New Economics Papers
on Business, Economic and Financial History
Issue of 2011‒03‒26
twelve papers chosen by

  1. Governance in Spanish Savings Banks. A Historical Perspective By Maixe-Altes, J. Carles
  2. Was land reform necessary? Access to land in Spain, 1860 to 1931 By Juan Carmona Pidal; Joan R. Rosés
  3. Propiedad industrial y competitividad global en perspectiva histórica.Una década de colaboración entre la OEPM y la UAM By Saiz, J. Patricio
  4. The Changing Military Industrial Complex By J Paul Dunne; Elisabeth Skons
  5. Above and Beyond the Call: Long-Term Real Earnings Effects of British Male Military Conscription in the Post-War Years By Grenet, Julien; Hart, Robert A.; Roberts, J. Elizabeth
  6. "Minsky Crisis" By L. Randall Wray
  7. Kaderschmieden der Wirtschaft und/oder Universitäten? Der Auftrag der Wirtschaftsuniversitäten und -fakultäten im 21. Jahrhundert By Gebhard Kirchgässner
  8. Mexico’s Progresa-Oportunidades and the emergence of social assistance in Latin America By Niño-Zarazúa, Miguel
  9. "Keynes after 75 Years: Rethinking Money as a Public Monopoly" By L. Randall Wray
  10. Rising Inequality and the Financial Crises of 1929 and 2008 By Jon D. Wisman; Barton Baker
  11. The Entrepreneurial Facets as Precursor to Vietnam’s Economic Renovation in 1986 By Quan Hoang Vuong; Van Nhue Dam; Daniel van Houtte; Tri Dung Tran
  12. US Infl ation and infl ation uncertainty in a historical perspective: The impact of recessions By Don Bredin; Stilianos Fountas

  1. By: Maixe-Altes, J. Carles
    Abstract: During the previous three decades, mutual financial firms have been experiencing a process of demutualization, and some of the non-for-profit banks have become publicly listed companies. Hence, the persistence of the Spanish Savings Banks constitutes an interesting case study. In line with recent literature, this paper attempts to reach a better understanding of the factors that have contributed to the persistence of these entities in the long run and to the maintenance of a very specific model of corporate governance. Regulatory influences, politics and political institutions have proved to be key elements of a model which has proved capable of delivering successful outcomes in increasingly competitive conditions. Nonetheless, the financial crisis would seem to have exacerbated the stresses and strains within this model and, in combination with the pressure of increasingly globalized markets, the Spanish Savings Banks find themselves in a new scenario.
    Keywords: corporate governance; stakeholder regime; savings banks
    JEL: N24 G34 N84
    Date: 2011–03
  2. By: Juan Carmona Pidal; Joan R. Rosés
    Abstract: In Spain, land reform involving the break-up of large southern estates was a central issue during the first decades of the twentieth century. It was justified on the grounds of economic efficiency, social equity and the distribution of political power. This paper uses new provincial data on landless workers, land prices and agrarian wages to consider if government intervention was desirable because land redistribution did not take place. Our evidence shows that the relative amount of landless workers decreased largely from 1890 to 1930. This was due to two interrelated market forces: structural change that drained rural population and a decrease in the ratio between land prices and rural wages, which made land cheaper for landless workers. So, given that rural markets did not restrict access to land, the government-initiated land redistribution had no clear-cut justification.
    Keywords: Land markets, Structural change, Land prices, Landless peasants
    JEL: N54 N53 Q15
    Date: 2011–02
  3. By: Saiz, J. Patricio (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid)
    Abstract: La capacidad de competir globalmente ha sido algo cambiante en el tiempo. Los procesos de innovación tecnológica y la educación condicionan en gran medida el crecimiento económico y esa competitividad internacional. La evolución y desarrollo histórico de los derechos de propiedad industrial han sido parte esencial de la gestión de la I+D+i y de la capacidad creativa e innovadora de las distintas sociedades. La historia económica y tecnológica se convierte, de este modo, en una herramienta esencial para el analista especializado en política económica. Y el archivo histórico de la Oficina Española de Patentes y Marcas en un laboratorio del pasado en el que reflexionar sobre el futuro
    Keywords: intellectual property rights; Spanish economic history; national innovation systems; patents; trademarks.
