New Economics Papers
on Business, Economic and Financial History
Issue of 2012‒07‒08
fifteen papers chosen by

  1. Heterodox Central Bankers: Eccles, Prebisch and Financial Reform in 1930s By Esteban Pérez Caldentey and Matias Vernengo
  2. Deep Recessions, Fast Recoveries, and Financial Crises: Evidence from the American Record By Michael D. Bordo; Joseph G. Haubrich
  3. J.A. Schumpeter and the Theory of Economic Evolution (One Hundred Years beyond the Theory of Economic Development) By Stan Metcalfe
  4. When did the dollar overtake sterling as the leading international currency? Evidence from the bond markets By Livia Chitu; Barry Eichengreen; Arnaud Mehl
  5. Between Progressivism and Institutionalism Albert Benedict Wolfe on Eugenics By Luca Fiorito
  6. Emergence and Development of Knowledge-Intensive Mining Services (KIMS) By Osvaldo Urzua
  7. Lessons of the Transformation of the Agricultural Administration and Associations in East Germany with the Collapse of the Socialist Regime By Wolz, Axel
  8. PIB y estructura productiva en Uruguay (1870-2011): Revisión de series históricas y discusión metodológica By Nicolás Bonino Gayoso; Carolina Román; Henry Willebald
  9. Immigration and Structural Change: Evidence from Post-war Germany By Sebastian Braun, Michael Kvasnicka
  10. Service-led growth and the balance of payments constraint in India: An unsustainable strategy By Suranjana Nabar-Bhaduri and Matías Vernengo
  11. Competitiveness in manufacturing. Germany vs. Italy – a comparison By A. Arrighetti; A. Ninni; E. Breda; R. Cappariello; M. Clemens; D. Schumacher
  12. Nature of the Director's profile and Knowledge Transfer in Corporate Social Responsibility: A Literature-based Approach By Hazar Ben Barka; Sarah Mokaddem
  13. Thermoeconomics, A Thermodynamic Approach to Economics, Third Edition, Chapter 1 Introduction By John Bryant
  14. Nuove serie storiche sull’attività di banche e altre istituzioni finanziarie dal 1861 al 2011: che cosa ci dicono? By Riccardo De Bonis; Fabio Farabullini; Miria Rocchelli; Alessandra Salvio
  15. Sur les Causes et les Effets en Macro-Economie : les Contributions de Sargent et Sims,Prix Nobel d'Economie 2011 By Collard, Fabrice; Fève, Patrick

  1. By: Esteban Pérez Caldentey and Matias Vernengo
    Keywords: Monetary Policy; Economic History; Heterodox Economics JEL Classification: B31, B50, E58, N10 The Great Depression led to a need to rethink the principles of central banking, as much as it had led to the rethinking of economics in general, with the Keynesian Revolution at the forefront of the theoretical changes. This paper suggests that the role of the monetary authority as a fiscal agent of government and the abandonment of the view of the economy as self-regulated were the central changes in central banking in the center. In addition, in the periphery central banks changed to try to insulate the worst effects of balance of payments crises and the use of capital controls became more common. Marriner S. Eccles, in the United States, and Raúl Prebisch, in Argentina, are paradigmatic examples of those new tendencies of central banking in the 1930s.
    Date: 2012
  2. By: Michael D. Bordo; Joseph G. Haubrich
    Abstract: Do steep recoveries follow deep recessions? Does it matter if a credit crunch or banking panic accompanies the recession? Moreover does it matter if the recession is associated with a housing bust? We look at the American historical experience in an attempt to answer these questions. The answers depend on the definition of a financial crisis and on how much of the recovery is considered. But in general recessions associated with financial crises are generally followed by rapid recoveries. We find three exceptions to this pattern: the recovery from the Great Contraction in the 1930s; the recovery after the recession of the early 1990s and the present recovery. The present recovery is strikingly more tepid than the 1990s. One factor we consider that may explain some of the slowness of this recovery is the moribund nature of residential investment, a variable that is usually a key predictor of recessions and recoveries.
