nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2011‒05‒24
twelve papers chosen by
Bernardo Batiz-Lazo
Bangor University

  1. Toward Normalization of Relations with Japan: The Strategy of North Korea, circa 1950 to 1961 By Mitsuhiko Kimuran
  2. Competing bimetallic ratios: Amsterdam, London and bullion arbitrage in the 18th century By Pilar Nogues-Marco
  3. The determinants of Italy’s regional imbalances over the long run: exploring the contributions of human and social capital By Emanuele Felice
  4. The US-UK productivity gap in the twentieth century: a race between technology and population By Banerjee, Rajabrata
  5. Compilation of Agricultural Production Data in Areas Currently in India, Pakistan, and Bangladesh from 1901/02 to 2001/02 By Takashi Kurosaki
  6. The role of experts in the public assessment of England´s trade crisis of the early 1620´s By Carlos Eduardo Suprinyak
  7. Portrait of the Economist as a Young Man: Raúl Prebisch’s evolving views on the business cycle and money, 1919-1949 By Esteban Pérez Caldentey and Matías Vernengo
  8. Population growth and endogenous technological change: Australian economic growth in the long run By Banerjee, Rajabrata
  9. Exploring the Evolution of Trade Survival Since 1962 By Hess, Wolfgang; Persson, Maria
  10. Central banking in Latin America: changes, achievements, challenges By Klaus Schmidt-Hebbel
  11. Balance of Payments Constrained Growth Models: History and Overview By A. P. Thirlwall
  12. The making of heterodox microeconomics By Lee, Frederic

  1. By: Mitsuhiko Kimuran
    Abstract: North Korea is still a strictly secluded state and little is known of its past and present though recent research using documents from countries in the former Soviet bloc has produced a number of breakthroughs especially in the discussion of the origins of the Korean War. Among others, history of relations between North Korea and Japan is most unexplored. One might assume that North Korea has had little interest in developing relations with Japan because of the adversary political ideologies between them. Focusing on the early history of North Korea, the present paper demonstrates that this assumption is quite wrong. North Korea needed the Japanese industrial products and technical know-how from the start of its state formation. This gave its leader, Kim Il-sung a good economic reason for establishing official relations with Japan. However, in the early period, he had little political power to execute his own policy toward Japan. His action had to follow the Soviet grand strategy toward the West. By 1961 he achieved a great success in his attempts. This afforded him a promising prospect for the military built-up using Japanese products, that is, developments of the nuclear and missile programs in the later periods.
    Date: 2011–05
  2. By: Pilar Nogues-Marco
    Abstract: This article analyses the stability of bimetallism in the mid-18th century for the case of two large centres that had different legal ratios and only one international market ratio. A new theoretical framework is articulated for the situation of international independence to set legal bimetallic ratios by monetary authorities in different countries. Then, using new data handcollected from archival sources and relevant to the two main bullion markets in the 18th century, Amsterdam and London, this theoretical framework is utilised to identify the regimes that actually prevailed during that period, in which Amsterdam was effectively on the bimetallic standard while London was on the gold standard de facto.
    Keywords: Bimetallism, Bimetallic stability, Bullion markets, Arbitrage, Specie-point mechanism, Melting-minting points
    JEL: E42 N13 F15 N23
    Date: 2011–04
  3. By: Emanuele Felice (Autonomous University of Barcelona and University of Siena)
    Abstract: The article aims to present and discuss estimates of levels of human and social capital in Italy’s regions over the long term, i.e. roughly from the second half of the nineteenth century up to the present day. The results are linked to newly available evidence for regional value added in order to begin to form an explanatory hypothesis of long-term regional inequality in Italy. More particularly, convergence in value added per capita across Italy’s regions is tested (through both cross-section and dynamic panel regressions) in light of the neoclassical exogenous growth approach, which incorporates human capital and social capital as conditioning variables into a long-term production function. On the whole, the results confirm the importance of conditioning variables, i.e. of regional differences in human capital and social capital, but also suggest that their impact significantly changed over the twentieth century, thus supporting the view that, in different periods, conditioning variables are determined by technological regimes.
