nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2012‒05‒29
twenty-two papers chosen by
Bernardo Batiz-Lazo
Bangor University

  1. Standard Oil as a Technological Innovator By Scherer, Frederic Michael
  2. Inherited vs Self-Made Wealth: Theory and Evidence from a Rentier Society (Paris 1872-1937) By Thomas Piketty; Gilles Postel-Vinay; Jean-Laurent Rosenthal
  3. Literacy at South African Mission Stations By Johan Fourie; Robert Ross; Russel Viljoen
  4. Chronic Specie Scarcity and Efficient Barter: The Problem of Maintaining an Outside Money Supply in British Colonial America By Farley Grubb
  5. Stealing to Survive: Crime and Income Shocks in 19th Century France By Vincent Bignon; Eve Caroli; Roberto Galbiati
  6. The Contribution of Douglass North to New Institutional Economics By Claude Ménard; Shirley Mary M.
  7. Blanco White y las cuestiones económicas By Luis Perdices de Blas; José Luis Ramos Gorostiza
  8. Nuclear Lessons for Cyber Security? By Nye, Joseph S.
  9. The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation By Stowe, Robert C; Stavins, Robert Norman; Chan, Gabriel Angelo; Sweeney, Richard Leonard
  10. Why it Worked: Critical Success Factors of a Financial Reform Project in Africa By Peterson, Stephen Bovard
  11. L'emigrazione italiana nell'Africa mediterranea By Antonio Cortese
  12. The Theory of Multiple Public Budget Determination from the Perspective of History of Economic Analysis By Alessandro Petretto
  13. Banks, Free Banks, and U.S. Economic Growth By Matthew Jaremski; Peter L. Rousseau
  14. The Dictator Effect: How Long Years in Office Affects Economic Development in Africa and the Near East By Papaioannou, Jason; van Zanden, Jan Luiten
  15. Transportation Infrastructure and Development in Ghana By Rémi Jedwab; Alexandre Moradi
  16. When did the dollar overtake sterling as the leading international currency? Evidence from the bond markets By Livia Chitu; Barry Eichengreen; Arnaud J. Mehl
  17. Islamic Economics: Still in Search of an Identity By Abdulkader Cassim Mahomedy
  18. What Happened to God's Time? The Evolution of Secularism and Hours of Work in America, Evidence from Religious Holidays By Lozano, Fernando A.
  19. Studying developing country business groups: some issues with reference to the Indian case By Mazumdar, Surajit
  20. The Effects of Democratization on Public Goods and Redistribution: Evidence from China By Martinez-Bravo, Monica; Padro, Gerard; Qian, Nancy; Yao, Yang
  21. The Effect of Conventional and Unconventional Monetary Policy Rules on Inflation Expectations: Theory and Evidence By Farmer, Roger E A
  22. Family Ties, Inheritance Rights, and Successful Poverty Alleviation: Evidence from Ghana By Edward Kutsoati; Randall Morck

  1. By: Scherer, Frederic Michael
    Abstract: A century ago, in 1911, the U.S. Supreme Court issued its path-breaking decision in the monopolization case against the Standard Oil Companies. Standard pleaded inter alia that its near-monopoly position was the result of superior innovation, citing in particular the Frasch-Burton process for refining the high-sulphur oil found around Lima, Ohio. This paper examines the role of Hermann Frasch in inventing and developing the desulphurization process, showing that Standard failed to recognize his inventive genius when he was its employee and purchased his rights and services only after he had applied the technique in his own Canadian company.
