nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2013‒04‒13
38 papers chosen by
Bernardo Batiz-Lazo
Bangor University

  1. Did Muhammad Ali Foster Industrialization in Early 19th Century Egypt? By Panza, Laura; Williamson, Jeffrey G
  2. Literacy at South African Mission Stations By Johan Fourie; Robert Ross; Russel Viljoen
  3. Competing Bimetallic Ratios: Amsterdam, London and Bullion Arbitrage in the Mid-18th Century By Nogues-Marco, Pilar
  4. The Commodity Export, Growth, and Distribution Connection in Southeast Asia 1500-1940 By Williamson, Jeffrey G
  5. World Human Development: 1870-2007 By Prados de la Escosura, Leandro
  6. Great Leap, Great Famine By Cormac Ó Gráda
  7. War, Conquest and Local Merchants: The Role of Credit in the Peripheral Military Administration of the Hispanic Monarchy during the First Half of the Sixteenth Century. By Jose Miguel Escribano Paez
  8. The entrepreneur in economic theory: from an invisible man toward a new research field By Vera Catarina Rocha
  9. Women, Medieval Commerce, and the Education Gender Gap By Bertocchi, Graziella; Bozzano, Monica
  10. Macroculture, Athletics and Democracy in ancient Greece By Economou, Emmanouel/Marios/Lazaros; Kyriazis, Nicholas
  12. The Transmission of Democracy: From the Village to the Nation-State By Giuliano, Paola; Nunn, Nathan
  13. In the Name of the Son (and the Daughter): Intergenerational Mobility in the United States, 1850-1930 By Olivetti, Claudia; Paserman, M. Daniele
  14. Politics on the road to the U.S. monetary union By Peter L. Rousseau
  15. What is a civil war ? a critical review of its definition and (econometric) consequences By Gersovitz, Mark; Kriger, Norma
  16. Fiscal Policy in a Depressed Economy: Was There a 'Free Lunch' in 1930s' Britain? By Crafts, Nicholas; Mills, Terence C
  17. How Cardinal Utility Entered Economic Analysis during the Ordinal Revolution By Moscati Ivan
  18. Does The John Bates Clark Medal Boost Subsequent Productivity And Citation Success? By Ho Fai Chan; Bruno S. Frey; Jana Gallus; Benno Torgler
  19. The Alpha of a Survey of the Literature in Economic and Financial Literacy By William T. Alpert; Oskar R. Harmon
  20. The Trade Impact of the Zollverein By Keller, Wolfgang; Shiue, Carol Hua
  21. The history augmented Solow model By Dalgaard, Carl-Johan; Strulik, Holger
  22. Emerging Geopolitical Trends and Security in the Association of Southeast Asian Nations, the People’s Republic of China, and India (ACI) Region By C. Raja Mohan
