New Economics Papers
on Business, Economic and Financial History
Issue of 2007‒11‒17
twenty papers chosen by

  1. From extreme luxury to everyday commodity Sugar in Sweden, 17th to 20th centuries By Rönnbäck, Klas
  2. Bank Failures in Theory and History: The Great Depression and Other "Contagious" Events By Charles W. Calomiris
  3. French investment banking at Belle Époque: the legacy of the 19th century Haute Banque By Hubert BONIN (GREThA)
  4. Globalization and Labor Market Integration in Late Nineteenth- and Early Twentieth-Century Asia By Gregg Huff; Giovanni Caggiano
  5. Financial Transition in Pre-World War II Japan and Southeast Asia By Gregg Huff
  6. Building up a multilateral strategy for the United States: Alvin Hansen, Jacob Viner and the Council on Foreign Relations (1939-1945) By Sebastiano Nerozzi
  7. Information asymmetries and financial intermediation during the Baring crisis : 1880-1890 By Juan-Huitzi Flores
  8. Myanmar and Japan: How Close Friends Become Estranged By Kudo, Toshihiro
  9. Canada's Pioneering Experience with a Flexible Exchange Rate in the 1950s:(Hard) Lessons Learned for Monetary Policy in a Small Open Economy By Michael D. Bordo; Ali Dib; Lawrence Schembri
  10. A History of Japan’s Foreign Aid Policy: From Physical Capital to Human Capital By Furuoka, Fumitaka
  11. Is Management Interdisciplinary? The Evolution of Management as an Interdisciplinary Field of Research and Education in the Netherlands By Baalen, P.J. van; Karsten, L.
  12. Size, Structure, and Strategies: Insolvency and "The Nature of the Firm" in Italy, 1920S-1970S By Paolo Di Martino; Michelangelo Vasta
  13. China's Agricultural Crisis and Famine of 1959-61: A Survey and Comparison to Soviet Famines By Dennis Tao Yang
  14. New series of the spanish foreign sector, 1850-2000 By Antonio Tena Junguito
  15. Central banking in the iberian peninsula: a comparison By Pablo Martin Aceña
  16. The French social protection system in the throes of reform (1975-2007). By Jean-Claude Barbier
  17. The Transformation of Rural Labour Systems in Colonial and Post-Colonial Northern Nigeria By Kohnert, Dirk
  18. The price of sugar in Sweden : Data, source & methods By Klas, Rönnbäck
  19. Seis décadas de relaciones entre el Banco Mundial y México By Urzúa, Carlos M.
  20. Industrialization in Egypt: Historical Development and Implications for Economic Policy By Ronia Hawash

  1. By: Rönnbäck, Klas (Department of Economic History, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper will focus upon the Swedish consumption of sugar, a product that illustrates the shift from being a luxury to being a mass-consumed commodity. Very little attention has been paid to the commodity of sugar by Swedish scholars, at least concerning the period prior to the introduction of the sugar beet in the late 19th century. The paper will try to answer three questions: - When did sugar experience a shift from luxury to everyday commodity? - What factors are important to explain the shift? - What impacts did the increasing sugar consumption have, at home and abroad? Regarding the last question, the paper most importantly presents a novel calculation of how large the ‘ghost acreage’ and slave labour population the Swedish consumption during the early modern era required. <p>
    Keywords: Economic History; Price History; Consumption; Sugar; Sweden; Ghost acreage; Slavery
    JEL: N33 N36 N93
    Date: 2007–11–12
  2. By: Charles W. Calomiris
    Abstract: Bank failures during banking crises, in theory, can result either from unwarranted depositor withdrawals during events characterized by contagion or panic, or as the result of fundamental bank insolvency. Various views of contagion are described and compared to historical evidence from banking crises, with special emphasis on the U.S. experience during and prior to the Great Depression. Panics or "contagion" played a small role in bank failure, during or before the Great Depression-era distress. Ironically, the government safety net, which was designed to forestall the (overestimated) risks of contagion, seems to have become the primary source of systemic instability in banking in the current era.
    JEL: E5 G2 N2
    Date: 2007–11
  3. By: Hubert BONIN (GREThA)
    Abstract: The research program about the history of investment banking assesses through this text the legacy transmitted by the merchant banks (Haute Banque) to the Paris banking market. It first delimited the foibles which hindered them in the last quarter of the 19th century, but précised how they succeeded in renewing themselves and in absorbing fresh forces of initiative and creativeness. It draws the strong lines of the strategic deployment of the private bankers, of their portfolio of banking skills and their aptitude to insert themselves in banking in the wake of “modern” banks or even to create one, the Banque de l’union parisienne (Bup) in 1904.
