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on Business, Economic and Financial History |
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Issue of 2010‒02‒13
thirteen papers chosen by |
| By: | Ann Carlos (University of Colorado, Boulder); Frank Lewis (Queen's University) |
| Abstract: | The Great Divergence in standards of living for populations around the world occurred in the late 18th century. Prior to that date evidence suggests that real wages of most Europeans, many living in China and India were similar. Some a little higher and some a little lower but with a low dispersion. By the middle of the 19th century, a divergence had occurred with western Europe pulling away from other groups. Little is known about the standards of living of the aboriginal peoples of North America many of whom were primarily hunter/gatherer’s at the end of the 18th century. Based on comparisons of expenditure, we show that the standard of living of aboriginal people in 1740 was similar to that of wage workers in London. However, within the next century, there would be a great divergence. This paper explores the ways in which hunter-gatherer lifeways and the concomitant property rights structures reduced the likelihood that native economy could experience modern rates of economic growth. Native society and property rights structures which provided a relatively high standard of living in the mid eighteenth century and for part of the nineteenth was unable to provide avenues for further development. |
| Keywords: | native americans, living standards, property rights |
| JEL: | N51 N31 I31 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1232&r=his |
| By: | Hubert BONIN (GREThA UMR CNRS 5113 - Institut de Sciences Politique de Bordeaux) |
| Abstract: | Many pamphleteers in the 1900s-1920s and of short-sighted histories criticised French investments in Russia. They accused on the moment or retrospectively bankers and financiers of having involved savers’ cash (that of “France des petits” and middle classes) in the “adventure” of “emprunts russes”. Our paper intends to argue about the reality of the portfolio of risk analysis of which banks equipped themselves in order to set up a capital of skills and to draw a “curb of experience”, to apply them to risks management fostered by assets committed to eastern Europe. |
| Keywords: | Bank; Risk analysis; Risk management; Investments in Russia; Emprunts russes; Market confidence; Risk saving |
| JEL: | N2 N24 F36 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2010-05&r=his |
| By: | Alexander Armstrong (Queen's University); Frank Lewis (Queen's University) |
| Abstract: | The difficulty or inability to borrow made capital market constraints an important part of the decision of potential emigrants to move from Europe to North America. We formalize the constraint with a life-cycle model, where agents jointly choose the optimal period of saving to finance migration and whether to migrate. Simulations of the model point to the potential role of preferences, the period of adjustment after arrival, and the direct migration costs in determining who will migrate and at what age; and they help account for the large wage gaps between the Old and New World. Our analysis of data from the passenger manifests of Dutch arrivals at Canadian ports from 1925 to 1927, that importantly include the saving of these immigrants, points to the promise of this approach to international migration. |
| Keywords: | immigration, canada |
| JEL: | N32 J61 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1230&r=his |
| By: | OÌ GraÌda, Cormac |
| Keywords: | Ireland--History--Famine, 1845-1852; Famines--Ireland--History; |
| URL: | http://d.repec.org/n?u=RePEc:ner:ucddub:urn:hdl:10197/408&r=his |
| By: | Batiz-Lazo, Bernardo; Haigh, Thomas |
| Abstract: | This article documents the adoption of computer technology by a civil engineering services and construction company in Mexico at the time that it became the first Mexican multinational enterprise. Computerization took place independently of cross border growth. The challenges, failures and successes of computerization attest to the transformation in the use of computer applications from the mechanization of routine procedures to the creative use of these applications. In line with company policy, the latter lead to the establishment of the computer centre as a standalone, profit generating business unit. However, this policy responded to ‘laissez faire’ and fiscal (i.e. minimizing tax payments) rather than strategic considerations. To little surprise computer services never grew to be a significant income stream. |
| Keywords: | Computer centers; History; Data processing; Computer integrated engineering; Mexico |
| JEL: | N8 N76 N66 N86 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20339&r=his |
| By: | Metin M. Cosgel (University of Connecticut); Thomas J. Miceli (University of Connecticut); Jared Rubin (California State University, Fullerton) |
| Abstract: | A fundamental question of economic and technological history is why some civilizations had adopted new and important technologies and others have not. In this paper, we analyze the effect that new technologies have on agents that legitimize rulers. We construct a simple political economy model that suggests that rulers may not accept productivity-enhancing technologies when they negatively affect an agent's ability to provide the ruler legitimacy. However, when other sources of legitimacy emerge, the ruler will accept the technology. We use this insight to help explain the initial blocking but eventual accepting of the printing press in the Ottoman Empire, industrial technologies in Imperial Russia, and military technologies in Qing China. |
| Keywords: | technology, state, political economy, legitimacy, revolt, Qing China, Imperial Russia, Ottoman Empire |
| JEL: | D7 H2 H3 N4 N7 O3 O5 P48 P5 Z12 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2010-02&r=his |
| By: | McCarthy, Colm |
| Keywords: | Fiscal policy--Ireland; Ireland--Economic policy; Ireland--Economic conditions--21st century; Banks and banking--Ireland; |
| Date: | 2009–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:ner:ucddub:urn:hdl:10197/1673&r=his |
| By: | Jan Kregel |