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:hrv:hksfac:4686409&r=his
  2. By: Thomas Piketty (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Gilles Postel-Vinay (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Jean-Laurent Rosenthal (CS CALTECH - Computer Science Department - California Institute of Technology)
    Abstract: This paper divides the population into two groups: the "inheritors" or "rentiers" (whose wealth is smaller than the capitalized value of their inherited wealth, i.e. who consumed more than their labor income during their lifetime); and the "savers" or "self-made men" (whose wealth is larger than the capitalized value of their inherited wealth, i.e. who consumed less than their labor income). Applying this simple theoretical model to a unique micro data set on inheritance and matrimonial property regimes, we find that Paris in 1872-1937 looks like a prototype "rentier society". Rentiers made about 10% of the population of Parisians but owned 70% of aggregate wealth. Rentier societies thrive when the rate of return on private wealth ris permanently and substantially larger than the growth rate g (say, r=4%-5% vs g=1%-2%). This was the case in the 19th century and early 20th century and is likely to happen again in the 21st century. In such cases top successors, by consuming part of the return to their inherited wealth, can sustain living standards far beyond what labor income alone would permit.
    Keywords: rentier society ;
    Date: 2011–06
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00601075&r=his
  3. By: Johan Fourie; Robert Ross; Russel Viljoen
    Abstract: Accurate measures of education quality — primarily, years of schooling or literacy rates — are widely used to ascertain the contribution of human capital formation on long-run economic growth and development. This paper, using a census of 4500 missionary station residents in 1849 South Africa, documents, for the first time, literacy and numeracy rates of non-White citizens in nineteenth-century South Africa. The census allows for an investigation into the causes of literacy at missionary stations. We find that age, residency, the missionary society operating the stations and numeracy, as a proxy for parental education, matter for literacy performance. The results provide new insights into the comparative performance of missionary societies in South Africa and contribute to the debate about the role of missionary societies in the economic development of colonial settings.
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:rza:wpaper:284&r=his
  4. By: Farley Grubb
    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.
    JEL: B12 B22 B31 D61 E41 E42 E51 E52 F11 F41 F54 N11 N21 N41
    Date: 2012–05
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18099&r=his
  5. By: Vincent Bignon (DGEI - DEMFI - Banque de France - Banque de France); Eve Caroli (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, LEDa - Laboratoire d'Economie de Dauphine - Université Paris IX - Paris Dauphine, IZA - Institute for the Study of Labor - IZA, Legos - Laboratoire d'Economie et de Gestion des Organisations de Santé - Université Paris IX - Paris Dauphine); Roberto Galbiati (EconomiX - CNRS : UMR7166 - Université Paris X - Paris Ouest Nanterre La Défense, Sciences Po - Sciences Po)
    Abstract: We wish to thank Andrea Bassanini, Cecilia Garcia-Peñalosa, Tommy Murphy, Tommaso Nannicini and seminar participants at University Bocconi for useful comments and discussions. Charlotte Coutand and Clement Malgouyres provided excellent research assistance. We also thank Pierre-Emmanuel Couralet and Fabien Gaveau who proved crucial in helping us with some of the data. We are grateful to Gilles Postel-Vinay for sharing with us his data on wine and phylloxera and for insightful comments and suggestions. The views expressed in the paper are those of the authors and do not necessarily reflect those of Banque de France or the Eurosystem. The usual disclaimer applies.
    Keywords: Crime ; Income shock ; Phylloxera ; 19th century France
    Date: 2011–09
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00623804&r=his
  6. By: Claude Ménard (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne); Shirley Mary M. (RCI - Ronald Coase Institute - Ronald Coase Institute)
    Abstract: Douglass North, along with Ronald Coase and Oliver Williamson, transformed the early intuitions of new institutional economics into powerful conceptual and analytical tools that spawned a robust base of empirical research. NIE arose in response to questions not well explained by standard neoclassical models, such as make or buy and why rich or poor? Today NIE is a success story by many measures: four Nobel laureates in under 20 years, increasing penetration of mainstream journals, and significant impact on major policy debates from anti-trust law to development aid. This paper provides a succinct overview of North's evolving ideas about institutions and explains how North's work shaped the emerging field of new institutional economics and had a potent impact on economics and the social sciences more broadly. North provides a powerful example of how persistent and well placed confidence and hard work can productively transform the status quo. North's influence continues strong and his enthusiasm for exploring new frontiers and cooperating across artificial academic boundaries has never waned.
