New Economics Papers
on Business, Economic and Financial History
Issue of 2008‒04‒21
fourteen papers chosen by

  1. The Rational of Private Bank Note Issuance. The Enskilda Banks in the Economic and Financial Development of Nineteenth Century Sweden By Anders Ögren
  2. Portraits of the Artist: Personal Visual Art in the Twentieth Century By David W. Galenson
  3. Interest Groups, Government Spending and Italian Industrial Growth (1876-1913) By Nadia Fiorino; Roberto Ricciuti
  4. A challenge to triumphant optimists? A new index for the Paris stock exchange (1854-2007) By David Le Bris; Pierre-Cyrille Hautcoeur
  5. Petites et grandes entreprises face à la faillite au XIXème siècle en France : du droit à la pratique By Pierre-Cyrille Hautcoeur; Nadine Levratto
  6. Una nova estimacio retrospectiva del VAB regional industrial. Espanya (1860-1930) By Daniel A. Tirado; Julio Martinez-Galarraga
  7. "Financial Business in Tokugawa Japan"(in Japanese) By Makoto Kasuya
  8. Sweden's Monetary Internationalization under the Silver and Gold Standards, 1834–1913 By Anders Ögren
  9. The Pastoral Boom, the Rural Land Market, and Long Swings in New Zealand Economic Growth 1873-1939 By David Greasley; Les Oxley
  10. Commercialisation, Factor Prices and Technological Progress in the Transition to Modern Economic Growth By Broadberry, Stephen; Ghosal, Sayantan; Proto, Eugenio
  11. Union Decline in Britain By Blanchflower, David G.; Bryson, Alex
  12. Public Pensions and Elderly Mortality in Canada: Comparing Means tested and Universal Eligibility, 1921 – 1966 By Herbert Emery; Jesse Matheson
  13. Détermination du niveau des prix et finances: le cas du Liban, 1965-2005. By Hassan Ayoub; Jérôme Creel; Etienne Farvaque
  14. Paradigms in Management By Matthias Huehn

  1. By: Anders Ögren
    Abstract: First established during the 1830's, the Enskilda banks were characterized by unlimited liability and the right to issue bank notes. In Swedish banking history, these banks have been considered to be primitive relics. This paper utilizes new data to revise this picture. Issuing notes based on an anchor provided by the National bank, the Enskilda banks made an important contribution to the development of liquid capital markets and for economic growth. The note issuance was also of importance to overcome shortages of liquidity due to both seasonal and regional variations in demand. In view of the crucial role of the Enskilda banks, the Banking Act of 1864, which permitted freer establishment and automatic prolongation of the charters for such banks, must be judged to have been an important institutional change.
    JEL: E40 G21 N13 N23
    Date: 2008
  2. By: David W. Galenson
    Abstract: Scholars of literature have devoted considerable attention to what they have called confessional or personal poetry, in which Robert Lowell, Sylvia Plath, and a series of other poets, from the 1950s on, made their art out of the experiences of their own lives. Yet art scholars have not analyzed a parallel practice in the visual arts, in which painters and sculptors have used motifs drawn largely or exclusively from their own lives. This practice was begun by Vincent van Gogh in the late nineteenth century, and it subsequently influenced a diverse group of major artists, including such conceptual artists as Edvard Munch, Frida Kahlo, Joseph Beuys, Bruce Nauman, Cindy Sherman, and Tracey Emin, and the experimental artists Francis Bacon and Louise Bourgeois. Although van Gogh did not think of his practice of painting himself and the people and things he cared most about as novel, others soon recognized it as an innovation that would help them to achieve their artistic goals, and personal art became a distinctive feature of the advanced art of the twentieth century. That personal art first appeared in the late nineteenth century, and became more common in the twentieth, reflects the increased autonomy of painters that was a consequence of the development of a competitive market for advanced art after the Impressionists' successful challenge to the monopoly of the official Salon.
    JEL: J01
    Date: 2008–04
  3. By: Nadia Fiorino; Roberto Ricciuti
    Abstract: In the last two decades of the XIX century the Italian model of economic growth shifted from agricultural to industrial. Historians maintain that this process was affected by the action of some interest groups that pursued both state protection from competition and specific public expenditure programs. Starting from the economic literature of interest groups, this paper attempts to empirically investigate the role of the interest groups in public expenditure decisions in Italy from 1876 to 1913. We argue that a proper indicator of the role of interest groups is their output. The analysis suggests that government spending was sensitive to the preferences of heavy industry rather then those of textile and cereal cultivators. We therefore highlight the role of the political process in setting economic policy at the early stages of the Italian development.
    Keywords: industrialization; special interests groups; public expenditure, Italian economic history.
