nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2009‒05‒23
eighteen papers chosen by
Bernardo Batiz-Lazo
University of Leicester

  1. Marital fertility and wealth in transition era France, 1750-1850 By Neil J. Cummins
  2. Bringing History into Evolutionary Economic Geography for a Better Understanding of Evolution By Zhigao Liu
  3. Monetary Policy and the Dollar By Peter L. Rousseau
  4. The uniform distributions puzzle By Eline POELMANS
  5. Agricultural Development and Stabilization of Peasant Householdsf Economy in Modern Rural Japan between the 1870s and 1930s: The Case of Aomori Prefecture By Izumi Shirai; Izumi Shirai
  6. Indian Currency and Beyond. The Legacy of the Early Economics of Keynes in the Times of Bretton Woods II By Anna M. Carabelli; Mario A. Cedrini
  7. From equilibrium models to mechanism design : On the place and the role of government in the public goods provision analysis in the second part of the twentieth century. By Monique Florenzano
  8. Effective exchange rates of the Bulgarian Lev 1879-1939 By Kalina Dimitrova; Martin Ivanov; Ralitsa Simeonova-Ganeva
  9. La contabilidad pública en las Cortes de Cádiz: la “Memoria sobre la Cuenta y Razón de España” (1811) de José Canga Argüelles. By Fernando López Castellano
  10. Cointegration in a historical perspective By Franses, Ph.H.B.F.; Dijk, D.J.C. van
  11. Two important traditional prices' indices for the measurement of inflation and cost-of-living in Romania, during the last century By Gheorghe Savoiu
  12. Economic crisis, its prospects and challenges for economic theory By Slavica Manic
  13. The Future of Securities Regulation By Luigi Zingales
  14. Double Competition and Market Stability in Sir James Steuart. By José M. Menudo; Ramón Tortajada
  15. Social Contracts and Historical Rules By Enrico Colombatto
  16. Time-Varying Agglomeration Externalities in UK Counties between 1841 and 1971 By Frank Neffke
  17. Capital taxation during the U.S. Great Depression By Ellen R. McGrattan
  18. Les entreprises de l'économie sociale comme source d'innovation sociale. Un détour historique par le XIXe siècle. By Anne Fretel

  1. By: Neil J. Cummins
    Abstract: The spectacularly early decline of French fertility is one of the great puzzles of economic history. There are no convincing explanations for why France entered a fertility transition over a century before anywhere else in the world. This analysis links highly detailed individual level fertility life histories to wealth at death data for four rural villages in transition-era France, 1750-1850. The results show that it was the richest groups who reduced their family size first and that they used `spacing' strategies to achieve this. In cross section, measures of the environment for social mobility are strongly associated with the fertility decline. The evidence presented here demonstrates thatsocioeconomic status mattered during the early French fertility decline. This study is a first step towards re-establishing the French experience as paramount in our understanding of Europe's demographic transition.
    Date: 2009
  2. By: Zhigao Liu
    Abstract: The paper tries to construct the historical methodology for evolutionary economic geography. I elevate history to the methodological foundation of evolutionary economic geography, on which concrete research methods should be based. I explore how to evolution in economic geography by placing history in historical time and historical contexts. Accordingly, the concepts of path creation and path dependence should be used together in historical study. More important, the concept of path interdependence, which stresses the importance of the circumstances under which different processes and events are likely to occur, opens a new window on the temporal aspects of the world.
    Keywords: Organizational ecology, fashion industry, creative industries, clusters, institutional lock-in
    Date: 2009–01
  3. By: Peter L. Rousseau
    Abstract: In this essay I propose that the adoption of the U.S. dollar as a common currency shortly after the ratification of the Federal Constitution and the accompanying transition from a fiat to specie standard was a pivotal moment in the nation’s early history and marked an improvement over the monetary systems of colonial America and under the Articles of Confederation. This is because the dollar and all that came with it monetized the modern sector of the U.S. economy and tied the supply of money more closely to the capital market and the provision of credit―feats that were not possible in an era when colonial legislatures were unable to credibly commit to controlling paper money emissions. The switch to a specie standard was at the time necessary to promote domestic and international confidence in the nascent financial system, and paved the way for the long transition to the point when the standard was no longer required.
