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on Business, Economic and Financial History |
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Issue of 2011‒09‒22
sixteen papers chosen by |
| By: | Concha Betrán (Universidad de Valencia); Pablo Martín-Aceña (Universidad de Alcalá-Madrid); María Angeles Pons (Universidad de Valencia) |
| Abstract: | The financial disturbances that originated in the US in the second half of 2007 are the latest in a series of episodes in various regions of the world in recent years. However, financial crises are not unique to current financial systems, history being full of banking and exchange rate crises. Are crises alike? Do they share similar features or, on the contrary, are they strikingly distinct? Have they become more frequent, longer-lasting and more severe since the 20th century? Are we now living in a more vulnerable financial world? What does history tell us when comparing past and present crises? This paper chooses to address some of these questions for the case of Spain. The objective of this paper is to study the financial crises that have occurred in Spain over the last 150 years. Data are revised and different indicators constructed to identify financial crises. We consider all types of crises, namely currency, banking, stock market and debt crises and all their possible combinations, estimate their frequency by period and measure their length and depth. The Spanish case is compared to the results obtained for multi-country analyses in order to test whether the general conclusions obtained in those papers hold for one sole country. Finally, we perform an analysis of the main financial crises in order to establish hypotheses that could be tested in future research. |
| Keywords: | financial crises, currency, banking, stock market and debt crises, Spanish banking history. |
| JEL: | N2 G18 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ahe:dtaehe:1106&r=his |
| By: | Richard S. Grossman (Department of Economics, Wesleyan University); Masami Imai (Department of Economics, Wesleyan University) |
| Abstract: | The recent financial turmoil highlights the incentive of highly leveraged financial institutions to take excessive risk, given the protection of limited liability. During the nineteenth and early twentieth century, many banks operated under liability rules which obligated shareholders to bear larger costs of bank insolvency in the form of contingent, or even unlimited liability. This paper examines the empirical relationship between the size of banks’ contingent liability and their risk-taking behavior using data on British banks from 1878-1912. We find that banks with more contingent liability appear to have taken less risk. We also find evidence that the risk-reducing effects of contingent liability were larger for banks with higher leverage, suggesting that contingent capital mitigated moral hazard problem at banks. |
| Keywords: | Contingent Capital, Bank Risk-Taking, British Banks |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:wes:weswpa:2011-003&r=his |
| By: | Hoyt Bleakley; Jeffrey Lin |
| Abstract: | The authors examine portage sites in the U.S. South, Mid-Atlantic, and Midwest, including those on the fall line, a geomorphological feature in the southeastern U.S. marking the final rapids on rivers before the ocean. Historically, waterborne transport of goods required portage around the falls at these points, while some falls provided water power during early industrialization. These factors attracted commerce and manufacturing. Although these original advantages have long since been made obsolete, the authors document the continuing importance of these portage sites over time. They interpret these results as path dependence and contrast explanations based on sunk costs interacting with decreasing versus increasing returns to scale. |
| Keywords: | Economic history ; Geography |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:11-38&r=his |
| By: | Iñaki Iriarte-Goñi (Department of Applied Economics and Economic History, Faculty of Economics. Gran Vía 4, (50005) Zaragoza, Spain); María Isabel Ayuda (Department of Economic Analysis, Faculty of Economics. Gran Vía 4, (50005) Zaragoza, Spain.) |
| Abstract: | The essential aim of this paper is to analyze wood consumption in Great Britain over the period 1850-1938. We calculate the apparent consumption of wood in Britain, taking into account both net imports of wood and the home harvest of wood. Then we develop some quantitative exercises which correlate wood consumption with GDP, and with prices of wood and iron (as an alternative material to wood). The main conclusion is that, although wood had lost its economic centrality after the energetic transition, wood consumption continued to grow in Britain both in absolute and relative terms, showing a positive elasticity to GDP superior to the unity. The decline of wood prices in the long run, the innovations affecting wood exploitation and treatment, and the fact that wood was used in a wide range of economic activities, can explain that growth in consumption. Britain faced the increase in wood demand relying almost totally on imports. Thus, although British economic development was to a great extent focussed on what has been called the “subterranean forests” of coal, simultaneously supported large tracts of foreign forest. |
| Keywords: | wood, forest history, industrialization, consumption function |
| JEL: | C22 N53 N54 O13 Q21 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ahe:dtaehe:1107&r=his |
| By: | Makiko Hino (Graduate School of Economics, Osaka University) |