    JEL: H11
    Date: 2008–03–03
  4. By: David Le Bris; Pierre-Cyrille Hautcoeur
    Abstract: Most empirical knowledge on the long term performance of financial investments is derived from the behaviour of the most successful markets. Recent research has tried to broaden the sample of markets studied towards European ones, many of which were among the worlds most developed up to World War One and again weight substantially in today's global portfolio. The synthesis by Dimson, Marsh and Staunton (2001) proposes data on the 20th century for 16 countries, and ends up with an optimistic tone, although a less enthusiastic one than most of the American literature. They argue that even in the worst case - Belgium - the stock market long term performance remained positive (2.5% yearly real return on the 20th century), and superior to that of other investments. The results of this paper suggest that most of the continental European results may be wrong, since they may significantly overestimate the performance of investments in stocks during the 20th century. We concentrate on the French case, but we argue that similar calculations on other European countries may well give similar results. This paper describes and analyzes a new homogeneous stock index for the French stock market from 1854 to 1998, and compares it to those of some other countries. The paper first describes the index's methodology (a weighted, yearly adjusted index comparable to Euronext's CAC40). It then provides some major results. First, investment in French stocks provided a positive real return during the 19th century, but a negative one - because of inflation - in the 20th . After 1914, hoarding gold or investing in real estate provided better returns than stocks. The equity premium was low and consistent with standard models of risk aversion. These results contrast no only with those observed on the US market, but also with older studies of the French market, which were based on un-weighted large indices suffering survivor bias. They are more consistent with the history of the French financial markets and economic policy regimes in the 19th and 20th centuries.
    Date: 2008
  5. By: Pierre-Cyrille Hautcoeur; Nadine Levratto
    Abstract: Economic literature studies bankruptcy as a homogenous phenomenon. Insolvency concerns all kind of firms and judgements are made without any reference to the firm’s size. We consider this assumption does not hold and we try to consider the alternative one, i.e. judges take into account the judicial form and the size. We test it over the 19th century whereas the bankruptcy law evolves towards its modern design. This period also present another great advantage: the limited liabilities companies are created in the second part of the 19th century and, at the same time legislator authorizes the free creation of public societies. It is thus appropriate to see whether judges applied the law indifferently or if they considered differently individual merchants and companies. The first part of the paper describes bankruptcy law and its changes over the period; the second section shows the global changes in the courts activity using national data. The data specially collected in the archives of commercial court of Paris allow us to introduce the legal status and the firms’ size as discriminating factors.
    Keywords: bankruptcy law, commercial courts, law and economics, firms default
    Date: 2008
  6. By: Daniel A. Tirado; Julio Martinez-Galarraga (Universitat de Barcelona)
    Abstract: This article offers a new historical dataset of industrial GVA for Spanish provinces (NUTSIII) and autonomous regions (NUTS II). For doing that, a new methodology is proposed in order to estimate historical figures of regional GVA. Traditional estimates of regional industrial output in Spain have usually been based on fiscal sources. These data allowed the estimation of regional industrial capital stocks that were used as a proxy of industrial regional production. Opposite to this, in this article we offer an estimation based on regional industrial factor incomes. In order to carry out the estimation, we have followed the proposals by Geary and Stark (2002) and Crafts (2005). The new estimation offers data of Spanish regional industrial GVA for different years along the period 1860-1930.
    Keywords: regional industrial disparities, spatial analysis, economic history
    JEL: N93 R12 N94 O18
    Date: 2008
  7. By: Makoto Kasuya (Faculty of Economics, University of Tokyo)
    Abstract: This paper aims to review researches on financial businesses in Tokugawa Japan. Recently, it is made clear that economic institutions play an important role for economic growth. Moreover, some scholars insist that financial factors influences economic growth, though others criticize this view. In this paper, therefore, first I conduct a survey of laws and their enforcement, and in the next two sections I analyze monetary and credit systems in the Edo period. In the fourth section, remittance between Osaka and Edo (now Tokyo) or between distant places is examined in comparison with contemporary British foreign exchange businesses, because silver was a key currency in Osaka and gold was Edo's key currency. In the fifth I define ryogae-sho (bankers in Tokugawa Japan) in this period and in the next section I conduct a survey of bankers' activities. In the seventh section I shed some light on 'direct' finance between lenders and borrowers because wealthy merchants did financial businesses very actively and in the next section financial activities in the outside of three large cities (Edo, Osaka, and Kyoto) are briefly examined. In the last section I summarize above analysis and examine briefly institutional changes around the Meiji Restoration.
    Date: 2008–02
  8. By: Anders Ögren
    Abstract: The central bank’s possibility to sustain the specie standard was largely affected by both the financial development and its internationalization. The increased foreign debt denominated in foreign currencies forced the central bank to engage in more disciplinary monetary policy. The developed banking system worked in two ways: 1) increased public wealth in the banking system allowed a more relaxed discipline but 2) the commercial banks’ supply of liquidity through note issuance allowed the central bank to strengthen monetary discipline. The international economy developed as a credit economy and this international credit economy led to more flexible monetary policy. This affected the working of the adjustment mechanism where domestic prices simultaneously followed changes in the domestic money supply and in international prices. Thus the international integration made both prices and money supply grow in harmony over the borders.
