New Economics Papers
on Business, Economic and Financial History
Issue of 2012‒05‒22
23 papers chosen by

  1. Censuses in 19th century Serbia: inventory of preserved microdata By Aleksandra Vuletic
  2. Estructura corporativa e interlocking directorates en las mayores empresas españolas, 1917-1970 By Juan Antonio Rubio Mondéjar; Josean Garrués Irurzun
  3. Awareness To Accounting And Role Of Accounting At Religious Organisations. The Case Of Brotherhoods Of Seville At The Last Decade Of 16th Century By Jesus Damian Lopez Manjon; Juan Baños Sanchez-Matamoros; Maria Concepcion Alvarez-Dardet Espejo
  4. Super-cycles of commodity prices since the mid-ninteenth century By Bilge Erten
  5. The Interplay Between Creativity issues and Design Theories: a new perspective for Design Management Studies? By Pascal Le Masson; Armand Hatchuel; Benoît Weil
  6. Once an enemy, forever an enemy? the long-run impact of the Japanese invasion of China from 1937 to 1945 on trade and investment By Che, Yi; Du, Julan; Lu, Yi; Tao, Zhigang
  7. Lords of Uhuru: the political economy of elite competition and institutional change in post-independence Kenya By Bedasso, Biniam
  8. Copper and Foreign Investment: The development of the mining industry in Cyprus during the great depression By Apostolides, Alexander
  9. The Euro crisis: a historical perspective . By Mourlon-Druol, Emmanuel
  10. Sales, Inventories, and Real Interest Rates: A Century of Stylized Facts By Luca Benati; Thomas A Lubik
  11. The economic costs of organized crime: evidence from southern Italy By Paolo Pinotti
  12. The New Deal and the Origins of the Modern American Real Estate Loan Contract in the Building and Loan Industry By Rose, Jonathan; Snowden, Kenneth
  13. "The Dynamics That Are Restructuring Higher Education in the US and France " By Alain Alcouffe; Jeffrey Miller
  14. Economics and ethics: a historical approach By Ciani Scarnicci, Manuela
  15. Online accessibility of academic articles and the diversity of economics By Timo Boppart; Kevin E. Staub
  16. The correlation between money and output in the United Kingdom: resolution of a puzzle By Edward Nelson
  17. The Rise and Fall of Unions in the U.S. By Emin M. Dinlersoz; Jeremy Greenwood
  18. The prolonged resolution of troubled real estate lenders during the 1930s By Jonathan D. Rose
  19. "Chronic Specie Scarcity and Efficient Barter: The Problem of Maintaining an Outside Money Supply in British Colonial America " By Farley Grubb
  20. Lessons from Korea to Africa: Leaders, Politics and Developmental States By Luis Mah
  21. História Social e Económica dos Ismailis de Moçambique – século XX By Joana Pereira Leite; Nicole Khouri
  22. John Richard Hicks and the Rehabilitation of the Walrasian treatment of Capital By Paolo Trabucchi
  23. Lecciones de las crisis financieras recientes para el diseño e implementación de las políticas monetaria y financiera en Colombia By Juan Pablo Zárate Perdomo; Adolfo Léon Cobo Serna; Jose Eduardo Gómez González

  1. By: Aleksandra Vuletic
    Abstract: -
    Keywords: Yugoslavia, census data
    JEL: J1 Z0
    Date: 2012–05
  2. By: Juan Antonio Rubio Mondéjar (Universidad de Granada. Department of Economic Theory and Economic History); Josean Garrués Irurzun (Universidad de Granada. Department of Economic Theory and Economic History)
    Abstract: This paper analyzes some of the characteristics of Spanish capitalism between 1917 and 1970. For that purpose, we resort to the technique known as interlocking directorates and applies the methodology of social network analysis (SNA) to the board of directors of the 210 largest Spanish companies, in a benchmark dates (1917, 1930, 1948 and 1970). The results allow us to answer the questions of what has been the evolution of the Spanish business structure over the twentieth century and which sectors have been central to each of the moments analyzed. At the same time, we identify the main groups of companies, and the links established among them, assessing the role of financial sector in the national economic structure. Based on the relationships between the members of the Board of Directors and social capital theory, the second objective identifies the circle of Spanish economic power, quantifies the degree of cohesion, and follow its evolution over time, confirming its continuity / disappearance.
