nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2007‒04‒09
27 papers chosen by
Bernardo Batiz-Lazo
University of Leicester

  1. Diversities Between the Regulations of Turkish Accounting Standard Setters: A Brief History of Turkiye’s Twentieth Century Accounting Standardization Applications By Yayla, Hilmi Erdogan
  2. Globalization, Growth and Distribution in Spain 1500-1913 By Joan R. Roses; Kevin H. O'Rourke; Jeffrey G. Williamson
  3. Institutional Barriers to Economic Development: The Silesian Linen Proto-Industry (17th to 19th century) By Boldorf, Marcel
  4. "Logistics, Market Size and Giant Plants in the Early 20th Century: A Global View" By Leslie Hannah
  5. "Pioneering Modern Corporate Governance: a View from London in 1900" By Leslie Hannah
  6. Organizing the Electronic Century By Richard N. Langlois
  7. Argentina: Bolivia's Economy: The First Year By Mark Weisbrot
  8. After the Ban: The Japanese Market for U.S. Beef By Roxanne Clemens
  9. The Rise of Democracy in Europe and the Fight Against Mass Poverty in Latin America: The Implications for Marxist Thought of Some Recent Mainstream Papers By Howard Petith
  10. Ecuador's Presidential Election: Background on Economic Issues By Mark Weisbrot; Luis Sandoval; Belén Cadena
  11. The Eurosystem, the US Federal Reserve and the Bank of Japan - similarities and differences By Dieter Gerdesmeier; Francesco Paolo Mongelli; Barbara Roffia
  12. Latin America: The End of An Era By Mark Weisbrot
  13. Increasing Inequality in the United States By Dean Baker
  14. The Penalty-Duel and Institutional Design: Is there a Neeskens-Effect? By Wolfgang Leininger; Axel Ockenfels
  15. QALYs versus HYEs - What's Right and What's Wrong By Ried, Walter
  16. Creative Destruction and Firm-Specific Performance Heterogeneity By Hyunbae Chun; Jung-Wook Kim; Randall Morck; Bernard Yeung
  17. New Zealand's Quota Management System: A History of the First 20 Years By Kelly Lock; Stefan Leslie
  18. E-learning as internationalization strategy in higher education: Lecturer’s and student’s perspective By Mihhailova, Gerda
  19. Accounting for Structural Change: Evidence from Two Centuries of U.S. Data By Benjamin N. Dennis; Talan Iscan
  20. Neoliberalismo Europeo y la Transición Española Vista desde el Enfoque de Clase y Explotación By Howard Petith
  22. The foundations of money, payments and central banking: A review essay By Stephen Millard
  23. Hard Coal Subsidies: A Never-Ending Story? By Manuel Frondel; Rainer Kambeck; Christoph M. Schmidt
  24. Skyscrapers and the Skyline: Manhattan, 1895-2004 By Jason Barr
  25. The narrative approach for the identification of monetary policy shocks in small open economies By Eleni Angelopoulou
  26. Constructing Historical Euro Area Data By Heather Anderson; Mardi Dungey; Denise Osborn; Farshid Vahid
  27. Patents, Innovations and Economic Growth in Japan and South Korea: Evidence from individual country and panel data By Sinha, Dipendra

  1. By: Yayla, Hilmi Erdogan
    Abstract: This study examines the evolution of Turkish accounting standards to ascertain the extent of differences in Turkiye’s accounting practices among the different governmental Standard setter’s regulations during the twentieth century. The research results show that the accounting standards had set by the public corporates own self as parallel to economic policies of Turkish Ministry of Finance and money policies of Central Bank of the Republic of Turkiye before the establishment of Turkish Accounting and Auditing Standards Board in 1994. On the other hand in the last two decades of twentieth century the specific standards had set by the Ministry of Finance for tax reporting companies and Capital Markets Board of Turkiye for financial reporting companies have the significant differences.
    Keywords: Standardization; Accounting in Turkiye.
