New Economics Papers
on Business, Economic and Financial History
Issue of 2008‒11‒25
eight papers chosen by

  1. The Political Economy of Agricultural Protection: Europe in the 19th and 20th Century By Swinnen, Johan F.M.
  2. The structure of protection and growth in the late 19th century By Sibylle H. Lehmann and Kevin H. O'Rourke
  3. Luddites and the Demographic Transition By Kevin H. O'Rourke, Ahmed S. Rahman and Alan M. Taylor
  4. Tobit at Fifty: A Brief History of Tobin's Remarkable Estimator, of Related Empirical Methods, and of Limited Dependent Variable Econometrics in Health Economics By Kohei Enami; John Mullahy
  5. The determinants of social spending in Spain (1880-1960): Is Lindert right? By Sergio Espuelas Barroso; Margarita Vilar Rodriguez
  6. Industrial Policies in Developing Countries: History and Perspectives By Michele Di Maio
  7. Israel Kirzner on Coordination and Discovery By Klein, Daniel B.; Briggeman, Jason
  8. Stabilization Theory and Policy: 50 Years after the Phillips Curve By Stephen J. Turnovsky

  1. By: Swinnen, Johan F.M.
    Abstract: Important changes took place in agricultural policies in Europe in the 19th and 20th century. The dramatic nature of the changes are illustrated by two years, a century apart: 1860 and 1960. In the 1860s European nations agree on a series of trade agreements which spread free trade across the continent. In the 1960s European nations conclude an international agreement which spreads heavy government intervention and protection against imports across the continent. This paper reviews the nature and the causes of these dramatic changes in agricultural and trade policies, from the beginning of the 19th century to the second half of the 20th century, when agricultural policies are integrated in (what is to become) the European Union.
    Keywords: Political Economy, Agricultural Policy, Europe, Historical Perspective, Agricultural and Food Policy,
    Date: 2008
  2. By: Sibylle H. Lehmann and Kevin H. O'Rourke
    Abstract: Many papers have explored the relationship between average tariff rates and economic growth, when theory suggests that the structure of protection is what should matter. We therefore explore the relationship between economic growth and agricultural tariffs, industrial tariffs, and revenue tariffs, for a sample of relatively well-developed countries between 1875 and 1913. Industrial tariffs were positively correlated with growth. Agricultural tariffs were negatively correlated with growth, although the relationship was often statistically insignificant at conventional levels. There was no relationship between revenue tariffs and growth.
    Date: 2008–11–14
  3. By: Kevin H. O'Rourke, Ahmed S. Rahman and Alan M. Taylor
    Abstract: Technological change was unskilled-labor-biased during the early Industrial Revolution, but is skill-biased today. This is not embedded in extant unified growth models. We develop a model which can endogenously account for these facts, where factor bias reflects profit-maximizing decisions by innovators. Endowments dictate that the early Industrial Revolution be unskilled-labor-biased. Increasing basic knowledge causes a growth takeoff, an income-led demand for fewer educated children, and the transition to skill-biased technological change. The simulated model tracks British industrialization in the 18th and 19th centuries and generates a demographic transition without relying on either rising skill premia or exogenous educational supply shocks.
    Date: 2008–11–07
  4. By: Kohei Enami; John Mullahy
    Abstract: Practitioners of empirical health economics might be forgiven for paying little heed to the recent 50th anniversary of the publication of one of the most important papers in its methodological heritage: James Tobin's widely-cited 1958 Econometrica paper that developed what later became known as the Tobit estimator. This golden anniversary milestone provides a fitting opportunity to reflect on Tobin's contribution and to assess the role that econometric limited dependent variable modeling has played in empirical health economics. Of primary focus here is how Tobin's estimator came to be and came to take root in empirical health economics. The paper provides a brief history of Tobin's estimator and related methods up through about 1971, discusses the early applications of Tobit and related estimators in health economics, i.e. the "technology diffusion" of Tobit in health economics, and offers some concluding remarks.
    JEL: I1
    Date: 2008–11
  5. By: Sergio Espuelas Barroso; Margarita Vilar Rodriguez (Universitat de Barcelona)