| Abstract: | The purpose of the 1933 Banking Act--aka Glass-Steagall--was to prevent the exposure of commercial banks to the risks of investment banking and to ensure stability of the financial system. A proposed solution to the current financial crisis is to return to the basic tenets of this New Deal legislation. Senior Scholar Jan Kregel provides an in-depth account of the Act, including the premises leading up to its adoption, its influence on the design of the financial system, and the subsequent collapse of the Act's restrictions on securities trading (deregulation). He concludes that a return to the Act's simple structure and strict segregation between (regulated) commercial and (unregulated) investment banking is unwarranted in light of ongoing questions about the commercial banks' ability to compete with other financial institutions. Moreover, fundamental reform--the conflicting relationship between state and national charters and regulation--was bypassed by the Act. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levppb:ppb_107&r=his |
| By: | Hendrickson, Joshua |
| Abstract: | The Great Moderation is often characterized by the decline in the variability of output and inflation from earlier periods. While a multitude of explanations for the Great Moderation exist, notable research has focused on the role of monetary policy. Specifically, early evidence suggested that the increased stability has been associated with monetary policy that responded much more strongly to rising inflation. Recent evidence casts doubt on this change in monetary policy. An alternative hypothesis is that the change in monetary policy was the result of a change in doctrine; specifically the rejection of the view that inflation was largely a cost-push phenomenon. As a result, this alternative hypothesis suggests that the change in monetary policy beginning in 1979 is reflected in the Federal Reserve's response to movements in nominal income rather than inflation as previously argued. I provide evidence for this hypothesis by estimating the parameters of a monetary policy rule in which policy adjusts to forecasts of nominal GDP for the pre- and post-Volcker eras. Finally, I embed the rule in two dynamic stochastic general equilibrium models with gradual price adjustment to determine whether the overhaul of doctrine can explain the reduction in the volatility of inflation and the output gap. |
| Keywords: | monetary policy rules; real-time data; Greenbook forecasts; nominal income target; Great Moderation |
| JEL: | E51 E30 E58 |
| Date: | 2010–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20346&r=his |
| By: | Markussen, Simen (Dept. of Economics, University of Oslo) |
| Abstract: | This paper exploits a Norwegian physician directed reform aimed to reduce sick-leave. Physicians were required to consider part-time sick-leave as the default treatment and – in the case of long lasting full-time sick-leave – to file a report documenting why the worker was unable to perform any work related activities. The reform had a large impact, reducing sick-leave by 18.8 percent. The main effect came from reduced spell duration – which can be directly linked to the extended documentation requirement laid on physicians within the first 8 weeks of a sick-leave spell. Physician-directed policies may be an (cost-) effective way of reducing sick-leave. |
| Keywords: | Labor market policies; sick-leave; physicians’ gate keeping |
| JEL: | H53 I18 J28 |
| Date: | 2009–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2009_019&r=his |
| By: | Miriam Shabafrouz (GIGA Institute of Global and Area Studies) |
| Abstract: | Algeria’s intrastate war in the 1990s, during which militant Islamists and the state fought fiercely against each other, still raises questions concerning the decisive factors leading to its onset and escalation. This paper uses the resource curse approach and the rentier state theory to understand the impact resource wealth could have had on the outbreak of this violent conflict, then goes one step further, adopting a context-sensitive approach. This approach attempts to juxtapose those conditions directly linked to the resource sector with the general conflict-fueling conditions diagnosed in Algeria. It takes into account conditions both within the country and in the international context. The application of a context matrix allows us to examine the interplay of resource-related factors and other conflictdriving forces, such as socioeconomic, demographic and ideological changes. Such an approach not only broadens the general understanding of the resource-violence link but also enhances our understanding of the eruption of violence in Algeria. |
| Keywords: | Algeria, oil, civil war, resource curse, rentier state theory, context approach |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:118&r=his |
| By: | Metin M. Cosgel (University of Connecticut); Haggay Etkes (Bank of Israel); Thomas J. Miceli (University of Connecticut) |
| Abstract: | This paper contributes to the literature on private law enforcement by proposing a novel solution to the problem of underenforcement by monopolistic enforcers. Monopolistic enforcers underinvest in fine collection because, by maximizing net expected revenue, they ignore the social benefits of deterrence. We show that this problem can be partially resolved by combining the tasks of law enforcement with tax collection because a joint enforcer-collector will have an interest in reducing the crime rate in order to maximize his income from taxes. In support of the theory, we discuss two historical examples of this practice: decentralized law enforcement under European feudalism, and centralized law enforcement in the Ottoman Empire. |
| Keywords: | Criminal fines, deterrence, private law enforcement, tax collection |
| JEL: | H11 K42 N40 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2010-03&r=his |
| By: | Tomasson, Gunnar; Bezemer, Dirk J |
| Abstract: | Classical political economy was underpinned by a shared view of the economy as a circular flow. This begged the question of how the value of produce can exceed the value of factor inputs: the ‘Profit Puzzle’. In this paper we advocate an understanding of the Profit Puzzle as a monetary paradox arising from Say’s Law. We trace how Classical, Keynesian and Neoclassical economists addressed the Puzzle. We suggest a solution based on the work of Bentham. |
| Keywords: | Circular Flow, Say's Law, Profit, Credit, Marx, Schumpeter, Keynes |
| JEL: | B12 E44 |
| Date: | 2010–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20320&r=his |