nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2012‒07‒23
24 papers chosen by
Bernardo Batiz-Lazo
Bangor University

  1. Why have governments succeeded in reducing French public debt historically and can these successes inspired us for the future? An historical perspective since 1890. By Dufrénot, G.; Triki, K.
  2. English Individualism and Continental Altruism? Servants, Remittances and Welfare in Eighteenth-Century Rural Europe. By Lambrecht, Thijs A.
  3. The German Transfer Problem, 1920-1933: A Sovereign Debt Perspective By Albrecht Ritschl
  4. Pre-colonial Ethnic Institutions and Contemporary African Development By Stelios Michalopoulos; Elias Papaioannou
  5. Crecimiento económico de largo plazo en Antioquia, Colombia: Estimación del PIB. 1800-1913 By Mejía Cubillos, Javier
  6. Intimations of Keith Hart's 'Informal Economy' - In the Work of Henry Mayhew, P T Bauer and Richard Salisbury By John D. Conroy
  7. Public debt ratio and its determinants in France since 1890 Does econometrics supports the historical evidence? By Dufrénot, G.; Triki, K.
  8. De Jure and de Facto Determinants of Power:Evidence from Mississippi By Graziella Bertocchi; Arcangelo Dimico
  9. Globalization: guidance from Franciscan economic thought and "Caritas in Veritate" By Zamagni, Stefano
  10. A Century of Human Capital and Hours By Diego Restuccia; Guillaume Vandenbroucke
  11. Hard to Forget: Long-lasting Effects of Social Capital Accumulation Shocks By Amodio, Francesco
  12. Milton Friedman's Contributions to Macroeconomics and Their Influence By David Laidler
  13. Immigration and Structural Change – Evidence from Post-war Germany By Sebastian Braun; Michael Kvasnicka
  14. Marx: From Hegel and Feuerbach to Adam Smith By Eric Rahim
  15. How Much of a Socialist Legacy? The Reemergence of Entrepreneurship in the East German Transformation to a Market Economy By Michael Fritsch; Elisabeth Bublitz; Alina Rusakova; Michael Wyrwich
  16. On the Welfare Costs of Business-Cycle Fluctuations and Economic-Growth Variation in the 20th Century By Osmani Teixeira de Carvalho Guillény; João Victor Isslerz; Afonso Arinos de Mello Franco-Neto
  17. Ian M. McDonald: A review of his contributions to economics By Jeff Borland
  18. 50 Years of Job Vacancies in Colombia: The Case of Bogota, 1960-2010 By Andrés Álvarez; Marc Hofstetter
  19. Una revisión de la enfermedad holandesa a la luz de la teoría austriaca del ciclo económico By Rodríguez González, Guillermo
  20. ORÍGENES HISTÓRICOS DE LA DESIGUALDAD EN EL PERÚ By Carlos Contreras; Stephan Gruber; Cristina Mazzeo
  21. What drives Health Care Expenditure in France since 1950? By Thomas Barnay; Olivier Damette
  22. F.A. Hayek and his rational choice of monetary arrangements By Sahoo, Ganeswar
  23. Currency crisis and collapse in interwar Greece: predicament or policy failure?. By [no author]
  24. The Long Persistence of Regional Entrepreneurship Culture: Germany 1925–2005 By Michael Fritsch; Michael Wyrwich

  1. By: Dufrénot, G.; Triki, K.
    Abstract: The question of reducing public debt is at the heart of the current debates in France where the level of debt ratio amounted to 86% of the GDP in 2011. In this paper, we examine how the primary balance, the GDP growth rate, the real interest rate and the inflation rate have influenced the evolution of the debt ratio since the end of the 19th century. We use a methodology based on both historical and empirical analysis. Our aim is to explain why some years, the interest rate, the economic growth, the fiscal policy have helped in making public debt low, while they did not during other periods. Which historical events explained such differences? Our purpose is to think about scenarios of exit of the current French debt crisis making comparisons with the past.
    Keywords: Debt ratio, France, historical analysis.