    Keywords: social networks, financial system, board of directors, Business History, interlocking directorates
    JEL: N24 P12 L14 C63
    Date: 2012–05–05
  3. By: Jesus Damian Lopez Manjon (Department of Finance and Accounting, Universidad Pablo de Olavide); Juan Baños Sanchez-Matamoros (Department of Finance and Accounting, Universidad Pablo de Olavide); Maria Concepcion Alvarez-Dardet Espejo (Department of Finance and Accounting, Universidad Pablo de Olavide)
    Abstract: This work questions if religious organizations with common shared beliefs and sacred objectives, but which members had a different level of awareness to accounting, should show a different behaviour concerning: a) the status of accounting in their internal organisations; and b) the permeability of such organizations to new accounting techniques. To reach our aim, we have analysed the content of 6 rules of brotherhoods located in the city of Seville (Spain), and enacted at the last decade of the 16th century. We have split the brotherhoods depending on its link or not with a guild or professional group.We can conclude that the awareness to accounting of its members and the perception of the belief system are explanations to cover the dissimilar behaviour of the brotherhoods in relation to accounting.
    Keywords: Accounting History; Religious Organizations; 16th century; Belief System
    Date: 2012–05
  4. By: Bilge Erten
    Abstract: Decomposition of real commodity prices suggests four super-cycles during 1865-2009 ranging between 30-40 years with amplitudes 20-40 percent higher or lower than the long-run trend. Non-oil price super-cycles follow world GDP, indicating they are essentially demand-determined; causality runs in the opposite direction for oil prices. The mean of each super-cycle of non-oil commodities is generally lower than for the previous cycle, supporting the Prebisch-Singer hypothesis. Tropical agriculture experienced the strongest and steepest long-term downward trend through the twentieth century, followed by non-tropical agriculture and metals, while real oil prices experienced a long-term upward trend, interrupted temporarily during the twentieth century.
    Keywords: Super-cycles, commodity prices, band-pass filters, Prebisch-Singer hypothesis
    JEL: C22 E3 Q02
    Date: 2012–02
  5. By: Pascal Le Masson (CGS - Centre de Gestion Scientifique - Mines ParisTech); Armand Hatchuel (CGS - Centre de Gestion Scientifique - Mines ParisTech); Benoît Weil (CGS - Centre de Gestion Scientifique - Mines ParisTech)
    Abstract: In this paper, we analyze the relationship between creativity issues and design theory. Although these two notions seemingly correspond to different academic fields (psychology, cognitive science and management for creativity; engineering science and logic for design theory), they appear to be deeply related when it comes to design methods and management. Analyzing three historical moments in design theory-building (the 1850s, with the ratio method for industrial upgrading in Germany; the 20th century with systematic design and the 1920s with the Bauhaus theory), we point to the dialectical interplay that links creativity and design theory, structured around the notion of "fixation effect": creativity identifies fixation effects, which become the targets of new design theories; design theories invent models of thought to overcome them; and, in turn, these design theories can also create new fixation effects that will then be designated by creativity studies. This dialectical interplay leads to regular inventions of new ways of managing design, ie new ways of managing knowledge, processes and organizations for design activities. We use this framework to analyze recent trends in creativity and design theories.
    Date: 2011
  6. By: Che, Yi; Du, Julan; Lu, Yi; Tao, Zhigang
    Abstract: We are living in an increasingly globalized world yet with constant and endless conflicts among countries. While studies have uncovered the impacts of various economic factors and policy regimes on trade and investment, a much less understood issue is whether conflicts among countries have any, especially long-lasting, impacts on cross-border trade and investment. In this paper, we exploit one of the most important conflicts of the 20th century between what are currently the world's second and third largest economies, the Japanese invasion of China from 1937 to 1945, to investigate its long-run impact on contemporary trade and investment between the two countries. We find that Chinese regions that suffered more severe damage in the Japanese invasion are both less likely to trade with and trade less with Japan. Consistently, we also find that Japanese multinationals are less likely to invest in Chinese regions that suffered greater numbers of casualties during the Japanese invasion. Our study shows that historical animosity still matters for international trade and investment, despite the trend toward a flat world.