  23. A Review of C.L.R. James and Marxism in the United States By Conrad, Daren A.
  24. Reallocation and Technology: Evidence from the U.S. Steel Industry By Collard-Wexler, Allan; De Loecker, Jan
  25. La reinvención de Medellín By Andrés Sánchez Jabba
  26. Pearls worth Rds4000 or less: Reinterpreting eighteenth century sumptuary laws at the Cape By Stan Du Plessis
  27. ¿Habrá una segunda oportunidad sobre la tierra? Instituciones coloniales y disparidades económicas regionales en Colombia By Laura Cepeda Emiliani; Adolfo Meisel Roca
  28. Not the Opium of the People: Income and Secularization in a Panel of Prussian Counties By Becker, Sascha O.; Woessmann, Ludger
  29. 50 is the new 30: Long-run trends of schooling and retirement explained by human aging By Strulik, Holger; Werner, Katharina
  30. Like Father like Sons? The Cost of Sovereign Defaults In Reduced Credit to the Private Sector By Esteves, Rui; Jalles, João Tovar
  31. "The U.S. Trade Adjustment Assistance after WWII" (in Japanese) By Junko Watanabe
  32. Growth and crisis in the Japanese economy By Valli Vittorio
  33. Comerciantes en economías de frontera: El caso de La Guajira Colombiana, 1870-1930 By Joaquín Viloria de La Hoz
  34. Persistent effects of empires: Evidence from the partitions of Poland By Grosfeld, Irena; Zhuravskaya, Ekaterina
  35. The Settlement of the United States, 1800 to 2000: The Long Transition towards Gibrat's Law By Desmet, Klaus; Rappaport, Jordan
  36. Gravity Modeling: International Trade and Innovations By Josheski, Dushko; Fotov, Risto
  37. Agricultural Price Distortions: Trends and Volatility, Past and Prospective By Anderson, Kym
  38. Agricultural policy in the European Union: An overview By Tangermann, Stefan; von Cramon-Taubadel, Stephan

  1. By: Panza, Laura; Williamson, Jeffrey G
    Abstract: Muhammad Ali, who ruled Egypt between 1805 and 1849, intervened in Egyptian markets in an attempt to foster industrialization, especially between 1812 and 1840. Like a modern marketing board, the state purchased agricultural commodities (cotton, wheat) at low prices and sold them on world markets at much higher prices, a policy equivalent to an export tax. Ali also replaced tax farming with his own land taxes. The revenues so derived were used in part to finance manufacturing investment and to build irrigation canals. In addition, Ali supplied flax and cotton at those cheap purchase prices to domestic textile manufacturing, thus subsidizing the industry. He also used non-tariff barriers to exclude foreign competition from domestic markets. Were Ali’s state-led policies successful in fostering industry? The answer is no easier to extract from this phase of Egyptian history than from other poor countries at that time since Egypt faced the same terms of trade boom typical of most poor commodity exporters – Egyptian export commodity prices soared relative to manufactured imports, forces that were causing de-industrialization everywhere else in the poor periphery. Ali picked a very difficult time to pursue his agenda, but we show that his policies were successful.
    Keywords: 19th century; de-industrialization; Egypt; industrial policy; trade
    JEL: F1 N7 O2
    Date: 2013–02
  2. By: Johan Fourie (Department of Economics, University of Stellenbosch); Robert Ross (Deapertments of History, Universities of Leiden and South Africa); Russel Viljoen (Department of History, University of South Africa)
    Abstract: Measures of education quality – primarily, years of schooling or literacy rates – are widely used to ascertain the contribution of human capital formation to long-run economic growth and development. This paper, using a census of 4,678 mission station residents, documents for the first time literacy and numeracy rates of non-white citizens in nineteenth-century South Africa. The 1849 census allows for an investigation into how the mission stations influenced the growth of literacy in the Cape Colony. We find that age, gender, duration of residence, whether the individual arrived at the station after the emancipation of slaves or was born there and, importantly, which missionary society was operating the station, matter for literacy performance. The results offer 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 development of a colonial society.
    Keywords: human capital, South Africa, missionary, literacy, age-heaping
    JEL: N37
    Date: 2013
  3. By: Nogues-Marco, Pilar
    Abstract: This article analyzes the stability of bimetallism for countries operating in integrated bullion markets who enact different legal ratios. I articulate a new theoretical framework to demonstrate that two countries can both be bimetallic only if they coordinate their legal ratios. The theoretical framework is applied to the mid-18th century when London’s legal ratio was 3.8% higher than that of Amsterdam. I find that Amsterdam was effectively on the bimetallic standard, whereas London was on a de facto gold standard.
    Keywords: arbitrage; bimetallic stability; bullion market integration; melting-minting points; monetary policy; specie-point mechanism
    JEL: E42 F15 N13 N23
    Date: 2013–01
  4. By: Williamson, Jeffrey G
    Abstract: This paper explores Southeast Asia's trade performance over the four and a half centuries from 1500 to 1940. It identifies the determinants of the commodity export performance – falling trade costs, income growth of its trading partners, and improved supply conditions at home. It also explores its impact on Southeast Asia's growth performance: trade specialization generated more macro volatility, de-industrialization, rising colonial power, and greater inequality up to World War 1, but these forces turned around in the region thereafter, including some modest industrial Catch-up. Finally, the paper elaborates on the distributional impact and colonial profitability of commodity export booms and busts throughout the last century.
