New Economics Papers
on Business, Economic and Financial History
Issue of 2009‒10‒17
sixteen papers chosen by

  1. The novelty of Latin America: Globalizations, futures, and nations. Part I By Fernando López-Alves
  2. "The Steam Engine and U.S. Urban Growth During the Late Nineteenth Century" By Burton A. Abrams; Jing Li; James G. Mulligan
  3. Entrepreneurship and Japanese Industrialization in Historical Perspective By John Tang
  4. Top Incomes in the Long Run of History By Anthony B. Atkinson; Thomas Piketty; Emmanuel Saez
  5. Civil War: A Review of Fifty Years of Research By Christopher Blattman
  6. Large shocks in U.S. macroeconomic time series: 1860–1988 By Olivier Darné; Amélie Charles
  7. Exchange Rate Regimes and Reserve Policy on the Periphery: The Italian Lira 1883-1911 By Filippo Cesarano; Giulio Cifarelli; Gianni Toniolo
  8. Why Do Politicians Implement Central Bank Independence Reforms? By Daunfeldt, Sven-Olov; Hellström, Jörgen; Landström, Mats
  9. Banque coloniales, crédit et circulation: l'exemple de la Martinique 1848-1871 By Agnès Festré; Alain Raybaut
  10. Series enlazadas de algunos agregados económicos nacionales y regionales, 1955-2007. Versión 2.1 By Angel de la Fuente
  11. Waiting for the Invisible Hand: Market Power and Endogenous Information in the Modern Market for Food By Trenton Smith; Hayley Chouinard; Philip Wandschneider
  12. "Government Intervention to Prevent Bankruptcy: The Effect of Blind-Bidding Laws on Movie Theaters" By James G. Mulligan; Daniel J. Wedzielewski
  13. Why Have Girls Gone to College? A Quantitative Examination of the Female College Enrollment Rate in the United States: 1955-1980 By Hui He
  14. La réforme de la normalisation comptable française : simple modernisation ou rupture profonde ? By Gregory Heem
  15. Endowments, Fiscal Federalism, and the Cost of Capital for States: Evidence from Brazil, 1891-1930 By André C. Martínez Fritscher; Aldo Musacchio
  16. How productive are academic researchers in agriculture-related sciences? The Mexican case By Rivera, Rene; Sampedro, Jose Luis; Dutrenit, Gabriela; Ekboir, Javier Mario; Vera-Cruz, Alexandre O.

  1. By: Fernando López-Alves
    Abstract: This essay argues that Latin America created a modern cutting edge design of the nation and national identity long before Europe. In many aspects, it was more modern than the United States. The region is seen as a modernizer and globalizer rather than a mere recipient of influences. In light of these findings, the essay revisits theories of the Nation, National Identity, Modernization and Globalization. Most literature on the construction of national identity and nationalism focuses on communal past experiences and history to explain the nation. Rather, I claim that a different dimension and intellectual construct, ‘the future of the nation’, provides one of the most fundamental building blocks of national identity in the modern world.
    Date: 2009–09
  2. By: Burton A. Abrams (Department of Economics,University of Delaware); Jing Li; James G. Mulligan (Department of Economics,University of Delaware)
    Abstract: There is an on-going debate concerning the role that the steam engine played in fueling urban growth in the U.S. during the second half of the nineteenth century. While a consensus has been building that steam power played little or no role in affecting urban growth, we find evidence to the contrary by using previously untapped county-level data on steam power in manufacturing.
    Keywords: urbanization, technology, convergence
    JEL: N32 O14 O18
    Date: 2009
  3. By: John Tang
    Abstract: Studies of entrepreneurship in nineteenth century Japan typically focus on the activities of leading industrialists who founded large, family-owned conglomerates known as zaibatsu. These individuals do not conform well with the archetypal Schumpeterian entrepreneur, but this discrepancy may be more an issue of context than behavior. However, due to a lack of documentation for smaller independent firms, it is difficult to make this comparison. To broaden the scope of analysis, I use data drawn from corporate genealogies, which provide a more complete cross-section of entrepreneurial activity. This dataset of firm entry during the Meiji Period (1868-1912) covers a wide range of industries, allowing me to analyze aspects of Japan's early industrialization that heretofore have relied on anecdotal or case evidence. I also propose a game-theoretic model of entry appropriate for entrepreneurs in late developing economies that exploit the qualitative nature of these data.
