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on Business, Economic and Financial History |
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Issue of 2007‒08‒14
eighteen papers chosen by |
| By: | Narayanan, Supreena |
| Abstract: | Corporate Governance deals with the ways in which suppliers of finance to corporations assure themselves of getting a return on their investments. This paper analyses the effects of legal systems and accounting conservatism on corporate governance. The U.K. and American corporate governance perspective, there have fundamentally been the same goals with respect to strengthening corporate governance In comparison to the U.S vs the U.K., the value of independent directors is emphasized in the recommendations of Derek Higgs regarding corporate governance, building on the earlier work of the Cadbury Commission. In the U.S. it is the responsibility of the States and the stock exchanges to determine their corporate governance requirements. In the U.K. it is the responsibility of the Security Exchange Commission to overlook adherence to corporate governance regulations whereas its is the duty of the Sarbanes Oxley act to overlook the corporate governance rules and regulations. Theory indicates that accounting conservatism is important to establish an efficient corporate governance system in both the U.S and the UK |
| Keywords: | Corporate Governance; Legal Systems; Accouting Conservatism |
| JEL: | F3 |
| Date: | 2006–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4431&r=his |
| By: | Bordo, Michael D. |
| Abstract: | This lecture revisits the evidence on the incidence and severity of different varieties of financial crises within the context of globalization then (pre-1914) and now (1980 to the present). I then discuss the determinants of emerging market crises from the perspective of the recent balance sheet approach. This approach puts at center stage the importance of financial development. I then peel the onion back further and consider the “deep” institutional determinants of financial development and their relationship to financial stability. I conclude by conjecturing about the ways countries learn from their financial crises to improve their institutions and grow up to financial stability. |
| Keywords: | financial crises, globalization, financial development, institutions |
| JEL: | F4 G2 N1 O1 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:5738&r=his |
| By: | Raouf, BOUCEKKINE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics); David, DE LA CROIX (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics); Dominique, PEETERS |
| Abstract: | We propose a model with some of the main demographic, economic and institutional factors usually considered to matter in the transition to modern growth. We apply our theory to England over the period 1530-1860. We use the model to measure the impact of mortality, population density and technological progress on school foundations, literacy and growth through a set of experiments. We find that one third of the rise in literacy over the period 1530-1850 can be directly related to the rise in population density, while one sixth is linked to higher longevity and one half to exogenous total factor productivity growth. Moreover, the timing of the effect of population density in the model is consistent with the available evidence for England, where it is shown that schools were established at a high rate over the period 1540-1620. |
| JEL: | O41 I21 R12 J11 |
| Date: | 2007–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2007019&r=his |
| By: | Toni Pierenkemper (Department of Economic and Social History, Cologne University Germany) |
| Abstract: | In late 18th century Prussia, the conditions were laied down that were to form the basis of the economic upturn of the 19th century. This period of transition was marked by a break with the former “mercantilist” or “camerialist” system as it is termed in its specific German form of promotion of trade and industry by the state in the 18th century. It was not mercantilist policy but its avoidance that contributed considerably to the success of industrialisation beginning the late 18th century. The Prussian political economy in the middle of the 18th century, labelled ‘Friederician Mercantilism’ according to Frederick II (1740-1786), is addressed in the context of the international mercantilist system (France and England). The traditional view of German economic history is that “Friederician Mercantilism” laied down the conditions for industrial development in the 19th century. The results of this paper are different: The mercantilist sytem impeded development and, combined with the King’s obstinacy in adhering to the system, did nothing to help pave the way for development into a modern industrial nation. This is demonstrated using the example of the newly acquired Silesian province (1740), which was in no good economic state in the mid-18th century; and the first decades subsequent to Prussia’s acquisition were marked by the belligerent circumstances associated with its takeover. Later, “Friederician Mercantilism” only made a limited contribution to the transformation of Silesia into a modern industrial region. In spite of an active trade policy, the measures implemented by the Prussians in order to boost industry proved to be misdirected: financial, trade, and industrial policies emerged as irrelevant or even disadavantageous to the Silesian province. This was even more so the case for the Upper Silesian coal mining district, which was, over the course of the 19th century, to grow into a powerful industrial centre. The new Prussian administration completely underestimated this area’s potential for development. In the 1770s there was a broad discussion of the economic situation in Upper Silesia that resulted in state activity in the domain of the Upper Silesian iron industry. However, it was shaped by the state’s military and fiscal interests. “Friederician Mercantilism” had no perspective for economic development and it was only with the death of Frederick II in 1786 that the potentiality of Prussia’s and Upper Silesia’s development into a modern economiy characacterised by free enterprise emerged. |