    Keywords: commodities; development; distribution; southeast Asia; trade
    JEL: F14 N15 O53
    Date: 2013–02
  5. By: Prados de la Escosura, Leandro
    Abstract: How has wellbeing evolved over time and across regions? How does the West compare to the Rest? What explains their differences? These questions are addressed using an historical index of human development. A sustained improvement in wellbeing has taken place since 1870. The absolute gap between OECD and the Rest widened over time, but an incomplete catching up –largely explained by education- has occurred since 1913 but fading away after 1970, when the Rest fell behind the OECD in terms of longevity. As the health transition was achieved in the Rest, the contribution of life expectancy to human development improvement declined. Meanwhile, in the OECD, as longevity increased, healthy years expanded. A large variance in human development is noticeable in the Rest since 1970, with East Asia, Latin America and North Africa catching up to the OECD, while Central and Eastern Europe and Sub-Saharan Africa falling behind.
    Keywords: Education; HDI; Human Development; Life Expectancy; Wellbeing
    JEL: I00 N30 O15 O50
    Date: 2013–01
  6. By: Cormac Ó Gráda (University College Dublin)
    Abstract: The paper is an extended review of two recent books on the Great Chinese Famine of 1959-61
    Keywords: : famine, Maoism, development
    Date: 2013–03–28
  7. By: Jose Miguel Escribano Paez (European University Institute.)
    Abstract: During the early modern period the European Monarchies were expanding geographically and politically. Despite the importance of the military campaigns the challenge was, however, not in conquering independent polities but in keeping them. For that reason the mobilization of resources to maintain the war effort was especially important and the members of the different military administrations were frequently obliged to obtain loans from the local merchants and financiers of the recently conquered communities. The reputation or 'credit' (the term employed to designate the borrower's trustworthiness) of these monarchical agents in charge of the organization and funding of the military campaigns played a key role in the mobilization of local resources to maintain these conquests. Through a micro-historical analysis of some local loans negotiated during this period, I will analyse the credit assessment around these loans as conditioned by information about past conducts, future rewards and individual credibility. In doing so, we can realise the complexity of this reputation-based credit-assessment and reconstruct the different meanings of reputation that they handled.
    Keywords: Credit, reputation, finances, military administration, conquests, Hispanic Monarchy, Sixteenth-Century.
    JEL: N73 N83 N93
    Date: 2012–09–04
  8. By: Vera Catarina Rocha (CEF.UP, FEP; CIPES)
    Abstract: Mainstream economics had great difficulty in fitting entrepreneurship into its theory and for long time the theoretical firm remained “entrepreneurless”. However, from the early 20th century onwards, we identify strong attempts of key economists to recognize the role of the entrepreneur as an explanatory force of several economic phenomena. This paper analyzes the evolution of economic thought on entrepreneurship, and in particular the path through which the entrepreneur (re)entered into economic theory over the 20th century, leading to the new and increasingly independent research field Economics of Entrepreneurship. The analysis goes through the main Economics fields where the (re)discover of the entrepreneur figure was most remarkable - namely Labor Economics, Microeconomics and Industrial Organization, and Economic Growth and Development - searching for the rationality to include the entrepreneur figure into the analyses of particular economic phenomena. The study is enriched by a brief bibliometric analysis, which helps to set forth a chronological trace of the entrepreneurship research within Economics literature.
    Keywords: Entrepreneurship, Entrepreneur, Economic Thought, Labor Economics, Industrial Organization, Economic Development and Growth
    JEL: B00 J01 L26 O10
    Date: 2012–05
  9. By: Bertocchi, Graziella; Bozzano, Monica
    Abstract: We investigate the historical determinants of the education gender gap in Italy in the late nineteenth century, immediately following the country’s Unification. We use a comprehensive newly-assembled database including 69 provinces over twenty-year sub-samples covering the 1861-1901 period. We find robust evidence that female primary school attainment, relative to that of males, is positively associated with the medieval pattern of commerce, along the routes that connected Italian cities among themselves and with the rest of the world. The effect of medieval commerce is particularly strong at the non-compulsory upper-primary level and persists even after controlling for alternative long-term determinants reflecting the geographic, economic, political, and cultural differentiation of medieval Italy. The long-term influence of medieval commerce quickly dissipates after national compulsory primary schooling is imposed at Unification, suggesting that the channel of transmission was the larger provision of education for girls in commercial centers.