    JEL: M41
    Date: 2006
  2. By: Joan R. Roses; Kevin H. O'Rourke; Jeffrey G. Williamson
    Abstract: The endogenous growth literature has explored the transition from a Malthusian world where real wages, living standards and labor productivity are all linked to factor endowments, to one where (endogenous) productivity change embedded in modern industrial growth breaks that link. Recently, economic historians have presented evidence from England showing that the dramatic reversal in distributional trends – from a steep secular fall in wage-land rent ratios before 1800 to a steep secular rise thereafter – must be explained both by industrial revolutionary growth forces and by global forces that opened up the English economy to international trade. This paper explores whether and how the relationship was different for Spain, a country which had relatively poor productivity growth in agriculture and low living standards prior to 1800, was a late-comer to industrialization afterwards, and adopted very restrictive policies towards imports for much of the 19th century. The failure of Spanish wage-rental ratios to undergo a sustained rise after 1840 can be attributed to the delayed fall in relative agricultural prices (due to those protective policies) and to the decline in Spanish manufacturing productivity after 1898.
    Keywords: Growth, distribution, globalization, Spain
    Date: 2007–04–04
  3. By: Boldorf, Marcel (Institut für Volkswirtschaft und Statistik (IVS))
  4. By: Leslie Hannah (Faculty of Economis, University of Tokyo and Ecole des Hautes Etudes en Sciences Sociales)
    Abstract: Around 1900, the businesses of developed Europe - transporting freight by a more advantageous mix of ships, trains and horses - encountered logistic barriers to trade lower than the tyranny of distance imposed on the sparsely populated United States. Highly urbanized, economically integrated and compact northwest Europe was a market space larger than, and - factoring in other determinants besides its (low) tariffs - not less open to inter-country trade than the contemporary American market was to interstate trade. By the early twentieth century, the First European Integration enabled mines and factories - in small, as well as large, countries - to match the size of United States plants, where factor endowments, consumer demand or scale economies required that.
    Date: 2007–03
  5. By: Leslie Hannah (Faculty of Economis, University of Tokyo and Ecole des Hautes Etudes en Sciences Sociales)
    Abstract: Around 1900 Britain was exceptionally suited to pioneering large scale enterprises because of the precocious development of its equity markets and London's experimentation with a more eclectic range of corporate governance techniques than the world's smaller and less cosmopolitan financial centers. Information dissemination, incentives and reputation - developed by a serendipitous mix of legal compulsions and flexible voluntarism - set the scene for the growth of large, UK-based, national and international corporations in the twentieth century.
    Date: 2007–03
  6. By: Richard N. Langlois (University of Connecticut)
    Abstract: This paper's title is an echo of Alfred Chandler's (2001) chronicle of the electronics industry, Inventing the Electronic Century. The paper attempts (A) a general reinterpretation of the pattern of technological advance in (American) electronics over the twentieth century and (B) a somewhat revisionist account of the role of organization and institution in that advance. The paper stresses the complex effects of product architecture and intellectual property regime on industrial organization and technological change. Whereas large research-oriented multi-divisional firms always played a crucial role in the industry's history, such firms proved most adept at systemic innovation, as in the case of television. But, as in the cases of early radio and of the IBM 360 mainframe computer, the multi-divisional firm was capable of bottling up within its boundaries (often through intellectual property rights) a relatively modular architecture whose "option value" such firms could not fully exploit. America's adherence to the model of industrial research within the vertically integrated corporation arguably contributed to the demise of American consumer electronics in the 1970s and 1980s. And America's subsequent relative success in semiconductors and personal computers --- and in today's converged digital consumer electronics --- owes much to the specialized and "fragmented" character of American industry, which could take fuller advantage of competitive global value chains and of the option value of modular architectures.
    Keywords: electronics, modularity, product architecture, vertical integration.
    JEL: L2 L63 N62 O33 O34
    Date: 2007–03
  7. By: Mark Weisbrot
    Abstract: This issue brief describes Bolivia's economy in the first year of Evo Morales' presidency. There were improvements in most of the major economic indicators, as well as some new initiatives by the government to fulfill its promises to the country's impoverished majority.