| Keywords: | Mercantilism, State, Prussia, Silesia, Industrial Politics |
| JEL: | N33 N93 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:wso:wpaper:01-2007&r=his |
| By: | Marcelo Magalhães Godoy (Cedeplar-UFMG) |
| Abstract: | During 19th century and the beginning of the following century Minas Gerais was the most important sugarcane plantation area in Brazil. In the 1830's there were presumably 4.150 productive unities working with sugarcane transformation in Minas Gerais. Probably, the sum of all sugar mills in the main regions producing to foreign markets - northeast coast, north of Rio de Janeiro and the plains of São Paulo - did not reach half of the number of sugar mills in Minas Gerais. In the same period, it is estimated that approximately 40% of the slave working force of Minas - more than 85.000 captives - was employed seasonally in the fabrication of sugar, of rapadura and of aguardente. It is high the possibility that such a large contingent had neither been employed in any other sugarcane plantation area nor in any other period of Brazilian slavery history. Furthermore, it is estimated that in the 1830's Minas Gerais produced around 33.200 tons of sugar and of rapadura, and more than 22 million liters of aguardente. According to the available information, it is suggested that the sugar production of the state of São Paulo did not surpass 8.500 tons, and the production of the state of Pernambuco was about 27.000 tons. The sugar exportation of the state of Bahia was not more than 30.000 tons; the amount exported by Rio de Janeiro did not reach 17.000 tons; the provinces of Alagoas and Sergipe exported together less than 6.000 tons. |
| Keywords: | Sugar plantation activities; domestic market; Minas Gerais; Brazil; 19th and 20th centuries |
| JEL: | N01 N36 N56 N96 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td310&r=his |
| By: | Stefania Albanesi (Columbia University, NBER, and CEPR); Claudia Olivetti (Boston University) |
| Abstract: | Until the early decades of the 20th century, women spent more than 60% of their prime- age years either pregnant or nursing. Since then, improved medical knowledge and obstetric practices reduced the time cost associated with women?s reproductive role. The introduction of infant formula also reduced women?s comparative advantage in infant care, by providing an e¤ective breast milk substitute. Our hypothesis is that these developments enabled married women to increase their participation in the labor force, thus providing the incentive to invest in market skills, potentially narrowing gender earnings di¤erentials. We document these changes and develop a quantitative model that aims to capture their impact. Our results suggest that progress in medical technologies related to motherhood was essential to generate the signi?cant rise in the participation of married women between 1920 and 1960, in particular those with children. By enabling women to reconcile work and motherhood, these medical advancements laid the ground for the revolutionary change in women?s economic role. |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:bos:wpaper:wp2007-030&r=his |
| By: | David Galenson |
| Abstract: | Irving Berlin, Cole Porter, and other songwriters of the Golden Era wrote popular songs that treated common topics clearly and simply. During the mid-1960s Bob Dylan, John Lennon, and Paul McCartney created a new kind of popular music that was personal and often obscure. This shift, which transformed popular music from an experimental into a conceptual art, produced a distinct change in the creative life cycles of songwriters. Golden Era songwriters were generally at their best during their 30s and 40s, whereas since the mid-'60s popular songwriters have consistently done their best work during their 20s. The revolution in popular music occurred at a time when young innovators were making similar transformations in other arts: Jean-Luc Godard and his fellow New Wave directors created a conceptual revolution in film in the early '60s, just as Andy Warhol and other Pop artists made painting a conceptual activity. |
| JEL: | J01 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13308&r=his |
| By: | Gómez-Sorzano, Gustavo |