    JEL: N1
    Date: 2012–06
  3. By: Stan Metcalfe
    Abstract: The centennial of the publication of Schumpeter's Theory of Economic Development is an occasion to look back in appraisal and an opportunity to look forward in anticipation to consider anew the challenges that remain unfulfilled for Schumpeterians. Along with Marx and Marshall, Schumpeter's great achievement was to formulate an evolutionary, open system perspective on modern capitalism, to explain why it could never be at rest and to link its emergent properties to the capacity to change from within. In terms of appraisal, I shall focus on three aspects of Schumpeter's scheme: the link between knowledge, enterprise and the meaning to be attributed to a knowledge economy, the nature of the competitive process in the presence of innovation, and the transient, out of equilibrium nature of all economic arrangements. In looking forward, I shall consider what is missing from evolutionary economic dynamics, pointing to the role of factor markets in the competitive process, the significance of differences in firm's investment strategies and the fine grained nature of competition in markets where differences in the qualities of goods and services matter, and, lastly, on the evolutionary dimensions of international competition. Two lessons are particularly pertinent to advancing the Schumpeterian enterprise. First, that the familiar one-dimensional models of economic evolution are useful but incomplete. Secondly, that, while much evolutionary thinking has naturally focused on the connection between the micro and the meso, we need also to consider the connection between the meso and the macro and in so doing connect to rich literatures in the field of economic growth and development.
    Date: 2012–06–26
  4. By: Livia Chitu (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Barry Eichengreen (University of California, 603 Evans Hall, Berkeley, 94720 California, USA.); Arnaud Mehl (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.)
    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 Classification: F30, N20
    Keywords: foreign public debt, international monetary system, international currencies, role of the US dollar, network externalities, path dependency
    Date: 2012–05
  5. By: Luca Fiorito
    Abstract: Albeit concerned with the biological element in social evolution, Albert B. Wolfe was among the very few economists of the progressive era who openly expressed his concerns about certain implications of eugenic rhetoric for the social science. Specifically, Wolfe questioned the strong hereditary boundaries that more extreme eugenicists suggested about human beings. As I will attempt to show in paper, a careful examination of Wolfe’s writings reveals that his reaction was rooted in the belief that many of the social problems which eugenicists attributed to hereditary limitations, were actually imputable to the influence that the social, economic, and physical environment exercised on the individuals.
    Keywords: Eugenics; Institutionalism; Social Evolution; Progressivism; Wolfe, Albert Benedict
    JEL: B1 B15
    Date: 2012–06
  6. By: Osvaldo Urzua
    Abstract: This research analyses the dynamics of the emergence and development of internationally competitive KIMS suppliers over the second half of the 20th century. It focuses on the structure of the technological learning and innovation process that accompanied and underpinned the emergence and development of KIMS. It focuses mainly on contrasting the Chilean and Australian experience. However, other mining economies such as South Africa have also been analyzed but in lesser details.
    Date: 2012–06
  7. By: Wolz, Axel
    Abstract: With the collapse of the socialist regime in East Germany in late 1989 and the rising political call for unification in early 1990, a radical and abrupt change of the institutional structure became necessary. The (agricultural) administration had to be totally restructured. This referred not only to substance, functions and tasks, similar to all other transition economies, but also the whole administrative set-up had to be re-established in line with the West German system (territorial re-organization). A new administrative system had to be built up from scratch, while simultaneously the socialist one had to be dismantled in a very short period. However, different to the other transition economies, there had been strong support from the West. Overall, this institutional change seems to have been accomplished successfully. In addition, the organizations representing the agricultural population had to be re-organized. The re-organization of the German Farmers’ Union is of special prominence as both German parts were representing completely different agricultural systems. This is the only important organization at national level where East Germans could stay in decision-making positions after unification which had severe repercussions when shaping transformation policies affecting the agricultural sector during the 1990s.
