nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2009‒06‒03
fourteen papers chosen by
Bernardo Batiz-Lazo
University of Leicester

  2. Opting out of the Great Inflation: German Monetary Policy after the Break Down of Bretton Woods By Andreas Beyer; Vítor Gaspar; Christina Gerberding; Otmar Issing
  3. Resident Impacts of Immigration: Perspectives from America’s Age of Mass Migration By Susan B. Carter; Richard C. Sutch
  4. The international competitiveness of cava: success of a particular firm or the district ? By Francesc Valls-Junyent
  5. An Examination of the Statistical Data Sources of the Philippines: Notes on Estimating the Historical GDP of the Primary Industry (1) [in Japanese] By Keiya Eto
  6. The BCS, Antitrust and Public Policy By Andrew Zimbalist
  7. Why Blu-ray vs. HD-DVD is not VHS vs. Betamax: The Co-evolution of Standard-setting Consortia By Julian P. Christ; André P. Slowak
  8. Mudanças na Concentração Espacial das Ocupações nas Atividades Manufatureiras no Brasil – 1872-1920 By Leonardo Monasterio; Eustáquio Reis
  9. Behold the 'Behemoth'. The privatization of Japan Post Bank By Uwe Vollmer; Diemo Dietrich; Ralf bebenroth
  10. Globalisation: Countries, Cities and Multinationals By Philip McCann; Zoltan J. Acs
  11. Structural Change in Argentina, 1900-1973: The Role of Import Substitution and Factor Endowments By Paul Segal
  12. New financial architecture and regional monetary integration in Latin America By Jean-François Ponsot
  13. The topology of the interbank market: developments in Italy since 1990 By Michele Manna; Carmela Iazzetta
  14. A Quantitative Analysis of Suburbanization and the Diffusion of the Automobile By Karen A. Kopecky; Richard M. H. Suen

  1. By: Richard C. Sutch (Department of Economics, University of California Riverside)
    Abstract: This research report makes the following claims: 1] There was not an unambiguous economic advantage of hybrid corn over the open-pollinated varieties in 1936. 2] The early adoption of hybrid corn before 1937 can be better explained by a sustained propaganda campaign conducted by the U.S. Department of Agriculture at the direction of the Secretary of Agriculture, Henry Agard Wallace. The Department's campaign echoed that of the commercial seed companies. The most prominent hybrid seed company, Pioneer Hi-Bred Company, was founded by Wallace and he retained a financial interest while serving as Secretary. 3] The early adopters of hybrid seed were followed by later adopters as a consequence of the droughts of 1934 and especially 1936. The eventual improvement of yields as newer varieties were introduced explains the continuation and acceleration of the process.
    JEL: N12
    Date: 2008–06
  2. By: Andreas Beyer (European Central Bank); Vítor Gaspar (Banco de Portugal); Christina Gerberding (Deutsche Bundesbank); Otmar Issing (Center for Financial Studies)
    Abstract: During the turbulent 1970s and 1980s the Bundesbank established an outstanding reputation in the world of central banking. Germany achieved a high degree of domestic stability and provided safe haven for investors in times of turmoil in the international financial system. Eventually the Bundesbank provided the role model for the European Central Bank. Hence, we examine an episode of lasting importance in European monetary history. The purpose of this paper is to highlight how the Bundesbank monetary policy strategy contributed to this success. We analyze the strategy as it was conceived, communicated and refined by the Bundesbank itself. We propose a theoretical framework (following Söderström, 2005) where monetary targeting is interpreted, first and foremost, as a commitment device. In our setting, a monetary target helps anchoring inflation and inflation expectations. We derive an interest rate rule and show empirically that it approximates the way the Bundesbank conducted monetary policy over the period 1975-1998. We compare the Bundesbank's monetary policy rule with those of the FED and of the Bank of England. We find that the Bundesbank's policy reaction function was characterized by strong persistence of policy rates as well as a strong response to deviations of inflation from target and to the activity growth gap. In contrast, the response to the level of the output gap was not significant. In our empirical analysis we use real-time data, as available to policy-makers at the time.
