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on Business, Economic and Financial History |
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Issue of 2007‒05‒26
fifteen papers chosen by |
| By: | Peter Rangazas; Alex Mourmouras |
| Abstract: | During the course of development, wages and labor productivity are much higher in the nonfarm sectors of the economy than in agriculture. In this paper, we examine the sources and consequences of wage and productivity gaps in the U.S. from 1800 to 2000. We build a quantitative general equilibrium model that closely matches the two-century long paths of farm and non-farm labor productivity growth, schooling, and fertility in the U.S. The family farm emerges as an important institution that contributes to differences in wages and labor productivity. Income from farm ownership compensates farm workers for the relatively low labor productivity and wages earned in agriculture. Farm ownership, along with the higher cost of raising children off the farm, generated a two-fold gap in labor productivity across the farm and nonfarm sectors in the 19th century US. Consequently, the reallocation of labor from farming to industry raised the average annual growth rate of output per worker by about half a percentage point over the 19th century. The paper also draws some lessons from the quantitative analysis of U.S. economic history for currently developing countries. |
| Date: | 2007–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/105&r=his |
| By: | Frank Levy; Peter Temin |
| Abstract: | We provide a comprehensive view of widening income inequality in the United States contrasting conditions since 1980 with those in earlier postwar years. We argue that the income distribution in each period was strongly shaped by a set of economic institutions. The early postwar years were dominated by unions, a negotiating framework set in the Treaty of Detroit, progressive taxes, and a high minimum wage -- all parts of a general government effort to broadly distribute the gains from growth. More recent years have been characterized by reversals in all these dimensions in an institutional pattern known as the Washington Consensus. Other explanations for income disparities including skill-biased technical change and international trade are seen as factors operating within this broader institutional story. |
| JEL: | J31 J53 N32 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13106&r=his |
| By: | Michael D. Bordo; Michael J. Dueker; David C. Wheelock |
| Abstract: | This paper examines the association between monetary policy and stock market booms and busts in the United States, United Kingdom, and Germany during the 20th century. Booms tended to arise when output growth was rapid and inflation was low, and end within a few months of an increase in inflation and monetary policy tightening. Latent variable VAR analysis of post-war data finds that inflation has had a particularly strong impact on market conditions, with disinflation shocks moving the market toward a boom and positive inflation shocks moving the market toward a bust. We conclude that central banks can contribute to financial market stability by minimizing unanticipated changes in inflation. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2007-20&r=his |
| By: | Galvarriato, Aurora Gómez; Gonzales, Rafael Dobado; Williamson, Jeffrey G |
| 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. |
| Keywords: | deindustrialization; globalization; growth; Mexico; trade |
| JEL: | F1 N7 O2 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6300&r=his |
| By: | Bibard, Laurent (ESSEC Business School) |
| Abstract: | The main aim of Renaissance humanism is to free humanity from the chains of Nature (in the West: Greek or Pagan thought) and God's Will (e.g. Judaism, Christianity, or Islam). This liberation implies that man will totally appropriate his environment and subject it to his will and power in a new "virility", which goes far beyond masculine and feminine sexuality-based orientations: this is both an advantage and a challenge to the ancient understandings of major and minor human, psychological and political issues.First, I present the humanist origins of modern "virility".Second, masculine and feminine orientations are linked with the evolution of Western Culture (with Paganism and Judaism as the roots of Western history).Third, sexuality is understood through a fundamental examination of its relationship to time. |
| Keywords: | Control; Economy; Globalization; Judaism; Paganism; Sexuality |
| JEL: | A00 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-07005&r=his |
| By: | Timothy Guinnane; Ron Harris; Naomi R. Lamoreaux; Jean-Laurent Rosenthal |
