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on Business, Economic and Financial History |
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Issue of 2013‒02‒08
twelve papers chosen by |
| By: | Lawrence F. Katz; Robert A. Margo |
| Abstract: | This paper examines shifts over time in the relative demand for skilled labor in the United States. Although de-skilling in the conventional sense did occur overall in nineteenth century manufacturing, a more nuanced picture is that occupations “hollowed out”: the share of “middle-skill” jobs – artisans – declined while those of “high-skill” – white collar, non-production workers – and “low-skill” – operatives and laborers increased. De-skilling did not occur in the aggregate economy; rather, the aggregate shares of low skill jobs decreased, middle skill jobs remained steady, and high skill jobs expanded from 1850 to the early twentieth century. The pattern of monotonic skill upgrading continued through much of the twentieth century until the recent “polarization” of labor demand since the late 1980s. New archival evidence on wages suggests that the demand for high skill (white collar) workers grew more rapidly than the supply starting well before the Civil War. |
| JEL: | J23 N11 N12 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18752&r=his |
| By: | M. Carboni; M. Fornasari |
| Abstract: | The limited partnership emerged as a key societal innovation during the early modern age. It allowed an effective separation between partners – those acting and those conferring capital – and it granted limited liability to partners in case of insolvency. The diffusion of limited partnership – between the Sixteenth and Seventeenth centuries - came at a crucial crossroad in the economic history of early modern Italian cities. Banking on new archival sources this paper will argue that in Bologna the diffusion of this new societal form was closely associated to a fundamental renewal of the city economic landscape. On the one hand the rise of the limited partnership came as a response to the international banking crisis of the last quarter of the Sixteenth century, the string of financial bankruptcies and the ensuing dramatic credit squeeze that affected the city. The limited partnership offered investors a new (and less risky) outlet for capital, and eased the credit crunch businesses were reeling from. On the other hand its diffusion was not business neutral, as a matter of fact it was closely related to the expansion of the silk manufacturing sector, that emerged as the forward sector of the city economy. |
| JEL: | N13 N23 N43 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp864&r=his |
| By: | Michael T. Owyang; Valerie A. Ramey; Sarah Zubairy |
| Abstract: | A key question that has arisen during recent debates is whether government spending multipliers are larger during times when resources are idle. This paper seeks to shed light on this question by analyzing new quarterly historical data covering multiple large wars and depressions in the U.S. and Canada. Using an extension of Ramey’s (2011) military news series and Jordà’s (2005) method for estimating impulse responses, we find no evidence that multipliers are greater during periods of high unemployment in the U.S. In every case, the estimated multipliers are below unity. We do find some evidence of higher multipliers during periods of slack in Canada, with some multipliers above unity. |
| JEL: | E62 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18769&r=his |
| By: | Marc Flandreau (Graduate Institute of International Studies) |
| Abstract: | This paper unpacks the operation of foreign debt bondholder committees before the creation of the British Corporation of Foreign Bondholders (CFB) in 1868. I argue that many ideas about this period need to be revisited. In particular, my evidence (which uses archival work to describe market microstructures) shows the importance of the London Stock Exchange as a Court of Arbitration. I show how the LSE General Purpose Committee set up a system of Collective Action Clauses, requiring majority agreement among bondholders to sanction a restructuring deal and permit market access. I argue that (unlike what research has argued thus far) this created powerful incentives for bondholders to get organized as they did. Previous models and formal analyses need to be recast. The CFB appears to have been an experiment in statutory restructurings rather than one in coordination. |
| Date: | 2013–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp01-2013&r=his |
| By: | Yalcintas, Altug |
