New Economics Papers
on Business, Economic and Financial History
Issue of 2010‒08‒21
fourteen papers chosen by

  1. Toward the anthropometric history of Native Americans c. 1820-1890 By John Komlos; Leonard Carlson
  2. Herausbildung erster Wesenszüge des Normalarbeitsverhältnisses in Deutschland By Kendzia, Michael J.
  3. Teaching Economics as a Science: the 1930 Yale Lectures of Ragnar Frisch By Bjerkholt, Olav; Qin, Duo
  4. Neoliberalism’s relationship with economic growth in the developing world: Was it the power of the market or the resolution of financial crisis? By Cohen, Joseph N
  5. The “Meteorological” and the “Engineering” Type of Econometric Inference: a 1943 Exchange between Trygve Haavelmo and Jakob Marschak By Bjerkholt, Olav
  6. Immigration: America's nineteenth century "law and order problem"? By Howard Bodenhorn; Carolyn M. Moehling; Anne Morrison Piehl
  7. The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness? By Stefan Ambec; Mark A. Cohen; Stewart Elgie; Paul Lanoie
  8. The Spatial Diffusion of a Knowledge Base-Laser Technology Research in West Germany, 1960-2005 By Michael Fritsch; Luis F. Medrano
  9. Is an historical economic crisis upcoming? By Caglar Tuncay
  10. Estimating regional GDP in Italy (1871-2001): sources, methodology and results. By Felice, Emanuele
  11. The Evolution of Brand Preferences: Evidence from Consumer Migration By Bart J. Bronnenberg; Jean-Pierre H. Dube; Matthew Gentzkow
  12. References made and citations received by scientific articles. By Albarrán, Pedro; Ruiz-Castillo, Javier
  13. Walras et l'économie publique By Alain Béraud
  14. Lying in Business: Insights from Hannah Arendt’s ‘Lying in Politics’ By Eenkhoorn, P.; Einmahl, J.H.J.

  1. By: John Komlos; Leonard Carlson
    Abstract: We analyze the height of Indian scouts hired by the US army after the Civil War. Their average height of 170 cm (67 in.) confirms that American natives were very tall compared to Europeans but were among the shortest segments of the rural populations in the New World. Their height was closer to that of the urban populations who experienced a much heavier disease load than rural populations living in a low population density environment. The trend in their height describes an inverted and elongated “U” shape with some increase in the late antebellum period and a subsequent decline after the Civil War. This implies that in spite of their considerable tribulations the Native American population was able to maintain and to some extent even improve their nutritional status through the Civil War, though harder times followed for those born thereafter.
    Date: 2010–08
  2. By: Kendzia, Michael J. (IZA)
    Abstract: The paper provides a historical overview of the development of the initial characteristics of the standard employment contract in Germany from the middle of the 19th century until the beginning of World War I. The beginning of the welfare state in Germany took place during the 1880s on the basis of dependent employment. For the analysis of this type of employment, the model of the standard employment contract is used, and the specific factors which determined the rise of the standard employment contract are examined. In the 19th century, wage labour became more and more common and finally displaced the pre-modern allocation of work. After being freed from feudal dependence, the familiar social question arose. In this context, the main driving forces as well as different approaches in solving this question are surveyed. State regulations were implemented to protect the workforce against exploitation by industrial entrepreneurs. Later on, a social insurance system was created to protect workers against basic risks. The paper finds that prior to the establishment of the social insurance system, a number of insurance funds had existed which were financed by worker contributions. Moreover, these insurance funds already contained the essential structural elements of the later Bismarckian welfare system. The paper concludes that at the end of the observed period, dependent, full-time employment subject to social insurance contributions can be identified.