    Keywords: Balance of Payments; Central Bank Reserves; Foreign Debt; Gold Standard; Monetary Base; Monetary Discipline; Monetary Policy; Money Supply; Silver Standard
    JEL: E42 E50 F33 N13 N23
    Date: 2008
  9. By: David Greasley; Les Oxley (University of Canterbury)
    Abstract: A pastoral boom led to higher farm and manufacturing productivity and to New Zealand attaining the world’s highest HDI in 1913. Staple exports invigorated the land market, diffused rural land ownership, and fostered intensive growth. The gains from higher land prices spread widely, but land market volatility also created instability. New Zealand had the world’s highest GDP per capita in 1938, but she experienced long swings in her growth rates. Dramatic swings in rural land market activity engendered by the pastoral boom contributed powerfully to a long depression in the 1920s; subsequently a new monetary regime facilitated fast recovery.
    Keywords: Land ownership; Pastoral sector; Manufacturing productivity; New Zealand land prices
    JEL: N17 N37 N47
    Date: 2008–02–01
  10. By: Broadberry, Stephen (Department of Economics, University of Warwick); Ghosal, Sayantan (Department of Economics, University of Warwick); Proto, Eugenio (Department of Economics, University of Warwick)
    Abstract: We provide a model of the links between commercialisation and technological progress, which is consistent with the historical evidence and places market relations at the heart of the industrial revolution. First, commercialisation raised wages as a growing reliance on impersonal labour market transactions in place of customary relations with a high degree of monitoring led to the adoption of efficiency wages. Second, commercialisation lowered interest rates as a growing reliance on impersonal capital market transactions in place of active investor involvement in investment projects led investors to allow borrowers to keep a larger share of the profits. Third, the resulting rise in the wage/cost of capital ratio led to the adoption of a more capital-intensive technology. Fourth, this led to a faster rate of technological progress through greater learning by doing on the capital intensive production technology. Fifth, the rate of technological progress was raised further by the patent system, which allowed the commercialisation of property rights in innovations embodied in machinery.
    Keywords: Commercialisation ; factor prices ; technological progress
    JEL: N13 O14 O43
    Date: 2008
  11. By: Blanchflower, David G. (Bank of England); Bryson, Alex (Policy Studies Institute)
    Abstract: This paper investigates the demise of unionisation in British private sector workplaces over the last quarter century. We show that dramatic union decline has occurred across all types of workplace. Although the union wage premium persists it is quite small in 2004. Negative union effects on employment growth and financial performance are largely confined to the 1980s. Managerial perceptions of the climate of relations between managers and workers have deteriorated since the early 1980s across the whole private sector, whether the workplace is unionised or not.
    Keywords: trade unions, wages, employment growth, financial performance
    JEL: J51
    Date: 2008–04
  12. By: Herbert Emery; Jesse Matheson
    Abstract: We investigate the impact of three public pension programs on the mortality rates of recipient age groups in Canada. The Old Age Pension (OAP), introduced in 1927 for Canadians over age 70, and Old Age Assistance (OAA), implemented in 1952 for Canadians aged 65–69, were means tested programs while Old Age Security (OAS), introduced in 1952 for Canadians over age 70, was a universal plan. Our data consist of age-specific mortality rates and pension information, by province, for the period 1921–1966. The three dimensional feature of this panel allows us to exploit variation in policy implementation dates across provinces, and changes in income and age group eligibility. We find that the implementation of all three pension programs resulted in statistically significant reductions in recipient age group mortality rates and that the effect of the federal universal OAS of 1952 was twice as large as either of the means tested plans. However, the number of lives extended with the universal OAS was small and the estimated cost per life extended large.
    JEL: H51 H53 H55 I18 I32 I38 J14 N32
    Date: 2008–01–14
  13. By: Hassan Ayoub (Universités de Lille.); Jérôme Creel (OFCE et ESCP- EAP.); Etienne Farvaque (Universités de Lille.)
    Abstract: La théorie budgétaire du niveau des prix distingue deux types de régimes pour les politiques économiques : Ricardien et Non-Ricardien. Nous analysons dans quelle mesure ces deux régimes peuvent s'appliquer à des sous-périodes dans l'histoire économique d'un pays. Le cas du Liban, passé de la prospérité à la guerre puis à la reconstruction, offre une application de cette théorie, et montre sa pertinence empirique.
    Keywords: Niveau général des prix ; inflation ; politiques monétaire et budgétaire ; dette publique ; ancrage nominal ; économie de guerre
    JEL: E60 E63
    Date: 2008–04
  14. By: Matthias Huehn (Faculty of Management Technology, The German University in Cairo)
    Abstract: The paper laments the current confusion in business science with regard to its epistemology. Any scientific discipline needs a firm structural basis, otherwise research is unfocused and flawed. In business science not even the vocabulary is clear: terms like Management and Business Administration mean many things to different people. The paper suggests to replace Burrell and Morgan’s matrix of sociological paradigms with a new typology which is really able to guide research and practice alike. Management scholars have argued too long without any sense of direction and managers have as a result become reserved and somewhat cynical toward Management theory.
    Keywords: Epistemology, paradigms in business, theory and practice, management, business science, sociology
    JEL: M0 B0
    Date: 2008–04

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