nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2008‒12‒07
nine papers chosen by
Bernardo Batiz-Lazo
University of Leicester

  1. Construction in Italy's Regions, 1861-1913 By Carlo Ciccarelli; Stefano Fenoaltea
  2. California and the creation of a modern wine industry: 1860-1919 By James Simpson
  3. Understanding West German Economic Growth in the 1950s By Barry Eichengreen; Albrecht Ritschl
  4. The U.S. Business Cycle, 1867-1995: Dynamic Factor Analysis vs. Reconstructed National Accounts By Albrecht Ritschl; Samad Sarferaz; Martin Uebele
  5. Reconsidering the application of the holder in due course rule to home mortgage notes By Thomas J. Fitzpatrick IV; Mark B. Greenlee
  6. Capital Formation and Capital Stock in Indonesia, 1950-2007 By Pierre van der Eng
  7. Eight Hundred Years of Financial Folly By Reinhart, Carmen
  8. Closing the 49th Parallel: An Unexplored Episode in Canadian Economic and Political History By James B. Davies; Stanley L. Winer
  9. Coping with Complexity. Keynes and International Economic Relations in the Aftermath of WWI By Anna M. Carabelli; Mario A. Cedrini

  1. By: Carlo Ciccarelli (Faculty of Economics, University of Rome "Tor Vergata"); Stefano Fenoaltea (Faculty of Economics, University of Rome "Tor Vergata")
    Abstract: This paper presents time-series estimates of construction activity in the regions of post-Unification Italy. Total construction followed very different time paths, reflecting the sharply local cycles in railway construction. Other public works were less idiosyncratic; the boom of the Giolitti years was widely diffused, but that of the 1880s was much more concentrated in Latium and Liguria. In the construction of buildings, the Giolittian boom was marked in the North and Center, but spotty in the South and major islands; earlier swings were comparatively minor, save of course for the 1880s bubble in Latium. Over the long term, railway construction was, per-capita, relatively evenly spread. Other social-overhead construction displays a similar pattern, but with exceptionally high levels in Latium and Liguria. Building construction seems instead to have declined somewhat from North to South; Liguria was again the overall leader, with Latium second.
    Date: 2008–12–03
  2. By: James Simpson
    Abstract: The very different factor endowments of the New World to those found in Europe implied that the wine industry developed its own style and characteristics. In California production was located at a considerable distance from the main markets on the East Coast, and trade was initially controlled by the East Coast merchants, who imported wines from Europe and purchased California wine in bulk, selling it under their own brands. The problems of marketing and the fight against fraud and adulteration, produced a struggle between the wine-makers and San Francisco’s merchants for the control of the industry, and the creation of the world’s largest, vertically integrated wine company, the California Wine Association.
    Keywords: Wine history, Agricultural commodity chains, Farm organization, California agriculture
    JEL: L14 N51 Q13
    Date: 2008–11
  3. By: Barry Eichengreen; Albrecht Ritschl
    Abstract: We evaluate explanations for why Germany grew so quickly in the 1950s. The recent litera- ture has emphasized convergence, structural change and institutional shake-up while minimiz- ing the importance of the postwar shock. We show that this shock and its consequences were more important than neoclassical convergence and structural change in explaining the rapid growth of the West German economy in the 1950s. We find little support for the hypothesis of institutional shakeup. This suggests a different interpretation of post-World War II German economic growth than features in much of the literature.
    Keywords: economic growth, productivity, Germany
    JEL: N14 N44 O52
    Date: 2008–12
  4. By: Albrecht Ritschl; Samad Sarferaz; Martin Uebele
    Abstract: This paper presents insights on U.S. business cycle volatility since 1867 de- rived from diffusion indices. We employ a Bayesian dynamic factor model to obtain aggregate and sectoral economic activity indices. We find a remarkable increase in volatility across World War I, which is reversed after World War II. While we can generate evidence of postwar moderation relative to pre-1914, this evidence is not robust to structural change, implemented by time-varying factor loadings. We do find evidence of moderation in the nominal series, however, and reproduce the standard result of moderation since the 1980s. Our estimates broadly confirm the NBER historical business cycle chronology as well the National Income and Product Accounts, except for World War II where they support alternative estimates of Kuznets (1952).
    Keywords: U.S. business cycle, volatility, dynamic factor analysis
    JEL: N11 N12 C43 E32
    Date: 2008–11
  5. By: Thomas J. Fitzpatrick IV; Mark B. Greenlee