    Abstract: The main objective of this paper is to analyse the origins of the welfare state in Spain using the theoretical framework designed by Peter Lindert. With this aim, we offer an econometric analysis of the factors that determined the evolution of the Spanish social spending between 1880 and 1960. By using new quantitative evidence, we constructed a panel-data set divided in five years periods with the percentage of social spending disaggregated in three groups: health care, social security and welfare. Our analysis allows us to put the Spanish case within the international debate on the historical determinants of the welfare state. The results obtained highlight a number of interesting features specific to this country. On the one hand, Spanish social spending as a percentage of GDP remained relatively low compared to the figures recorded by other countries during the period under study. On the other hand, demographic factors played a determining role in the initial stages of the development of welfare state, while economic growth had a more ambiguous influence. The political and public finance variables also exercised some influence on the growth in public spending. However, globalisation was not a motivating force behind the welfare state in Spain.
    Keywords: political economy, welfare state, public policy, spanish social policy, determinants of growth of public social spending
    JEL: H0 H5 F18 D6 N4
    Date: 2008
  6. By: Michele Di Maio (Università di Macerata)
    Abstract: <div style="line-height: normal"><span style="font-size: 10pt"><div style="line-height: normal"><span style="font-size: 10pt">This paper presents a historical and empirical account of the role played by government</span></div><div style="line-height: normal"><span style="font-size: 10pt">intervention in the form of industrial policies in spurring development and growth in</span></div><div style="line-height: normal"><span style="font-size: 10pt">developing countries in the last fifty years. Adopting the taxonomy proposed in Cimoli et</span></div><div style="line-height: normal"><span style="font-size: 10pt">alt. (2008), it describes the set of industrial policies implemented since the end of WWII</span></div><div style="line-height: normal"><span style="font-size: 10pt">to today in a number of developing countries. Which are the characteristics of successful</span></div><div style="line-height: normal"><span style="font-size: 10pt">industrial policies? Are there industrial policies, among the ones that have worked in the</span></div><div style="line-height: normal"><span style="font-size: 10pt">past, which can be also useful in the present context? Is there a fit-all recipe, or the high</span></div><div style="line-height: normal"><span style="font-size: 10pt">degree of country heterogeneity makes impossible to identify any general effective industrial</span></div><div style="line-height: normal"><span style="font-size: 10pt">policy? These are some of the questions this papers tries to suggest some answers.</span></div></span></div>
    Keywords: Industrial policy,Developing Countries,East Asia,Latin America
    JEL: O1 O11
    Date: 2008–10
  7. By: Klein, Daniel B. (George Mason University); Briggeman, Jason (George Mason University)
    Abstract: Israel Kirzner has been one of the leaders in fashioning an Austrian school of economics. He has tried to marry Friedrich Hayek’s discourse with the deductive, praxeological approach of Ludwig von Mises. The praxeological style stakes its claims to scientific status on purported axioms and categorical, 100-percent deductive truths, as well as the supposed avoidance of any looseness in evaluative judgments. In keeping with the praxeological style of discourse, Kirzner claims that his notion of coordination can be used as a clear-cut criterion of economic goodness. Kirzner wishes to claim that gainful entrepreneurial action in the market is always coordinative. We contend that Kirzner’s efforts to be categorical and to avoid looseness are not successful. We argue that looseness inheres in the economic discussion of the most important things, and associate that viewpoint with Adam Smith. We suggest that Hayek is much closer to Smith than to Mises, and that Kirzner’s appeals to Hayek’s discussions of coordination are spurious. In denying looseness and by trying to cope with the brittleness of categorical claims, Kirzner becomes abstruse. We dissect Kirzner’s discourse and find that it erupts with problems. Kirzner has erred in rejecting the understanding of coordination held by Hayek, Ronald Coase, and their contemporaries in the field at large. Kirzner’s refraining from the looser Smithian perspective stems from his devotion to Misesianism. Beyond all the criticism, however, we affirm the basic thrust of what Kirzner says about economic processes. Once we give up the claim that voluntary profitable activity is always or necessarily coordinative, and once we make peace with the aesthetic aspect of the idea of concatenate coordination, the basic claims of Kirzner can be salvaged: Voluntary profitable activity is usually coordinative, and government intervention is usually discoordinative. But the praxeological style of discourse must be dropped.
    Keywords: coordination; concatenation; discovery; entrepreneurship;
    JEL: A10 B00 D02
    Date: 2008–11–17
  8. By: Stephen J. Turnovsky
    Date: 2008–05

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