| Abstract: | The purpose of this article is to examine the expansion and the aspect of silk textile export in Northern Italy, especially in Como district, during the period of 1919-1929, when the Italian silk textile industry gained an international competitive advantage. The author would like to propound some views to which little attention has been given. Generally speaking, the modernization of management organization in the early 1920fs accelerated the development of silk textile industry. Firstly, the textile machine industry concurrently came to grow, which made it possible to improve the quality of textiles and helped for the silk industry to acquire the new markets for its goods. Secondly, the increasing use of artificial silk from the early 1920fs drastically changed the situation around silk textile. Thirdly, the silk textiles with the new additional raw material came to be woven under the mass production system. Fourthly, the silk textile industry tried to improve the design of silk textiles for couture, and succeeded in reaching the forefront of Italian fashion, cooperated with the government. All of the above-mentioned facts did start when the British government imposed tariff barriers on the silk textile. At that time, Italy had no choice but to develop overseas market. In the second half of the 1920s, capturing the new markets of Asia, Africa and South America, the export of silk textiles including artificial silk as new mass products remarkably increased. |
| Keywords: | Italian Economic History, Silk textile industry, Export, Market, Fashion |
| JEL: | N60 N64 N94 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1127&r=his |
| By: | Tomas Fernandez-de-Sevilla (Universitat de Barcelona) |
| Abstract: | This paper analyses the trajectory of the Spanish automobile firm FASA-Renault during the 1970s. This period comprises the early years of the crisis experienced by the Spanish economy and industry between 1974 and 1985. At the external level, the Spanish economy was affected by two oil shocks. At an internal level, the automobile industry was affected by a decree passed by the government: the so-called Ford decree of 1972, which allowed the establishment of the American company in Spain and had serious consequences for SEAT, the main Spanish producer. The production of SEAT suffered a one third reduction between 1972 and 1980 and, in addition, the financial situation of the firm was unsustainable. Conversely, during this stage FASARenault became the main Spanish production (its outpout was multiplied by 3,5 during the 1970s) and sales leader in Spain (its sales as percentage of total Spanish market sales increased from 23 to 36%). The main aim of this paper is to analyse the trajectory of success of FASA-Renault in Spain durig the 1970s. |
| Keywords: | development, industrial policy, fasa-renault, spain, automobile |
| JEL: | N84 L52 L62 O25 L53 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:bar:bedcje:2011261&r=his |
| By: | Wahl, Fabian |
| Abstract: | The goal of this paper is to provide an explanation for the remarkable difference in the contemporary Germans positive self-assessment of their living conditions and the development of the most important economic welfare indicators (like GDP or consumption per capita) during the Third Reich. To explain this discrepancy, findings of the new research field of happiness economics are applied to the peacetime of the Third Reich to analyze the development of the standard of living in this period. First, the theory of adaption and aspiration is used to explain the growing satisfaction of the Germans after the Great Depression. In the second step, based on current life satisfaction studies, the development of the most important economic determinants of happiness during the 1930s is examined. -- |
| Keywords: | Economic History,Third Reich,Happiness Economics,Standard of Living |
| JEL: | D10 D12 N34 N94 I31 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fziddp:322011&r=his |
| By: | Fabrice Murtin; Romain Wacziarg |
| Abstract: | Over the last two centuries, many countries experienced regime transitions toward democracy. We document this democratic transition over a long time horizon. We use historical time series of income, education and democracy levels from 1870 to 2000 to explore the economic factors associated with rising levels of democracy. We find that primary schooling, and to a weaker extent per capita income levels, are strong determinants of the quality of political institutions. We find little evidence of causality running the other way, from democracy to income or education. |
| JEL: | N10 O43 O57 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17432&r=his |
| By: | Gary Richardson; Patrick Van Horn |
| Abstract: | In 1931, a financial crisis began in Austria, struck numerous European nations, forced Britain to abandon the gold standard, and spread across the Atlantic. This article describes how banks in New York City, the central money market of the United States, reacted to events in Europe. An array of data sources – including memos detailing private conversations between leading bankers the governors of the New York Federal Reserve, articles written by prominent commentators, and financial data drawn from the balance sheets of commercial banks – tell a consistent tale. Banks in New York anticipated events in Europe, prepared for them by accumulating substantial reserves, and during the crisis, continued business as usual. Leading international bankers deliberately and collectively decided on the business-as-usual policy in order to minimize the impact of the panic in the United States and Europe. |
| JEL: | E42 E44 G21 N1 N12 N14 N2 N22 N24 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17437&r=his |
| By: | Michael D. Bordo; Owen F. Humpage; Anna J. Schwartz |