    Keywords: Abhängiges Beschäftigungssystem, Normalarbeitsverhältnis, Soziale Frage, Soziale Sicherung, Bismarck, Sozialversicherungsgesetzgebung
    JEL: J50 J40
    Date: 2010–08
  3. By: Bjerkholt, Olav (Dept. of Economics, University of Oslo); Qin, Duo (Department of Economics, Queen Mary, University of London)
    Abstract: This paper is prepared for the forthcoming publication of Frisch’s 1930 Yale lecture notes, A Dynamic Approach to Economic Theory: The Yale Lectures of Ragnar Frisch (details at: As the lecture series was given just as the Econometric Society was founded in 1930. We provide as background, a blow-by-blow story of how the Econometric Society got founded with emphasis on Frisch’s role. We then outline how the Yale lecture notes came into being, closely connected to Frisch’s econometric work at the time. We comment upon the lectures, relating them to Frisch’s later works and, more important, to subsequent developments in economics and econometrics.
    Keywords: history; econometrics
    JEL: B23
    Date: 2010–04–01
  4. By: Cohen, Joseph N
    Abstract: This article examines the relationship between "economic freedom" and economic growth. Previous studies have found a positive relationship between economic growth rates and "economic freedom", and used this relationship as a basis for arguing that more liberal economic policies promote development. "Economic freedom" conflates laissez-faire policy with other important concepts, like good governance and macroeconomic stability. When laissez-faire is parsed from these other concepts, it shows no positive relationship with growth outside of the early-1990s, a period in which financially-strained developing governments and financial systems enjoyed debt bailouts in exchange for liberalization reforms. Further analysis shows that laissez-faire exerts no discernible effect on economic growth net of the debt relief, inflation containment and improved inward investment that occurred after the Cold War. I argue that free market capitalism itself may not have promoted economic development in the post-Cold War era. Instead, free market reforms occurred alongside domestic and international political developments that helped developing countries resolve a serious financial crises, and that the resolution of these crises were most important in explaining the comparative prosperity of the 1990s and 2000s.
    Keywords: economic freedom; neoliberalism; laissez faire; periodicity; economic growth; economic development; capitalism
    JEL: P11 P17 O21 E61 O4
    Date: 2010–07–15
  5. By: Bjerkholt, Olav (Dept. of Economics, University of Oslo)
    Abstract: The article presents an exchange of letters between Jakob Marschak and Trygve Haavelmo in May-July 1943. Marschak had from the beginning of 1943 become the research director of Cowles Commission at the University of Chicago. Trygve Haavelmo, who at the time worked for the Norwegian Shipping and Trade Mission in New York, had just published the article on the statistical implications of simultaneous equations, which would become his most quoted work. The content and the implications of the article was at the centre of the letter exchange. The introduction provides some background for the exchange.
    Keywords: history; econometrics
    JEL: B23
    Date: 2010–08–11
  6. By: Howard Bodenhorn; Carolyn M. Moehling; Anne Morrison Piehl
    Abstract: Past studies of the empirical relationship between immigration and crime during the first major wave of immigration have focused on violent crime in cities and have relied on data with serious limitations regarding nativity information. We analyze administrative data from Pennsylvania prisons, with high quality information on nativity and demographic characteristics. The latter allow us to construct incarceration rates for detailed population groups using U.S. Census data. The raw gap in incarceration rates for the foreign and native born is large, in accord with the extremely high concern at the time about immigrant criminality. But adjusting for age and gender greatly narrows that observed gap. Particularly striking are the urban/rural differences. Immigrants were concentrated in large cities where reported crime rates were higher. However, within rural counties, the foreign born had much higher incarceration rates than the native born. The interaction of nativity with urban residence explains much of the observed aggregate differentials in incarceration rates. Finally, we find that the foreign born, especially the Irish, consistently have higher incarceration rates for violent crimes, but from 1850 to 1860 the natives largely closed the gap with the foreign born for property offenses.