    JEL: N73 N74 O31 O34
    Date: 2011–01
  4. By: J Paul Dunne (University of the West of England and University of Cape Town); Elisabeth Skons (Stockholm International Peace Research Institute)
    Abstract: The first reference to a military industrial complex (MIC) was made by US President Eisenhower in 1961. He then referred to something historically specific: the build-up of a large permanent military establishment and a permanent arms industry, which raised his concerns for the unwarranted influence of these societal forces. Subsequently the meaning of the MIC evolved to refer to the vested interests within the state and industry in expanding the military sector and in increasing military spending, with external threats providing the justification. During the Cold War, when the defence was strongly focused on deterrence, this produced a set of specific state-industry relationships that in turn generated a beneficial environment for the development and strengthening of the MIC. With the end of the Cold War, the conditions for a strong MIC were less favourable, at least initially, with changes in the international security environment, cuts in military spending and arms production, and ensuing privatisation, commercialisation, and internationalisation of military activities as well as of arms production. This paper discusses how the MIC has been affected by these changes and the degree to which there has been continuity of old power structures and a continuing MIC.
    JEL: H56 D4
    Date: 2011–03
  5. By: Grenet, Julien (London School of Economics); Hart, Robert A. (University of Stirling); Roberts, J. Elizabeth (University of Stirling)
    Abstract: We add to the literature on the long-term economic effects of male military service. We concentrate on post-war British conscription into the armed services from 1949 to 1960. It was called National Service and applied to males aged 18 to 26. Based on a regression discontinuity design we estimate the effect of military service on the earnings of those required to serve through conscription. We argue that, in general, we should not expect to find large long-term real earnings among conscripts compared to later birth cohorts of males who were not eligible for call-up. Our empirical evidence firmly rejects the view that conscription entails relative long-term real earnings differences.
    Keywords: WWII conscription, long-term real earnings, regression discontinuity design, National Service
    JEL: J24 J31 N44
    Date: 2011–03
  6. By: L. Randall Wray
    Abstract: Stability is destabilizing. These three words concisely capture the insight that underlies Hyman Minsky's analysis of the economy's transformation over the entire postwar period. The basic thesis is that the dynamic forces of a capitalist economy are explosive and must be contained by institutional ceilings and floors. However, to the extent that these constraints achieve some semblance of stability, they will change behavior in such a way that the ceiling will be breached in an unsustainable speculative boom. If the inevitable crash is "cushioned" by the institutional floors, the risky behavior that caused the boom will be rewarded. Another boom will build, and the crash that follows will again test the safety net. Over time, the crises become increasingly frequent and severe, until finally "it" (a great depression with a debt deflation) becomes possible. Policy must adapt as the economy is transformed. The problem with the stabilizing institutions that were put in place in the early postwar period is that they no longer served the economy well by the 1980s. Further, they had been purposely degraded and even in some cases dismantled, often in the erroneous belief that "free" markets are self-regulating. Hence, the economy evolved over the postwar period in a manner that made it much more fragile. Minsky continually formulated and advocated policy to deal with these new developments. Unfortunately, his warnings were largely ignored by the profession and by policymakers—until it was too late.
    Keywords: Stability Is Destabilizing; Hyman Minsky; Money Manager Capitalism; Financial Instability Hypothesis; Global Financial Crisis; Self-Regulating Markets
    JEL: B22 B25 B52 E11 E12 E44 O11
    Date: 2011–03
  7. By: Gebhard Kirchgässner
    Abstract: After a short sketch of the history of modern business schools in the German speaking countries, their four major activity fields are considered: (i) academic teaching, (ii) scientific research, (iii) consulting and (iv) executive education. While teaching was traditionally dominant, research has gained more importance in recent decades, not only in Economics but also in Management departments. With respect to consulting, we have to distinguish between consulting for governments by economists and for private companies by professors of management. Executive education is mainly a domain of management (and law) departments; economists only play a minor role in this area. We conclude with discussing some of the ethical questions with which Economics and Management departments are confronted today.