| Abstract: | This article challenges the idea that the corporation is a globally superior form of business organization and that the Anglo-American common-law is more conducive to economic development than the code-based legal systems characteristic of continental Europe. Although the corporation had important advantages over the main alternative form of organization (partnerships), it also had disadvantages that limited its appeal to small- and medium-sized enterprises (SMEs). As a result, when businesses were provided with an intermediate choice, the private limited liability company (PLLC) that combined the advantages of legal personhood and joint stock with a flexible internal organizational structure, most chose not to organize as corporations. This article tracks the changes that occurred in the menu of business organizational forms in two common-law countries (the UK and the US) and two countries governed by legal codes (France and Germany) and presents data showing the rapidity with which firms in each country responded to enabling legislation for PLLCs. We show that the PLLC was introduced first and most easily in a code country (Germany) and last and with the most difficulty in a common-law country (the US). Late introduction was associated with prolonged use of the partnership form, suggesting that the disadvantages of corporations did indeed weigh heavily on SMEs. |
| JEL: | K2 K22 N40 N80 O57 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13109&r=his |
| By: | Benjamin F. Jones; Benjamin A. Olken |
| Abstract: | Assassinations are a persistent feature of the political landscape. Using a new data set of assassination attempts on all world leaders from 1875 to 2004, we exploit inherent randomness in the success or failure of assassination attempts to identify assassination's effects. We find that, on average, successful assassinations of autocrats produce sustained moves toward democracy. We also find that assassinations affect the intensity of small-scale conflicts. The results document a contemporary source of institutional change, inform theories of conflict, and show that small sources of randomness can have a pronounced effect on history. |
| JEL: | D74 F52 P16 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13102&r=his |
| By: | Joshua D. Angrist (MIT, NBER and IZA); Adriana D. Kugler (University of Houston, NBER, CEPR and IZA) |
| Abstract: | Natural and agricultural resources for which there is a substantial black market, such as coca, opium, and diamonds, appear especially likely to be exploited by the parties to a civil conflict. Even legally traded commodities such as oil and timber have been linked to civil war. On the other hand, these resources may also provide one of the few reliable sources of income in the countryside. In this paper, we study the economic and social consequences of a major exogenous shift in the production of one such resource - coca paste - into Colombia, where most coca leaf is now harvested. Our analysis shows that this shift generated only modest economic gains in rural areas, primarily in the form of increased selfemployment earnings and increased labor supply by teenage boys. The results also suggest that the rural areas which saw accelerated coca production subsequently became more violent, while urban areas were affected little. The acceleration in violence is greater in departments (provinces) where there was a pre-coca guerilla presence. Taken together, these findings are consistent with the view that the Colombian civil conflict is fueled by the financial opportunities that coca provides, and that the consequent rent-seeking activity by combatants limits the economic gains from coca cultivation. |
| Keywords: | rural development, economic shocks, civil war, illegal drugs |
| JEL: | Q34 O13 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2790&r=his |
| By: | Giovanni Caggiano; Gregg Huff |
| Abstract: | Between 1880 and 1939, Burma, Malaya and Thailand received inflows of migrants from India and China comparable in size to European immigration in the New World. This article examines the forces that lay behind this migration to Southeast Asia and asks if experience there bears out Lewis' unlimited labor supply hypothesis. We find that it does and, furthermore, that immigration created a highly integrated labor market stretching from South India to Southeastern China. Emigration from India and China and elastic labor supply are identified as important components of Asian globalization before the Second World War. |
| URL: | http://d.repec.org/n?u=RePEc:gla:glaewp:2007_06&r=his |
| By: | Alain Béraud (THEMA - Théorie économique, modélisation et applications - [CNRS : UMR8184] - [Université de Cergy Pontoise]) |
