nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2012‒09‒16
fourteen papers chosen by
Bernardo Batiz-Lazo
Bangor University

  1. Financial Returns to Infrastructure and Investment Strategies during Britain's Industrial Revolution By Dan Bogart
  2. History matters: The origins of cultural supply in Italy By Borowiecki, Karol Jan
  3. Poor Institutions, Rich Mines: Resource Curse and the Origins of the Sicilian Mafia By P. Buonanno; R. Durante; G. Prarolo; P. Vanin
  4. State–society cycles and political pacts in a national–dependent society : Brazil By Pereira, Luiz C. Bresser (Luiz Carlos Bresser)
  5. Why was Belgium so late in adopting Keynesian ideas and devising regional development policies? By Erik Buyst
  6. Regional Monetary Cooperation in Latin America By José Antonio Ocampo; Daniel Titelman
  7. Rangel : ciclos longos e dualidade By Bresser-Pereira, Luiz Carlos
  8. What's new in the new industrial policy in Latin America ? By Devlin, Robert; Moguillansky, Graciela
  9. Financial structures and the real effects of credit-supply shocks in Denmark 1922-2011 By Kim Abildgren
  10. Export experience of managers and the internationalization of firms By Sala, Davide; Yalcin, Erdal
  11. Sovereign Debt in Latin America, 1820–1913 By Gerardo della Paolera; Alan M. Taylor
  12. Sovereign Debt Restructurings 1950 - 2010: Literature Survey, Data, and Stylized Facts By Christoph Trebesch; Michael G Papaioannou; Udaibir S. Das
  13. Business cycles, monetary transmission and shocks to financial stability: empirical evidence from a new set of Danish quarterly national accounts 1948-2010 By Kim Abildgren
  14. Pension Payments and Receipts by New Zealand Birth Cohorts, 1916–1986 By Andrew Coleman

  1. By: Dan Bogart (Department of Economics, University of California-Irvine)
    Abstract: The infrastructure sector has the potential to generate wide differences in profits and economic outcomes. This paper examines financial returns and investment strategies for Britain’s turnpike roads in the early nineteenth century. There are three main findings. First, rates of return on capital invested and returns to bondholders were similar to competitive sectors. Second, there was significant variation in returns across trusts. Third, there is evidence that turnpike investors were driven by financial motives, although economic motives appear to be important in some cases. The findings have implications regarding the connection between infrastructure and Britain’s industrialization.
    Keywords: Monopoly; Regulation; Turnpike roads; Infrastructure; Britain; Industrial Revolution
    JEL: K23 N43 N73
    Date: 2012–08
  2. By: Borowiecki, Karol Jan (Department of Business and Economics)
    Abstract: I investigate the consequences of long-run persistence of a societies’ preference towards cultural goods. Historical cultural activity is approximated with the frequency of births of classical composers during the Renaissance and is linked with contemporary supply of cultural activities in Italian provinces. Areas with a one-standard-deviation higher number of composer births expose nowadays up to 0.4 standard deviations higher supply of cultural activities (such as concerts or theater performances). Those provinces seem to exhibit today also a somewhat lower supply of non-cultural activities. The results point at a tantalising divergence in societies’ cultural preferences which is attributable to events rooted long in the past. Furthermore, the findings imply a remarkable persistency of the geography of artistic activity. While human capital is found to be potentially a driver for spill-over effects across different cultural disciplines over time, other unobservable factors, such as societies’ preference traits, determine the persistency within most closely related cultural areas.
    Keywords: Economic development; culture; institutions; path dependence; endogenous preferences
    JEL: N33 N34 O10 Z10
    Date: 2012–08–17
  3. By: P. Buonanno; R. Durante; G. Prarolo; P. Vanin
    Abstract: This study explains the emergence of the Sicilian mafia in the XIX century as the product of the interaction between natural resource abundance and weak institutions. We advance the hypothesis that the mafia emerged after the collapse of the Bourbon Kingdom in a context characterized by a severe lack of state property-right enforcement in response to the rising demand for the protection of sulfur - Sicily's most valuable export commodity - whose demand in the international markets was soaring at the time. We test this hypothesis combining data on the early presence of the mafia and on the distribution of sulfur reserves across Sicilian municipalities and find evidence of a positive and significant effect of sulphur availability on mafia's diffusion. These results remain unchanged when including department fixed-effects and various geographical and historical controls, when controlling for spatial correlation, and when comparing pairs of neighboring municipalities with and without sulfur.