    Keywords: transition, agricultural administration, farmers' union, unification, Germany, Institutional and Behavioral Economics, Political Economy,
    Date: 2012–08
  8. By: Nicolás Bonino Gayoso (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Carolina Román (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Henry Willebald (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: La construcción y sistematización de series históricas del PIB y sus componentes ha tomado un renovado vigor en los últimos años (CEPAL 2009,Smits et al. 2009,Timmer y De Vries 2007). El interés analítico en el desarrollo económico comparado de los países –asícomo los esfuerzos de contabilización macroeconómica de largo plazo – han alentado ese campo del conocimiento. En Uruguay, las series oficiales de Cuentas Nacionales comienzan en 1955 y, para el período anterior, se cuenta con varias estimaciones, con metodologías y coberturas diversas que brindan resultados diferentes. Factores como el reciente cambio de base dispuesto por el Banco Central del Uruguay, los diversos indicadores de bienestar que se basan en el desempeño de la economía y los repetidos requerimientos de dimensionar variables al tamaño de la economía, conducen a la necesidad de contar con una sistematización de las estimaciones disponibles. El propósito de este documento es generar una serie homogénea y consistente del PIB en Uruguay en el largo plazo (1870-2011) a partir de las series disponibles en pesos corrientes y constantes, para lo que se consideran mediciones a nivel global de la economía, per cápita y por actividades. Para ello, se hace una revisión completa de las series disponibles, se señalan sus limitaciones y se propone una metodología de empalme del PIB con distintas alternativas de cálculo en función de determinados supuestos de comportamiento sectorial. La validación de los resultados surge del contraste con series de otros países y de la consistencia con el relato histórico. Finalmente se presenta una panorámica de las series–elaboradas a partir de la hipótesis estándar–, sus tasas de crecimiento y su variabilidad, de acuerdo a lo que la literatura sobre crecimiento e historia económica de Uruguay ha identificado como sus “modelos” o “patrones” de desarrollo de largo plazo.
    Keywords: GDP, historical national accounts, Uruguay, productive structure
    JEL: N01 N16
    Date: 2012–05
  9. By: Sebastian Braun, Michael Kvasnicka
    Abstract: Does immigration accelerate sectoral change towards high-productivity sectors? This paper uses the mass displacement of ethnic Germans from Eastern Europe to West Germany after World War II as a natural experiment to study this question. A simple two-sector model of the economy, in which moving costs prevent the marginal product of labor to be equalized across sectors, predicts that immigration boosts output per worker by expanding the high-productivity sector, but decreases output per worker within a sector. Using German district-level data from before and after the war, we find strong empirical support for these predictions
    Keywords: Immigration, sectoral change, output growth, post-war Germany
    JEL: J61 J21 C36 N34
    Date: 2012–06
  10. By: Suranjana Nabar-Bhaduri and Matías Vernengo
    Keywords: Economic Development, Service Sector, India JEL Classification: O11, O14, O53 India has been an exemplary case of economic growth, lionized in the international press as one of the emerging market economies that will take over the world economy in the current century. The Indian services revolution is often cited as an example of an alternative development strategy under which the process of growth is services-led, as against the traditional manufacturing-led paradigm that has historically been the case. This paper suggests that the Indian development strategy actually looks eerily similar to the Central American and Mexican patterns of integration into the world economy, which are highly dependent on the exports of people, directly through migration, and indirectly through low wages in particular sectors (‘maquilas’ in the Americas, the call centers in India), even if the growth rates in India have been considerably higher than in those Latin American regions.