    JEL: H54 C4
    Date: 2012
  2. By: Lambrecht, Thijs A.
    Abstract: Life-cycle service was one of the characteristic aspects of the European Marriage Pattern. The majority of the children of labourers and peasants left the household of their parents during adolescence to acquire material resources and skills in preparation of marriage. Whilst in service, adolescents could save part of their wages. As most of them worked in close geographical proximity to their family, children in service were also a potential source of income for their parents. This paper studies the nature, frequency and value of remittances from farm servants to their parents in three countries during the eighteenth century. Important differences emerge from this comparative study. Farm servants in Belgium and France frequently supported their parents financially with their earnings. In England parents could in most cases not rely on structural assistance from their unmarried adolescent children. I argue that property rights explain these differences. The absence of land that could be passed on through inheritance operated as a check to intergenerational solidarity.
    Keywords: welfare; servants; wages; remittances; household economy; poor relief; property rights
    JEL: N13 D64
    Date: 2012–07–18
  3. By: Albrecht Ritschl
    Abstract: The severity of the Great Depression in Germany has sometimes been blamed on reparations in simplistic fashion. Alternative interpretations relied on American capital exports, the demise of the Gold Standard, or on malfunctions of the domestic economy, such as excessive wage increases during the 1920s. This paper argues for a more subtle link between Germany's slump and these policies. I explain Germany's foreign borrowing rush before 1929 from transfer protection under the Dawes Plan, which gave commercial credits seniority over reparations. I argue that the Young Plan of 1929 implied a reversal of this seniority scheme, causing a sudden stop and reversal in the German balance of payments that lasted throughout the Great Depression. Invoking basic results of sovereign debt theory, the paper identifies a sequence of reparation regimes with varying degrees of relaxation of Germany's participation constraint in international credit markets. Transfer protection under the Dawes Plan created an incentive for Germany (and her commercial creditors) to drive out reparations. I conclude that the Young Plan could only have worked in the absence of an international recession, and that attempts to salvage it in 1931 were necessarily futile.
    Keywords: Germany, Great Depression, sovereign debt, reparations
    JEL: N14 N24
    Date: 2012–07
  4. By: Stelios Michalopoulos; Elias Papaioannou
    Abstract: We investigate the role of deeply-rooted pre-colonial ethnic institutions in shaping comparative regional development within African countries. We combine information on the spatial distribution of ethnicities before colonization with regional variation in contemporary economic performance, as proxied by satellite images of light density at night. We document a strong association between pre-colonial ethnic political centralization and regional development. This pattern is not driven by differences in local geographic features or by other observable ethnic-specific cultural and economic variables. The strong positive association between pre-colonial political complexity and contemporary development obtains also within pairs of adjacent ethnic homelands with different legacies of pre-colonial political institutions.
    JEL: N17 O4 O43 Z1
    Date: 2012–07
  5. By: Mejía Cubillos, Javier
    Abstract: This paper provides the first detailed quantitative analysis of the economic activity of Antioquia for the nineteenth century and early twentieth. From the existing data for the Colombian economy, it is reconstructed one of the first series of regional GDP in Latin America for the period. We find that Antioquia, in the early nineteenth century, enjoyed of higher per capita incomes than the average of Colombia. Moreover, we found periods of economic boom between 1800 and 1840, 1860 and 1880, and 1905 and 1913, the latter being more pronounced. Thus, the paper answers the long discussion about the economic takeoff of Antioquia. It is provided insights into the economic growth of Antioquia without need for institutional or cultural arguments.
    Keywords: Colombia; Antioquia; economic growth; 19th century; 20th century; quantitative economic history; GDP estimates
    JEL: O41 O47 N16
    Date: 2012–06
  6. By: John D. Conroy
    Abstract: This paper considers the idea of informality in market exchange, as introduced into the economic development literature by Keith Hart in the 1970s. In addition to Hart (1971, 1973) it will discuss three writers who may be considered his intellectual forerunners. Each, to a greater or less degree, anticipated the idea of informal economic activity and described it in a particular historical period and place. They are the mid-Victorian journalist Henry Mayhew (London, c.1850), the libertarian economist P. T. Bauer (British West Africa, c.1948) and the economic anthropologist R. F. Salisbury (colonial New Guinea, c.1952-1963). The principal texts relied upon are Mayhew's monumental London Labour and the London Poor (4 vols, 1851-61), Bauer's Economics of Under-Developed Countries (1957) and Salisbury's From Stone to Steel (1962) and Vunamami: Economic Transformation in a Traditional Society (1970).