    Keywords: New Institutional Economics, institutions, transaction costs, development and growth
    Date: 2011–06
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00624297&r=his
  7. By: Luis Perdices de Blas (Universidad Complutense de Madrid); José Luis Ramos Gorostiza (Universidad Complutense de Madrid)
    Abstract: Between the end of the Enlightenment and the incipient liberalism, Blanco White was one of the most important Spanish intellectuals of the first half of the nineteenth century. His exile in England (1810)1841) and his mastery of the English language enabled him to relate to some of the great British economists and thinkers of the era, such as Malthus, Bentham, Whately, Senior or J.S. Mill. Despite this and his initial training in the business world, Blanco White never paid particular attention to socioeconomic issues. In fact, he has been primarily studied as political writer, journalist, man of letters or religious polemicist. However, he also addressed some issues of undoubted economic interest, as the slave trade, the situation of Spain in the early nineteenth century, the problem of the poor, or the colonial question and the overseas trade. This paper aims to examine how Blanco White approached these issues within the context of the ideas of his Spanish contemporaries. It also aims to show that Blanco’s ideas were largely rooted in a Spanish tradition of thought (full text in Spanish)
    Keywords: Blanco White,Spain,economics,slavery,colonial trade,poor question
    JEL: B10 B30
    Date: 2012–05
    URL: http://d.repec.org/n?u=RePEc:ahe:dtaehe:1204&r=his
  8. By: Nye, Joseph S.
    Abstract: Identifying “revolutions in military affairs†is arbitrary, but some inflection points in technological change are larger than others: for example, the gunpowder revolution in early modern Europe, the industrial revolution of the nineteenth century, the second industrial revolution of the early twentieth century, and the nuclear revolution in the middle of the last century. In this century, we can add the information revolution that has produced today’s extremely rapid growth of cyberspace. Earlier revolutions in information technology, such as Gutenberg’s printing press, also had profound political effects, but the current revolution can be traced to Moore’s law and the thousand-fold decrease in the costs of computing power that occurred in the last quarter of the twentieth century. Political leaders and analysts are only beginning to come to terms with this transformative technology.
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:hrv:hksfac:8052146&r=his
  9. By: Stowe, Robert C; Stavins, Robert Norman; Chan, Gabriel Angelo; Sweeney, Richard Leonard
    Abstract: The introduction of the U.S. SO2 allowance-trading program to address the threat of acid rain as part of the Clean Air Act Amendments of 1990 is a landmark event in the history of environmental regulation. The program was a great success by almost all measures. This paper, which draws upon a re¬search workshop and a policy roundtable held at Harvard in May 2011, investigates critically the design, enactment, implementation, performance, and implications of this path-breaking application of economic thinking to environmental regulation. Ironically, cap and trade seems especially well suited to addressing the problem of climate change, in that emitted greenhouse gases are evenly distributed throughout the world’s atmosphere. Recent hostility toward cap and trade in debates about U.S. climate legislation may reflect the broader political environment of the climate debate more than the substantive merits of market-based regulation.
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:hrv:hksfac:8160721&r=his
  10. By: Peterson, Stephen Bovard
    Abstract: Little is written about the critical success factors that make or break a project implementing a public financial management reform in Africa. Based on the twelve year experience of Harvard’s DSA project which transformed Ethiopia’s financial management in the third best on the continent, this paper presents the key factors of the projects success: task, context, patrons, roles, staff and decisions. The task was focused from the start on the basics of financial control (budget and accounts and their budget classification, chart of accounts and financial calendar) and the development of an often forgotten end state in PFM reform—the self-accounting unit. Three features of context supported the project: political (close ties between the US and Ethiopia government established during the civil war), task environment (a hard budget constraint) and, serendipity (a war that ensure one set of cooks in the kitchen and removed the inevitable critique by foreign aid agencies, and the government policy of second stage devolution—which made the focal point of district level decentralization). The third CSF, the projects patrons, stayed the course, met stated commitments and did not meddle. The project performed four roles (go-between in the vacuum of decentralization), decider (making the key decisions on pilots), first responder (providing PFM innovations not specified in the terms of reference) and perhaps most important, the furniture (an object that could be kicked and blamed). The project was able to assemble the array of essential staff: all rounders, managers, technicians, networkers and a closer.