    Keywords: Sino-Japanese War; Trade; Foreign Direct Investment
    JEL: D74 F10 F23 F21
    Date: 2011–12
  7. By: Bedasso, Biniam (UNU-MERIT/MGSoG, Maastricht University)
    Abstract: The post-independence history of Kenya is characterized by an unusual mix of stability with ever-lingering fragility. The high level of elite persistence in Kenya could be seen both as a cause and a result of this peculiar nature of the political economy of the country. This paper has the objective of studying the effects of historical elite competition and consolidation on political-economic stability and institutional transition in post-independence Kenya. The logic of the natural state is applied to organize the narrative and analyze the key features (North, Wallis and Weingast (2009), Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History: Cambridge University Press). Most of the existing institutional structures in Kenya are built on elite configurations inherited from the colonial times. The robust growth performance of the first decade after independence was generated by smallholder agriculture, while most of the rent was transferred to the elite via state patronage. The political instability of the later years had a lot to do with dwindling patronage resources and elite fragmentation. For most part of the political economy history of the country, patron-client networks and tribalism have played key role in regulating intra-elite bargains. Land has always been the leverage used by the elite to manipulate the aforementioned structures. Although the Kenyan elite have maintained keen interest in winning via constitutional means, they have kept reverting to extralegal avenues whenever intra-elite negotiations seemed to have failed to be enforced.
    Keywords: elites, dominant coalition, economic growth, institutional change, Kenya
    JEL: P16 D72 O55
    Date: 2012
  8. By: Apostolides, Alexander
    Abstract: This paper evaluates the impact of the rapid growth of mining on the Cypriot economy during the period 1921-1938, with special focus on the expansion of copper sulphate mining. During this period the industry was transformed by companies such as the Cyprus Mining Corporation (CMC) and this affected the whole economy and society. The island was for the first time inundated with substantial foreign direct investment, which encouraged technological adaptation and altered labour relations; as such there has been a debate on how beneficial was mining for the economy at that time. Using substantial primary data we estimated output (GDP share), employment and productivity estimates for the mining industry, as well as profit estimates for the foreign mining firms through the use of a counterfactual. The data allows us to argue that mining was very beneficial in increasing labour productivity and earning foreign exchange, but also highlights that the economic and social benefits for the economy were less than those suggested by the colonial authorities due to mass exports of profits.
    Keywords: Cyprus; Interwar Economics; Mining; Cyprus Mining Corporation (CMC); Rio Tinto
    JEL: N54 L72 N14
    Date: 2012–04–11
  9. By: Mourlon-Druol, Emmanuel
    Abstract: In this research report IDEAS explores the current euro crisis by looking at the debates preceding the conception of the euro. How can the early days of EU monetary cooperation help us understand today's predicament? And what lessons can we draw from them for the euro? Emmanuel Mourlon-Druol is Pinto Fellow at LSE IDEAS. Today's debates about the viability of the eurozone bear a striking resemblance with those about the creation of a European single currency in the late twentieth century. The early steps of European monetary cooperation, the negotiations over the creation of the European Monetary System (EMS), those over the creation of the euro, as well as the other plans suggested which eventually failed (the proposal for a European parallel currency for instance), help us better understand the challenges that the euro faces today. Many of the issues at stake then are indeed still central to debates now. The question of the transfer of resources from richer to poorer member states, the adoption of a German-inspired interpretation of monetary policy, to take but two examples, are issues that anyone reading today's newspapers will be familiar with. This paper argues that looking at these past debates do not just provide an insight into the past – but also helps us better understand our current predicament.
    Date: 2011–06
  10. By: Luca Benati; Thomas A Lubik
    Abstract: We use Bayesian time-varying parameters structural VARs with stochastic volatility to investigate changes in both the reduced-form and the structural correlations between business inventories and either sales growth or the real interest rate in the United States during both the interwar and the post-WWII periods. We identify four structural shocks by combining a single long-run restriction to identify a permanent output shock as in Blanchard and Quah (1989), with three sign restrictions to identify demand- and supply-side transitory shocks. We produce several new stylized facts which should inform the development of new models of inventories. In particular, we show that (i ) during both the interwar and the post-WWII periods, the structural correlation between inventories and the real interest rate conditional on identied interest rate shocks is systematically positive; (ii ) the reduced-form correlation between the two series is positive during the post-WWII period, but in line with the predictions of theory it is robustly negative during the interwar era; and (iii ) during the interwar era, the correlations between inventories and either of the two other series exhibits a remarkably strong co-movement with output at the business-cycle frequencies.