    Keywords: Inflation, Price Stability, Monetary Policy, Monetary Targeting, Policy Rules
    JEL: E31 E32 E41 E52 E58
    Date: 2009–01–16
  3. By: Susan B. Carter (Department of Economics, University of California Riverside); Richard C. Sutch (Department of Economics, University of California Riverside)
    Abstract: Elementary economic models are often used to suggest that immigration depresses the wages of native-born workers. These models assume that when immigrants enter a labour market, all other features of that market remain unchanged. Such an assumption is almost never valid. Here we explore the economic impacts of immigrants during America’s Age of Mass Migration a century ago. This was a period of dynamic structural change that witnessed the appearance of new industries, adoption of new technologies, discovery of new mineral resources, the rise of big business, and the geographic concentration of industries. We show that immigrants – and residents – selected destinations where labour demand and wages were rising. Thus, native workers experienced wage increases in the presence of heavy immigration. Models that abstract from the special characteristics of labour markets that attract immigrants misrepresent their economic impact.
    Keywords: Immigration, Internal migration, Economic history of immigration, Counterfactual analysis
    Date: 2006–08
  4. By: Francesc Valls-Junyent (Universitat de Barcelona)
    Abstract: First of all, the author wonders about the degree of success of the Catalan sparkling wine industry in the recent past. The comparison with the Italian sparkling spumante and also with the case of the most celebrated sparkling wine in the world, champagne, shows a very positive trend of the cava production and exports in the last three decades of the XXth century. Secondly, this paper focuses on the agent or cause responsible of this success. Is it due to a particular firm or should it be attributed to the whole industrial cava cluster around the area of Sant Sadurni dAnoia? More than two thirds of the exports correspond to a particular firm. In this sense, we should attribute the success to it. However, the historical explanation of the development of the industrial cava cluster in the main and well-kwown viticultural Catalan area of Penedes, shows that all producers have benefit from the Marshalian external economies due to this concentration. And the paper shows that the leading export firm would never have succeeded in the international market without the existence of this kind of invisible advantages.
    Keywords: skilled labor, wine industry, wine trade, spumante, cava, cluster, champagne, sparkling wine, protectionism
    JEL: N64 N34 D23 O14 L66 L23 J24 F16 F14
    Date: 2009
  5. By: Keiya Eto
    Date: 2009–04
  6. By: Andrew Zimbalist (Department of Economics, Smith College)
    Abstract: This paper examines the history and the economics of the Bowl Championship Series, in the context of all college bowl games. The evidence suggests that the BCS restricts entry to the FBS conferences that are outside the BCS cartel and that the revenue distribution from the bowl games is highly skewed in favor of the six BCS conferences. The resulting revenue advantage enables the BCS conferences to perpetuate their historical predominance. The BCS selection process is based on a conceptually confused and biased system. The paper discusses the rationale proffered by the BCS for its system and then considers the antitrust arguments against the BCS. It concludes that the outcome of any antitrust claim would be uncertain, which together with the involved expense and time render problematic any antitrust strategy to break up the BCS cartel. Instead, the paper concludes with a call for a legislative solution that would open up the national championship to all FBS conferences, increase output, redistribute revenues more evenly throughout Division I and the rest of the NCAA, and provide more opportunities to college athletes.