    JEL: K42 N33 N54 O13 O43
    Date: 2012–09
  4. By: Pereira, Luiz C. Bresser (Luiz Carlos Bresser)
    Abstract: The history of independent Brazil may be divided into three major state–society cycles, and, after 1930, five political pacts or class coalitions can be identified. These pacts were nationalist; only in the 1990s did the Brazilian elites surrender to the neoliberal hegemony. Yet, since the mid-2000s they have been rediscovering the idea of the nation. The main claim of the essay is that Brazilian elites and Brazilian society are “national–dependent”, that is, they are ambivalent and contradictory, requiring an oxymoron to define them. They are dependent because they often see themselves as “European” and the mass of the people as inferior. But Brazil is big enough, and there are enough common interests around its domestic market, to make the Brazilian nation less ambivalent. Today Brazil is seeking a synthesis between the last two political cycles – between social justice and economic development in the framework of democracy.
    Date: 2012–08–28
  5. By: Erik Buyst
    Date: 2012
  6. By: José Antonio Ocampo (Asian Development Bank Institute (ADBI)); Daniel Titelman
    Abstract: Latin American has the longest history of regional integration efforts in the developing world. This paper analyzes the experience of regional monetary cooperation in Latin America over the past three decades. This experience has been overall successful but also uneven, both in terms of country coverage and services provided. Although strictly not a form of monetary cooperation, development financing does play a useful complementary role by proving counter-cyclical or at least stable financing during crises, when private financing for developing countries dries up.
    Keywords: Regional monetary cooperation, Monetary cooperation, Latin America, development financing
    JEL: O23 O54
    Date: 2012–08
  7. By: Bresser-Pereira, Luiz Carlos
    Abstract: For Ignácio Rangel economic development is an intrinsically contradictory movement through which technological innovation, whose dynamics explains the long cycle, is permanently in conflict with the existing capitals that it depreciates. Development in Brazil is not just defined by the opposition between the capitalist and the pre-capitalist sector; there is also an external duality that does not just express the relation between its stages of economic growth and the development of the world economy, but also tells us how its modern and its backward sector change at each stage. The duality has a double character: through the coexistence of relations of productions that correspond to two sequential historical phases, and through the existence, in the domestic and in the external “pole” of such duality, a relation of dependency toward the more advanced societies.
    Date: 2012–08–30
  8. By: Devlin, Robert; Moguillansky, Graciela
    Abstract: Latin America was an aggressive practitioner of industrial policies (IP) in the years 1950-1980. During much of the period the general practice was in line with the then mainstream thinking in development economics. Significant growth, industrialization and modernization took place, but serious flaws in concept and execution of the IP caused them to fail as a vehicle for economic catch-up with rich countries in an era of an expansive world economy. A very serious Latin American external debt crisis in the 1980s, coupled with the ascendance in international discourse of arguments for retrenchment of the State in economics and life, contributed to a pendulum swing in the region to the policies of the so-called Washington Consensus. Major structural adjustments and reforms designed to bring the free market forward and push back the market governance of the State dominated the 1980s and 1990s. In recent years, however, countries in Latin America have witnessed a renaissance in the deployment of systematic IP. This paper explains why IP have emerged and why they are a necessary step for the more profound structural change needed to drive sustained high rates of growth. Based on illustrated cases which we think reflect the current state of affairs in the region, the paper highlights the nature of the shift to a more proactive state promotion of industrial and services upgrading, as well as the important new characteristics of the current outbreak of IP which are different from the ones of the past and offer hope for greater success. It also identifies a legacy of some bad habits which linger and need to be addressed with urgency if the new trend is to be successfully consolidated.
    Keywords: Public Sector Corruption&Anticorruption Measures,E-Business,ICT Policy and Strategies,Climate Change Economics,Economic Theory&Research
    Date: 2012–09–01
  9. By: Kim Abildgren (Danmarks Nationalbank, Havnegade 5, DK-1093 Copenhagen K, Denmark)
    Abstract: We examine the real effects of credit-supply shocks using a series of structural vector autoregressive models estimated on the basis on a new quarterly data set for Denmark spanning the past 90 years or so. We find no effects on the unemployment level from supplyshocks to credit from commercial/savings banks in the periods 1922-1949 and 1981-2011 even though these periods contained several cases of severe banking and financial crises. Furthermore, credit-supply shocks do not seem to explain any significant share of the volatility in the unemployment rate during these periods. We attribute these findings to the large market for mortgage-credit loans in Denmark raised through bond-financed mortgage banks combined with comprehensive government interventions to safeguard financial stability during times of crises. There might, however, be indications of real effects from credit-supply shocks in the period 1950-1980 where credit rationing and exchange controls served as important economic-policy instruments. Overall these results indicate that both the financialsystem structure as well as the extent of government intervention during banking crises play a key role to the significance of real effects of credit-supply shocks. These findings must be kept in mind when modelling the role of financial intermediaries in macroeconomic models. JEL Classification:
    Keywords: Credit-supply shocks, banking and financial crises, vector autoregressions, Danish economic history
    Date: 2012–08
  10. By: Sala, Davide (Department of Business and Economics); Yalcin, Erdal (IFO Institute - Leibniz Institute for Economic Research)
    Abstract: As the firm gravitates to the core analysis of international trade models, the possibilities to learn from the theory of the multinational enterprise developed in international business studies increase. The managerial resources and capabilities that are so emphasized in this theory for export initiation have largely been neglected in the empirical studies of international trade. Probably not because they are unimportant, but rather because of the challenge to identify and measure them. We exploit Danish employer-employee matched data to overcome this barrier and analyze the impact of managers’ international experience together with other managerial characteristics on the likelihood that the firm starts exporting. We find that productivity and fixed costs associated to exporting are not the sole determinants of the selection of firms into international markets, but “managerial inputs” are as important. Our data allows us to identify managers’ export experience based on the CEOs’ historical career as documented in official registry statistics. This puts our study apart from earlier survey based studies which rely on self-assessments.