    Date: 2012–05
  11. By: Paolo Pinotti (Università Bocconi, Department of policy analysis and public management)
    Abstract: I examine the post-war economic development of two regions in southern Italy exposed to mafia activity after the 1970s and apply synthetic control methods to estimate their counterfactual economic performance in the absence of organized crime. The synthetic control is a weighted average of other regions less affected by mafia activity that mimics the economic structure and outcomes of the regions of interest several years before the advent of organized crime. The comparison of actual and counterfactual development shows that the presence of mafia lowers the growth path, at the same time as murders increase sharply relative to the synthetic control. Evidence from electricity consumption and growth accounting suggest that lower GDP reflects a net loss of economic activity, due to the substitution of private capital with less productive public investment, rather than a mere reallocation from the official to the unofficial sector.
    Keywords: organized crime, economic development, synthetic control methods
    JEL: K4 R11 O17
    Date: 2012–04
  12. By: Rose, Jonathan (Federal Reserve Board); Snowden, Kenneth (University of North Carolina at Greensboro, Department of Economics)
    Abstract: We treat the direct reduction loan contract as an instance of financial innovation and describe its adoption within the building and loan (B&L) industry beginning in the 1880s and culminating in the 1930s. A long chain of complementary innovations at B&Ls gradually reduced the costs of adoption, leading to moderate use by the 1920s and potential for far greater use. In the 1930s, extreme dissatisfaction with other contracts radically altered the adoption calculus, as did new competition from FHA-insured lenders. Federal savings and loan charters built upon the accumulated innovations at B&Ls by emulating the small segment of the industry that had adopted direct reduction lending by the 1920s. Other policies helped restructure the liabilities of B&Ls to accommodate the loss of credit risk sharing and mutuality inherent to older contracts. New Deal policies therefore built upon and facilitated the ongoing process of financial innovation that brought the familiar modern loan contract to the conventional loan market.
    Keywords: New Deal; Building and Loan
    JEL: N00
    Date: 2012–05–09
  13. By: Alain Alcouffe (Department of Economics, University of Toulouse); Jeffrey Miller (Department of Economics, University of Delaware)
    Abstract: Over the past half century higher education has become an ever more important part of developed economies as an every greater number of young people need to prepare for a more complex world. This paper compares the response to this challenge in France and the US. This is a particularly interesting contrast since the two systems are different markedly in how they are structured: the US system is very decentralized and French system is very centralized.
    Keywords: higher education in France, higher education in the US, for-profit colleges
    JEL: I21 I22 I28 H52
    Date: 2012
  14. By: Ciani Scarnicci, Manuela
    Abstract: Amartya Sen (1933-) is one of the greatest scholars who studied the relationship between ethics and economics and was held the Nobel Economics Prize thanks to this. At the awarding of the Nobel prize, while talking about his studies, the motive was: “...has been highly instrumental in restoring an ethical dimension to economics and related disciplines”. Precisely the theories of this binomial taken from the work of A. Sen “Economics and Ethics” are the basis of this work. Thanks to A. Sen there is proof that there has been a strong detachment of economics from ethics and this is to be considered as one of the greatest lack of the modern economic theory. The basis of the argument of the Nobel Prize winner is the idea that economy can be made more productive in paying more attention to ethical considerations which determine human beings’ behaviour and judgement. Sen, affirms that the predominant economic theory is the one based on individual interest aimed at the maximization of one’s own benefits, yet there aren’t proofs that this maximization is present in any choice of men. Moreover, it is not true that by only following one’s own interest it is possible to reach excellent economic trends. Adam Smith’s theory itself on self- interest, if careful interpretation is provided, do not represent a support for the defenders of human behavior which is only moved by self-interest. Obviously, there might be peculiar situations too where self-interest might lead to ethical approaches. Ethical economics is based on the behavior that individuals exercise in doing business practices. It is then useful to understand what causes such behaviors, therefore it is important to retrieve an interdisciplinary economic study, as Robert Skidelsky claims in his work “The return of the Master”. In this script he tries to give a perspective on the reasons which push an individual towards justice and equity. This dissertation arises from the theories of a few great political philosophers who found their teachings not only on the intrinsic reasons of the human nature but also on the role a State must have to make possible for a civil society to exercise those principles previously said. All the authors considered assume that the individual is a social animal and so the latter is analyzed and studied as integrated in a social context .