    Keywords: informal economy, informal sector, Keith Hart, Henry Mayhew, P. T. Bauer, Richard Salisbury
    JEL: B20 B25 B31 J40 J49 O10 O17 Z10
    Date: 2012–03
  7. By: Dufrénot, G.; Triki, K.
    Abstract: Can the evolution of public debt be predicted from its determinants? While the recovery programs undertaken during the 2008 crisis have led to a big takeoff in public debt ratios, the factors likely to curb its upward spiraling dynamic are subject to considerable uncertainty and fuel debate among economists. Are budgetary consolidations alone sufficient? Is there a need to return to inflationary policies, or is strong economic growth the essential factor to bring about a drop in the public debt ratio? The present paper proposes a long term retrospective study of the French case. A model of advanced indicators for the debt ratio is proposed whose results are interpreted in the light of the historical context. It is shown that from the end of the 19th century to the beginning of the 1950s, growth, inflation and primary balances were factors capable of explaining the alternation between upward and downward phases in the debt ratio. Then, during the three decades of the post-war boom, very high inflation and economic growth masked nascent budgetary imbalances while the so-called “stop and go” policies were privileged. The 1980s marked a break in the sense that growth and improvement in the primary balances no longer allowed the upward dynamics of the debt ratio to be reversed.
    Keywords: Public debt, debt ratio, advanced indicators, economic history, forewarning indicator.
    JEL: H54 C4
    Date: 2012
  8. By: Graziella Bertocchi; Arcangelo Dimico
    Abstract: We evaluate the empirical relevance of de facto vs. de jure determinants of political power in the U.S. South between the end of the nineteenth and the beginning of the twentieth century. We apply a variety of estimation techniques to a previously unexploited dataset on voter registration by race covering the counties of Mississippi in 1896, shortly after the introduction of the 1890 voting restrictions encoded in the state constitution. Our results indicate that de jure voting restrictions reduce black registration but that black disfranchisement starts well before 1890 and is more intense where a black majority represents a threat to the de facto power of white elites. Moreover, the effect of race becomes stronger after 1890 suggesting that the de jure barriers may have served the purpose of institutionalizing a de facto condition of disfranchisement.
    Keywords: race, voting, institutions, education, inequality
    JEL: J15 N41 O43 P16
    Date: 2012–07
  9. By: Zamagni, Stefano (Associazione Italiana per la Cultura della Cooperazione e del Non Profit)
    Abstract: This essay pursues a threefold purpose: first, to sketch the historical period that provides the backdrop to the formation of Franciscan economic thought; second, to set out the principles governing that doctrine, highlighting its originality and its relevance to the real problems of the day; and lastly, to enumerate the essential reasons for the resurgence of interest, today, in the Franciscan point of view concerning the challenges to our society posed by globalization and by the present economic crisis.
    Date: 2012–06–19
  10. By: Diego Restuccia; Guillaume Vandenbroucke
    Abstract: An average person born in the United States in the second half of the nineteenth century completed 7 years of schooling and spent 58 hours a week working in the market. By contrast, an average person born at the end of the twentieth century completed 14 years of schooling and spent 40 hours a week working. In the span of 100 years, completed years of schooling doubled and working hours decreased by 30 percent. What explains these trends? We consider a model of human capital and labor supply to quantitatively assess the contribution of exogenous variations in productivity (wage) and life expectancy in accounting for the secular trends in educational attainment and hours of work. We find that the observed increase in wages and life expectancy account for 80 percent of the increase in years of schooling and 88 percent of the reduction in hours of work. Rising wages alone account for 75 percent of the increase in schooling and almost all the decrease in hours in the model, whereas rising life expectancy alone accounts for 25 percent of the increase in schooling and almost none of the decrease in hours of work. In addition, we show that the mechanism emphasized in the model is consistent with other trends at a more disaggregate level such as the reduction in the racial gap in schooling and the decrease in the cross-sectional dispersion in hours.