    Keywords: regional history, human capital, social capital, convergence
    JEL: E13 E24 N93 N94 R11
    Date: 2011–03–28
  4. By: Banerjee, Rajabrata
    Abstract: Recent developments in endogenous growth models have enabled researchers to reconsider some key events such as the take-off of the United States in the twentieth century. This paper investigates the roles played by innovative activity and population growth on comparative total factor productivity (TFP) growth between the US and the UK in the period 1870–2009. The study finds that the comparative lead in the US TFP was a race between innovative activity on the one hand and population growth on the other. While the first factor influenced TFP growth positively, the latter created a growth drag. Moreover, the findings strongly support the Schumpeterian hypothesis, where innovative activity has permanent growth effects in the long run.
    Keywords: endogenous growth; productivity gap; technology; population
    JEL: O30 O40
    Date: 2011–05–12
  5. By: Takashi Kurosaki
    Abstract: This paper presents estimates for agricultural production data in areas currently in India, Pakistan, and Bangladesh from 1901/02 to 2001/02. A salient feature of these estimates is that they correspond to current international borders. The British Empire of India, which was broken up in 1947 (in the so-called "Partition" of the Indian subcontinent), covered areas of what are now India, Pakistan, and Bangladesh. Although a rich accumulation of statistical documents is available from the colonial period, there has been no rigorous attempt to compile statistics corresponding to the current borders during a period that includes years prior to 1947. This is because the Partition broke up the Empire of India not only at the provincial level (for which data are readily available) but also at the district or lower levels of administration. This paper is an attempt to fill this gap, focusing on production in crop farming in India, Pakistan, and Bangladesh. Since neither the states of Pakistan and Bangladesh nor the concept of such nations existed during the early decades of the twentieth century, this exercise is hypothetical to some extent. Nevertheless, because farming activities are carried out on the soil of a region irrespective of its political designation, the estimates presented in this paper could shed new light on agricultural development in the three countries over the long term.
    Date: 2011–02
  6. By: Carlos Eduardo Suprinyak (Cedeplar-UFMG)
    Abstract: Economic pamphleteering in England during the early 17th century has often been described as an attempt to influence the course of public policy with the aim of either protecting vested interests or else promoting in earnest the adoption of a few mercantilist doctrines. However, these judgments pass over a more basic question: to what extent, if any, could members of the English business community influence public opinion and the policy decision-making process? Special consultations over pressing economic issues offered an opportunity for their voices to be heard, but the growing financial difficulties which the English crown faced at that time opened the main path available for their active engagement with public administration. Lionel Cranfield was by far the most successful of such cases during the period at hand, playing a leading role throughout the public debates which surrounded the trade crisis of the early 1620’s – over which the pamphlet literature, in contrast, seems to have exerted a much more limited impact.
    Keywords: pre-classical economics; mercantilism; 17th century; Stuart England; Lionel Cranfield.
    JEL: B11
    Date: 2011–05
  7. By: Esteban Pérez Caldentey and Matías Vernengo
    Abstract: This paper analyzes Raúl Prebisch’s less familiar contributions to economic theory, related to the business cycle, and heavily informed by the Argentinean experience. His views of the cycle emphasize the common nature of the cycle in the center and the periphery as one unified phenomenon. While his rejection of orthodoxy is less than complete, some elements of what would become a more Keynesian position are developed. In particular, a preoccupation with the management of the balance of payments and the need for capital controls as a macroeconomic management tool, considerably before Keynes and White’s plans led to the Bretton Woods agreement. In the process it is clear that Prebisch developed several ideas that are still relevant to understand cyclical fluctuations in the periphery, and became more concerned with the capacity of taking advantage of cyclical booms to maintain sustained economic growth.
    Keywords: Business Cycle, Macroeconomic Policy, History of Economic Thought JEL Codes: B31, E32, E65
    Date: 2011
  8. By: Banerjee, Rajabrata
    Abstract: The Australian growth experience appears to be a three-act phenomenon, with higher per capita income and living standards before 1890 and after 1940, disconnected by a 50-year period of no trend improvement in between. This paper examines the roles of technological progress and population growth in Australian productivity growth over the past two centuries. The empirical results confirm that while population growth had a negative effect, innovative activity had a positive effect on productivity growth. Furthermore, the estimates strongly support the Schumpeterian growth hypothesis, which predicts that productivity growth is driven by the levels of research intensity in the economy.