    JEL: K21 L11 L12 L44 L83
  7. By: Julian P. Christ (Universität Hohenheim); André P. Slowak (Universität Hohenheim)
    Abstract: Extensive research has been conducted on the economics of standards in the last three decades. To date, standard-setting studies emphasize a superior role of demand-side-driven technology diffusion; these contributions assume the evolution of a user-driven momentum and network externalities. We find that consumers wait for a dominant standard if they are unable to evaluate technological supremacy. Thus, supply-side driven activities necessarily need to address a lacking demand-side technology adoption. Our paper focuses on Blu-ray vs. HD-DVD as an illustrative case of consortia standard wars. One central role of consortia is to coordinate strategic behavior between heterogeneous agents, e.g. incumbents, complementors (content providers) and others, but also to form a coalition against other standard candidates. More precisely, we argue for signalizing activities through consortia events. We depict the essential role of consortia structures for the recently determined standard war between the High-Definition disc specifications Blu-ray and HD-DVD. Therefore, the paper suggests that unique supply-side dynamics from consortia structures, consortia announcements and exclusive backing decisions of firms determined the standard-setting process in the Blu-ray vs. HD-DVD standard war. This study is based on the following data: movie releases and sales numbers, membership affiliation for structural consortia analysis, and an in-depth event study. A detailed comparison of the technological specifications of both standard specifications supports our argument that there was no technological supremacy of one standard candidate from a consumer-oriented usecase perspective. We furthermore clarify that content providers (complementors) such as movie studios and movie rental services feature a gate-keeping position in the Blu-ray vs. HD-DVD standard war. In the case of Blu-ray, film studios decided the standard war because the availability of movie releases, but not technological supremacy, made the standard attractive to consumers. Finally, we find that there is a co-evolution of the consortia in terms of membership dynamics. Particularly, firm allegiance of heterogeneous agents plays a crucial role.
    Keywords: Blu-ray, HD-DVD, standard wars, co-evolution, consortia, event study
    JEL: B52 D84 L15 O33
    Date: 2009–05
  8. By: Leonardo Monasterio; Eustáquio Reis
    Abstract: O trabalho apresenta perspectivas históricas às desigualdades econômicas regionais no Brasil. São analisadas as mudanças na concentração espacial das atividades econômicas baseadas em dados sobre a distribuição da força de trabalho a partir dos Censos de 1872 e 1920. A Nova Geografia Econômica (NGE) é o arcabouço analítico que mostra como geografia, custos de transporte e dotação de fatores deram impulso à industrialização da cidade de São Paulo e por que o acelerado crescimento industrial teve impacto tão limitado e defasado no restante do país. Em suma, a explicação está na redução dos custos de transporte gerada pelas ferrovias associada à imigração internacional subsidiada como solução institucional para a carência de mão-de-obra. Resultados econométricos mostraram que a Nova Geografia Econômica é uma ferramenta para compreender as raízes das desigualdades regionais no Brasil. O modelo de localização das atividades manufatureiras em 1920 sugere a importância dos custos de transporte, forças aglomerativas e externalidades associadas à imigração na concentração espacial da indústria brasileira. This paper provides historical perspectives on regional economic inequalities in Brazil. It analyzes the changes in the spatial concentration of economic activities based upon data on the municipal distribution of the labor force by occupation from the Censuses of 1872 and 1920. The New Economic Geography provides the analytical framework to show how geography, transport costs and factor endowments gave industrial preeminence to the city of São Paulo and why the accelerated industrial growth had such a limited and delayed effects in the rest of the country. In short, the explanation lies in the significant reduction in transport costs brought by railroads associated with subsidized international migration as an institutional solution to the labor shortage problem. Estimation results show that the New Economic Geography is a tool to understand the roots of regional inequalities in Brazil. The model on the location of manufacturing activities in 1920 indicates the importance of transport cost, agglomeration forces and the externalities associated with overseas immigration in the spatial concentration of Brazilian industrialization.
    Date: 2008–11
  9. By: Uwe Vollmer (Economics Department, University of Leipzig); Diemo Dietrich (Halle Institute for Economic Research); Ralf bebenroth (Research Institute for Economics and Business Administration, Kobe University)
    Abstract: This paper analyzes the privatization process of the Japanese Post Bank (JPB), the largest bank in the world. We report some evidence in favour of the "political view" of SOB's and argue that, before privatization, postal savings banks served as vehicles for politicians to reallocate funds in exchange for private rents. We ask why politicians in Japan decided to privatize the postal savings system, predict how the privatization will proceed and study the expected results of the privatization process. We argue that there will be no level playing field in bank competition after the start of the privatization process and discuss possible out-comes of JPB privatization on financial stability in Japan.