| Abstract: | I apply the Beveridge-Nelson business cycle decomposition method to the time series of per capita murder in the State of Arizona (1933-2005). 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, social, and political unrest, and recently with the periodic terrorist attacks to the U.S. The estimated cyclical component of murder warns that terrorist attacks in the U.S. soil, and foreign wars fought by the country from 1941 to 2005, have affected Arizona creating estimated turning point dates clearly marked by the most tragic terrorist attacks to the nation: the shut down in power in NYC in 1965, the World Trade Center Bombing in 1993, and 9/11 2001. Other indexes already constructed include the attacks indexes for the U.S (http://mpra.ub.uni-uenchen.de/1145/01/MPRA_paper_1145.pdf), New York City (http://mpra.ub.uni-muenchen.de/4200/01/MPRA_paper_4200.pdf), and Massachusetts (http://mpra.ub.uni-muenchen.de/4342/01/MPRA_paper_4342.pdf). These indexes must be used as dependent variables in structural models for terrorist attacks, and in models assessing the effects of terrorism over the U.S. economy. |
| Keywords: | A model of cyclical terrorist murder in Colombia; 1950-2004. Forecasts 2005-2019; the econometrics of violence; terrorism; and scenarios for peace in Colombia from 1950 to 2019; scenarios for sustainable peace in Colombia by year 2019; decomposing violence: terrorist murder in the twentieth in the United States; using the Beveridge and Nelson decomposition of economic time series for pointing out the occurrence of terrorist attacks; decomposing violence: terrorist murder and attacks in New York State from 1933 to 2005; terrorist murder; cycles of violence; and terrorist attacks in New York City during the last two centuries; cycles of violence; and terrorist attacks index for the State of Massachusetts. |
| JEL: | D74 K14 O51 K42 N42 H56 C22 |
| Date: | 2007–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4360&r=his |
| By: | Luca, PENSIEROSO (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics) |
| Abstract: | This paper casts the Belgian Great Depression of the 1930s within a dynamic stochastic general equilibrium (DSGE) framework. Results show that a total factor productivity shock within a standard real business cycle model is unsatisfactory. Introducing war expectations in the baseline model produces little improvement. Given the evidence on sticky wages put forward by historians, it shows that a simple DGSE model with sticky wages ˆ la Taylor improves on the result. |
| Keywords: | Great Depression; Belgium; sticky wages; dynamic stochastic general equilibrium |
| JEL: | E13 N14 |
| Date: | 2007–08–02 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2007025&r=his |
| By: | Rui Pedro Esteves; Jaime Reis; Fabiano Ferramosca |
| Abstract: | The existence of a self-regulating arbitrage mechanism under the gold standard has been traditionally considered as one of its main advantages, and attracted a corresponding research interest. This research is arguably relevant not only to test for the efficiency of the "gold points", but also to study the evolution of financial integration during the so-called first era of globalization. Our first aim with this paper is to contribute to the enlargement of the scope of the literature by considering the case of Portugal that adhered to the system, in 1854, at a much earlier phase than the majority of countries, thus allowing for a broader perspective on the evolution of the efficiency of the foreign exchange market. As a typical "peripheral" country, Portugal can be used as the starting point for a study of the degree of integration of the periphery within the system. Furthermore, the Portuguese exchange also illustrates the role in practice of large players in sustaining currency stability, over and beyond the atomistic forces of arbitrage and speculation assumed in conventional theoretical frameworks. We also address the question of the credibility of the authorities` commitment to the standard, through the perspective of the target zone literature. |
| Keywords: | Gold Standard, Credibility, Portugal, Pre-1913 |
| JEL: | F31 F33 N23 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:338&r=his |
| By: | Siyan Chen; Norman V. Loayza; Marta Reynal-Querol |
| Abstract: | Using an “event-study” methodology, this paper analyzes the aftermath of civil war in a cross-section of countries. It focuses on those experiences where the end of conflict marks the beginning of a relatively lasting peace. The paper considers 41 countries involved in internal wars in the period 1960-2003. In order to provide a comprehensive evaluation of the aftermath of war, the paper considers a host of social areas represented by basic indicators of economic performance, health and education, political development, demographic trends, and conflict and security issues. For each of these indicators, the paper first compares the post- and pre-war situations and then examines their dynamic trends during the post-conflict period. It conducts this analysis both in absolute and relative terms, the latter in relation to control groups of otherwise similar countries. The paper concludes that, even though war has devastating effects and its aftermath can be immensely difficult, when the end of war marks the beginning of lasting peace, recovery and improvement are indeed achieved. |
| Keywords: | Civil War |
| JEL: | O10 O57 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1043&r=his |
| By: | Alvin E Roth |
| Date: | 2007–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:843644000000000283&r=his |
| By: | Michel, BEINE; Cecily, DEFOORT (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics); FrŽdŽric, DOCQUIER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics) |