    Abstract: In this paper we investigate the history of negotiable instruments and the holder in due course rule and contrast their function and consequences in the 1700s with their function and consequences today. We explain how the holder in due course rule works and identify ways in which the rule’s application is limited in some consumer transactions. In particular, we focus on laws limiting application of the rule to some home mortgage loans. We investigate Lord Mansfield’s original justification for the rule as a money substitute, the lack of explicit justification of the rule by the drafters of the Uniform Commercial Code in the 1950s, the contemporary justification of the rule as a means of increasing the availability and decreasing the cost of credit, and the concerns of legislators and regulators about lack of consumer knowledge, bargaining power, and financial resources which caused them to limit the application of the holder in due course rule to some consumer transactions. We conclude that changes in policy justification, parties to negotiable instruments and the structure of the home mortgage market call for a reconsideration of the continuing appropriateness of holder in due course protection for assignees of home mortgage notes. We suggest further analysis based on economic theory and review of empirical research in order to formulate policy recommendations.
    Keywords: Mortgage loans
    Date: 2008
  6. By: Pierre van der Eng
    Abstract: This paper presents long-term estimates of gross fixed capital formation for 1951-2007 that are disaggregated by categories of productive assets. These data, combined with approximations of probable average asset lives and a feasible asset retirement method are used in a Perpetual Inventory Method to estimate gross fixed capital stock in Indonesia for 1950-2007 disaggregated by productive assets. Most of Indonesia’s capital stock long consisted of residential and non-residential structures. Total capital stock grew significantly since the late-1960s at about 10% per year, until the 1997-98 economic crisis. The high capital-output ratio in 1997 suggests that part of Indonesia’s high economic growth during the 1990s was due to unsustainable resource accumulation.
    Keywords: investment, capital formation, capital stock, economic growth, Indonesia
    JEL: E22 E43 N15 O11 O47
    Date: 2008
  7. By: Reinhart, Carmen
    Abstract: The economics profession has an unfortunate tendency to view recent experience in the narrow window provided by standard datasets. With a few notable exceptions, cross-country empirical studies on financial crises typically begin in 1980 and are limited in other important respects. Yet an event that is rare in a three decade span may not be all that rare when placed in a broader context. In my paper with Kenneth Rogoff we introduce a comprehensive new historical database for studying debt and banking crises, inflation, currency crashes and debasements. The data covers sixty-six countries in across all regions. The range of variables encompasses external and domestic debt, trade, GNP, inflation, exchange rates, interest rates, and commodity prices. The coverage spans eight centuries, going back to the date of independence or well into the colonial period for some countries.
    Keywords: Financial crises; inflation;; default
    JEL: E0
    Date: 2008–03
  8. By: James B. Davies (University of Western Ontario); Stanley L. Winer (Carleton University)
    Abstract: We draw attention to, and begin to consider the implications of the severe restrictions on emigration by Canadians to the United States introduced under the U.S. Immigration Act of 1965. These restrictions came into effect in 1968 and lasted until mobility began to increase under the free trade agreements in the early 1990's. This is an unusual episode in Canadian history, one whose implications for public policy have received little attention. The near closing of the border during this period likely led to a decrease in the elasticity of labour supply in Canada. We derive the implications of such a change in a competitive political model where the political costs and benefits of levying taxes on different activities are distinguished. Increased reliance on, and changes in the structure of, labour income taxes, and an increase in the size of the public sector are predicted. We show that these predictions are consistent with what occurred over the two decades after the near closing of the U.S. border.
    Date: 2008
  9. By: Anna M. Carabelli; Mario A. Cedrini (SEMEQ Department - Faculty of Economics - University of Eastern Piedmont)
    Abstract: In the attempt to deepen the understanding of Keynes's thought as an international macroeconomist, we explore the hypothesis of consistency between his general methodological approach to the economic material and his way of reasoning about international economic relations as shaped by WWI. We argue that the methodology of "The Economic Consequences of the Peace" reflects Keynes's attempt to cope with the attributes of the complexity characterizing the European settlement for the post-war period, and particularly 1) organic interdependence among variables at play, 2) irreducible dilemmas and situations of conflict, as well as 3) the need for external, public assistance to overcome the impasse and promote a "shared responsibilities" approach to the imbalances. Striking similarities appearing with the method of Keynes's economic diplomacy in the Forties call for further research in this sense.
    Keywords: Keynes; complexity; international economic relations
    JEL: B31 F02 B41
    Date: 2008–10

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