    Keywords: Education gender gap; family types.; Italian Unification; medieval commerce; political institutions
    JEL: E02 H75 I25 J16 N33 O15
    Date: 2013–02
  10. By: Economou, Emmanouel/Marios/Lazaros; Kyriazis, Nicholas
    Abstract: In the present essay we examine whether and how sports affected the emergence of democracy as a political phenomenon in Classical Greece. To achieve this we introduce in a model the concept of macroculture as a complex of mutually supporting values, norms and beliefs in various areas of human activity, like athletics, war, politics, etc. Then, we proceed through a historical review on the history of sports in Ancient Greece and we investigate various aspects of how and under which terms athletics performed during classical Greece, predominantly, in ancient Athens. We found that the values that gradually emerged through sports during an extended period that goes back as far as the Bronze Age times, led to the development of an environment of mutually supporting norms and values such as equality and trust, that by being correlated and coordinated each other, led to the creation of new values and norms, as the theory of macroculture proposes. We also found that these new values were “diffused” from athletics to the field of politics and played a key role to the emergence of democracy.
    Keywords: Macroculture, sports, democracy, Classical Greece.
    JEL: D71 I28 Z13
    Date: 2012–05–08
  11. By: Mário Graça Moura (FEP.UP); António Almodovar (FEP.UP)
    Abstract: This paper focuses on the gradual decomposition of classical political economy and its transformation into ‘economics’, a process which was to culminate in the conception of ‘theory’ as a mere engine of analysis. Why exactly did modern ‘economics’ become accepted? What was meant to be achieved – and was it? And why did some writers reject both old political economy and modern economics? We intend to contribute to an understanding of these issues by analysing a set of representative histories of economic ideas from this period: those by Luigi Cossa (1880), John Kells Ingram (1915, originally published in 1888), and Charles Gide and Charles Rist (1915).
    Keywords: : History of Economic Thought; Methodology; Classical Economics.
    JEL: B1 B4
    Date: 2012–12
  12. By: Giuliano, Paola; Nunn, Nathan
    Abstract: We provide evidence that a history of democracy at the local level is associated with contemporary democracy at the national level. Auxiliary estimates show that a tradition of local democracy is also associated with attitudes that favor democracy, with better quality institutions, and higher level of economic development.
    Keywords: democracy; historical persistence; local institutions
    JEL: N30 P0 Z1
    Date: 2013–01
  13. By: Olivetti, Claudia; Paserman, M. Daniele
    Abstract: This paper provides a new perspective on intergenerational mobility in the United States in the late 19th and early 20th centuries. We devise an empirical strategy that allows to calculate intergenerational elasticities between fathers and children of both sexes. The key insight of our approach is that the information about socioeconomic status conveyed by first names can be used to create a pseudo-link not only between fathers and sons, but also between fathers and daughters. The latter is typically not possible with historical data. We find that the father-son elasticity in economic status grows throughout the sample period. Intergenerational elasticities for daughters follow a broadly similar trend, but with some differences in timing. We argue that most of the increase in the intergenerational elasticity estimate in the early part of the 20th Century can be accounted for by the vast regional disparities in economic development, with increasing returns to human capital contributing to explain the residual. Other mechanisms such as changes in fertility, migration, and investment in public schooling, appear to have had only a minor role in explaining the trends.
    Keywords: Intergenerational Mobility; Marriage
    JEL: J11 J62 N31
    Date: 2013–03
  14. By: Peter L. Rousseau (Vanderbilt University)
    Abstract: Is political unity a necessary condition for a successful monetary union? The early United States seems a leading example of this principle. But the view is misleadingly simple. I review the historical record and uncover signs that the United States did not achieve a stable monetary union, at least if measured by a uniform currency and adequate safeguards against systemic risk, until well after the Civil War and probably not until the founding of the Federal Reserve. Political change and shifting policy positions end up as key factors in shaping the monetary union that did ultimately emerge.