| Abstract: | This paper casts the Belgian Great Depression of the 1930s within a dynamic stochastic general equilibrium (DSGE) framework. Results show that a total factor productivity shock within a standard real business cycle model is unsatisfactory. Introducing war expectations in the baseline model produces little improvement. Given the evidence on sticky wages put forward by historians, it shows that a simple DGSE model with sticky wages ˆ la Taylor improves on the result. |
| Keywords: | human capital; convergence; brain drain |
| JEL: | O15 O40 F22 F43 |
| Date: | 2007–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2007024&r=his |
| By: | Rhodes, James; Yoshino, Naoyuki |
| Abstract: | This paper surveys the postwar evolution of Bank of Japan (BOJ) monetary policy. Using both qualitative and quantitative data, we describe the changes in the money supply process in response to changing institutional constraints. We focus on the transition from quantitative to qualitative control mechanisms, illuminating, in particular, the important role of the BOJ’s lending guidance (window guidance) in the early periods and financial liberalization in subsequent periods. Monetary policy reaction functions are estimated and used to verify major changes in policy instruments, targets, and indicators. |
| Keywords: | Japanese Monetary Policy |
| JEL: | E52 E51 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4387&r=his |
| By: | Michel Freyssenet (CSU - Cultures et sociétés urbaines - [CNRS : UMR7112] - [Université Paris VIII Vincennes-Saint Denis]) |
| Abstract: | Le processus qui a conduit à la faillite de la sidérurgie française en 1979 n’a pas été le fruit de l'incompétence d'un patronat familial, ou bien du laisser-faire de la CECA, ou bien encore de l'interventionnisme de l'État, mais de trois contradictions sociales qui se sont formées au cours des années 50, en pleine euphorie de l'expansion, et que les forces sociales et les acteurs en présence ont perpétuées par leur action contradictoire: la reconstitution après-guerre d'une classe ouvrière traditionnelle dans des bassins mono-industriels; un divorce entre l'industrie de transformation et la sidérurgie; enfin une lutte incessante entre des sociétés sidérurgiques de taille équivalente réticentes à coopérer. Lire plus: http://freyssenet.com/?q=node/352. |
| Keywords: | sidérurgie française; CECA; Europe; industries de transformation; histoire des entreprises; division du travail; mécanisation; automatisation; relations industrielles |
| Date: | 2007–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00165640_v1&r=his |
| By: | Robert E. Lucas, Jr. |
| Abstract: | A model is proposed to describe the evolution of real GDPs in the world economy that is intended to apply to all open economies. The five parameters of the model are calibrated using the Sachs-Warner definition of openness and time-series and cross-section data on incomes and other variables from the 19th and 20th centuries. The model predicts convergence of income levels and growth rates and has strong but reasonable implications for transition dynamics. |
| JEL: | O0 O1 O19 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13286&r=his |
| By: | Beechey, Meredith (Monetary Affairs Division); Österholm, Pär (Department of Economics) |
| Abstract: | This paper estimates the path of inflation persistence in the United States over the last 50 years and draws implications about the evolution of the Federal Reserve's monetary-policy preferences. Standard models of central bank optimization predict that the central bank's preference for output stability is a determinant of inflation persistence. Hence, time variation of that preference should be reflected in changes in inflation persistence. We estimate an ARMA(1,q) model with a time-varying autore- gressive parameter for monthly U.S. inflation data from 1955 to 2006.The coefficients provide an estimate of the inflation target and the path of inflation persistence. The estimated inflation target over the sample is approximately 2.8 percent and we find that inflation persistence declined substantially during Volcker and Greenspan's tenures to a level significantly less than one and significantly below that of the 1970s and early 1980s. |
| Keywords: | Monetary policy; Central bank preferences; Inflation persistence; Time-varying parameters; Kalman filter |
| JEL: | E52 E58 |
| Date: | 2007–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2007_018&r=his |
| By: | Suleiman Abu-Bader (Department of Economics, Ben-Gurion University of the Negev); Aamer Abu-Qarn (Department of Economics, Ben-Gurion University of the Negev) |
| Abstract: | In this study we test for structural changes in international trade patterns of 77 countries over the post-WWII period, to examine if they experienced a substantial increase in their trade ratios following major GATT rounds such as the Kennedy Round, or after joining GATT. Our results show that trade ratios of most of these countries exhibited structural breaks in their time paths, however, most of the postbreak paths were below the extrapolated prebreak paths. Furthermore, while the significant break years coincided closely with major regional and international events such as the oil shocks of the 70s and the East-Asian financial crisis in 1997, they occurred far before or after the time of a country's accession to GATT or the time of the major GATT rounds. |
| Keywords: | International Trade, Trade Liberalization, Structural Change, Oil Shocks, Kennedy Round, East Asia, Financial Crisis |
| JEL: | C22 F1 F13 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:bgu:wpaper:239&r=his |