    JEL: E42 E44 N11 N21
    Date: 2009–05
  4. By: Eline POELMANS
    Abstract: The coal and steel production was key in the post-war rebuilding of the European economy. However, after WWII, Germany still had the technological knowledge and experience to quickly regain its pre-war position as the dominant economic force in Europe. In response to this ‘problem’, the political leaders of six Western European countries founded the European Coal and Steel Community or ECSC, which they hoped would provide a common legal framework for the coal and steel industry. When the ECSC was founded, all six founding countries of the ECSC produced steel and all but two also produced substantial quantities of coal. However, there were considerable differences in the ‘regional concentration’ of the coal and steel companies and before 1952 (the first year of the ECSC), a (relatively) small geographical area was responsible for more than 90 % of both the European coal and steel production. We have then looked at how the relative importance of this ‘industrial triangle’ in the total coal and steel production of the ECSC has decreased between 1952 and 1967 and we discuss the different causes of this decrease. More specifically, we show how the importance of the so-called ‘coastal steelworks’ has increased between 1952 and 1967.
    Keywords: ECSC, regional concentration, coastal steelworks, industrial triangle
    JEL: L7 M21 N54 N64 R11
    Date: 2009–04
  5. By: Izumi Shirai (Graduate School of Economics, Osaka University); Izumi Shirai (Graduate School of Economics, Osaka University)
    Abstract: This article clarifies the management of peasant households in the Tsugaru district of the Aomori Prefecture between the 1870s and 1930s, especially focusing on the relationship between the advances in agricultural technology and the labor allocation strategy of the peasant households. We obtained the followings results. (1) The 1870s saw a new rice-cultivating technology being introduced and spread in the Tsugaru district. This technological improvement realized labor savings in rice production in peasant households and also led to improvements in land productivity. However, the harvest was not sufficient enough to stabilize the peasant householdsf economy because of the poor condition of the land and repeated crop failures. As such, by the 1900s, peasant households also began producing commercial goods as a side-business to offset the risks of agriculture and to acquire extra cash. (2) In Tsugaru, one of the side-businesses peasant households engaged in was straw craft manufacturing. However, by the 1920s, the Aomori Prefecture had lost its competitive advantage to the Hokkaido market in the Kinki district. On the other hand, apple production increased in Tsugaru. Further, apple was designated as a competitive commercial product by the Meiji Government, who then was importing apples in significant quantities from the western countries. (3) In this paper, effective insect/pest-control was found to be one of the important reasons why Tsugaru became the largest apple producer. In particular, the Aomori Prefectural Agriculture Research Center played an important role in the development and diffusion of scientific technologies. Additionally, since the 1870s, Tsugaru was blessed with effective institutions that halted the spread of disease and reduced insect damage. This might have enabled the quick penetration of technologies. (4) In the expansionary phase of apple production, peasant households reduced the amount of labor they invested in rice production and weed eradication, and concentrated heavily on apple production. This labor-intensive apple production realized not only savings in employment costs but also mass production with high quality. As a result, apple production contributed heavily to the stabilization of the householdsf economy.
    Keywords: Japanese Economic History, Agricultural Development, Peasant HouseholdCLabor Allocation
    JEL: N55 N35 O13
    Date: 2009–05
  6. By: Anna M. Carabelli; Mario A. Cedrini (SEMEQ Department - Faculty of Economics - University of Eastern Piedmont)
    Abstract: In the paper, we revisit the focus and method of “Indian Currency and Finance” (1913) and the rationale of Keynes's proposal for an international monetary system combining cheapness with stability. In particular, we centre on the management of exchange reserve and the pattern of relationships between creditor and debtor countries, to suggest that Keynes's fresh look at Asia in the first years of the twentieth century may provide useful hints for an overall rethinking of the major faults of today's Bretton Woods II system as well as the rationale for a global monetary reform.
    Keywords: John Maynard Keynes, Indian Currency and Finance, international economic order, exchange reserves
    JEL: B31 B40 F02 F31
    Date: 2009–05
  7. By: Monique Florenzano (Centre d'Economie de la Sorbonne)
    Abstract: Focussing on their analysis of the optimal public goods provision problem, this paper follows the parallel development of equilibrium models and mechanism design after the accommodation of Samuelson's definition of collective goods to the general equilibrium framework. Both paradigms lead to the negative conclusion of the impossibility of a fully decentralized optimal public goods provision through market or market-like institutions.