    Keywords: Meiji Japan, entrepreneurship, entry model, industrialization, late development,technology adoption, zaibatsu
    JEL: N85 O14 O33
    Date: 2009–09
  4. By: Anthony B. Atkinson; Thomas Piketty; Emmanuel Saez
    Abstract: This paper summarizes the main findings of a recent literature that has constructed top income shares time series over the long-run for more than 20 countries using income tax statistics. Top incomes represent a small share of the population but a very significant share of total income and total taxes paid. Hence, aggregate economic growth per capita and Gini inequality indexes are very sensitive to excluding or including top incomes. We discuss the estimation methods and issues that arise when constructing top income share series, including income definition and comparability over time and across countries, tax avoidance and tax evasion. We provide a summary of the key empirical findings. Most countries experience a dramatic drop in top income shares in the first part of the 20th century in general due to shocks to top capital incomes during the wars and depression shocks. Top income shares do not recover in the immediate post war decades. However, over the last 30 years, top income shares have increased substantially in English speaking countries and in India and China but not in continental Europe countries or Japan. This increase is due in part to an unprecedented surge in top wage incomes. As a result, wage income comprises a larger fraction of top incomes than in the past. Finally, we discuss the theoretical and empirical models that have been proposed to account for the facts and the main questions that remain open.
    JEL: H2 N10 O15
    Date: 2009–10
  5. By: Christopher Blattman
    Abstract: Why do civil wars occur at all when, given the high costs of war, groups have every incentive to reach an agreement that avoids fighting? Explanations have focused on information asymmetries and the inability to sign binding contracts in the absence of the rule of law. [WP No. 166].
    Keywords: econometric, macroeconomic recoveries, micro-level analysis, data, economics, Civil war, violence, economic development, contracts, costs, war, incentive, growth, poverty, economists,
    Date: 2009
  6. By: Olivier Darné (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Amélie Charles (Audencia Nantes, School of Management - Audencia, School of Management)
    Abstract: In this paper we examine the large shocks due to major economic or financial events that affected U.S. macroeconomic time series on the period 1860–1988, using outlier methodology. We show that these shocks can have temporary or permanent effects on the series and that most of them can be explained by the Great Depression, World War II and recessions as well as by monetary policy for the interest rate data. We also find that macroeconomic time series do not seem inconsistent with a stochastic trend once we adjusted the data of these shocks.
    Date: 2009
  7. By: Filippo Cesarano (Banca D'Italia); Giulio Cifarelli (Università degli Studi di Firenze, Dipartimento di Scienze Economiche); Gianni Toniolo
    Abstract: The three exchange rate regimes adopted by Italy from 1883 up to the eve of World War I — the gold standard (1883-1893), floating rates (1894-1902), and “gold shadowing” (1903-1911) — produced a puzzling result: formal adherence to the gold standard ended in failure while shadowing the gold standard proved very successful. This paper discusses the main policies underlying Italy’s performance particularly focusing on the strategy of reserve accumulation. It presents a cointegration analysis identifying a distinct co-movement between exchange rate, reserves, and banknotes that holds over the three sub-periods of the sample. Given this long-run relationship, the different performance in each regime is explained by the diversity of policy measures, reflected in the different variables adjusting the system in the various regimes. Italy’s variegated experience during the gold standard provides a valuable lesson about current developments in the international scenario, showing the central role of fundamenals and consistent policies.
    Keywords: Exchange rate; gold standard; reserve policy; cointegration
    JEL: F31 F33 N13 N23
    Date: 2009
  8. By: Daunfeldt, Sven-Olov (The Ratio Institute); Hellström, Jörgen (Department of Economics, Umeå University); Landström, Mats (Department of Economics, University of Gävle)
    Abstract: This paper is a first empirical attempt to investigate why politicians around the world have chosen to give up power to independent central banks, thereby reducing their ability to fine-tune the economy. A new data-set covering 132 countries, of which 89 countries had implemented such reforms, was collected. Politicians in non-OECD countries were more likely to delegate power to independent central banks if their country has been characterized by a high variability in historical inflation and if they faced a high probability of being replaced. No such effects were found for OECD-countries.