| Abstract: | If official interventions convey private information useful for price discovery in foreign-exchange markets, then they should have value as a forecast of near-term exchange-rate movements. Using a set of standard criteria, we show that approximately 60 percent of all U.S. foreign-exchange interventions between 1973 and 1995 were successful in this sense. This percentage, however, is no better than random. U.S. intervention sales and purchases of foreign exchange were incapable of forecasting dollar appreciations or depreciations. U.S. interventions, however, were associated with more moderate dollar movements in a manner consistent with leaning against the wind, but only about 22 percent of all U.S. interventions conformed to this pattern. We also found that the larger the size of an intervention, the greater was its probability of success, although some interventions were inefficiently large. Other potential characteristics of intervention, notably coordination and secrecy, did not seem to influence our success rates. |
| JEL: | E52 E58 F31 N22 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17425&r=his |
| By: | Tine De Moor; Jaco Zuijderduijn |
| Abstract: | In this paper we contribute to literature on human capital formation by investigating age references on early-modern portraits from the Low Countries. We use the very popular aetatis formulae to estimate to what degree sitters to portraits were able to give their age in an accurate way. This approach allows us to estimate the numeracy of single men and women, as well as couples who commissioned pair portraits to commemorate marriage. The paper suggests a methodology to be used for this type of research and also uses some specific characteristics of portraits to contribute to recent discussions in the field of numeracy studies, particularly with respect to gender differences in numeracy. |
| Keywords: | Portraits, human capital, numeracy, Holland, early modern period, gender |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ucg:wpaper:0016&r=his |
| By: | Tadeusz Kowalski (Poznan University of Economics, Poznan, Poland); Yochanan Shachmurove (The City College of New York, New York, U.S.A.) |
| Abstract: | This paper provides an overview of the evolution of macroeconomic thought from 1936, the year John Maynard Keynes published his general theory of employment, interest and money to the year 2010. It explores the reasons for the extension of the business cycle during the postwar period. The paper details the decline in the popularity of the Keynesian theory and the return to classical economic principles. The recent crisis necessitates a shift in the way economists understand, theorize, teach and implement macroeconomic policies. The paper suggests some new elements needed in order to mitigate the next inevitable economic and financial crisis. |
| Keywords: | Financial crises; The United States Financial Crisis Inquiry Commission; The 2010 Economic Report of the United States President; Keynesian Theory; Adaptive Expectations; Rational Expectations; Monetary and Fiscal Policies; Business Cycles; Regulations; General Agreement on Tariffs and Trade (GATT); World Trade Organization (WTO); Trade Liberalization; United States; China; Euro; Econometric Policy Evaluation. |
| JEL: | B0 E0 E3 E4 E5 E6 F0 F3 F4 G0 H3 H6 K2 O51 P1 R3 |
| Date: | 2011–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:wse:wpaper:56&r=his |
| By: | Marcella Corsi; Carlo D'Ippoliti; Federico Lucidi |
| Abstract: | The Italian case can be considered as an internationally relevant example to suggest a critical reflection on the evaluation criteria adopted in research assessment exercises, pointing at the need of clear and shared guidelines based on transparency and accountability and aiming at preserving (or even encouraging) the pluralism of ideas. Our findings support the view that if research institutions are encouraged to engage only in those lines of research that are likely to receive the highest rating according to the adopted evaluation criteria, a convergence process is to be expected within Economics, resulting in a disregard of heterodox schools and historical methods in favour of mainstream approaches and quantitative methods. In our view, a proper fine-tuning of the assessment methodology is needed, before subsequent rankings can be used as a guide for the allocation of public financing among research institutions. In the case of Economics, this means overcoming the limits of commonly adopted peer review approaches, through the development of proper evaluation designs and the integration of qualitative appraisals with quantitative indicators. In order to preserve pluralism and originality of research, we propose a simple quantitative index based on field-normalization. |
| Keywords: | research evaluation; contemporary research in economics; Italy |
| JEL: | A11 A14 B20 B40 B50 |
| Date: | 2011–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:2013/97185&r=his |
| By: | Juan Gabriel Brida (Facultad de Economía de la Libre Universidad de Bolzano); Juan Pereyra (Colegio de México); Martín Puchet Anyul (Facultad de Economía de la UNAM); Wiston Adrián Risso (Facultad de Economía de la Libre Universidad de Bolzano) |