| Abstract: | In this essay, I quantitatively analyze the significance of scholarship in economic philosophy since the 1960s. In order to do so, I examine, through the number of publications and citations, the evolution of the main trends in economic philosophy over a fifty years period. This paper will develop a better conception of how the pathways of major debates, in particular rhetoric of economics (RoE) versus realism in economics (RiE), helped economic philosophy achieve its present status in economics. Viewed through this lens, it is clear that the main trends in the recent history of the discipline have emerged out of the concerns of non-mainstream economists since the 1980s. |
| Keywords: | rhetoric of economics; realism in economics; bibliometric analysis |
| JEL: | B25 B24 B41 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44191&r=his |
| By: | Gergely Ujhelyi (University of Houston) |
| Abstract: | This paper studies the policy impact of civil service regulations, exploiting reforms undertaken by US state governments throughout the 20th century. These reforms replaced political patronage with a civil service recruited based on merit and protected from politics. I find that state politicians respond to these changes by spending relatively less through the reformed state-level bureaucracies. Instead, they allocate more funds to lower level governments. The reallocation of expenditures leads to reduced long-term investment by state governments. |
| Keywords: | civil service rules, bureaucracy, intergovernmental transfers, patronage |
| JEL: | H11 H72 |
| Date: | 2013–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:hou:wpaper:201303249&r=his |
| By: | Quamrul Ashraf; Stelios Michalopoulos |
| Abstract: | This research examines variations in the di¤usion of agriculture across countries and archaeological sites. The theory suggests that a society?s history of climatic shocks shaped the timing of its adoption of farming. Speci?cally, as long as climatic disturbances did not lead to a collapse of the underlying resource base, the rate at which foragers were climatically propelled to experiment with their habitats determined the accumulation of tacit knowledge complementary to farming. Thus, di¤erences in climatic volatility across hunter-gatherer societies gave rise to the observed spatial variation in the timing of the adoption of agriculture. Consistent with the proposed hypothesis, the empirical investigation demonstrates that, conditional on biogeographic endowments, climatic volatility has a non-monotonic e¤ect on the timing of the adoption of agriculture. Farming di¤used earlier across regions characterized by intermediate levels of climatic ?uctuations, with those subjected to either too high or too low intertemporal variability transiting later. |
| Keywords: | Hunting and gathering, agriculture, Neolithic Revolution, climatic volatility, Broad Spectrum Revolution, technological progress |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2013-3&r=his |
| By: | Philip Osafo-Kwaako; James A. Robinson |
| Abstract: | In this paper we investigate the empirical correlates of political centralization using data from the Standard Cross-Cultural Sample. We specifically investigate the explanatory power of the standard models of Eurasian state formation which emphasize the importance of high population density, inter-state warfare and trade as factors leading to political centralization. We find that while in the whole world sample these factors are indeed positively correlated with political centralization, this is not so in the African sub-sample. Indeed, none of the variables are statistically related to political centralization. We also provide evidence that political centralization, where it took place, was indeed associated with better public goods and development outcomes. We conclude that the evidence is quite consistent with the intellectual tradition initiated in social anthropology by Evans-Pritchard and Fortes in the 1940s which denied the utility of Eurasian models in explaining patterns of political centralization in Africa. |
| JEL: | N17 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18770&r=his |
| By: | Stéphane Auray (ENSAI); Aurélien Eyquem (Université de Lyon); Frédéric Jouneau-Sion (Université de Lille) |
| Abstract: | In this paper, we bridge economic data and climatic time series to assess the vulnerability of a pre-industrial economy to changes in climatic conditions. We propose an economic model to extract a measure of total productivity from English data (real wages and land rents) in the pre-industrial period. This measure of total productivity is then related to temperatures and precipitations. We find that lower (respectively higher) than average precipitations (respectively temperatures) enhance productivity. Further, temperatures have non-linear effects on productivity: large temperature variations lower productivity. Quantitatively, a permanent two degree rise in temperatures lowers the level of productivity by more than 22%, and production by more than 26%. This historical impact evaluation may serve as an informative benchmark for currently under-developed economies in front of the upcoming climatic change |