    Keywords: inflation; institutional reforms; monetary policy; time-inconsistency
    JEL: E52 E58 P48
    Date: 2009–10–07
  9. By: Agnès Festré (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis); Alain Raybaut (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis)
    Abstract: Cette contribution s'intéresse au fonctionnement de la banque de la Martinique dans la période de transition qui a suivi l'abolition de l'esclavage. L'article souligne le succès mitigé de cette institution en matière d'intermédiation financière. Si la banque a pu rationaliser la distribution de crédit et répondre aux contraintes de financement posées par la transition, elle a progressivement négligé sa vocation agricole initiale au profit d'une activité essentiellement commerciale. L'article met ainsi en évidence les conflits d'intérêts entre le monde agricole et celui du commerce. Il montre que cette situation conflictuelle a rendu d'autant plus délicate la gestion des problèmes monétaires rencontrés dans la période par cette économie mono-productrice.
    Keywords: Banque coloniale; Transition post-esclavagiste; Crises de circulation; Banque de la Martinique
    Date: 2009
  10. By: Angel de la Fuente
    Abstract: En este trabajo se construyen series “homogéneas” de VAB a precios corrientes y constantes, empleo y población para España y sus regiones durante el periodo 1955-2007. Estas series se obtienen enlazando la Contabilidad Regional del INE con las series elaboradas por Julio Alcalde y colaboradores para la Fundación BBVA. El “punto de corte” en el que se abandona esta última fuente en favor de la anterior como referencia para la construcción de la serie enlazada se determina utilizando un procedimiento que permite estimar cuál de las dos series disponibles generará un estimador con menor error cuadrático medio cuando se utiliza como variable dependiente en una regresión sobre una variable independiente arbitraria. La discrepancia entre ambas series que aflora en el momento del enlace se reparte entre los niveles iniciales y las tasas de crecimiento de la serie más antigua utilizando, en la medida de lo posible, estimaciones externas del valor de las variables de interés a comienzos del período muestral.
    Date: 2009–09
  11. By: Trenton Smith; Hayley Chouinard; Philip Wandschneider (School of Economic Sciences, Washington State University)
    Abstract: In many ways, the modern market for food exemplifies the economist’s conception of perfect competition, with many buyers, many sellers, and a robust and dynamic marketplace. But over the course of the last century, the U.S. has witnessed a dramatic shift away from traditional diets and toward a diet comprised primarily of processed brand-name foods with deleterious long-term health effects. This, in turn, has generated increasingly urgent calls for policy interventions aimed at improving the quality of the American diet. In this paper, we ask whether the current state of affairs represents a market failure, and—if so—what might be done about it. We review evidence that most of the nutritional deficiencies associated with today’s processed foods were unknown to nutrition science at the time these products were introduced, promoted, and adopted by American consumers. Today more is known about the nutritional implications of various processing technologies, but a number of forces—including consumer habits, costly information, and the market power associated with both existing brands and scale economies—are working in concert to maintain the status quo. We argue that while the current brand-based industrial food system (adopted and maintained historically as a means of preventing competition from small producers) has its advantages, the time may have come to consider expanding the system of quality grading employed in commodity markets into the retail market for food.
    Keywords: credence goods, history, food policy, certification
    JEL: D23 D83 I18 Q18
    Date: 2009–02
  12. By: James G. Mulligan (Department of Economics,University of Delaware); Daniel J. Wedzielewski (JPMorganChase)
    Abstract: In the 1970s motion picture studios used blind bidding and non-refundable guarantees to reduce the risks of producing large budget films. However, theater owners claimed that blind bidding and guarantees shifted the risk to them and increased the likelihood of bankruptcy. In response to lobbying by theater owners, twenty-four states passed laws banning blind bidding between 1978 and 1984, while seven states also banned non-refundable guarantees. We find that the laws were not only ineffective in keeping theater owners from exiting the market; they may have been detrimental to theater owners converting to multiplexes at that time.
    Keywords: bankruptcy, blind bidding, vertical contractual relationships, government intervention.
    JEL: L1 L2
    Date: 2009
  13. By: Hui He (Department of Economics, University of Hawaii at Manoa)
    Abstract: This paper documents a dramatic increase in the college enrollment rate of women from 1955 to 1980 and asks a quantitative question: to what extent can such change be accounted for by the change in the female cohort-specific college wage premium? I develop and calibrate an overlapping generations model with discrete schooling choice. I find that changes in the life-cycle earnings differential can explain the increase in female college enrollment rate very well. Young women's changing expectations of future employment opportunity also played an important role in driving their college attendance decision from the mid 1950s to the early 1970s.