    Date: 2012
  11. By: A. Arrighetti; A. Ninni; E. Breda; R. Cappariello; M. Clemens; D. Schumacher
    Abstract: This Working Paper contains the contributions written in English forthcoming in a Special Issue of the Journal of Industrial and Management Economics / Economia e politica industriale (39, (2), 2012 ). The title (and the topic) of the whole Special Issue is “Competitiveness in Manufacturing: Germany vs. Italy”
    Keywords: Manufacturing Industries; International Trade; Human Capital; Internationalization Processes; Industrial Policy; Germany; Italy
    Date: 2012
  12. By: Hazar Ben Barka (CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris XIII - Paris Nord - CNRS : UMR7234); Sarah Mokaddem (CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris XIII - Paris Nord - CNRS : UMR7234)
    Abstract: Board Interlocks could have a positive effect on the adoption of governance practices and especially on the Corporate Social Responsibility (CSR). We surpass the predictions of the agency theory by proposing a cognitive-behavioral approach of governance to define the role of director. Given the lack of previous researches, a literature-based approach comes as a necessity. We study the connection between the nature of the director's profile and the knowledge transfer in CSR practices; and this could be beneficiary for the boards of directors. We underline the importance of individual director characteristics such as identification, recognition or motivation in the success of this transfer.
    Keywords: Profile of the director, Knowledge Transfer, Board of Directors' Network. Behavioral Governance, CSR.
    Date: 2012–03–29
  13. By: John Bryant (Vocat International)
    Abstract: Chapter from a book entitled Thermoeconomics, A Thermodynamic Approach to Economics (Third Edition), which deals with the relationships between the disciplines of thermodynamics and economics. Chapter 1 covers historical research on the disciplines, the structural comparisons between of the ideal gas equation and the quantity theory. Chapter 2 concerns a general stock model that can be adapted to represent those of money, labour and economic output. Chapter 3 deals with economic representations of the first and second laws of thermodynamics, work done, internal value and entropic value, reversibility, entropy, particular economic processes and utility. Chapter 4 concerns a thermodynamic representation of production processes, reaction kinetics entropy and maximisation and the cycle. Chapter 5 constructs a thermodynamic money system, using historical data of the UK and USA economies to provide empirical analysis. Particular aspects covered include elastic relationships, entropy, and interest rates. Chapter 6 describes aspect of labour and unemployment. Chapter 7 describes the principles of investment and economic entropy, including DCF, annuities and bonds. Chapter 8 sets out analyses of world energy and climate change to illustrate empirically some of the principles covered by the book.Chapter 9 is a discussion of thermoeconomics and sustainability.
    Keywords: Thermodynamics, economics, Le Chatelier, entropy, utility, money, equilibrium, value, energy, interest, elasticity, employment, climate change
    JEL: A1 C02 C68 D5 E O
    Date: 2012–06
  14. By: Riccardo De Bonis (Bank of Italy); Fabio Farabullini (Bank of Italy); Miria Rocchelli (Bank of Italy); Alessandra Salvio (Bank of Italy)
    Abstract: This paper reconstructs time series for Italy's banks, banks of issue, Cassa Depositi e Prestiti S.p.A. and non-bank financial intermediaries from 1861 to 2011. Statistics refer to the main items of bank balance sheets, currency in circulation, postal saving, bank interest rates, and value added. The paper analyses the main trends of the banking system and other financial corporations since Italian unification.
    Keywords: banks, banks of issue, Cassa Depositi e Prestiti S.p.A., value added
    JEL: C82 G21 N13 N14 Y1
    Date: 2012–06
  15. By: Collard, Fabrice (Université de Berne); Fève, Patrick (TSE (GREMAQ, IUF, IDEI et Banque de France))
    Abstract: Cet article présente les contributions originelles et essentielles de T. Sargent et C. Sims à la modélisation macro-économétrique. Après avoir exposé leur critique de la modélisation existante, cet article s'attache à préciser l'originalité de leurs approches respectives. La présentation de leurs travaux insiste ensuite sur les différentes voies de rapprochement de ces deux types des modélisations.
    Keywords: , , , , , , , Anticipations Rationnelles, Modèles Dynamiques, Identifications, Chocs Structurels
    JEL: C1 C2 C3 E2 E3 E4
    Date: 2012–05

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