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:hrv:hksfac:4876869&r=his
  11. By: Antonio Cortese
    Abstract: From the period of Unification until the mid-seventies of last century, Italy – latter a country of immigration – has witnessed considerable migratory flows towards foreign countries. In the paper are analyzed, from a predominantly demographic perspective, the outflows which covered the Mediterranean countries of Africa aiming at tracing back the extent and nature. Following the process of decolonization, the important Italian presence in the countries of the Southern shore of the Mediterranean is extremely limited and presents very different features from those that characterized the period of our “mass migration”.
    Keywords: Migrazioni internazionali, International migration, Emigrazione italiana, italian emigration
    JEL: F22 F54 J11
    Date: 2012–05
    URL: http://d.repec.org/n?u=RePEc:rtr:wpaper:0149&r=his
  12. By: Alessandro Petretto (DIpartimento Scienze Economiche, Università di Firenze)
    Abstract: From an analitycal historical perspective, this paper deals with the important public finance issue of decentralizing the government’s economic activities and functions into distinct branches, respectively devoted to collecting taxes and to allocating a given budget to different public goods. We start with the so-called Italian tradition in public finance and go on to the crucial contributions from James Pigou, Paul Samuelson and Richard Musgrave, up till the modern second best and optimal taxation approaches. Starting from the Italian tradition is meaningful as this stream of literature has given important pioneristic contributions to this topic, namely by Maffeo Pantaleoni and Enrico Barone. However, it is in developing the relationships of these contributions with the modern second best optimal taxation approach that we may find rigorous solutions to the main emerging problems of the issue.
    Keywords: branch model, optimal taxation, public goods
    JEL: B10 H21 H41
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:frz:wpaper:wp2012_11.rdf&r=his
  13. By: Matthew Jaremski (Department of Economics, Colgate University); Peter L. Rousseau (Department of Economics, Vanderbilt University)
    Abstract: The “Federalist financial revolution” may have jump-started the U.S. economy into modern growth, but the Free Banking System (1837-1862) did not play a direct role in sustaining it. Despite lowering entry barriers and extending banking into developing regions, we find in county-level data that free banks had little or no effect on growth. The result is not just a symptom of the era, as state-chartered banks seem to have strong and positive effects on manufacturing and urbanization.
    Keywords: Free banking; antebellum banking; financial liberalization; finance-led growth
    JEL: G21 O43 N21
    Date: 2012–03
    URL: http://d.repec.org/n?u=RePEc:van:wpaper:1206&r=his
  14. By: Papaioannou, Jason; van Zanden, Jan Luiten
    Abstract: This paper contributes to the growing literature on the links between political regimes and economic development by studying the effects of years in office on economic development. The hypothesis is that dictators who stay in office for a long time period will become increasingly corrupt, and that their poor governance will impact on economic growth (which is reduced), inflation (which increases) and the quality of institutions (which deteriorates). This may be related to the fact that their time horizon is shrinking: they develop (in the terminology developed by Olson) from ‘stationary bandits’ into ‘roving bandits’. Or they may get caught into a ‘disinformation trap’, caused by the ‘dictator dilemma’. We test these hypotheses and indeed find strong evidence for the existence of a dictator effect: the length of the rule is negatively related to economic growth and the quality of democratic institutions, and positively related to inflation. This effect is particularly strong in young states and in ‘single-party’ regimes. The negative effect of years in office was almost constant in time and did not disappear after about 1992.