    Keywords: female college enrollment rate, college wage premium, life-cycle
    JEL: J24 J31 I21 E24
    Date: 2009–10–01
  14. By: Gregory Heem (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR6227 - Université de Nice Sophia-Antipolis)
    Abstract: Le 13 mars 2007, le ministre de l'économie, des finances et de l'industrie, Monsieur Thierry Breton nommait Monsieur Jean-François Lepetit, ancien président de la COB, à la présidence du Conseil national de la comptabilité (CNC). L'objectif affiché était de voir le rôle du CNC s'accroître, après l'entrée en vigueur des normes comptables internationales IFRS, mais aussi de réfléchir à de nouveaux sujets tels que l'inscription des marques au bilan des entreprises. Plus globalement, l'idée était de rationaliser le dispositif normatif actuel composé du CNC et du CRC (Comité de la réglementation comptable) afin de mieux identifier l'existence d'un régulateur sur ces questions comptables, mais aussi d'améliorer la capacité à associer toutes les parties prenantes à l'élaboration des normes comptables. L'objet de cet article est d'analyser la réforme actuelle du CNC afin d'identifier si elle réforme traduit une simple modernisation de la normalisation comptable française ou si cela est le résultat d'une véritable rupture avec les pratiques antérieures.
    Keywords: normalisation; CNC; CRC; ANC; normes
    Date: 2008–01–04
  15. By: André C. Martínez Fritscher (Banco de México); Aldo Musacchio (Harvard Business School, Business, Government and the International Economy Unit)
    Abstract: There is a large literature that aims to explain what determines country risk (defined as the difference between the yield of a sovereign's bonds and the risk free rate). In this paper, we contribute to the discussion by arguing that an important explanatory factor is the impact that commodities have on the capacity to pay. We use a newly created data base with state-level fiscal and risk premium data for Brazil states between 1891 and 1930 to show that Brazilian states with natural endowments that allowed them to export commodities that were in high demand (e.g., rubber and coffee) ended up having higher revenues per capita and, thus, lower cost of capital. We also explain that the variation in revenues per capita was both a product of the variation in natural endowments (i.e., the fact that states cannot produce any commodity they want) and a commodity boom that had asymmetric effects among states. These two effects generated variation in revenues per capita at the state level thanks to the extreme form of fiscal decentralization that the Brazilian government adopted in the Constitution of 1891, which gave states the sole right to tax exports. We end by running instrumental variable estimates using indices of export prices for each state to instrument for revenues per capita. Our IV estimates confirm our results that states with commodities that had higher price increases had lower risk premia.
    Date: 2009–10
  16. By: Rivera, Rene (Universidad Autonoma Metropolitana Xochimilco); Sampedro, Jose Luis (Universidad Autonoma Metropolitana Xochimilco); Dutrenit, Gabriela (UNU-MERIT, Universidad Autonoma Metropolitana Xochimilco); Ekboir, Javier Mario; Vera-Cruz, Alexandre O. (UNU-MERIT, Universidad Autonoma Metropolitana Xochimilco)
    Abstract: This paper explores the effect of commercial farmers-academic researchers linkages on research productivity in fields related to agriculture. Using original data and econometric analysis, our findings show a positive and significant relationship between intensive linkages with a small number of commercial farmers and research productivity, when this is defined as publications in ISI journals. This evidence seems contrary to other contributions that argue that strong ties with the business sector reduce research productivity and distort the original purposes of university, i.e., conducting basic research and preparing highly-trained professionals. When research productivity is defined more broadly adding other types of research outputs, the relationship is also positive and significant confirming the argument that close ties between public research institutions and businesses foster the emergence of new ideas that can be translated into innovations with commercial and/or social value. Another important finding is that researchers in public institutions produce several types of research outputs; therefore, measuring research productivity only by published ISI papers misses important dimensions of research activities.
    Keywords: agriculture sector, research productivity, university-business sector interaction, university-industry collaboration
    JEL: O31 O32 Q16 Q18
    Date: 2009

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