18. By: Singh, Lakhwinder
    Abstract: This paper explores the relationship between the productivity growth and both domestic and international knowledge spillovers in the Korean manufacturing industries, using panel data for twenty eight industries over the period 1970-2000. To empirically verify the extent of domestic and international knowledge spillovers we have followed endogenous growth approach and wisdom from new international trade theory. We find strong productivity effects from industry’s own R&D as well as domestic and foreign knowledge spillovers. International knowledge spillovers transmitted by trade played dominant role in explaining productivity growth in the Korean manufacturing industries during the 1970s and 1980s, but the international knowledge spillovers did not play any significant role in the 1990s. This empirical finding has strong implications for the Korean technology policy as well as for the strict intellectual property rights regime enacted by the WTO.
    Keywords: Knowledge spillovers; Productivity growth; Manufacturing industry; South Korea
    JEL: R11 O11
    Date: 2006–10–04
  19. By: Déborah Oliveira Martins dos Reis
    Date: 2006
  20. By: Gomez-Sorzano, Gustavo
    Abstract: Abstract: This paper continues a research born in 1993 as a consequence of the growing concern regarding the escalation of violence in Colombia; its objective is to create an econometric model capable of forecasting the path of terrorist murder under different policy options and helping the country in the design of state policy drawing the lineaments for reaching the pacification of the country. I claim that the approach presented here is the only way of creating an econometric model for terrorist murder in Colombia. In the first part I use The Beveridge and Nelson decomposition of economic time series to estimate the cyclical component of murder, which is used later to construct a theoretically and statistically satisfying model to account for cyclically motivated terrorist murder in Colombia, 1950-2004. The variables that together account for eighty three percent of the variation in cyclical terrorist murder are the years of Colombia’s La Violencia period when the peasant self-defense movements appeared, the years of the so-called National Front political collusion between the two main establishment parties, the real trade balance, the size of Colombia’s military forces as a proxy for all armed forces (military, para-military, guerrilla, and drug-related) in the country, the unemployment rate, the number of students matriculated in all modalities and people displaced in the country. The forecasts for cyclical terrorist murder for 2003-2004 show the big dilemma facing the Colombian authorities: the strong reduction of displaced people from 212,000 in 2003 to 117,000 in 2004 boosted the cyclical terrorist murder in the countryside, erasing the initial results by president Uribe’s administration at controlling the intensity of the conflict and implying that any future policy at diminishing it should control the number of displaced people, one of the biggest problems facing Colombia today. The final section presents forecasts for 2005-2019 suggesting, that peace will be attained around year 2008 and, that the way, at this point to reach sustainable peace is through the continuation of the Democratic Security Policy and strong presidential leadership headed towards disarmament of all armed actors in the country combined with the implementing of political and social changes that will secure lasting peace before year 2019.
    Keywords: Colombia; Beveridge and Nelson; cyclical terrorist murder; democratic security policy; sustainable peace; permanent peace; lasting peace.
    JEL: C53 C22
    Date: 2006–05–22
  21. By: Flávio Saes; Nelson Nozoe
    Date: 2006
  22. By: José Flávio Motta; Agnaldo Valentin
    Date: 2006
  23. By: Becchio Giandomenica (University of Turin); Marchionatti Roberto (University of Turin)
    Date: 2005–05–26
  24. By: Maria Mello de Malta
    Date: 2006
  25. By: Naércio Menezes-Filho; Renato Leite Marcondes; Elaine Toldo Pazello; Luiz Guilherme Scorzafave
    Date: 2006
  26. By: Monasterio, Leonardo M; Noguerol, Luiz Paulo
    Abstract: This paper analyzes the heights of Brazilian people using anthropometric and economic data. The literature suggests that height is a good proxy of the material living conditions of different populations. Data indicate that the difference between the heights of 21 and 65-year-old men is approximately six centimetres. The same value, by coincidence, represents the difference in the stature of the poorest and richest quintiles. Adjusted data show an increase of 3.8 centimetres in the heights of adult male Brazilians born between 1939 and 1981. There are also stable regional differences; in the North and Northeast of the country, heights are about two centimetres lower than the national average for all groups. Regression analyses show that proxy variables related to living conditions during bodily growth, and using regional dummies, were statistically significant causes of the variation in the heights of individuals. In contrast, colour, urban/rural, and inequality variables were not significant. The results replicate what the historiography of the relation between living conditions and stature makes clear: the social environment has a significant impact on the average height of populations.
    Keywords: Anthropometrics – Inequality – Indicators of conditions of life – Height - Brazil
    JEL: O15
    Date: 2005–08
  27. By: Fábio Pesavento; Sérgio Monteiro
    Date: 2006
  28. By: Jaques Kerstenetzky
    Date: 2006
  29. By: Feridun, Mete
    Abstract: This study examines the causes of the East Asian financial crisis and presents an early warning system based on data from Mmalaysia, Iindonesia, Tthailand, Ssingapore, and Pphilippines during 1982:1–1998:1 through a panel probit regression model using 20 monthly macroeconomic and financial sector variables. Results indicate that the significant variables are current account/GDPgdp, domestic credit/terms of trade, lending and deposit rate spread, and foreign direct investment/GDPgdp. Evidence further suggests that the probability of the crisis increases with an increase in domestic credit/Mm1, imports, and foreign direct investment/Tthe probability of the crisis increases with a decrease in exports, stock prices, terms of trade, current account, and lending and deposit rate spread. model correctly indicates 64% of the crises and 77% of the tranquil periods even with a cut-off probability of 10%.
    Keywords: Asian financial crisis; probit model; early warning systems
    JEL: F0
    Date: 2006–01
  30. By: Quatraro Francesco (University of Turin)
    Abstract: In this paper we investigate the impact of computer investments on productivity, and eventually check far the existence of development dynamics stimulating such investments. While a large number of studies can be found at the firm level, there is a substantial lack of analyses at the macro-leve1. We focus on 28 Italian manufacturing and service sectors, aver the period 1995-2002. Controlling far inter-industry spillovers, ICTs investments proved to positively and significant1y affect productivity. Moreover those sectors with lower levels of productivity in 1995 showed up higher average annual growth rates of investments in computer equipment. The case far tailored policy actions is eventually discussed.
    Date: 2006–08

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