    Keywords: colonial currency, Bank of the United States, Jacksonian monetary policy, free banking, National Banking System, Federal Reserve System
    JEL: N1 N2
    Date: 2013–03–25
  15. By: Gersovitz, Mark; Kriger, Norma
    Abstract: The authors argue that the academic literature, both qualitative and quantitative, has mislabeled most episodes of large-scale violence in Africa as civil war; these episodes better fit their concept of regional war complexes. The paper seeks to highlight the fundamental flaws in the conception of civil war in the econometric literature and their implications for econometric specification and estimation, problems that this literature is inherently incapable of rectifying. The authors advocate the comparative study of regional war complexes in Africa based on historical narratives.
    Keywords: Post Conflict Reconstruction,Peace&Peacekeeping,Post Conflict Reintegration,International Affairs,Hazard Risk Management
    Date: 2013–04–01
  16. By: Crafts, Nicholas; Mills, Terence C
    Abstract: We report estimates of the fiscal multiplier for interwar Britain based on quarterly data and time-series econometrics. We find that the government-expenditure multiplier was in the range 0.3 to 0.9 even during the period when interest rates were at the lower bound. The scope for a 'Keynesian solution' to recession was much less than is generally supposed. In the later 1930s but not before Britain's exit from the gold standard, there was a 'fiscal free lunch' in the sense that deficit-financed government spending would have improved public finances enough to pay for the interest onthe extra debt.
    Keywords: defence news; Keynesian solution; multiplier; public works; self-defeating austerity
    JEL: E62 N14
    Date: 2013–01
  17. By: Moscati Ivan (University of Turin)
    Abstract: The paper shows that cardinal utility entered economic analysis during the Ordinal Revolution initiated by Pareto and not, as many popular histories of utility theory assume, before it. Cardinal utility was the outcome of a discussion begun by Pareto about the capacity of ranking transitions among different combinations of goods. The discussion simmered away during the 1920s and early 1930s, underwent a decisive rise in temperature between 1934 and 1938, and continued with some final sparks until 1944. The paper illustrates the methodological and analytical issues and the measurement-theoretic problems, as well as the personal and institutional aspects that characterized this debate. Many eminent economists of the period contributed to it, with Samuelson in particular playing a pivotal role in defining and popularizing cardinal utility. Based on archival research in Samuelson’s papers at Duke University, the paper also addresses an issue of priority associated with the mathematical characterization of cardinal utility.
    Date: 2013–01
  18. By: Ho Fai Chan; Bruno S. Frey; Jana Gallus; Benno Torgler
    Abstract: Despite the social importance of awards, they have been largely disregarded by academic research in economics. This paper investigates whether a specific, yet important, award in economics, the John Bates Clark Medal, raises recipients’ subsequent research activity and status compared to a synthetic control group of nonrecipient scholars with similar previous research performance. We find evidence of positive incentive and status effects that raise both productivity and citation levels.
    Keywords: Awards, Incentives, Research, John Bates Clark Medal, Synthetic control method
    JEL: A13 C23 M52
    Date: 2013–03–14
  19. By: William T. Alpert (University of Connecticut); Oskar R. Harmon (University of Connecticut)
    Abstract: There is a century long history of economic and financial education laced with implications for both political civic education. It has been argued by some economists that since economics is based on rational self-interested “agents” we don’t need to teach economics at the undergraduate level all. This paper offers a brief review of the literature from the K- college results of economic and financial education extending the survey to the more recent attempts at public financial and economic education. In the review we try to highlight both the results and types of approaches. We then identify some of the areas in which the relatively new areas of behavioral and experimental economics are relevant to economic and financial literacy efforts. We speculate on how these findings may effect economic and financial literacy efforts in the future. JEL Classification: A20, A21, A22, A29
    Keywords: Financial literacy, economic literacy, economic education, financial education
    Date: 2013–03
  20. By: Keller, Wolfgang; Shiue, Carol Hua
    Abstract: The Zollverein was arguably the most important free-trade agreement of the 19th century. This paper investigates the economic impact of the Zollverein on trade in Germany. Although 1834 is the official date of the Zollverein's establishment, member states in fact joined in a non-random sequence over several decades. This was because the benefits of becoming a member increased, both as the size of the union increased, and as membership in the union became increasingly important for accessing foreign markets. Our key innovation in this paper is to incorporate the endogenous effects of accession into an estimate of the economic impact of the Zollverein customs union. We find these effects are important--our estimated effects are several times larger than the simpler estimates that do not take these effects into account. The paper discusses the implications of this for Germany's economic history as well as for other studies of trade liberalization.