    Keywords: Bank, merchant banking; Paris banking market; banking strategy; portfolio of strategic activities; firms’ portfolio of skills
    JEL: N23 N24 G21
    Date: 2007
  4. By: Gregg Huff; Giovanni Caggiano
    Abstract: This article uses new data sets to analyze labor market integration between 1882 and 1936 in an area of Asia stretching from South India to Southeastern China and encompassing the three Southeast Asian countries of Burma, Malaya and Thailand. We find that by the late nineteenth century, globalization, of which a principal feature was the mass migration of Indians and Chinese to Southeast Asia, gave rise to both an integrated Asian labor market and a period of real wage convergence. Integration did not, however, extend beyond Asia to include core industrial countries. Asian and core areas, in contrast to globally integrated commodity markets, showed divergent trends in unskilled real wages
    Keywords: Globalization; Labor market integration; Migration; Southeast Asia; Terms of trade, real wage convergence
    JEL: F15 F22 J31 N35 O15
    Date: 2007–07
  5. By: Gregg Huff
    Abstract: This article compares Japan and Southeast Asia before the Second World War to explore the question Goldsmith posed: why, since financial transition in all countries follows the same path, should there be such remarkable differences in the speed of transition? Beginning after the Meiji Restoration in 1868 and starting from the same per capita income as Southeast Asian countries, Japan had, by 1913, built a modern financial system comparable to those in the West. But finance in Southeast Asian countries was (and remained in 1939) little developed, dominated by metropolitan interests, heavily reliant on informal finance, and geared towards primary commodity exports. The article argues that Southeast Asia's no more than partial financial transition is explained by a continued ability to tap natural resources, limited technological change, and the laissez-faire stance of colonial governments. Japan, by contrast, could not depend on abundant resources for growth. Its experience demonstrates how nationalist objectives of military power and industrialisation can motivate government to accelerate financial transition
    Date: 2007–07
  6. By: Sebastiano Nerozzi (University of Palermo, Dipartimento di Studi su Politica, Diritto e Società)
    Abstract: Between 1943 and 1947 a new economic order was founded, which aimed at implementing multilateral trade, international monetary cooperation and economic stability supported by government intervention. This paper describes the contribution provided to this process by a group of American economists working under the auspices of the Council on Foreign Relations and in close connection with the State Department. Since 1939 the Economic and Financial Group led by Jacob Viner and Alvin H. Hansen played an important role in designing strategic choices which concerned American economic interests in the post-war world and in preparing the ground for the establishment of such multilateral agencies as the IMF, the IBRD and the ITO-GATT system. In assessing Viner’s and Hansen’s views and proposals, this paper shows how different and competing approaches to economic theory and policy compromised and converged in supporting this outcome.
    Keywords: Jacob Viner, Alvin Hansen, Bretton Woods, Council on Foreign Relations, Post-War Planning; State Department.
    JEL: B31 E63 F59 N12
    Date: 2007
  7. By: Juan-Huitzi Flores
    Abstract: This paper analyses the information structure of European investors on the eve of the Baring crisis in 1890. We argue that financial intermediaries were in a privileged position by having the monopoly of information. This situation led to conflicting interests because business and proper investors’ advice were not always compatible, as they are not even today. Even though spreads in secondary market prices between Argentina’s long-term sovereign bonds and U.K. consols remained stable throughout the 1880s, primary market variables such as underwriting fees or total amounts of “money left on the table” in Argentina’s Initial Public Offerings reflect the deteriorating macroeconomic situation of the country. In fact, this paper suggests that lessons from the Baring crisis can be transferred to contemporaneous crises.
    Date: 2007–10
  8. By: Kudo, Toshihiro
    Abstract: Independent Myanmar and Japan had long held the strongest ties among Asian countries, and they were often known as having “special relations†or a “historically friendly relationship.†Such relations were guaranteed by the sentiments and experiences of the leaders of both countries. Among others, Ne Win, former strongman throughout the socialist period (1962-1988), was educated and trained by the Japanese army officers of the Minami Kikan, leading to the birth of the Burma Independence Army (BIA). Huge official development assistance provided by the Japanese government also cemented this special relationship. However, the birth of the present military government (SLORC/SPDC) in 1988 drastically changed this favorable relationship between the two countries. When the military seized power in a coup, Japan was believed to be the only country that possessed sufficient meaningful influence on Myanmar to encourage a move toward national reconciliation between the junta and the opposition party led by Aung San Suu Kyi. In reality, Japan failed to exert such an influence due to its sour relations with the military government and reduced influence in the new international and regional political landscape. What is worse, Japan seems to be losing its say on Myanmar issues in the international political arena, as it has been wavering in limbo between the sanctionist forces, such as the United States and the European Union, and engagement forces, such as China and ASEAN.