| Keywords: | Climatic conditions TFP shocks, land rent |
| JEL: | C22 N13 O41 Q54 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2012-31&r=his |
| By: | Poomjai Nacaskul (Bank of Thailand); Kritchaya Janjaroen (Bank of Thailand); Suparit Suwanik (Bank of Thailand) |
| Abstract: | The late-2000s global financial crisis saw increased public profiles and balance sheets of both the US and European central banks, their combined series of financial rescue measures in effect pushing the envelope of central banking modus operandi. And in general, somewhat anecdotally amongst non-crisis Asia-Pacific/emerging economies, central banks are under increased pressure to pursue growth agenda, or at least being publicly called to task as to whether strict inflation regime is all that necessary. All the while, orthodox economics appear to be bursting at the seams, as the world witnesses extreme financial-capital market events increasingly becoming the ‘new normal’, globalised banking system portending knife-edged stability dynamics consistent with high degree of epidemic, network-like systemic interconnectivities, and global catastrophe phenomena reflecting energy/ecological/environmental imbalances more and more frequently materialising as economic disequilibria. Taken together, it is only becoming more difficult to reconcile historical evolution of central banks (the institutions) and central banking (the mandate) with ever mounting stabilisation policy demands and global ‘mega-trend’ challenges over the next decades. This essay details our positive and normative analysis and posits our conceptual arguments concerning the very essence of central banks (the institutions) and central banking (the discipline). We begin with Historical Evolution, from the genesis of early ‘proto’ central banks to the emergence of modern consensus on central banking. Stylised facts and conceptual schemas drawn from that exercise then enables us to formulate the notion of Policy Space as a generalization of central bank role and responsibility. We then employ economic rationales to argue for and advocate key elements and principles in terms of Institutional Integrity as an imperative foundation for the pursuit of policy goals. The emerging evolutionary perspective also compels us to postulate a number of Paradigm Challenges facing current and future generations of central bankers. |
| Keywords: | Economic Rationales for Central Banking |
| JEL: | B52 E02 E52 E58 E61 N4 |
| Date: | 2012–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:bth:wpaper:2012-04&r=his |
| By: | Benjamin Volland |
| Abstract: | The question whether alcohol in general, and different types of alcoholic beverages in particular (e.g., beer) are normal or inferior goods is a heavily disputed issue within economics and health research. Based on recently developed theories of preference adjustment this paper argues that the answer to this question may not be independent of the level of income itself. It therefore applies a gradual switching regression approach to aggregate beer consumption data in Germany from 1957 to 2007. This method allows elasticities to change over time, without prior specifications of the time and speed of adjustments. Results suggest that an important behavioral change is present in the data, as elasticities of beer demand shifted considerably between 1965 and 2004. In particular, they demonstrate that over this period beer shifted from being a normal to being an inferior good. |
| Keywords: | Beer demand, Inferior goods, Gradual switching regression |
| JEL: | D10 C22 |
| Date: | 2013–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2012-19&r=his |
| By: | Philippe Aghion (Harvard University); Antoine Dechezleprêtre (Grantham Research Institute on Climate Change and the Environment and Centre for Economic Performance, London School of Economics); David Hemous (INSEAD); Ralf Martin (Imperial College Business School and Centre for Economic Performance, London School of Economics); John Van Reenen (Centre for Economic Performance, London School of Economics and NBER) |
| Abstract: | Can directed technical change be used to combat climate change? We construct new firm-level panel data on auto industry innovation distinguishing between “dirty” (internal combustion engine) and “clean” (e.g. electric and hybrid) patents across 80 countries over several decades. We show that firms tend to innovate relatively more in clean technologies when they face higher tax-inclusive fuel prices. Furthermore, there is path dependence in the type of innovation both from aggregate spillovers and from the firm's own innovation history. Using our model we simulate the increases in carbon taxes needed to allow clean to overtake dirty technologies. |
| Keywords: | Climate Change, Innovation, Directed Technical Change, Automobiles |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.99&r=his |