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on Business, Economic and Financial History |
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Issue of 2009‒02‒07
ten papers chosen by |
| By: | Knutsen, Sverre; Sjögren, Hans |
| Abstract: | There are mainly two types of theories explaining banking crisis, emanating from the monetarist school respectively institutional economics. Using an allegory, monetarists are discussing how much water in terms of liquidity that is needed to stop a fire escalating into a disaster, while institutionalists are occupied with the causes of the fire. Our study rejects the explanatory value of the monetarist view, but also criticizes the Kindleberger-Minsky model for not taking the legalisation and the sanctions in the hands of the authorities into account. We consider the institutional factor as a decisive part in the understanding of systemic risk and the process towards increasing debt in non-financial sectors and introduce the concept institutional clash. Not every recession has caused a banking crisis. But all banking crises have been preceded by an institutional clash. Consequently, an institutional clash is a prerequisite but not sufficient to cause a banking crisis: there must be a recession for a crisis to emerge. We also launch a stage-model for the evolution of banking crises. The stages in that model highlight decisive factors before, under and after a crisis. Our model has the capability to explain the occurrence of crises in a re-regulated economy. However, we only give few examples from Nordic banking crises how our model could be applied. Thus, the article is explorative. It is natural to make further empirical observation in order get a solid theory of driving forces behind banking crisis. The next step would be to empirically integrate all the Nordic banking crises between 1850 and 2000 in our analysis. |
| Keywords: | Banking history; banking crisis; finance; institutional theory; Denmark; Finland; Norway; Sweden; Scandinavia. |
| JEL: | N24 N84 G32 G21 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13133&r=his |
| By: | Scherer, F. M. (Harvard U) |
| Abstract: | This paper, written for a conference at the University of Lisbon, surveys patterns since the 16th century in the governance of communications service providers--in order, the mails, telegraphy, the telephone, and radio. It analyzes the tendency for many communications service enterprises to be publicly-owned and identifies reasons for the exceptions. Tasks subject to either public control or regulation are identified--e.g., route structure, pricing, patent stalemates, technological standards, physical interfaces and interoperability, electromagnetic spectrum allocation, and the privacy of communications. |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp08-050&r=his |
| By: | Guinnane, Timothy W. (Yale U); Ogilvie, Sheilagh (U of Cambridge) |
| Abstract: | Simple Malthusian models remain an important tool for understanding pre-modern demographic systems and their connection to the economy. But most recent literature has lost sight of the institutional context for demographic behavior that lay at the heart of Malthus’s own analysis. This paper estimates a short-run version of a Malthusian model for two Württemberg communities from 1646 to 1870. Württemberg differed institutionally from the northwest European societies analyzed in previous studies. The impact of institutional differences shows clearly in differing demographic reactions to economic shocks. Mortality was less sensitive to shocks than one would expect, while nuptiality was especially sensitive. |
| JEL: | J10 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:yaleco:44&r=his |
| By: | Scherer, F. M. (Harvard U) |
| Abstract: | This paper, written for a conference of the Society for Economic Research on Copyright Issues, explores the history of copyright protection for musical compositions. The first modern copyright law did not cover musical works. The role of Johann Christian Bach, Ludwig van Beethoven, and Johann Neopmuk Hummel in securing legal changes is traced. How Giuseppe Verdi exploited the new copyright law in Northern Italy is analyzed. The paper argues that Verdi, enriched by copyright protection, reduced his compositional effort along a backward-bending supply curve. However, his good fortune may have had a demonstration effect inducing other talented individuals to become composers. An attempt to determine the impact of legal changes on entry into composing is inconclusive. The paper shows, however, that a golden age of musical composition nevertheless occurred in nations that lacked copyright protection for musical works. |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp08-052&r=his |
| By: | Clark, Gregory (U of California, Davis); Page, Marianne (U of California, Davis) |
| Abstract: | The English Old Poor Law, which before 1834 provided welfare to the elderly, children, the improvident, and the unfortunate, was a bete noire of the new discipline of Political Economy. Smith, Bentham, Malthus and Ricardo all demanded its abolition. The Poor Law Amendment Act of 1834, drafted by Political Economists, cut payments sharply. Because local rules on eligibility and provision varied greatly before the 1834 reform, we can estimate the social cost of the extensive welfare provision of the Old Poor Law. Surprisingly there is no evidence of any of the alleged social costs that prompted the harsh treatment of the poor after 1834. Political economy, it seems, was born in sin. |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ucdeco:08-7&r=his |
| By: | Jha, Saumitra (Stanford U) |