    JEL: E66
    Date: 2007–01
  8. By: Roxanne Clemens (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC))
    Abstract: In the months following the reopening of the Japanese market to imports of U.S. beef on July 26, 2006, Japanese importers were unable to procure adequate supplies. This paper discusses reasons for early supply shortages and some of the policy and trade issues that will affect demand for U.S. beef in the short to medium term. The paper also discusses current marketing efforts for domestic and imported beef, new marketing technologies, and general consumer trends. The information presented in this paper includes on-site observations and data from meetings with Japanese importers and retailers and industry experts during market research in Tokyo and Osaka in November 2006.
    Keywords: age verification, beef traceability, food safety, Japan, marketing.
    Date: 2007–04
  9. By: Howard Petith
    Abstract: Recently a number of mainstream papers have treated the rise of democracy in 19th century Europe and its instability in Latin America in an eminently Marxist fashion. This paper sets out their implications for Marxist thought. With respect to Europe, Marx's emphasis on political action backed by the threat of violence is vindicated but his justification for socialism is not. With respect to Latin America, the unequal distribution of wealth is the cause of political instability that is, in turn, the root cause of mass poverty. In addition it is possible to explain some of the paradoxical characteristics of neo-liberalism and to make a weak argument for socialism in spite of its rejection in Europe.
    Keywords: Marxism, Democracy, Europe, Latin America
    JEL: E11 O52 O54 N46
  10. By: Mark Weisbrot; Luis Sandoval; Belén Cadena
    Abstract: This paper looks at the biggest economic challenges that Ecuador's new president will need to address, and examines its recent economic history, including the issues of growth, dollarization, and international trade and finance.
    Date: 2006–11
  11. By: Dieter Gerdesmeier (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Francesco Paolo Mongelli (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Barbara Roffia (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.)
    Abstract: The paper provides a systematic comparison of the Eurosystem, the US Federal Reserve and the Bank of Japan. These monetary authorities exhibit somewhat different status and tasks, which reflect different historical conditions and national characteristics. However, widespread changes in central banking practices in the direction of greater independence and increased transparency, as well as changes in the economic and financial environment over the past 15-20 years, have contributed to reduce the differences among these three world’s principal monetary authorities. A comparison based on simple “over-the-counter” policy reaction functions shows no striking differences in terms of monetary policy implementation. JEL Classification: E40, E52, E58.
    Keywords: Monetary policy, central banks and their policies, monetary policy committees.
    Date: 2007–03
  12. By: Mark Weisbrot
    Abstract: This overview article looks at Latin America's political shift over the last several years. The author argues that these changes have largely been misunderstood and underestimated here for a number of reasons: Latin America's unprecedented growth failure over the last 25 years is a major cause of these political changes and has not been well-understood. The collapse of the IMF's influence in Latin America, and middle-income countries, is also an epoch-making change. The availability of alternative sources of finance, most importantly from the reserves of the Venezuelan government, is very important. The increasing assertion of national control over natural resources is also an important part of the new relationship between Latin America and the United States. The author argues that for these and other reasons, the relationship between Latin America and the United States has undergone a fundamental and possibly irreversible change, and one that opens the way to new and mostly more successful economic policies.
    Date: 2006–12
  13. By: Dean Baker
    Abstract: This report traces the increase in U.S. inequality over the last quarter-century. It outlines the myriad drivers of this trend, including deliberate policy decisions on trade, immigration, interest rates, and health care costs.
    Date: 2006–11
  14. By: Wolfgang Leininger; Axel Ockenfels
    Abstract: We document an increase in the scoring probability from penalties in soccer, which separates the time period before 1974 significantly from that after 1976: the scoring probability increased by 11%.We explain this finding by arguing that the institution of penalty-shooting before 1974 is best described as a standard of behaviour for striker and goal-keeper, which in game-theoretic terms represents a 2x2-game. In contrast to this, after 1976 the institution of the penalty-duel is best described by a 3x3 game form constrained by certain behavioural rules. Those rules can be parameterized by a single parameter, which nevertheless allows the theoretical reproduction (and hence explanation) of all the empirically documented regularities.The scoring probability in equilibrium of the latter institution is higher than in the former one.We present historical evidence to the effect, that this change in the perception of penalty- duels (as two different games), was caused by Johan Neeskens’ shrewd and “revolutionary” penalty-taking during World-Cup 1974, when he shot a penalty in the first minute of the final between Germany and the Netherlands right into the middle of the goalmouth.