    JEL: J01 K4 N3
    Date: 2010–08
  7. By: Stefan Ambec; Mark A. Cohen; Stewart Elgie; Paul Lanoie
    Abstract: Twenty years ago, Harvard Business School economist and strategy professor Michael Porter stood conventional wisdom about the impact of environmental regulation on business on its head by declaring that well designed regulation could actually enhance competitiveness. The traditional view of environmental regulation held by virtually all economists until that time was that requiring firms to reduce an externality like pollution necessarily restricted their options and thus by definition reduced their profits. After all, if there are profitable opportunities to reduce pollution, profit maximizing firms would already be taking advantage of those opportunities. Over the past 20 years, much has been written about what has since become known simply as the Porter Hypothesis (“PH”). Yet, even today, there is conflicting evidence, alternative theories that might explain the PH, and oftentimes a misunderstanding of what the PH does and does not say. This paper provides an overview of the key theoretical and empirical insights on the PH to date, draw policy implications from these insights, and sketches out major research themes going forward. <P>Il y a bientôt vingt ans, Michael Porter, économiste et professeur de stratégie de la Harvard Business School, a remis en question le paradigme généralement accepté quant à l’impact des réglementations environnementales sur la performance d’affaires, en affirmant que des politiques environnementales bien conçues pouvaient en fait améliorer la compétitivité des entreprises. Jusqu’alors, le point de vue dominant, accepté par la quasi-totalité des économistes, stipulait que d’imposer aux entreprises de réduire une externalité comme la pollution réduisait nécessairement les options à leur disposition et, par définition, leurs profits. Après tout, s’il y a des opportunités profitables de réduire la pollution, les firmes qui maximisent leurs profits auraient dû les identifier par elles-mêmes. Depuis 20 ans, beaucoup de choses ont été écrites sur ce qu’il est convenu d’appeler l’Hypothèse de Porter. Aujourd’hui, il y a diverses théories pour expliquer l’Hypothèse de Porter. Les résultats empiriques ne sont pas concluants et il subsiste une certaine confusion sur ce que dit et ne dit pas l’Hypothèse de Porter. Ce texte présente un survol des grands enjeux théoriques et empiriques entourant l’Hypothèse de Porter, en tire les grandes implications en termes de politiques publiques et propose des avenues de recherche pour le futur.
    Keywords: Porter Hypothesis, environmental policy, innovation, performance , Hypothèse de Porter, politiques environnementales, innovation, performance
    Date: 2010–08–01
  8. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Luis F. Medrano (Friedrich Schiller University Jena, School of Economics and Business Administration)
    Abstract: We analyze the spatial diffusion of knowledge in laser technology in West Germany from 1960, when this technology began, until 2005. Laser technology research has been nearly exclusively conducted in regions that are home to a university with a physics or electrical engineering department, an indication of the science-based character of the technology. Early adoption of laser knowledge was especially prevalent in large agglomerations. While we cannot detect knowledge spillovers from adjacent regions, geographic proximity to the center of initial laser research was conducive to early adoption of laser research; however, the effect is small. The earlier a region embarked on this type of research, the higher the level of laser research later, indicating the accumulation of knowledge generated in previous periods. Our results highlight the role of a region's absorptive capacity for commencing and conducting research in a new technological field. In the case of laser technology, it was more the level of existing tacit knowledge than an interregional transfer of tacit knowledge that played an important role.
    Keywords: Innovation, regional innovation systems, knowledge, spatial diffusion, laser technology
    JEL: R11 O33 O52
    Date: 2010–08–04
  9. By: Caglar Tuncay
    Abstract: In this work, the time chart of Dow Jones Industrial Average (DJIA) index is analyzed and approach of recession time term is predicted, which may be hallmark of a worldwide economic crisis. However, the methods used for the prediction will be disclosed a few years from now. On the other hand, this work will be updated by the author frequently once in every few months where no revisions will be made on the previous uploads and a timestamp will designate each part. Thus, the time evolution of the crisis can be followed and the prediction may be verified by the readers in time.