    Keywords: Africa; dictatorships; economic growth; political institutions
    JEL: H7 O2 O55
    Date: 2012–05
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:8962&r=his
  15. By: Rémi Jedwab (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, LSE - London School of Economics and Political Science - LSE); Alexandre Moradi (Sussex University - Sussex University)
    Abstract: We study the impact of transportation infrastructure on agriculture and development in colonial Ghana. Two railway lines were built between 1901 and 1923 to connect the coast to mining areas and the large hinterland city of Kumasi. This unintendedly opened vast expanses of tropical forest to cocoa cultivation, allowing Ghana to become the world's largest producer. This attracted migrants to producing areas and the economic surplus drove urbanization. Using data at a very fine spatial level, we find a strong effect of railroad connectivity on cocoa production due to reduced transportation costs. We then show that the economic boom in cocoa-producing areas was associated with demographic growth and urbanization. We _nd no spurious effect from lines that were not built yet, and lines that were planned but never built. We show that our results are robust to considering nearest neighbor estimators. Lastly, railway construction has durably transformed the economic geography of Ghana, as railway districts are more developed today, despite thirty years of marked decline in rail transportation.
    Keywords: Railroads ; Trade Costs ; Urbanization ; Africa
    Date: 2011–07
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00607207&r=his
  16. By: Livia Chitu; Barry Eichengreen; Arnaud J. Mehl
    Abstract: This paper offers new evidence on the emergence of the dollar as the leading international currency, focusing on its role as currency of denomination in global bond markets. We show that the dollar overtook sterling much earlier than commonly supposed, as early as in 1929. Financial market development appears to have been the main factor helping the dollar to surmount sterling’s head start. The finding that a shift from a unipolar to a multipolar international monetary and financial system has happened before suggests that it can happen again. That the shift occurred earlier than commonly believed suggests that the advantages of incumbency are not all they are cracked up to be. And that financial deepening was a key determinant of the dollar’s emergence points to the challenges facing currencies aspiring to international status.
    JEL: F30 N20
    Date: 2012–05
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18097&r=his
  17. By: Abdulkader Cassim Mahomedy
    Abstract: The last few decades have seen a phenomenal growth of the emerging discipline of Islamic Economics and Finance. In this paper I trace the origins and birth of this nascent science examining the various factors that gave impetus to its emergence and development. I contrast the different characterisations of the discipline as it has developed within the broader socio-political context and the reasons thereof. Despite the concerted efforts of the proponents of Islamic economics to shape for their discipline a distinctive paradigm they have had little success in doing so beyond arguing that it is underpinned by a strong moral ethic. By and large its epistemological roots have remained firmly within the framework of Rationalism and methodological individualism and consequently it has not been able to shed itself of its neoclassical moorings, the very paradigm it originally set out to replace. I illustrate several of the contradictions apparent in the discipline as hitherto enunciated and I critically analyse the reasons for some of these shortcomings. Finally, I conclude by arguing that if Islamic economics is to fulfil its raison d'être its proponents must resolve its theoretical and practical difficulties by clearly expounding on its weltanschauung and develop its content and form appropriate to this worldview
    Date: 2012
    URL: http://d.repec.org/n?u=RePEc:rza:wpaper:283&r=his
  18. By: Lozano, Fernando A. (Pomona College)
    Abstract: Are American workers less likely to observe a religious holiday now than they were 30 years ago? In this paper I use evidence from religious holidays to explore the evolution of market hours' flexibility and religious observance during the last thirty years. To do so, I take advantage of three different sources of exogenous variation: the first is the timing of the Current Population Survey, which allows me to observe data that is collected during different holidays in different years. The second is the timing of the religious holiday, as most are scheduled either with the lunar or the solar calendar. The third is the required observance of the holiday: in some holidays believers are called to abstain from work (Yom Kippur), in other holidays not (Tu b'Shevat), some holidays have been secularized (Saint Patrick's Day), and other holidays not (Good Friday). Additionally, I differentiate between any changes in hours of work during religious holidays across time and changes across cohorts. My results suggest that work schedules' flexibility has changed little during the sample period, yet less people are taking time off from work during Good Friday, while more people take time off from work during Yom Kippur, Rosh Hashanah, Mardigras and Saint Patrick's Day. These results are consistent with the increasing secularization of Christians in America, the Baal Teshuva movement among Jewish Americans, and the commercialization of Mardigras or Saint Patrick's Day. These results suggest a change in which holidays workers choose to observe.