    Keywords: customs union; market integration; price convergence
    JEL: N73
    Date: 2013–03
  21. By: Dalgaard, Carl-Johan; Strulik, Holger
    Abstract: Unified growth theory predicts that the timing of the fertility transition is a key determinant of contemporary comparative development, as it marks the onset of the take-off to sustained growth. Neoclassical growth theory presupposes a take-off, and explains comparative development by variations in (subsequent) investment rates. The present analysis integrates these two perspectives empirically, and shows that they together constitute a powerful predictive tool vis-a-vis contemporary income differences. --
    Keywords: comparative development,unified growth theory,neoclassical growth theory
    JEL: O11 O57
    Date: 2013
  22. By: C. Raja Mohan (Asian Development Bank Institute (ADBI))
    Abstract: The rapid economic growth in the region consisting of the Association of Southeast Asian Nations (ASEAN), the People’s Republic of China (PRC), and India has begun to change the strategic landscape of the world. The accretion of military power that inevitably followed the region’s economic growth is altering the balance of power within the region and between Asia and the West. This background paper outlines the geopolitical trends in a region that has become the center stage of international politics in the 21st century. It begins with a review of the idea of Asia in the 20th century and identifies the inherited political legacy of Asia in the middle of the 20th century. The paper then provides an assessment of the region’s unfolding geopolitical transformation in recent years and asks if the regional structures in Asia can cope with it. The paper also explores the problems of integrating the two rising Asian powers, the PRC and India, into the structures of global governance. It concludes with a brief discussion on the strategic policy imperatives facing the ACI region.
    Keywords: ASEAN, China, India, geopolitical trends, international politics, geopolitical transformation
    JEL: F59
    Date: 2013–03
  23. By: Conrad, Daren A.
    Abstract: The purpose of this paper is to investigate the influence on the theoretical dimension of Marxism, advanced by Cyril Lionel Robert James, on the struggles in the United States in the 1960s and 1970s and to explore the influence that this intellectual had in the development of an understanding of Marxism in the U.S. during this period. In order to do so, it is important to chronologically follow James’s life. For the purpose of this paper, I will discuss some of the aspects of James’s Marxism which will allow us to see how he shaped his thoughts as a Marxist and the extent to which he was able to put his theories into practice. A fragment of James’s autobiography serves as a useful illustration: I had been reading…But the people who had passion, human energy, anger, violence and generosity were the common people whom I saw around me. They shaped my political outlook and from that day to this day those are the people with who I am concerned the most. That’s why I was able to understand Marx very easily, and particularly Lenin. When I went into Marxism I was already well prepared…Even in my days of fiction I had the instinct which enable me to grasp the fundamentals of Marxism so easily and then to work at Marxism having the basic elements of a Marxist view – my concern with the common people. James’s method was more or less empirical and his observations formed the basis for his exploration of ideas.
    Keywords: Marxism, CLR James
    JEL: B0 B00 B10
    Date: 2013–04–09
  24. By: Collard-Wexler, Allan; De Loecker, Jan
    Abstract: We measure the impact of a drastic new technology for producing steel, the minimill, on the aggregate productivity of U.S. steel producers, using unique plant-level data between 1963 and 2002. We find that the sharp increase in the industry's productivity is linked to this new technology, and operates through two distinct mechanisms. First, minimills displaced the older technology, called vertically integrated production, and this reallocation of output was responsible for a third of the increase in the industry's productivity. Second, increased competition, due to the expansion of minimills, drove a substantial reallocation process within the group of vertically integrated producers, driving a resurgence in their productivity, and consequently of the industry's productivity as a whole.