    Keywords: Professional soccer, mixed strategy equilibrium, institutional design
    JEL: D01 C72 D74 C93
    Date: 2007–03
  15. By: Ried, Walter (Institut für Volkswirtschaft und Statistik (IVS))
    Abstract: Some twenty years ago, the quality-adjusted life years (QALY) approach was developed for the purpose of assessing changes in mortality and morbidity in terms of individual preferences. Recently, it has been challenged by the healthy-years equivalent (HYE)
  16. By: Hyunbae Chun; Jung-Wook Kim; Randall Morck; Bernard Yeung
    Abstract: Traditional U.S. industries with higher firm-specific stock return and fundamentals performance heterogeneity use information technology (IT) more intensively and post faster productivity growth in the late 20th century. We argue that elevated firm performance heterogeneity mechanically reflects a wave of Schumpeter's (1912) creative destruction disrupting a wide swath of U.S. industries, with newly successful IT adopters unpredictably undermining established firms. This evidence validates endogenous growth theory models of creative destruction, such as Aghion and Howitt (1992); and suggests that recent findings of more elevated firm-specific performance variation in richer, faster growing countries with more transparent accounting, better financial systems, and more secure property rights might partly reflect more intensive creative destruction in those economies.
    JEL: E32 G3 O3 O4 O51
    Date: 2007–04
  17. By: Kelly Lock (Motu Economic and Public Policy Research); Stefan Leslie (New Zealand Ministry of Fisheries)
    Abstract: New Zealand is a world leader in the use of Individual Transferable Quota (ITQ) to manage fisheries. Although the use of an ITQ system is not unique to New Zealand, no other country has used this system to the same extent as New Zealand. This has meant that, internationally, a lot of interest has been placed on how our system works and the level of success it has achieved. Generally, the New Zealand system is considered to be a success story, yet the system has changed a number of times since its inception in 1986. Despite the level of interest in New Zealand's unique ITQ system, the current literature is unable to provide a complete account of the historic and current regulations surrounding it. This paper addresses this gap by documenting how the Quota Management System (QMS) functions and the changes it has undergone since its introduction. Reviewing these changes facilitates a deeper understanding of the system itself, as well as providing insight into its potential limitations.
    Keywords: Quota management system; individual transferable quota; fisheries; management; New Zealand
    JEL: Q22 Q28
    Date: 2007–04
  18. By: Mihhailova, Gerda
    Abstract: Purpose – Use of e-learning opens up a whole new range of business expansion and internationalization opportunities for many companies including higher education institutions. The paper seeks to explore the challenges a business college may encounter using e-learning as internationalization strategy. E-learning-related problems are analyzed from two main internal interest groups’ point of view – lecturers and students. The aim of the case study presented in the paper is to find out what are the major challenges from a student and academic personnel perspective using e-learning. This kind of analyses should be the first step introducing e-learning as a strategic tool for business expansion. Design/methodology/approach – Questionnaires, in-depth interviewing and semi-structured group interviews were used to find answers to the posed research questions. Research took place in two phases. In phase one, two types of questionnaires were distributed – Type A to lecturers (ten respondents) and Type B to students (115 respondents), Both types were constructed by the author. In phase two, two in-depth interviews and two semi-structured group interviews were conducted (ten students in one group of interview, eight lecturers in the second group of interview). Findings – The main problem areas for lecturers related to e-learning are: lack of time, lack of interest/motivation, lack of co-operation, compensation system does not take into account the specifics of e-learning and lecturers are concerned about the quality of teaching in a virtual environment. The most problematic of them appear to be lack of time and inappropriate compensation system. Students appear to have interest in e-courses, but the level of knowledge regarding specifics of web-based learning as well as about e-courses offered was unexpectedly low. This is an especially problematic case as open university students were the main target group for whom the e-courses were designed in the first place. Research limitations/implications – The research is based on one case study and thus the conclusions made may not exactly reflect the situation in all universities of Estonia. But due to the shared economic, cultural and historical background, at least to some extent the case study reflects the main problem areas of all Estonian universities using e-learning. Originality/value – The originality of the paper stems from an interdisciplinary approach to e-learning – use of e-learning as a tool for internationalization. The paper presents results of a case study research, conducted in an East-European business college and the results of the study are discussed in respect of historical, social and economic specifics of Estonia.