| Abstract: | This paper analyses the incentives that shaped Hindu and Muslim interaction in India's towns from the rise of Islam to the rise of European intervention in the 17th century; it argues that differences in the degree to which medieval Hindus and Muslims could provide complementary, non-replicable services and a mechanism to share the gains from exchange has resulted in a sustained legacy of religious tolerance. Due to Muslim-specific advantages in Indian Ocean shipping, incentives to trade across ethnic lines were strongest in medieval trading ports, leading to the development of institutional mechanisms that further supported inter-religious exchange. Using new town-level data spanning India's medieval and colonial history, this paper finds that medieval trading ports were 25 percent less likely to experience a religious riot between 1850-1950, two centuries after Europeans disrupted Muslim dominance in overseas shipping. Medieval trading ports continued to exhibit less widespread religious violence during the Gujarat riots in 2002. The paper shows that these differences are not the result of variation in geography, political histories, wealth, religious composition or of medieval port selection, and interprets these differences as being transmitted via the persistence of institutions that emerged to support inter-religious medieval trade. The paper further characterises these institutions and the lessons they yield for reducing contemporary ethnic conflict. |
| JEL: | F10 N25 O17 Z12 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:2004&r=his |
| By: | Jha, Saumitra (Stanford U) |
| Abstract: | A key challenge for developing societies is to build coalitions across disparate interests in favour of beneficial policies. This paper documents the role of a financial innovation-- shares--in aligning disparate interests in favour of representative government during England's Civil War (1642-48). Using novel micro-data, the paper shows that shareholding was a major determinant of support for political reform by members of parliament. The paper suggests that shares allowed a broad spectrum of investors to benefit from new opportunities overseas. However, overseas rights belonged chiefly to the executive. Thus the introduction of shares aligned incentives in favour of political reforms and overseas policies crucial for growth. |
| JEL: | F10 K00 N13 O10 O43 P10 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:2005&r=his |
| By: | Mário Pedro Ferreira (Faculdade de Economia e Gestão, Universidade Católica Portuguesa (Porto)) |
| Abstract: | The use of the Internet in grocery retailing created the need for new business models, but it did not bring radical changes to consumer behaviour. Despite adopting revolutionary business models in their early days, online grocery firms did not manage to survive or reach profitability without using existing supermarket infrastructure and knowledge. Today, with most online grocers supplying small market niches, it is important to understand the reasons that made online grocers adopt a hybrid click and mortar strategy. Historical evidence from online grocery in the UK and the US suggests that firms had to adopt contingent strategies to face the difficulty of attracting consumers, sectorial entry barriers and financial targets. |
| Keywords: | e-grocery, contingency, mismatch, revolution and evolution |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:cap:mpaper:042009&r=his |
| By: | Killion, M. Ulric |
| Abstract: | The Article first presents a brief history or survey of the some of the earlier problems that associate with China’s banking and financial institutions. The Article then addresses specific problems, in the context of the rules, procedures, and practices of the banking and finance sector, which widely range from non-performing loans, to China’s money market and interbank lending business. These problems also directly associate with the liberalization of the banking and finance sector of the economy, and the requirements of both the WTO rules and China’s WTO Protocol on accession. The Article also briefly explores the US sub-prime mortgage crisis and its contagion effect throughout the world, including the Asian region. In the context of China and the subprime crisis, the Article summarizes some of the problems that associate with China banking and financial institutions, by focusing on the policy implications of the history of banking and finance in China, and what this means in terms of both WTO compliance and greater liberalization of banking and financial institutions, especially pursuant to the WTO GATS, as service industries. All of this, eventually, allows for the presentation of certain conclusions concerning China banking and finance in the new era of a global subprime crisis. |
| Keywords: | China; banking; finance; WTO; GATT; GATS; subprime crisis; Interbank lending |
| JEL: | F10 F30 G21 |
| Date: | 2009–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13091&r=his |
| By: | Patrick E. McCabe |
| Abstract: | I examine the economic incentives behind the mutual fund trading scandal, which made headlines in late 2003 with news that several asset management companies had arranged to allow abusive--and, in some cases, illegal--trades in their mutual funds. Most of the gains from these trades went to the traders who pursued market-timing and late-trading strategies. The costs were largely borne by buy-and-hold investors, and, eventually, by the management companies themselves. ; A puzzle emerges when one examines the scandal from the perspective of those management companies. In the short run, they collected additional fee revenue from arrangements allowing abusive trades. When those deals were revealed, investors redeemed shares en masse and revenues plummeted; management companies clearly made poor decisions, ex post. However, my analysis indicates that those arrangements were also uneconomic, ex ante, because--even if the management companies had expected never to be caught--estimated revenue from the deals fell well short of the present value of expected lost revenues due to poor performance in abused funds. ; Why some of the mutual fund industry's largest firms chose to collude with abusive traders remains something of a mystery. I explore several possible explanations, including owner-manager conflicts of interest within management companies (between their shareholders and the executives who benefitted from short-term asset growth), but none fully resolves the puzzle. Management companies' decisions to allow abuses that harmed themselves as well as mutual fund shareholders convey a broader lesson, that shareholders, customers, and fiduciary clients be cautious about relying too heavily on firms' own self-interest to govern their behavior. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2009-06&r=his |