    Keywords: Schooling, hours of work, productivity, life expectancy, trends, United States
    JEL: E1 I25 J11 O4
    Date: 2012–07–09
  11. By: Amodio, Francesco (Associazione Italiana per la Cultura della Cooperazione e del Non Profit)
    Abstract: Very few contributions have dealt with the analysis of specific determinants of social capital accumulation and destruction. Even if limited in scale, the analysis of precise historical events can help in discerning the dynamics of social capital and its persistence. The case of Italian unification is here considered. I focus on three historical episodes of conflict, which caused the death of a big fraction of population in three specific locations. When towns in the areas surrounding these locations are considered, I show how each kilometer further from the hit town is associated with a significant increase in the electoral turnout in European Parliament elections held in 1979-1999. I believe these differences to reflect differences in social capital endowments across towns. The pattern is confirmed when World War I casualties are used as a measure of social capital at the beginning of the XXth century. Results are robust to the inclusion of a number of controls and to several robustness checks.
    Keywords: social capital; political participation; social capital persistence; Italy
    Date: 2012–06–20
  12. By: David Laidler (University of Western Ontario)
    Abstract: Milton Friedman's contributions to and influence on macroeconomics are discussed, beginning with his work on the consumption function and the demand for money, not to mention monetary history, which helped to undermine the post World War 2 "Keynesian" consensus in the area. His inter-related analyses of the dynamics of monetary policy's transmission mechanism, the case for a money growth rule, and the expectations augmented Phillips curve are then taken up, followed by a discussion of his influence not only directly on the monetarist policy experiments of the early 1980s, but also less directly on the regimes that underlay the "great moderation" that broke down in the crisis of 2007-2008. Friedman's seminal influence on the development of today's mainstream, stochastic, but essentially Walrasian, macroeconomic theory, rooted in his explicit deployment of econometric theory in the analysis of forward-looking maximising behaviour in 1957, and in his later work on the Phillips curve, is also assessed in the light of his own preference, which he shared with Keynes, for a pragmatic Marshallian approach to economic theorising.
    Keywords: Friedman; macroeconomics; Keynes; Keynesianism; monetarism; money; inflation; cycle; depression; monetary policy; consumption
    JEL: B22 E20 E30 E40 E50
    Date: 2012
  13. 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
  14. By: Eric Rahim (Department of Economics, University of Strathclyde)
    Abstract: This paper discusses the development of Marx’s thought over a period of something like fifteen months, between the spring of 1843 and the autumn of 1844. The focus of the paper is Marx’s first encounter with classical political economy as he found it in the Wealth of Nations. The outcome of this encounter was presented by Marx in his Economic and Philosophical Manuscripts of 1844. It is argued here that in the classical theory, with which he had hitherto been largely unfamiliar, Marx found all the elements he needed to synthesise the philosophical standpoint he had developed in the preceding months with political economy. The Manuscripts represent the first crucial stage in the development of this synthesis. This first encounter of Marx with classical political economy, and his first steps in the development of his synthesis, have received hardly any attention in the literature. The present paper seeks to fill this gap.
    Date: 2012–06
  15. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Elisabeth Bublitz (Friedrich Schiller University Jena, School of Economics and Business Administration); Alina Rusakova (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: The 40 years of socialist regime in East Germany were characterized by a massive anti-entrepreneurship policy. We investigate the reemergence of entrepreneurship in East Germany during its transformation to a market economy following the collapse of the East German state in 1989. It took about 15 years until self-employment levels in East Germany reached those of West Germany. Despite this catch up, we find a number of peculiarities in East German self-employment that appear to be a continuing legacy of the socialist period. In particular, older and better-educated East Germans have a relatively low propensity for starting an own business. Moreover, East German workers tend to have a lower variety of skills than their West German counterparts, which could explain a lower propensity for start up in the early years after reunification. Despite this socialist imprint, we also find considerable continuity in the levels of self-employment in the 1920s and those after transition to a market economy, suggesting the existence of a long-lasting regional entrepreneurship culture.