    Keywords: General equilibrium, Lindahl-Foley equilibrium, Wicksell public competitive equilibrium, private provision equilibrium, mechanism design, free-rider problem, incentive compatibility.
    JEL: B20 B21 H10 H41
    Date: 2009–02
  8. By: Kalina Dimitrova; Martin Ivanov; Ralitsa Simeonova-Ganeva
    Abstract: The paper constructs the first series of nominal and real effective exchange rates of the Bulgarian Lev from its establishment in 1879 until 1939. The dynamics of both indicators during the Classical Gold Standard fits the general picture of exchange rate development of other European countries while their movements in the Interwar years reflects the exchange rate policy of the monetary authority and the price effects of the Great Depression. The study also provides econometric estimation of the impact of the real effective exchange rates and foreign demand on Bulgaria’s real export performance allowing for some policy implications.
    Date: 2009–05
  9. By: Fernando López Castellano (Universidad de Granada. Deparment of Applied Economics)
    Abstract: En este trabajo se narra un intento relevante, siquiera desde el punto de vista doctrinal, de la historia institucional de la Hacienda: el ambicioso proyecto de reforma de la Contabilidad Pública llevado a cabo por las Cortes Generales y Extraordinarias instaladas en Cádiz durante la invasión napoleónica. En este capítulo poco conocido de la historia institucional de la Hacienda, destacan las ideas sobre la Cuenta y Razón expuestas por el Secretario del Despacho de Hacienda, José Canga Argüelles, a lo largo de su corto, pero prolífico paso por el ministerio, y, sobre todo, en su “Memoria sobre la Cuenta y Razón de España”, leída ante las Cortes Generales y Extraordinarias reunidas en Cádiz el día 29 de Junio de 1811. La Memoria contiene las líneas maestras de la futura reforma gaditana y de los posteriores proyectos de administración de la Tesorería. La filosofía de la Memoria será asumida por el texto constitucional y por la Comisión Especial de Hacienda, encargada de elaborar el proyecto de nueva planta de Tesorería, y se verá reflejada, finalmente, en el Decreto de 7 de agosto de 1813.
    Keywords: Economic History; Treasury; Public Accounts; Account and Reason;
    JEL: N43 M4 H83
    Date: 2009–05–09
  10. By: Franses, Ph.H.B.F.; Dijk, D.J.C. van (Erasmus Econometric Institute)
    Abstract: We analyse the impact of the Engle and Granger (1987) article by its citations over time, and find evidence of a second life starting in the new millennium. Next, we propose a possible explanation of the success of this citation classic. We argue that the conditions for its success were just right at the time of its appearance, because of the growing emphasis on time-series properties in econometric modelling, the empirical importance of stochastic trends, the availability of sufficiently long macro-economic time series, and the availability of personal computers and econometric software to carry out the new techniques.
    Keywords: cointegration;citations
    Date: 2009–05–07
  11. By: Gheorghe Savoiu (Faculty of Economics, University of Pitesti)
    Abstract: This paper details the two original constructions of price indices made by the author in the last ten years. These constructions are a proposal of centennial price index and an over eighty years old Romanian cost-of-living index.
    Keywords: statistical index, interpret index, cost-of-living index (CLI), consumer price index (PCI), harmonized consumer price index (HPCI), Schumpeterian index, centennial index.
    JEL: N11 C1 O5
    Date: 2009–05
  12. By: Slavica Manic (Faculty of Economics, Belgrade, Serbia)
    Abstract: Actual crisis which originated from USA quickly spread throughout the world economy. Although at the beginning it was labeled as exclusively financial one, after its second wave (in 2008) everything became much clear.
    Keywords: economic crisis, economic theory
    JEL: F4
    Date: 2009–05
  13. By: Luigi Zingales (University of Chicago, NBER & CEPR)
    Abstract: The U.S. system of security law was designed more than 70 years ago to regain investors’ trust after a major financial crisis. Today we face a similar problem. But while in the 1930s the prevailing perception was that investors had been defrauded by offerings of dubious quality securities, in the new millennium, investors’ perception is that they have been defrauded by managers who are not accountable to anyone. For this reason, I propose a series of reforms that center around corporate governance, while shifting the focus from the protection of unsophisticated investors in the purchasing of new securities issues to the investment in mutual funds, pension funds, and other forms of asset management.