    Keywords: Export status; managerial promotions; international experience; self-selection
    JEL: D22 F23 M51
    Date: 2012–09–06
  11. By: Gerardo della Paolera; Alan M. Taylor
    Abstract: This paper examines sovereign lending to Latin America and the Caribbean from 1820 to 1913. We examine four waves of capital flows where defaults were followed by a return to market access. In spite of extended default, countries kept promising high returns that attracted international investors again and again: financial autarky thus gave way to eras of high integration to global markets as measured by sovereign risk pricing. We discuss imperfections of the sovereign debt institutional context in the region and discuss a menu of options that some countries used to seek funds in the global financial markets after defaults. The parallel with the modern Latin American and Caribbean sovereign bond market experience is striking.
    JEL: F34 H63 N16 N26 N46
    Date: 2012–09
  12. By: Christoph Trebesch; Michael G Papaioannou; Udaibir S. Das
    Abstract: This paper provides a comprehensive survey of pertinent issues on sovereign debt restructurings, based on a newly constructed database. This is the first complete dataset of sovereign restructuring cases, covering the six decades from 1950–2010; it includes 186 debt exchanges with foreign banks and bondholders, and 447 bilateral debt agreements with the Paris Club. We present new stylized facts on the outcome and process of debt restructurings, including on the size of haircuts, creditor participation, and legal aspects. In addition, the paper summarizes the relevant empirical literature, analyzes recent restructuring episodes, and discusses ongoing debates on crisis resolution mechanisms, credit default swaps, and the role of collective action clauses.
    Keywords: Debt relief , Debt restructuring , Developing countries , Domestic debt , Emerging markets , Sovereign debt ,
    Date: 2012–08–14
  13. By: Kim Abildgren (Danmarks Nationalbank, Havnegade 5, DK-1093 Copenhagen K, Denmark)
    Abstract: In Denmark official quarterly national accounts are only available for the period since 1977. The paper constructs a set of summary non-seasonally adjusted quarterly national accounts for Denmark for 1948-2010 in current and constant prices as well as a set of other key quarterly macroeconomic indicators covering the Danish economy since 1948. As a first exploratory analysis of these two new data sets the paper reviews some of the stylised empirical evidence on the business cycle, the monetary transmission mechanism and shocks to financial stability that can be uncovered using filtering techniques and reduced-form vector autoregressive (VAR) models. The long-span data sets make it possible to estimate VAR models of a higher dimension than is usually found in the literature due to degrees-of-freedom problems. The results from the VAR analysis indicate a significant and long-lasting negative impact on real GDP following an exogenous shock to the banking sector’s write-down ratio. JEL Classification: C32, C82, E01, E32, E44, E52, N14
    Keywords: Quarterly national accounts, Danish economic history, business cycles, monetary transmission, financial stability, band-pass filters, VAR analysis
    Date: 2012–08
  14. By: Andrew Coleman (Motu Economic and Public Policy Research and the New Zealand Treasury)
    Abstract: This paper analyses how much different cohorts can expect to contribute into the PAYGO-funded New Zealand Superannuation scheme, and contrasts it with the amount each cohort can be expected to obtain in benefits if the current scheme is continued. The analysis is based on historic census and contributions data and SNZ projections of future population trends. The results show that cohorts born prior to 1980 can expect to pay half as much as they can expect to get in retirement benefits, because of the small number of pension recipients when they made the bulk of their payments.
    Keywords: retirement incomes, intergenerational transfers, government pension schemes
    JEL: E24 H55
    Date: 2012–09

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