    Keywords: Entrepreneurship, self-employment, new business formation, transformation, East Germany
    JEL: L26 O11
    Date: 2012–07–16
  16. By: Osmani Teixeira de Carvalho Guillény; João Victor Isslerz; Afonso Arinos de Mello Franco-Neto
    Abstract: Lucas(1987) has shown a surprising result in business-cycle research: the welfare cost of business cycles are very small. Our paper has several original contributions. First, in computing welfare costs, we propose a novel setup that separates the effects of uncertainty stemming from business-cycle fluctuations and economic-growth variation. Second, we extend the sample from which to compute the moments of consumption: the whole of the literature chose primarily to work with post-WWII data. For this period, actual consumption is already a result of counter-cyclical policies, and is potentially smoother than what it otherwise have been in their absence. So, we employ also pre-WWII data. Third, we take an econometric approach and compute explicitly the asymptotic standard deviation of welfare costs using the Delta Method. Estimates of welfare costs show major differences for the pre-WWII and the post-WWII era. They can reach up to 15 times for reasonable parameter values -- ß=0.985, and f=5. For example, in the pre-WWII period (1901-1941), welfare cost estimates are 0.31% of consumption if we consider only permanent shocks and 0.61% of consumption if we consider only transitory shocks. In comparison, the post-WWII era is much quieter: welfare costs of economic growth are 0.11% and welfare costs of business cycles are 0.037% -- the latter being very close to the estimate in Lucas (0.040%). Estimates of marginal welfare costs are roughly twice the size of the total welfare costs. For the pre-WWII era, marginal welfare costs of economic-growth and business-cycle fluctuations are respectively 0.63% and 1.17% of per-capita consumption. The same figures for the post-WWII era are, respectively, 0.21% and 0.07% of per-capita consumption.
    Date: 2012–07
  17. By: Jeff Borland
    Abstract: It is a pleasure and privilege to be able to provide this commentary on Ian McDonald’s career in economics. It’s been my good fortune to have Ian as a teacher when I was a 2nd year student; as the supervisor of my Masters thesis; as my boss when I tutored Intermediate Macroeconomics; and then as a colleague for over 20 years in the Department of Economics. So I feel I’m in a position to provide you with an informed perspective on Ian’s career; as well as being incredibly lucky to have had the benefit of his example and wise counsel over all these years.
    Date: 2012
  18. By: Andrés Álvarez; Marc Hofstetter
    Abstract: This paper presents a novel monthly dataset of job vacancies in Bogota between 1960 and 2010. The dataset was constructed by counting the number of help-wanted announcements published in the most important newspaper with national circulation—namely, El Tiempo. We describe the methodology used to construct the database, discuss some possible problems associated with it, and propose ways to solve them. The paper also presents an estimation of the job vacancy rate. We depict a Beveridge curve and use the vacancy rate to forecast unemployment. This first look at the series yields sensible results, while leaving a myriad of open questions for future research.
    Date: 2012–07–15
  19. By: Rodríguez González, Guillermo
    Abstract: The purpose of this paper is to review the phenomenon has been called Dutch disease in the light of Austrian business cycle theory. To this end we will see the history of Austrian business cycle theory from its roots in Wicksell ([1898] 2000) to the extension of the theory in open economies with fiat currencies in Cachanosky (2012). We will review the concept of Dutch disease and the positions of its nature negative, neutral or positive in terms of growth, along with the problem of real exchange rate and its possible relationship with the long term growth, and taking into account the relevant differences between the economies that emit fiat currencies used as reserves and economies that import those currencies as reserves to issue their money, finally we postulate that the Dutch disease, as the economic malaise, it´s simply a variant specific and peripheral, of the distortions in the inter-temporary structure of capital by bad investments, extensively studied in the Austrian business cycle theory.
    Keywords: Enfermedad holandesa; macroeconomía del capital; teoría austriaca del ciclo; dinero fiduciario
    JEL: E50 F31 B53
    Date: 2012–07–09
  20. By: Carlos Contreras (Departamento de Economía - Pontificia Universidad Católica del Perú); Stephan Gruber; Cristina Mazzeo
    Abstract: Los trabajos sobre la desigualdad económica en América Latina han coincidido en señalar el carácter elevado y persistente que este fenómeno tiene en el subcontinente, a la vez que han postulado su origen histórico. En consonancia con este planteamiento, proponemos en este documento que la desigualdad en el Perú se originó durante el período colonial. Pero no es fácil llevar un registro histórico cuantitativo de ella, por lo que se recurre en este documento a la información demográfica aportada por los censos coloniales y republicanos. Esta herramienta permite trazar una periodización de la evolución de la desigualdad en el Perú republicano, consistente en tres etapas: el período de la post independencia, entre 1821-1890, marcado por una disminución de la desigualdad; el período oligárquico, entre 1890-1940, marcado por la aparición de una clase media y una complicación de la pirámide de la riqueza; y el período 1940-1990, marcado por un empeoramiento de la desigualdad, a raíz de la depreciación del trabajo causado, a su vez, por la explosión demográfica y por la disminución del crecimiento económico ocurrido desde los años setenta.