    Keywords: Myanmar (Burma), Japan, China, ODA, Foreign Relations, Cold War
    JEL: F14 F35 N45
    Date: 2007–08
  9. By: Michael D. Bordo; Ali Dib; Lawrence Schembri
    Abstract: This paper revisits Canada's pioneering experience with floating exchange rate over the period 1950-1962. It examines whether the floating rate was the best option for Canada in the 1950s by developing and estimating a New Keynesian small open economy model of the Canadian economy. The model is then used to conduct a counterfactual analysis of the impact of different monetary policies and exchange rate regimes. The main finding indicates that the flexible exchange rate helped reduce the volatility of key macro-economic variables. The Canadian monetary authorities, however, clearly did not understand all of the implications of conducting monetary policy under a flexible exchange rate and a high degree of capital mobility. The paper confirms that monetary policy was more volatile in the post-1957 period and Canada's macroeconomic performance suffered as a result.
    JEL: E32 E37 F31 F32 N01
    Date: 2007–11
  10. By: Furuoka, Fumitaka
    Abstract: This paper critically reviews Japan’s experience from being an aid recipient after the World War Second to becoming a leading donor of Official Development Assistance (ODA) since the 1990s. Of particular significance is the new trend of Japanese aid policy in which Japan stressed the importance of human capital rather than physical capital. Under the new guidelines which were first announced in 1991, Japanese government has paid more attentions to spend their money for human capital investment in developing countries, such as educations, health care, rather than physical investment, such as constructions of dams or highways.
    Keywords: foreign aid; Japan; human capital; history
    JEL: F35
    Date: 2007–11–08
  11. By: Baalen, P.J. van; Karsten, L. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Management research and education are often characterized as being interdisciplinary. However, most discussions on what interdisciplinarity in management studies means have bogged down in ideological fixations. In this paper we alternatively take a historical perspective and analyze the evolution of the interdisciplinarity concept in management studies during the last decades in the Netherlands. We distinguish between two opposite versions of interdisciplinarity: a synoptic (conceptual) and an instrumental (pragmatic) one. Both versions resulted from different knowledge strategies (boundary-work) of competing and cooperating disciplines. We conclude that in the Netherlands instrumental versions of interdisciplinarity in management research and education prevailed.
    Keywords: Interdisciplinarity;disciplinarity;management science;management education;history of management education;
    Date: 2007–09–19
  12. By: Paolo Di Martino; Michelangelo Vasta
    Abstract: During the Twentieth century, Italian joint-stock companies remained relatively small and tended to die young. This fact constrained the development of the full potential of the Italian industry, as small-dimensioned companies struggled to implement the most efficient technologies and managerial techniques. This paper analyses this problem by looking at the functioning of insolvency procedures. Using quantitative and qualitative evidence, we show how various devices that progressively appeared on the scene failed in providing efficient solutions to re-start worthy companies. Insolvency procedures thus remained liquidation-prone, a factor that contributes to explain the peculiarity and the limits of Italian industrial capitalism.
    JEL: N44 N84
    Date: 2007–10
  13. By: Dennis Tao Yang
    Abstract: China?s Great Leap Forward (GLF) of 1958-61, a campaign of unprecedented mobilization efforts to achieve rapid industrialization, ended as a catastrophe. National grain production collapsed and a widespread famine claimed millions of human lives. This paper reviews a growing economic literature on this historical crisis. While multiple causes are hypothesized, empirical findings suggest that the collapse of grain production was primarily attributable to a systematic failure in central planning, involving the diversion of agricultural resources to industry and excessive grain procurements that precipitated malnutrition among peasants and decimation of labor productivity. The resulting decline in grain availability, as well as urban bias in China?s food distribution system, became the main culprits of the enormous famine. In light of the Chinese experience, this paper also explores the role of defective planning in the Soviet famines of 1931-3 and 1947.
    Keywords: central planning, food supply, famine, urban bias, China, USSR
    Date: 2007
  14. By: Antonio Tena Junguito
    Abstract: This paper offers new series on the evolution of the foreign sector of the Spanish economy in the period between 1821 and 2001. Besides the classical series of the trade balance in current, constant and gold pesetas, it incorporates the series of incomes, payments and balance of the main entries of the Current Account and Capital Balance, along with a special treatment of the tourist series since the 1920s. As a complement to the analysis of the foreign sector, new indicators of trade, financial and customs tariffs protection and degree of openness of the Spanish economy have been included together with new homogeneous estimations of the distribution by products and the revealed comparative advantage (according to a systematic aggregate following the Standard International Trade Classification (SITC. 2 (UN (1985) and GATT (1986)) as well as the geographical distribution of exports and imports (following the UN Classification (INE (2002)).