| Abstract: | Kaldor présente l'analyse qu'il fait de la répartition comme une théorie keynésienne. Son travail s'inspire, nous dit-il, des contributions de Keynes, dans le Traité de la Monnaie, et de Kalecki. Cependant, alors que Keynes et Kalecki développent des analyses de courte période, Kaldor décrit les caractéristiques d'un équilibre de longue période si bien que le mécanisme d'ajustement sur lequel il s'appuie, la flexibilité des taux de marge, est inapproprié. Pasinetti, en suggérant de l'article de Kaldor reposé sur une erreur logique et que la correction de cette erreur permettrait de montrer que le taux de profit — en équilibre de longue période — ne dépend que du taux de croissance naturel de l'économie et de la propension à consommer des capitalistes, relança le débat. Cependant, sa thèse apparaît comme douteuse. D'une part, l'équilibre qu'il décrit n'est pas unique et il se peut que, dans certaines circonstances, l'économie tende vers un autre équilibre dont les caractéristiques sont déterminées par la propension à épargner des salariés. D'autre part, l'idée que la fonction d'épargne proposée par Kaldor est logiquement incohérente est sans fondement. Enfin, l'hypothèse cruciale sur laquelle repose le raisonnement de Pasinetti, l'existence d'une classe d'individus qui tirent des profits la totalité de leurs revenus ne paraît guère caractériser de façon pertinente les systèmes économiques qui prédominent dans les économies développées. |
| Keywords: | Répartition, Kaldor, Keynes, Kalecki, Pasinetti |
| Date: | 2007–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00143948_v2&r=his |
| By: | Jérôme Maucourant (Triangle : action, discours, pensée politique et économique - [CNRS : UMR5206][IEP LYON] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]) |
| Abstract: | Il existe bien des raisons qui pourraient pousser un économiste épris d'histoire à comprendre le rôle des sanctuaires dans l'économie de l'Antiquité. Assurément, le type d'interrogations dépend fortement de l'orientation méthodologique de l'économiste. De nombreux courants de pensée existent dans la discipline économique. Nous prendrons le parti ici que ces points de vue, parfois contradictoires, peuvent en définitive faire avancer la connaissance. Ainsi, l'économiste qui se servira de l'outil analytique que représentent « les coûts de transaction » pourra s'interroger sur le rôle des temples dans la réduction de ces coûts que D. North définit comme « coûts de définition et de mise en exécution des contrats qui sous-tendent l'échange » . D'une façon différente, un économiste quelque peu influencé par la lecture de K. Polanyi, pourra être intéressé par le fonctionnement d'une économie où le principe du marché n'est pas nécessairement le principe essentiel qui régit la reproduction des structures économiques ; à cet égard, les sanctuaires dans l'Antiquité sont peut-être une occasion d'illustrer l'analyse typiquement polanyienne visant à comprendre l'articulation des comportements de redistribution, d'échange et de réciprocité.<br />Trois types d'interrogation traverseront ainsi le présent exposé. Dans quelle mesure l'« économie divine » influence-t-elle ou est influencée par l'« économie des hommes » ? Quel type de rationalité, de comportements économiques peut-on observer en étudiant l'économie des sanctuaires ? Enfin, quelle est la place des marchés dans les systèmes économiques considérés que l'observation des pratiques de l'économie divine peut nous laisser entrevoir ? Pour des raisons de commodité, nous avons divisé notre présentation selon un critère géographique qui renverra, comme nous le verrons, à une certaine hétérogénéité des structures économiques. Notre objet n'est pas vraiment de démontrer un certain nombre de thèses sur l'économie antique, mais plutôt de faire état de quelques questions que suscite la richesse des autres contributions du colloque dont le présent numéro de Topoï rend compte. |
| Keywords: | Polanyi ; sanctuaires ; transactions économiques ; Antiquité ; redistribution ; échange ; réciprocité |
| Date: | 2007–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00138317_v1&r=his |
| By: | Bobirca, Ana; Miclaus, Paul-Gabriel |
| Abstract: | The purpose of the article is to illustrate the main characteristics of the corporate governance challenge facing the countries of South-Eastern Europe (SEE) and to subsequently determine and assess the extensiveness and effectiveness of corporate governance regulation in these countries. Therefore, we start with an overview on the subject of the key problems of corporate governance in transition. We then address the issue of corporate governance measurement for SEE countries. To this end, we include a review of the methodological framework for determining both the extensiveness and the effectiveness of corporate governance legislation, as defined by the EBRD and a discussion on aspects related to corporate governance development, the quality of corporate governance codes and of the “law on the books”. We then focus on the actual analysis of legal institutions effectiveness and provide a measure of corporate governance in Romania and other SEE emerging markets. The paper concludes by emphasizing the relationship between legal change and the development of financial markets in the SEE region. |