    Date: 2011–03
  8. By: Niño-Zarazúa, Miguel
    Abstract: This paper provides an overview of the political and economic context under which Mexico’s Progresa-Oportunidades was introduced to prelude the emergence of social assistance in Latin America. The paper identifies four distinctive features of the programme that were revolutionary in their own right. First, the Progresa-Oportunidades embraced a multidimensional approach to poverty, linking income transfers with simultaneous interventions in health, education and nutrition. Second, the programme focused on the poor. This is in clear contrast to generalised food subsidies and other targeted interventions that dominated the antipoverty agenda in the past. Third, the programme followed a complex system of identification and selection of beneficiaries to prevent discretionary political manipulation of public funds. Finally, an independent impact evaluation protocol proved to be critical for both improving the programme’s effectiveness and strengthening its legitimacy across different political factions and constituencies. The paper concludes that the success of Progresa-Oportunidades must be understood in a broader context, where a harsh economic and political environment, coupled with a rapid democratisation and increasing political competition, laid down the foundations for the introduction and then sustained expansion of the programme
    Keywords: social assistance; poverty; human development; Latin America; Mexico
    JEL: I31 O54 I38 O12
    Date: 2011–03–16
  9. By: L. Randall Wray
    Abstract: In this paper I first provide an overview of alternative approaches to money, contrasting the orthodox approach, in which money is neutral, at least in the long run; and the Marx-Veblen-Keynes approach, or the monetary theory of production. I then focus in more detail on two main categories: the orthodox approach that views money as an efficiency-enhancing innovation of markets, and the Chartalist approach that defines money as a creature of the state. As the state's "creature," money should be seen as a public monopoly. I then move on to the implications of viewing money as a public monopoly and link that view back to Keynes, arguing that extending Keynes along these lines would bring his theory up to date.
    Keywords: Money; Public Monopoly; Monetary Theory of Production; Keynes; Marx; Veblen; Knapp; Chartalism
    JEL: B14 B15 B22 B52 E12 E40 E42 E50 E51 E52 G14 G21 H1 H3 H4 H44
    Date: 2011–03
  10. By: Jon D. Wisman; Barton Baker
    Abstract: The most widely embraced explanations of the financial crisis of 2008 have centered upon inadequate regulation stemming from laissez-faire ideology, combined with low interest rates. Although these widely-acknowledged causal factors are true, beneath them lies a deeper determining force that has received less notice: the dramatic increase in inequality in the U.S. over the preceding 35 years. Heightened inequality generated three dynamics that made the economy vulnerable to systemic dysfunction. The first is that inequality constrained consumption, reducing profitable investment potential in the real economy, and thereby encouraging an every wealthier elite to flood financial markets with credit, helping keep interest rates low, encouraging the creation of new credit instruments, and fueling speculation. The second dynamic is that greater inequality meant that individuals were forced to struggle harder to find ways to consume more to maintain their relative social status. The consequence was that over the preceding three decades household saving rates plummeted, households took on evergreater debt, and workers worked longer hours. The third dynamic is that, as the rich took larger shares of income and wealth, they gained more command over ideology and hence politics. Reducing the size of government, cutting taxes on the rich and reducing welfare for the poor, deregulating the economy, and failing to regulate newly evolving credit instruments flowed out of this ideology.
    Keywords: Underconsumption, deregulation, speculation, real estate boom, credit, conspicuous consumption, social respectability
    Date: 2011–01
  11. By: Quan Hoang Vuong; Van Nhue Dam; Daniel van Houtte; Tri Dung Tran
    Abstract: In this research, we aim to develop a conceptual framework to assess the entrepreneurial properties of the Vietnamese reform, known as Doi Moi, even before the kickoff of Doi Moi policy itself. We argued that unlike many other scholars’ assertion, economic crisis and harsh realities were neither necessary nor sufficient conditions for the reform to take place, but the entrepreurial elements and undertaking were, at least for case of Vietnam’s reform. Entrepreneurial process on the one hand sought for structural changes, kicked off innovation, and on the other its induced outcome further invited changes and associated opportunities. The paper also concludes that an assessment of possibility for the next stage of Doi Moi in should take into account the entrepreneurial factors of the economy, and by predicting the emergence of new entrepreneurial facets in the next phase of economic development.
    Keywords: Economic Reform; Transition Economies; Vietnam’s Doi Moi; Entrepreneurship; Economic Crisis; Government Policy; Communist Countries
    JEL: G18 E22 L14 L26 P20 P31
    Date: 2011–03
  12. By: Don Bredin (University College Dublin); Stilianos Fountas (University of Macedonia)
    Abstract: We use over two hundred years of US inflation data to examine the impact of inflation uncertainty on inflation. An analysis of the full period without allowing for various regimes shows no impact of uncertainty on inflation. However, once we distinguish between recessions and non recessions, we find that inflation uncertainty has a negative effect on inflation only in recession times, thus providing support to the Holland hypothesis.
    Keywords: asymmetric GARCH, recession, inflation uncertainty
    JEL: C22 E31
    Date: 2011–03–11

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