    Date: 2007–10
  15. By: Pablo Martin Aceña
    Abstract: The paper explores the similiraties and differences between the origin, behavior and evolution of the central banks of Portugal and Spain. Portugal and Spain are two countries that share the same peninsular space in the west corner of Europe. Though different in size and population, the political, social and economic history of both nations offer more similarities than differences. In the financial sphere, he resemblances are remarkable. Both nations exhibit very low levels of financial intermediation, as measured by the ratio between total bank deposits and GDP. Another common feature of both Iberian nations is the dominance exerted by a sole institution. However, we also find some divergences between the financial structures of the two countries that are worth noting. Three differences merit our particular attention in this paper. The first diversity refers to the distinct composition of the quantity of money. The monetary regime is the second difference between the two countries (Portugal joined the gold standard while Spain remained off the gold standard). Finally, the Bank of Portugal and the Bank of Spain exhibit also significant contrasts in their behavior as central banks.
    Date: 2007–10
  16. By: Jean-Claude Barbier (Centre d'Economie de la Sorbonne)
    Abstract: The French system of social protection, contrary to many simplistic accounts, has undergone quite a great number of reforms in the past 30 years. This were very differentiated across sectors but also appear as linked to the business cycle. The French system, in its present developments does not manifest a too simplistic "path-dependency", because of its hybrid character : it is not easy to insert it into the traditional tripartition of welfare regimes, and, precisely because of this hybrid nature, the current developments can be explained in terms of the "imprint" of past history, which has perhaps always been hybrid. This text is a follow-up to the book written with Bruno Théret, Le nouveau système français de protection sociale (Editions La Découverte).
    Keywords: France, social protection, welfare state.
    JEL: I38 H55
    Date: 2007–10
  17. By: Kohnert, Dirk
    Abstract: The study attempts to highlight the interrelation between three central points in the ongoing debate on the political economy of development: viability, surplus, and class-formation. A case study of the develop¬ment of rural labour systems in Northern Nigeria is meant to provide both a better qualitative and quantitative idea of this interrelation. After an analysis of the socio-economic effects of forced and bonded labour during colonial times, the articulation of different systems of family and non-family labour has been investigated. Class-specific effects of labour and capital input do even result in an increasing use of communal labour by rich and middle peasants after the Nigerian Civil War: its form remains, but its content changes fundamentally. The socio-economic and material base for small-scale peasant subsistence production has been gradually destroyed.
    Keywords: political economy of development; labour systems; rural areas; economic history; Africa; colonialism; Nigeria;
    JEL: J81 J71 N37 P48 Z13 K31 F54 P16 J2 J43 J61 J83 P52
    Date: 1986
  18. By: Klas, Rönnbäck (Department of Economic History, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper presents a new price series for sugar in Sweden, or more exactly Stockholm, in a long-term perspective (1624–1900). Prior to this, no price data has been available from Sweden for this commodity. The paper is devoted to presenting source-related and technical aspects of the price series, as well as the price series as such. Analysis of the development of prices will be conducted in other papers.<p>
    Keywords: Economic History; Price; Sources; Sugar; Sweden
    JEL: N01
    Date: 2007–11–08
  19. By: Urzúa, Carlos M. (Tecnológico de Monterrey, Campus Ciudad de México)
    Abstract: A recount of the relations between the World Bank and Mexico not only makes for a fascinating lecture, but it also exemplifies the way in which a development bank should and should not behave if it wants to become a trustworthy partner.
    Keywords: Mexico, World Bank, development banks, aid
    JEL: N26 O19
    Date: 2007–10
  20. By: Ronia Hawash (Faculty of Management Technology, The German University in Cairo)
    Abstract: Although Egypt has begun industrialization long ago (1920's), it is still lagging far behind other countries that have begun the industrialization process much later than Egypt. The arising problem is that the Egyptian manufactures' sector is facing a deteriorating position in terms of trade, as the Egyptian economy faces competitive pressures from three fronts: First, countries within the MENA region which opened up their economies early and took positive measures to increase their competitiveness such as Tunisia and Morocco. Second, East Asian economies and European transition economies which are characterized by having more efficient productive structures using skilled labor and capital intensive activities and hence produce higher value added and better quality goods. Third, the large unskilled, labor abundant, low wage economies such as China, India and Bangladesh that have been integrating rapidly in the global economy, exerting growing competitiveness pressures on countries exporting low-skilled manufactures such as Egypt. This paper deduces that the constraints to having a booming industrial sector are related to the inefficient human resource development, technical constraints, legislative constraints and economic constraints. Accordingly, the paper recommends having more investments in human development, building the capabilities of the public sector, more enhancements for the small industries, and managing the process of integration in the global economy.
    Keywords: Industrial development, industrial policy
    JEL: O14 L60 E61
    Date: 2007–10

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