    Keywords: Desigualdad, pobreza, historia economica, Peru
    JEL: N36
    Date: 2012
  21. By: Thomas Barnay (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris XII - Paris Est Créteil Val-de-Marne : EA437 - Université Paris Est Marne-la-Vallée); Olivier Damette (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris XII - Paris Est Créteil Val-de-Marne : EA437 - Université Paris Est Marne-la-Vallée)
    Abstract: Using the French annual database (1950-2009), we conducted a time-series analysis to explain the role of GDP per capita on HCE (Health Care Expenditure) per capita taking into account structural breaks and non-linearity in the long-term economic relationship between HCE and GDP, controlling for price effect, population ageing, innovation proxy and medical density. We show that the non-linearity of the long-run relationship between HCE and GDP comes from both the presence of a structural break and non-linearity explained by a transition variable (by constructing a smooth transition cointegrating regression). More precisely, lower GDP elasticity is explained by an exogenous shock linked to health system policies in the mid 1980's (break analysis) and endogenously driven changes in the health care system via medical density in France.
    Keywords: health expenditure; time series; GDP
    Date: 2012–05–01
  22. By: Sahoo, Ganeswar
    Abstract: This paper addresses the perspective of Hayek’s doctrine on monetary arrangements in the economy and his favorable argument for an international central bank over national central bank. I also discussed Hayek’s view on free banking (i.e. for the free issue of bank notes) that would enable the banks to provide more and cheaper credit. Furthermore, Hayek comes up with an intellectual debate on “rational choice” of monetary arrangements whether the commercial banks should have the right to issue bank notes (demand for free banking) which can be redeemable in the established national gold or silver currency or an international central bank. This paper focuses on Hayek’s overall philosophy on international money mechanism and his intellectual debate of rational choice between the two arrangements – free banking or an international central bank and his concerned over unstable arrangements in money mechanism,which, he believes, profoundly affects economic and social conditions of people and government. Therefore, to reach the conclusion, I outlined Hayek’s perspectives on central bank and government, then international gold standard, and finally, his choice between free banking and an international central banking which is central theme of this paper.
    Keywords: Money; Banking; Central Bank; Free Banking; Monetary Nationalism
    JEL: E31 E51 B22 E44 E42 E58 E52 E41 B53
    Date: 2012–05–02
  23. By: [no author]
    Abstract: Greece in 1928 viewed the anchoring to the Gold Exchange Standard as the imperative choice of the time in order to implant financial credibility and carry over an ambitious plan of reforms to modernise the economy. But after the pound sterling exited the system in 1931, Greece, instead of following suit, chose a defence that drove interest rates at high levels, squeezed the real economy and exhausted foreign reserves. Unable to borrow from abroad, it quitted the system in 1932 and the Drachma was heavily devalued. Despite a rise in competitiveness, the erosion of real incomes cut domestic demand, unemployment continued to rise and the country entered a period of acute social and political instability. The lessons are perhaps relevant today for the costs that Greece would face by exiting the Eurozone. A model of Balance of Payments crises with partial capital controls is employed to analyze the response of currency pegs to external shocks and examine under which circumstances the regime collapses. Its main predictions are found to be in agreement with the actual outcomes in 1932.
    Date: 2012–07
  24. By: Michael Fritsch; Michael Wyrwich
    Abstract: We investigate the persistence of levels of self-employment and new business formation in different time periods and under different framework conditions. The analysis shows that high levels of regional self-employment and new business formation tend to be persistent for periods as long as 80 years and that such an entrepreneurial culture can even survive abrupt and drastic changes in the politic-economic environment. We thus conclude that regional entrepreneurship cultures do exist and that they have long-lasting effects.
    Keywords: entrepreneurship, self-employment, new business formation, persistence, culture
    JEL: L26 R11 O11
    Date: 2012–07

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