    Keywords: hours flexibility, religious holidays, secularization, work week
    JEL: J22 Z12
    Date: 2012–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp6552&r=his
  19. By: Mazumdar, Surajit
    Abstract: Through a critical review of some of the literature and making use of information relating to Indian groups, the case is made for a more bottom-up, and more historical, approach to the study of the developing country business group. The lack of clarity and unanimity in the conceptualization of the business group, the mismatch between many conceptions and the reality of Indian groups and how avoidable ignorance has led to mistaken conclusions are highlighted. Arguing that these problems stem from an excessive bias towards a top-down method of analyzing business groups, a shift in emphasis towards the concrete investigation of these groups, of their structures and working, and of their evolution over time, is urged.
    Keywords: business groups; developing countries; India
    JEL: L2
    Date: 2011
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:38906&r=his
  20. By: Martinez-Bravo, Monica; Padro, Gerard; Qian, Nancy; Yao, Yang
    Abstract: This study investigates the effects of introducing elections on public goods and redistribution in rural China. We collect a large and unique survey to document the history of political reforms and economic policies and exploit the staggered timing of the introduction of elections for causal identification. We find that elections significantly increase public goods expenditure, the increase corresponds to demand and is paralleled by an increase in public goods provision and local taxes. We also find that elections cause significant income redistribution within villages. The results support the basic assumptions of recent theories of democratization (Acemoglu and Robinson, 2000; Lizzeri and Persico, 2004). In addition, we show that the main mechanism underlying the effect of elections is increased leader incentives.
    Keywords: Democracy; Elections; Institutions
    JEL: P16
    Date: 2012–05
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:8975&r=his
  21. By: Farmer, Roger E A
    Abstract: This paper has three parts. First, I provide a theoretical framework to explain how rational expectations models, where the central bank follows a conventional monetary policy rule, can be used to understand the history of interest rates and inflation in the period between 1951 and the Great Recession of 2008. Second, I use the framework developed in the first part of the paper to illustrate how the purchase of assets other than treasuries, for example, mortgage backed securities and long bonds, can influence inflation expectations when the interest rate is zero. Third, I show that the beginning of unconventional monetary policy in 2008 coincided with a significant increase in inflation expectations. I extend existing models of monetary policy by adding explicit markets for financial securities. Using this extended framework, I show that the purchase of assets, other than short term treasury bills, has a differential impact on the prices of risky securities. Unconventional monetary policy is an important tool in a central bank’s arsenal that can and should be used to help prevent deflation in the wake of a financial crisis.
    Keywords: inflation; interest rates; unconventional monetary policy; zero lower bound
    JEL: E31 E4
    Date: 2012–05
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:8956&r=his
  22. By: Edward Kutsoati; Randall Morck
    Abstract: Ghanaian custom views children as members of either their mother’s or father’s lineage (extended family), but not both. Patrilineal custom charges a man’s lineage with caring for his widow and children, while matrilineal custom places this burden on the widows’ lineage – her father, brothers, and uncles. Deeming custom inadequate, and to promote the nuclear family, Ghana enacted the Intestate Succession (PNDC) Law 111, 1985 and 1998 Children’s Act 560 to force men to provide for their widows and children, as in Western cultures. Our survey shows that, although most people die intestate and many profess to know Law 111, it is rarely implemented. Knowledge of the law correlates with couples accumulating assets jointly and with inter-vivos husband to wife transfers, controlling for education. These effects are least evident for widows of matrilineal lineage men, suggesting a persistence of traditional norms. Widows with closer ties with their own or their spouse’s lineage report greater financial support, as do those very few who benefit from legal wills or access Law 111 and, importantly, widows of matrilineal lineage. Some evidence also supports Act 560 benefiting nuclear families, especially if the decedent’s lineage is matrilineal. Overall, our study confirms African traditional institutions’ persistent importance, and the limited effects of formal law.
    JEL: G18 G23 H55 K36 O17 O55 Z1
    Date: 2012–05
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18080&r=his

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