    Keywords: competition; productivity; reallocation; technology
    JEL: L1 O3
    Date: 2013–02
  25. By: Andrés Sánchez Jabba
    Abstract: Medellin, the second most important amongst Colombian cities, was once the country’s main industrial hub. This success was based on the rise of its textile cluster, which constituted the primary source of urban economic growth during most of the twentieth century. However, excessive specialization in textile production generated a sharp industrial crisis associated to the commercial liberalization of the 1990’s. On the other hand, the emergence of organized drug trafficking significantly increased the levels of violence. The combination between these two factors triggered a profound urban crisis, characterized by institutional instability. Although this distressing scene seemed difficult to revert, Medellin figured out how to reinvent itself: violence decreased, social and economic indicators improved and the city decided to orient urban economic development towards the generation of knowledge and high tech products and services. This represents a new urban strategy which relies on the intensive use of technology and requires an increased level of innovation and human capital, aspects that favor economic growth and the generation of wealth. RESUMEN: En este trabajo se analiza la evolución reciente de la economía de Medellín, una de las principales ciudades colombianas. Con la adopción del modelo de industrialización por sustitución de importaciones esta urbe se convirtió en el centro industrial más importante del país. Esto se debió al surgimiento de su aglomerado textil, el cual fue la fuente de crecimiento económico urbano durante gran parte del siglo XX. Sin embargo, el excesivo grado de especialización en la producción textil generó una profunda crisis industrial cuando inició el proceso de liberalización comercial en la década de 1990. Adicionalmente, el surgimiento del narcotráfico incrementó considerablemente los niveles de violencia. La combinación de estos dos factores dejó a la ciudad sumida en una profunda crisis urbana hacia finales del siglo XX, caracterizada por la inestabilidad institucional. Aunque este desolador panorama parecía difícil de revertir, Medellín supo reinventarse: los niveles de violencia disminuyeron, los indicadores sociales y económicos mejoraron y la ciudad buscó el resurgimiento urbano orientando su economía hacia la generación de conocimiento apalancado en la innovación y el uso intensivo de la tecnología. Esta última representa una nueva estrategia urbana, consistente con las nuevas condiciones y que puede ayudar a generar una mayor riqueza y desarrollo económico.
    Date: 2012–10–17
  26. By: Stan Du Plessis
    Abstract: Governor Ryk Tulbagh promulgated sumptuary laws at the Cape in 1755. Umbrellas could no longer be carried freely by all classes, silk dresses of a certain length could not be worn by ladies without regard to rank, and the value of pearl necklaces was strictly limited. These laws have often been interpreted as an attempt to maintain a social hierarchy (e.g. Ross 1990), a “defence against emulation†in the words of De Vries (2008). But the standard explanation leaves something to be desired: it does not engage with the economic motivation for sumptuary laws that influenced similar regulations in Europe and Asia at the time, nor does it explain why the VOC would legislate in the Cape what the Dutch never tolerated at home, and it seamlessly extrapolates the explanation for laws in Batavia to a different social and economic setting in the Cape. An alternative interpretation of Tulbagh’s sumptuary laws is developed in this paper, which draws on evidence from the Cape and from Batavia. Their economic causes are sought in the East, where the laws originated, while their social reception and their impact are sought in the records of the Cape. In this way the paper provides a new interpretation of the causes underlying the sumptuary laws of 1755 and their role as instruments of economic and social policy.