    Keywords: U.S. Security Law, Securities Regulation, Trust
    JEL: G2 G28
    Date: 2009–01
  14. By: José M. Menudo (Department of Economics, Universidad Pablo de Olavide); Ramón Tortajada (Department of Economics, Université Pierre Mendès France)
    Abstract: In this work we deal with the theory of price determination in Steuart’s writings; in particular with the concept of Double competition. The background is the evolution of the concept of market during the 18th century. Steuart proposed a theoretical construction in order to tackle the problem of price stability. The first part of the paper presents the method proposed by the authors in order to analyse the price formation in Steuart. We are going to propose a static approach made of periods. The second part develops the explanation of Steuart’s theoretical schema. Price determination is a breakdown process inside a monetary circulation system that ensures the transaction between agents, i.e. the market. Exchange mechanism occurs on a two-fold basis: among merchants and producers and then among consumers and merchants. However, every period is connected so that price fluctuation becomes a new economic problem. The two final sections of the paper are dedicated to the required external regulation. If market is unstable, merchants do not know how to bring this stability about. Maintaining a stable price depends on an authority outside the market. Steuart propose the way towards a smooth price vibration where State and stability are inseparable.
    Keywords: James Steuart, Equilibrium and Disequilibrium, Price formation, Information and Knowledge
    JEL: B11 D50 L11 B41 D83
    Date: 2009–05
  15. By: Enrico Colombatto
    Abstract: The public choice-school has explained why policy- making is generally disappointing and frequently against the very interest of the public at large. The economics profession has put forward two kinds of allegedly free-market remedies. On the one hand, the mainstream view underscores the need for more expert advice and better agency rules. On the other, the constitutional standpoint emphasizes the role of meta-rules founded on a social contract, so that abuse can be restrained, if not eliminated. This paper questions the foundations of the new contractarian views, which hardly escape the consequentialist and utilitarian problems raised by the orthodox approach to policy- making. In particular, it is argued that in order to understand the nature of today’s policy- making, rational constructivism is of little help; competing explanations, such as those offered by the institutional or the evolutionary schools, are similarly ineffective. The insufficiencies of the mainstream approaches suggest an alternative. We develop the idea that “First Principles” – that is those set of ideas that have characterized Western Civilization during the past two millennia – provide a better lens for understanding the role and characteristics of policy-making.
    Date: 2009–05
  16. By: Frank Neffke
    Abstract: Using dynamic panel data methods on UK counties (1841-1971), we investigate long-term employment dynamics in seven distinct local industries. We study how industries benefit from specialised environments (MAR), diverse local economies (Jacobs’) and large local markets (urbanization), and, in contrast to most other authors, test if the strength of MAR, Jacobs’ and urbanization externalities changes over time. We find declining MAR and rising Jacobs’ externalities since the mid-nineteenth century, questioning the adequacy of a static framework when studying agglomeration externalities
    Keywords: agglomeration, dynamic externalities, Jacobs’ externalities, MAR externalities, urbanization externalities
    JEL: L60 N93 N94 R11
    Date: 2008–12
  17. By: Ellen R. McGrattan
    Abstract: Previous studies quantifying the effects of increased capital taxation during the U.S. Great Depression find that its contribution is small, both in accounting for the downturn in the early 1930s and in accounting for the slow recovery after 1934. This paper confirms that the effects are small in the case of taxation of business profits, but finds large effects in the case of taxation of dividend income. Tax rates on dividends rose dramatically during the 1930s and, when fed into a general equilibrium model, imply significant declines in investment and equity values and nontrivial declines in gross domestic product (GDP) and hours of work. The results are amplified if businesses make intangible investments which can be expensed from taxable capital income.
    Date: 2009
  18. By: Anne Fretel (Centre d'Economie de la Sorbonne)
    Abstract: The notion of association in the 19th century was throught as an alternatives mode of work organization which could solve the "social question". Though the study of author's as Saint-Simon or Blanc we are able to show that the innovating potential of their reforms is due to the moral framework proposed rather than the elaboration of economic principles distinct from a liberal option. Association is thought as the vector of diffusion of moral principles, thus increasing collective welfare. We also argue that thus particularity of association is still accurate today. Associations are more specific relatively to the values they hold (democratic participation, social utility) rather than the work conditions they offer.
    Keywords: Non profit sector, social economiy, France, liberalism, social utility.
    JEL: B15 L31 N33 N43
    Date: 2009–04

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