    Keywords: Public banking, Japan, Privatization, Postal savings banks
    JEL: G21 G28 L32 P12
    Date: 2009–02
  10. By: Philip McCann (University of Waikato NZ; University of Reading UK; University of Groningen, The Netherlands); Zoltan J. Acs (George Mason University)
    Abstract: In this paper we explore the relationship between the size of a country, the size of its cities, and the economic performance of the country. In order to do this we integrate three different literature, namely the literature on optimal country size, literature on historical processes of urbanisation and the performance of cities, and literature on the role of multinational firms in the global economy. Using an economic geography perspective, we demonstrate that the relationship between city-size and the prosperity of the nation state, to a much more complex set of relationships. In the modern era of globalisation the role of global companies within the city-region is critical, and city-regions in turn are seen to drive national economies. As such, the relationships between firms, cities and countries have been largely reversed, casting doubt on various institutional economic theories.
    Keywords: scale, cities, countries, multinational firms, globalisation
    JEL: R12 F23 N90 O33
    Date: 2009–06–04
  11. By: Paul Segal
    Abstract: This paper investigates structural change in Argentina between 1900 and 1973. It has been argued that trade policy under import-substituting industrialization disfavoured agriculture and led to a “technological lag” in the sector, and that this explains agriculture’s relative decline during a period of rapid industrialization. I find that there is no technological lag to be found in the data and, moreover, that relative prices had no discernible effect on agricultural output. A three-by-three model based on these findings is developed in which structural change is caused by exogenous changes in factor endowments. A simulation of the model replicates the observed structural changes from the 1920s onwards, suggesting that the decline of agriculture and rise of manufacturing can be explained by population growth once the land frontier had been reached.
    Keywords: Argentina, Economic growth, Structural change, Trade policy
    JEL: N56 O13 O14 O24 O41 O54
    Date: 2009
  12. By: Jean-François Ponsot (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II)
    Abstract: Reducing transaction costs and the need for international reserves is a primary objective to the establishment of regional payment agreements. Another objective, especially in the case of Latin America where the Ecuadorian promoters of the Bank of the South and the New Architecture are planning the implement of a regional clearing system, is to reduce member countries dependence on the US dollar as an international standard and reserve currency. To help improving the design of such agreements this paper refers to the plan Keynes designed for the Bretton Woods Conference. First, it observes that cases were made against this plan from which useful lessons may still be drawn. Second, it shows that Keynes defined a system for exchanging domestic currencies for each other that can be improved and help design currency unions in accordance with their promoters'objectives.
    Keywords: regional monetary arrangements ; foreign exchange ; currency union ; dollar standard, payment systems; Latin America
    Date: 2009–05–14
  13. By: Michele Manna (Bank of Italy); Carmela Iazzetta (Bank of Italy)
    Abstract: When a bank defaults or stops trading in the interbank market, both a liquidity shortage in the market itself and mounting trading losses should be anticipated. To gain more insight into the way a liquidity crisis spreads, we apply network topology techniques to monthly data on deposits exchanged by Italian banks, from 1990 to 2008. Our research yields three main results: first, only a few banks are today pivotal in the redistribution of liquidity across the system, while banks close to, but outside this core circle, weigh less than they used to; secondly, the halt in operations in a second set of banks may cut off some of their counterparts from the rest of the network, with increasingly less negligible effects; finally, only 2-3 banks out of the 10 we identify as most interconnected within the network are currently also among the top 10 banks by volume of traded deposits.
    Keywords: interbank market, topology, liquidity crisis
    JEL: D4 E5 G2
    Date: 2009–05
  14. By: Karen A. Kopecky (Department of Economics, The University of Western Ontario); Richard M. H. Suen (Department of Economics, University of California Riverside)
    Abstract: Suburbanization in the U.S. between 1910 and 1970 was concurrent with the rapid diffusion of the automobile. A circular city model is developed in order to access quantitatively the contribution of automobiles and rising incomes to suburbanization. The model incorporates a number of driving forces of suburbanization and car adoption, including falling automobile prices, rising real incomes, changing costs of traveling by car and with public transportation, and urban population growth. According to the model, 60 percent of postwar (1940-1970) suburbanization can be explained by these factors. Rising real incomes and falling automobile prices are shown to be the key drivers of suburbanization.
    Keywords: automobile; suburbanization; population density gradients; technological progress
    JEL: E10 O11 N12 R12
    Date: 2009–01

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