    Keywords: Aritotle; Sen; Hume; Hobbes; Kant; Rousseau; Calvin; D'Aquino; Smith; ASP; Sympathy; aurea medietas; Becker; Locke;
    JEL: D63 I18 Z10 N00 H30 A11
    Date: 2012
  15. By: Timo Boppart; Kevin E. Staub
    Abstract: A key aspect of generating new ideas is drawing from different elements of preexisting knowledge and combining them into a new idea. In such a process, the diversity of ideas plays a central role. This paper examines the empirical question of how the internet affected the diversity of new research by making the existing literature accessible online. The internet marks a technological shock which affects how academic scientists search for and browse through published documents. Using article-level data from economics journals for the period 1991 to 2009, we document how online accessibility lead academic economists to draw from a more diverse set of literature, and to write articles which incorporated more diverse contents.
    Keywords: Digitization, online publication, bibliometrics, knowledge production function, recombinant growth, citations, networks, scholarly communication
    JEL: A11 D83 O31 O33
    Date: 2012–05
  16. By: Edward Nelson
    Abstract: Friedman and Schwartz (1982) and Goodhart (1982) report a zero correlation between money growth and output growth in U.K. historical data. This finding is puzzling, as there is wide agreement that changes in monetary policy are frequently nonneutral in the short run and that the U.K. experience, in particular, is replete with instances of real effects of monetary policy actions. This paper proposes a resolution to the puzzle. An analysis conducted on subperiods shows that a positive money growth/output growth correlation is indeed recoverable from U.K. historical data. Strike activity in the 1970s and shifts in the terms of trade during the interwar period are the two factors primarily responsible for obscuring the positive correlation between money and output in the United Kingdom.
    Date: 2012
  17. By: Emin M. Dinlersoz; Jeremy Greenwood
    Abstract: Union membership displayed a ∩-shaped pattern over the 20th century, while the distribution of income sketched a ∪. A model of unions is developed to analyze these phenomena. There is a distribution of firms in the economy. Firms hire capital, plus skilled and unskilled labor. Unionization is a costly process. A union decides how many firms to organize and its members' wage rate. Simulation of the developed model establishes that skilled-biased technological change, which affects the productivity of skilled labor relative to unskilled labor, can potentially explain the above facts. Statistical analysis suggests that skill-biased technological change is an important factor in de-unionization.
    JEL: J23 J24 J51 L11 L16 L23 O14 O33
    Date: 2012–05
  18. By: Jonathan D. Rose
    Abstract: This paper studies how building and loan associations (B&Ls) slowly unwound their obligations following a set of financial shocks during the Great Depression, with a special focus on a group of particularly troubled B&Ls in Newark, NJ. Investors in B&Ls disagreed over whether to realize losses on foreclosed real estate holdings, and those investors favoring liquidation were unable to force action after legal developments nullified statutory withdrawal privileges. In the medium run, a market-based resolution mechanism developed in the form of a secondary market for B&L liabilities. Liability holders barred from withdrawal incurred large losses while liquidating their investments on this market. At the same time, B&Ls used the market to avoid realizing some losses by exchanging foreclosed real estate for their second-hand share liabilities. More formal resolution ultimately took place from 1938 to 1943, first consisting heavily of closures, and then of reorganizations. Reorganizations were spurred by a large scale federal intervention arranging for the creation of bad banks, liquidity injections, and liability insurance.
    Date: 2012
  19. By: Farley Grubb (Department of Economics, University of Delaware)
    Abstract: Colonial Americans complained that gold and silver coins (specie) were chronically scarce. These coins could be acquired only through importation. Given unrestricted trade in specie, market arbitrage should have eliminated chronic scarcity. A model of efficient barter and local inside money is developed to show how chronic specie scarcity in colonial America could prevail despite unrestricted specie-market arbitrage, thus justifying colonial complaints. The creation of inside fiat paper monies by colonial governments was a welfare-enhancing response to preexisting chronic specie scarcity, not the cause of that scarcity.