    Keywords: E-learning; Higher education; Students; Academic staff; Estonia
    JEL: M1 M10 M12
    Date: 2005
  19. By: Benjamin N. Dennis; Talan Iscan (Millennium Challenge Corporation, University of the Pacific; Department of Economics, Dalhousie University)
    Keywords: agriculture; labor; growth
    Date: 2007–03–27
  20. By: Howard Petith
    Abstract: Recientemente, ha aparecido en la corriente principal de la economía, un nuevo enfoque que se expresa en términos de clase y explotación y que se basa en un modelo analítico complejo y sofisticado. El objetivo de este artículo es exponer dos ejemplos de este enfoque de forma simplificada y demostrar cómo explican la tendencia neoliberal reciente de la Unión Europea y la transición Española desde la dictadura hacia la democracia.
    Keywords: Neoliberalisme, Transición Española
    JEL: E11 O52 N93
    Date: 2007–03–20
  21. By: Viv B. Hall; C. John McDermott
    Abstract: The current economic expansion is one of the more enduring in New Zealand's post-war period. But is this a change from past behaviour? We examine New Zealand's post-war business cycles for the sample period 1946q1 to 2005q4, using a newly developed 60-year quarterly time series for real GDP. The non-parametric Bry and Boschan (1971) algorithm is used to derive Classical business cycle turning points, and to underpin the establishment of key cycle characteristics. The latter include cycle asymmetries, volatility, diversity and degree of duration dependence. Markov-switching models estimated by Gibbs-sampling methods (Kim and Nelson, 1999), are then used to derive mean growth rate and volatility regimes, and to draw implications. Results point to a return to a more rhythmic pattern of long expansions and short contractions, after that pattern was interrupted following the oil shocks of the 1970s and New Zealand's reforms of the mid to late 1980s and early 1990s. More rhythmic patterns should not be mistaken for a predetermined pattern, as duration test results show that cycle expansion paths do not age. This, together with the onservation that rates of growth are not dissimilar across the more sustained expansion phases, implies that in order to enhance New Zealand's prospoerity, policies are required that extend business cycle expansions without allowing the excesses that undermine those expansions to build up.
    JEL: E23 E32
    Date: 2006–08
  22. By: Stephen Millard (Bank of England)
    Abstract: The purpose of this paper is to understand the economics behind the evolution of payments where by payments I mean the ‘transfer of monetary value’ (in return for goods, services, or real or financial assets). It is clear from this definition of payments that, in order for there to be payments, there first needs to be money. So, the paper first discusses why money might evolve as a result of some frictions inherent in real-world economies. It then discusses the evolution of banks, arguing that banks developed in order to provide payment services (making ‘money’ work more efficiently). The paper then discusses how banks can save on the use of collateral to make payments – collateral that they can convert into loans to earn a return – by the development of ‘payment systems’. Such systems will involve some form of netting of payments (clearing) and final settlement in some asset. ‘Central banks’ fit into this picture by providing, in their liabilities, a settlement asset that the other banks are happy to use. In so doing, they are incentivised to worry about monetary and financial stability
    Keywords: Money, banks, payment systems, central banks
    JEL: E42 E58
    Date: 2007–02–02
  23. By: Manuel Frondel; Rainer Kambeck; Christoph M. Schmidt
    Abstract: In Germany, hard coal has been subsidized for almost half a century. Despite the declining significance of hard coal production for the domestic labor market, the magnitude of subsidies increased until the middle of the last decade. In 1996, they peaked at € 6.7 bill.While German hard coal subsidies have been shrinking to € 2.7 bill. in 2005, it is very likely that they will be extended well into the next decade and even beyond. This article discusses the feeble arguments raised by the proponents of hard coal subsidization in Germany and other EU countries. Most importantly, in addition to the drain imposed on public budgets, these subsidies imply a substantial opportunity cost, leading funds away from alternative, more beneficial public investments. From a social welfare perspective, we therefore recommend the rapid abolition of these subsidies not only in Germany, where in nominal terms the accumulated amount of subsidies has now by far exceeded € 130 bill., but all across Europe.