| Keywords: | corporate governance; South-Eastern Europe; transition; extensiveness; effectiveness |
| JEL: | G38 P31 K22 G34 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3272&r=his |
| By: | Hou, Feng; Myles, John |
| Abstract: | Whether or not relative rates of assortative marriage have been rising in the affluent democracies has been subject to considerable dispute. First, we show how the conflicting empirical findings that have fueled the debate are frequently an artifact of alternative methodological strategies for answering the question. Then, drawing on comparable census data for Canada and the United States, we examine trends in educational homogamy and intermarriage with log-linear models for all marriages among young adults under 35 over three decades. Our results show that educational homogamy, the tendency of like to marry like, has unambiguously risen in both countries since the 1970s, with no sign of the U-turn in levels of intermarriage reported in some earlier comparative studies. Rising levels of marital homogamy were the result of declining intermarriage at both ends of the educational distribution. However, while trends for men and women were quite similar in Canada, they differed significantly in the United States. The overall rise in marital homogamy In the United States was partially offset by an increased tendency of women with some college education to marry `down¿ the educational hierarchy. In Canada, the only sign of abatement in the trend toward greater educational homogamy was a slight increase in intermarriage among university-educated men and women during the 1990s. |
| Keywords: | Families, households and housing, Education, training and learning, Household characteristics, Outcomes of education, Marriage and common-law unions |
| Date: | 2007–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp3e:2007299e&r=his |
| By: | Changmin Lee (Indiana University Bloomington) |
| Abstract: | I analyze directorships held by CEOs who retired during 1989-1993 and during 1998-2002. My results suggest that retired CEOs became more popular on boards. Also, although pre-retirement accounting performance helps explain the number of outside directorships a retired CEO held in the 1989-1993 sample as Brickley, Linck, and Coles (1999) found, it does not in the 1998-2002 sample. Third, a company's stock performance during a CEO's tenure affects whether he became an inside director of that company after retirement. A 25% change in stock price performance increased the probability by 11% in the 1989-1993 sample, and 51% in the 1998-2002 sample. Finally, if a retired CEO worked in a regulated industry, his probability of serving at least one outside directorship fell by 34% in the 1989-1993 sample, and 24% in the 1998-2002 sample. |
| Keywords: | Corporate governance, Board of director, Deregulation |
| JEL: | G34 G38 L10 L51 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2007007&r=his |
| By: | Giovanni Dosi; Alfonso Gambardella; Marco Grazzi; Luigi Orsenigo |
| Abstract: | In this work we discuss the impact of the new ICT techno-economic paradigm upon the vertical and horizontal boundaries of the firm and ask whether the change in the sources of competitive advantage has resulted in changes in the size distribution of firms and also in the degree of concentration of industries. Drawing both on firm-level and national statistical data we assess the evolution of the overall balances between the activities which are integrated within organizations and those which occur through market interactions. While the new paradigm entails ``revolutionary'' changes in the domain of technology, the modification in industrial structures has been somewhat more incremental. Certainly, the vertical and horizontal boundaries of firms have changed and together one is observing a turnover in the club of biggest world firms accounting also for a shift in the relative importance of industrial sectors. Nonetheless, we do not observe an abrupt fading of the Chandlerian multidivisional corporation in favour of smaller less-integrated firms. |
| Keywords: | New techno-economic paradigm; Organizational change; Vertical integration; Boundaries of the firm; Visible hand. |
| Date: | 2007–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2007/12&r=his |