| Abstract: | This paper describes the dynamics of the economic performance of the sub-national Mexican states from 1970 to 2006; the used state variables are the levels and the growth rates of the GDP per capita. The authors situate his approach in a conceptual and methodological panorama of the existent literature. Starting by the regime concept, the paper introduces a distance notion for to compare the observed paths and the clustering of the economies whose evolution is studied. The analysis shows that have existed two fundamental clusters: one of high and another of low performance, in addition of other transitory groups. In the cluster of high performance increases the number of members while in the cluster of low performance diminishes; at the same time, the article shows that the sub-national states that belong to the first cluster have had performances each time more similar. Also it confirms that the subnational states move starting from the cluster of low performance to arrive to the cluster of high performance and that the distance between both clusters has increased. These facts are interpreted basing in the concept of dual economy proposed by the development theory. |
| Keywords: | economic performance; economic regime; convergence; cluster; development |
| JEL: | O40 O47 C82 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:ude:wpaper:1011&r=his |
| By: | Herwig Immervoll; Linda Richardson |
| Abstract: | We use a range of data sources to assess if, and to what extent, government redistribution policies have slowed or accelerated the trend towards greater income disparities in the past 20-25 years. In most countries, inequality among “non-elderly” households has widened during most phases of the economic cycle and any episodes of narrowing income differentials have usually not lasted long enough to close the gap between high and low incomes that had opened up previously. With progressive redistribution systems in place, greater inequality automatically leads to more redistribution, even if no policy action is taken. We find that, in the context of rising market-income inequality, tax-benefit systems have indeed become more redistributive since the 1980s but that this did not stop income inequality from rising: market-income inequality grew by twice as much as redistribution. The redistributive strength of tax-benefit systems weakened in many countries particularly in the most recent decade. While growing market-income disparities were the main driver of inequality trends between the mid-1980s and mid-1990s, reduced redistribution was often the main driver in the ten years that followed. Benefits had a much stronger impact on inequality than social contributions or taxes, despite the much bigger aggregate size of direct taxes. As a result, redistribution policies were often less successful at counteracting growing income gaps at the bottom in the top half of the income distribution.<BR>Nous utilisons une série de sources de données afin d'évaluer si, et dans quelle mesure, les politiques de redistribution du gouvernement ont ralenti ou accéléré la tendance vers une aggravation des disparités de revenus dans les 20-25 dernières années. Dans la majorité des pays, l'inégalité parmi les ménages de “non-personnes âgées” s’est élargie pendant la plupart des phases du cycle économique et des épisodes de rétrécissement d’écarts de revenus n'ont généralement pas duré assez longtemps pour réduire l'écart entre les revenus élevés et faibles qui se sont ouverts auparavant. Avec les systèmes de redistribution progressive en place, une plus grande inégalité conduit automatiquement à une plus grande redistribution, même si aucune décision politique n'est prise. Nous constatons que, dans le contexte de la hausse de l’inégalité du revenu du marché, les systèmes socio-fiscaux sont en effet devenus plus redistributifs depuis les années 80 mais cela n'a pas empêché les inégalités de revenu à augmenter : l'inégalité du revenu du marché a augmenté deux fois plus que la redistribution. La force de redistribution des systèmes socio-fiscaux s’est affaiblie dans de nombreux pays, en particulier dans la dernière décennie. Alors que l’augmentation des disparités du revenu du marché a été le principal moteur de l'évolution des inégalités entre les années 80 et 90, la réduction de redistribution était souvent le principal moteur dans les dix ans qui ont suivi. Les bénéfices ont eu un impact beaucoup plus fort sur les inégalités que les cotisations sociales ou les impôts, malgré l’importance plus grande de l’ensemble des impôts directs. En conséquence, les politiques de redistribution ont souvent connu moins de succès à contrecarrer les écarts de revenus croissants au fond dans la moitié supérieure de la répartition des revenus. |
| Keywords: | redistribution, OECD, income inequality, working age population |
| JEL: | C81 D31 H22 H55 |
| Date: | 2011–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:122-en&r=his |
| By: | Ronald Jean Degen (International School of Management Paris) |
| Abstract: | This paper identifies the ways in which the ideas of Fordism and Taylorism have been responsible for the success of the U.S. motor vehicle companies until 1955, and for their subsequent decline. On three occasions, the motor vehicle industry has changed the fundamental ideas on the process of manufacturing, and, perhaps more significantly, on how humans work together to create value. Under Fordism and Taylorism, the conditions of employment at the assembly lines became less and less bearable for the workers, and this resulted in an ongoing confrontation between management and the workforce, led by United Auto Workers (UAW). This confrontation resulted in escalating labor costs for the U.S. motor vehicle companies, and undermined their capacity to compete with the Japanese motor vehicle companies, who had developed a lean production system and a more humanistic management style. |
| Keywords: | Fordism, Taylorism, decline of the U.S. motor vehicle companies, mass production system, lean production system, reflective production system, confrontational management-labor-relations |
| JEL: | M0 M1 |
| Date: | 2011–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:pil:wpaper:81&r=his |