    Keywords: Energy policy, energy security, coal mining
    JEL: Q28 Q42 Q58
    Date: 2006–11
  24. By: Jason Barr
    Abstract: This paper investigates the determinants of skyscraper building cycles in Manhattan from 1895 to 2004. We first provide a simple model of the market for tall buildings. Then we empirically estimate the determinants of the time series of the number of skyscraper completions and their average heights over the 110 year period. We estimate the model under the assumption of rational expectations and myopic expectations, and find that the myopic model provides a better fit of the data. Furthermore, we find that several local and national variables determine both the number of completions and the average height of skyscrapers, including New York City area population; national employment in finance, insurance and real estate; building costs; access to financing; property tax rates and zoning regulations.
    Keywords: Skyscrapers, building cycles, building height, Manhattan,New York City, myopic expectations, rational expectations
    JEL: D84 N61 N62 R11 R33
    Date: 2007–04
  25. By: Eleni Angelopoulou (Bank of Greece and Athens University of Economics and Business)
    Abstract: This paper reviews 22 years of UK monetary policy (1971-1992) using official record from the Quarterly Bulletin of the Bank of England. A definition of policy shocks, which allows for the exclusion of cases of interest rate increases, which were unrelated to the monetary policy objectives, is used. The empirical analysis shows that output displays the usual hump-shaped response after a shock to the policy indicator but adjustment to pre-shock levels is slow. Other variables also display theory-consistent behaviour. Based on this policy indicator monetary policy is found to cause very limited output fluctuation in a four year horizon. The policy indicator is found to outperform the intervention rate as a measure of policy
    Keywords: monetary policy shocks, narrative approach, UK
    JEL: E52 E58
    Date: 2007–02–02
  26. By: Heather Anderson (Australian National University); Mardi Dungey (University of Cambridge); Denise Osborn (University of Manchester); Farshid Vahid (Australian National University)
    Abstract: The conduct of time series analysis on the Euro Area currently presents problems in terms of availability of sufficiently long data sets. The ECB has provided a dataset of quarterly data from 1970 covering many data series in its Area Wide Model (AWM), but not for a number of important financial market series. This paper discusses methods for producing such backdata and in the resulting difficulties in selecting aggregation methods. Simple applicaiton of the AWM weights results in orders of magnitude difference in financial series. The use of different aggregation methods across series induces relationships. The effects of different possible methods of constructing data are shown through estimation of simple Taylor rules, which result in different weights on output gaps and inflation deviation for what are purportedly the same data
    Keywords: Euro area, data aggregation, Taylor rule
    JEL: C82 C43 E58
    Date: 2007–02–02
  27. By: Sinha, Dipendra
    Abstract: This paper looks at the relationship between patents and economic growth in Japan and South Korea using both individual country and panel data. For the econometric estimation, we use annual data for 1963-2005. For Japan, we find that the logarithms of real GDP and the number of patents are cointegrated. For South Korea, we do find such evidence. For Japan, we find a two-way causality between the growth of real GDP and the growth of the number of patents. For panel data, we find that the logarithms of real GDP and the number of patents are cointegrated. We find some evidence that the growth of real GDP Granger causes the growth of the number of patents. However, we do not find any evidence of reverse causality.
    Keywords: patents; innovations; panel data
    JEL: O30 C10
    Date: 2007–03–21

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