    Date: 2010–08
  10. By: Felice, Emanuele
    Abstract: This paper presents new estimates of Italian regional GDP for the years 1871, 1881 1891, 1901, 1911, 1938 and 1951. This allows us to draw a long term picture of regional development of the country, from the years following national unification to the advent of Euro in 2001.
    Keywords: industrialization; regional inequality; regional income; economic growth;
    JEL: N93 N94 R11
    Date: 2009–09
  11. By: Bart J. Bronnenberg; Jean-Pierre H. Dube; Matthew Gentzkow
    Abstract: We study the long-run evolution of brand preferences, using new data on consumers' life histories and purchases of consumer packaged goods. Variation in where consumers have lived in the past allows us to isolate the causal effect of past experiences on current purchases, holding constant contemporaneous supply-side factors such as availability, prices, and advertising. Heterogeneity in brand preferences explains 40 percent of geographic variation in market shares. These preferences develop endogenously as a function of consumers' life histories and are highly persistent once formed, with experiences 50 years in the past still exerting a significant effect on current consumption. Counterfactuals suggest that brand preferences create large entry barriers and durable advantages for incumbent firms, and can explain persistence of early-mover advantage over long periods. Variation across product categories shows that the persistence of brand preferences is related in an intuitive way to both advertising levels and the social visibility of consumption.
    JEL: D12 L1
    Date: 2010–08
  12. By: Albarrán, Pedro; Ruiz-Castillo, Javier
    Abstract: This paper studies massive evidence about references made and citations received after a five-year citation window by 3.7 million articles published in 1998-2002 in 22 scientific fields. We find that the distributions of references made and citations received share a number of basic features across sciences. Reference distributions are rather skewed to the right, while citation distributions are even more highly skewed: the mean is about 20 percentage points to the right of the median, and articles with a remarkable or outstanding number of citations represent about 9% of the total. Moreover, the existence of a power law representing the upper tail of citation distributions cannot be rejected in 17 fields whose articles represent 74.5% of the total. Contrary to the evidence in other contexts, the value of the scale parameter is between three and four in 15 of the 17 cases. Finally, power laws are typically small but capture a considerable proportion of the total citations received
    Date: 2009–12
  13. By: Alain Béraud (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise)
    Abstract: Pour Walras, l'économie politique est, à la fois, l'exposé de ce qui est et le programme de ce qui devrait être. Dans son analyse de l'équilibre général, la libre concurrence apparaît comme un mécanisme autorégulateur de la production des richesses. Mais cette démonstration, en montrant sous quelles hypothèses le marché conduit à une situation où la satisfaction des agents est maximale, met en évidence les situations où l'échec du marché rend nécessaire une intervention de l'état.
    Keywords: Walras, Dupuit, services publics, monopole naturel, optimum
    Date: 2010–09–09
  14. By: Eenkhoorn, P.; Einmahl, J.H.J. (Tilburg University, Center for Economic Research)
    Abstract: The famous political philosopher Hannah Arendt develops several arguments why truthfulness cannot be counted among the political virtues. This article shows that similar arguments apply to lying in business. Based on Hannah Arendt’s theory, we distinguish five reasons why lying is a structural temptation in business: business is about action to change the world and therefore businessmen need the capacity to deny current reality; commerce requires successful image-making and liars have the advantage to come up with plausible stories; business communication is more often about opinions than about facts, giving leeway to ignore uncomfortable signals; business increasingly makes use of plans and models, but these techniques foster inflexibility in acknowledging the real facts; businessmen fall easily prey to self-deception, because one needs to act as if the vision already materializes. The theory is illustrated by a case study of Landis that grew from a relative insignificant into a large organization within a short period of time, but ended with outright lies and bankruptcy.
    Keywords: Lying;deceit in business;Hannah Arendt;image-making;self-deception;accounting fraud;politics and business;Landis
    JEL: D89 M14 M41
    Date: 2010

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