    Keywords: endogenous growth; technological progress; population
    JEL: O4 O3
    Date: 2011–03
  9. By: Hess, Wolfgang (Department of Economics, Lund University); Persson, Maria (Department of Economics, Lund University)
    Abstract: Aiming to explore how the survival of trade flows has evolved over time, we analyze a rich data set of detailed imports to individual EU15 countries from 140 non-EU exporters, covering the period 1962-2006. We find that short duration is a persistent characteristic of trade throughout the extended time period that we study: in general only 40 percent of trade flows survive the first year of service, and this share has not changed much since the 1960s. However, this observed constancy is the result of two underlying trends that work in opposite directions. On the one hand, positive trends in several of the observed explanatory variables -- which in turn influence the hazard of trade flows dying in a negative direction -- imply that the hazard tends to decrease over calendar time. On the other hand, there is also a positive trend in the hazard due to calendar year-specific unobserved factors. Holding all observed determinants constant, the probability of a trade flow dying in its first year increases from 34% at the beginning of the period to 90% at the end.
    Keywords: Duration of Trade; Survival; Entry and Exit; European Union; Discrete-Time Hazard Models
    JEL: C41 F10 F14
    Date: 2011–04–18
  10. By: Klaus Schmidt-Hebbel (Catholic Universty of Chile)
    Abstract: Latin America's central banks were strengthened in the 1990s by independence laws, adoption of new policy regimes (foremost inflation targeting), and more transparent policy decisions bound by ex-ante rules and ex-post accountability. Central bank modernization - supported by significant fiscal adjustment and financial-sector strengthening - led most Latin American countries to converge to one-digit inflation rates and contributed to higher and more stable growth than in the past. Yet the region's new policy framework was put to severe testing by the global financial crisis and recession. Quick and innovative policy responses by the region's central banks helped domestic financial systems and the real economy to resist well the massive financial and real consequences of the banking crisis and recession in industrial countries. Empirical evidence reported here shows that the central banks' new policy framework and policy response during the crisis dampened significantly the amplitude of the recession. Having weathered well the global financial crisis and recession, now Latin America's central banks face a large array of policy challenges, which are reviewed in this lecture. Some are common to central banks in industrial and emerging economies, derived from the crisis itself and the issues it poses for improving the role of central banks in attaining more effectively both monetary and financial stability. Other challenges are idiosyncratic to emerging economies in the region (and elsewhere) that are facing renewed growth, high commodity prices, large capital inflows, and real exchange-rate appreciation.
    Keywords: Monetary Policy, Central Banks, Latin America
    JEL: E52 E58 O54
    Date: 2011–05
  11. By: A. P. Thirlwall
    Abstract: This paper surveys balance of payments constrained growth models from Thirlwall’s original contribution in 1979 to the latest tests of the model using cointegration techniques. Historical antecedents of the model are explored (e.g. the Harrod trade multiplier; dual gap analysis; Prebisch’s centre-periphery model), and various extensions of the model are outlined including: capital flows; interest payments on debt, and generalisation of the model to include many countries and many goods. All the empirical literature, using time series, panel and cross section data, is documented with discussion of the tests employed. The basic model that long run GDP growth can be approximated by the ratio of export growth to the income elasticity of demand for imports is remarkably robust. The relevance of the model is shown for the current discussion of global imbalances in the world economy.
    Keywords: Balance of Payments Constrained Growth; Harrod Trade Multiplier; North-South Models; Global Imbalances
    JEL: F02 F32 F43
    Date: 2011–05
  12. By: Lee, Frederic
    Abstract: This paper constitutes the first chapter in my work-in-progress manuscript, Microeconomic Theory: A Heterodox Approach. Because many heterodox feel that the only micro theory is mainstream micro, the paper starts with a brief rejection of mainstream theory. It then proceeds to give an overview of heterodox economic theory. The third section defines heterodox microeconomic theory and relates it to heterodox value theory. Since heterodox economic theory and particularly microeconomic theory is not already formed, it has to be created. Thus the fourth section of the paper delineates the heterodox methodology of theory creation, which includes critical realism and the method of grounded theory, and discusses various methodological issues such as data, case studies, mathematics and modeling, and econometrics. The following section deals with the historical character of heterodox economic theories; and the paper ends with a discussion about the making of heterodox microeconomic theory that will take place in the subsequent chapters of the book.
    Keywords: Heterodox; Microeconomics; Critical Realism; Grounded Theory
    JEL: B50 D00 B41
    Date: 2011–05–12

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