    Keywords: Adam Smith, barter, bearer bonds, Benjamin Franklin, bills of credit, colonial America currency substitution, fiat currency, interest-bearing money, legal tender, paper money, quantity theory of money, sinking fund, specie money, tax-redemption.
    JEL: B12 B22 B31 D61 E41 E42 E52 F11 F41 F54 N11 N21 N41
    Date: 2012
  20. By: Luis Mah
    Abstract: A recent series of studies have been dealing with the dynamics behind the building of developmental states in Africa. This working paper is a contribution for that debate by looking at the experience of the Korean developmental state and the lessons that Africa can learn from this Asian country’s experience seen as an outstanding model of economic development. Despite poor resource endowment and a large population, a colonial legacy, the devastation following a civil war, persistent political instability, and the lingering military confrontation with her northern neighbour, Korea’s role in the international economic system has rapidly increased in importance since the 1960s. For nearly five decades, Korea has achieved a remarkable economic performance that transformed the country from a typical case of a developing nation trapped in a “vicious circle of underdevelopment”, into one of the largest economies in the late 1990s. Beneath the economic success lied a system of “socialisation of private risk”, a particular mode of organising the market, as the “visible hand” of a strong, bureaucratic and developmental state were able to accelerate the pace of economic growth by identifying strategic industrial sectors, making discretionary allocation of resources to those sectors, and minimising the collective action dilemmas pervasive in most developing countries. But the Korean state, as any other state, is a political realm that encompasses distinct, contending and at times colliding actors. In fact, the Korean developmental state provides us clues about the role that leadership play and what stands at the “heart of a politics of economic growth”. Policy choices and implementation rest on the strategies designed by the rulers to boost their political legitimacy, to strengthen their power, and to guarantee regime survival. Strategies are not only a product of institutional opportunities and constraints, but also of history, context, coalition politics and ideological templates involving the actors at the time of action. This paper will discuss the role played by President Park Chung-Hee (1961-1979) in building a bureaucratic-developmental state and what African countries can learn from these leadership experiences in terms of its own development path.
    Keywords: Korea, Africa, Development
    Date: 2011–12
  21. By: Joana Pereira Leite; Nicole Khouri
    Abstract: A historiografia recente em torno da presença indiana em Moçambique e nos territórios da África Oriental e Centro Oriental é unânime em evidenciar a sua vocação comercial no contexto da ocupação colonial dos séculos XIXXX. No caso de Moçambique as fontes documentais disponíveis do tempo da colonização portuguesa atestam a sua importância quer no mundo rural, assegurando a monetarização dos produtos da agricultura africana, essenciais à manutenção da economia de exportação colonial, quer na dinamização de um segmento importante do comércio de retalho em contexto urbano, direccionado a um espectro amplo e heterogéneo de consumidores que estruturavam o mercado interno no tempo colonial.
    Keywords: ismailis, Moçambique, século XX
    Date: 2011–09
  22. By: Paolo Trabucchi
    Keywords: capital, capital as a single magnitude, capital as a set of het-erogenous goods, normal equilibrium, marginal product, Walras, Hicks.
    JEL: B21 B31 D33 D50
    Date: 2012–05
  23. By: Juan Pablo Zárate Perdomo; Adolfo Léon Cobo Serna; Jose Eduardo Gómez González
    Abstract: El presente trabajo da cuenta de las principales lecciones que se han recogido en materia de política monetaria y financiera sobre la crisis actual, y traza un paralelo con la crisis colombiana de los noventa (guardadas las proporciones) y con las acciones que de ella se derivaron. Además propone algunas acciones que podrían adoptarse en materia de implementación de las políticas monetarias y financieras con el fin de reducir los riesgos asociados con el comportamiento del sistema financiero y de crédito, tendientes a buscar una economía más estable y con menores desbalances macroeconómicos en el largo plazo.
    Keywords: Crisis financiera internacional; Colombia; Lecciones de política. Classification JEL: G01; G15; G18
    Date: 2012–05

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