    Keywords: Sumptuary laws, Cape colony in the 18th century, Dutch East India Company
    Date: 2013
  27. By: Laura Cepeda Emiliani; Adolfo Meisel Roca
    Abstract: In this paper we analyze the colonial origins of the current economic inequalities among the regions of Colombia. The next section reviews the recent literature of the new institutional economic history on the intercountry and interregional economic inequalities observed in the Americas. The major geographical aspects of the Colombian territory are discussed, since together with institutions geography is considered to be a key determinant of economic prosperity in the long run. A simple model relating prosperity with a proxy for institutions and geographical variables was estimated for the cities with more than 100.000 inhabitants. In the final comments we discuss one of the main options for the advancement of regions which have a “bad colonial history” in comparison with other regions in the same country. RESUMEN: En este trabajo se analizan los orígenes coloniales de las desigualdades económicas entre las regiones de Colombia. Se hace una revisión de los estudios más recientes en la tradición de la nueva historia institucional para tratar de entender cómo las instituciones coloniales llevaron a las enormes desigualdades territoriales que hoy se observan en los países americanos. Se presentan los aspectos más sobresalientes de la geografía física colombiana, ya que la geografía y las instituciones son consideradas como las bases últimas de las desigualdades económicas entre las regiones. Se realiza un sencillo análisis econométrico para relacionar los niveles de pobreza observados en las ciudades colombianas de más de 100.000 habitantes con una proxy de instituciones coloniales y una medida de características geográficas. En las reflexiones finales se discute una de las opciones más claras que tienen las regiones de un país que tienen una “mala historia colonial” para poder superar esa situación: la inversión en capital humano.
    Date: 2013–03–12
  28. By: Becker, Sascha O.; Woessmann, Ludger
    Abstract: The interplay between religion and the economy has occupied social scientists for long. We construct a unique panel of income and Protestant church attendance for six waves of up to 175 Prussian counties spanning 1886-1911. The data reveal a marked decline in church attendance coinciding with increasing income. The cross-section also shows a negative association between income and church attendance. But the association disappears in panel analyses, including first- differenced models of the 1886-1911 change, panel models with county and time fixed effects, and panel Granger-causality tests. The results cast doubt on causal interpretations of the religion- economy nexus in Prussian secularization.
    Keywords: Prussian economic history; Religion; secularization
    JEL: N33 Z12
    Date: 2013–01
  29. By: Strulik, Holger; Werner, Katharina
    Abstract: Workers in the US and other developed countries retire no later than a century ago and spend a significantly longer part of their life in school, implying that they stay less years in the work force. The facts of longer schooling and simultaneously shorter working life are seemingly hard to square with the rationality of the standard economic life cycle model. In this paper we propose a novel theory, based on health and aging, that explains these long-run trends. Workers optimally respond to a longer stay in a healthy state of high productivity by obtaining more education and supplying less labor. Better health increases productivity and amplifies the return on education. The health accelerator allows workers to finance educational efforts with less forgone labor supply than in the previous state of shorter healthy life expectancy. When both life-span and healthy life expectancy increase, the health effect is dominating and the working life gets shorter if the preference for leisure is sufficiently strong or the return on education is sufficiently large. We calibrate an extended version of the model and show that it is capable to predict the historical trends of schooling and retirement. --
    Keywords: healthy life expectancy,longevity,education,retirement,labor supply,compression of morbidity
    JEL: E20 I25 J22 O10 O40
    Date: 2013
  30. By: Esteves, Rui; Jalles, João Tovar
    Abstract: This paper investigates the impact of sovereign defaults on the ability of the corporate sector in emerging nations to finance itself abroad. The hypothesis here is that defaults have a negative spillover effect on the private sector through credit rationing. We explore a novel dataset covering the vast majority of corporates and municipals in emerging nations that received foreign capital between 1880 and 1913. The detailed nature of the data allows us to explore variation between countries and economic sectors. The results confirm that rationing existed, was very large, and persisted long beyond the solution of the original default problem. Therefore, the private sector in emerging countries paid a severe reputational cost for the debt intolerance of their governments, with possible implications for the growth prospects of these nations.
    Keywords: Credit Rationing; Foreign Investment; Pre-1914; Sovereign Default
    JEL: F32 F34 H63 N10 N20
    Date: 2013–01
  31. By: Junko Watanabe (Graduate School of Economics and Faculty of Economics, Kyoto University)
    Abstract: This study examines post war U.S. economic policies, focusing on industrial adjustment policies related to trade frictions. In particular, Trade Adjustment Assistance (TAA) policies are reviewed from a historical perspective, from their introduction in 1962 through to the present. From the view of this study, TAA is interpreted as a sort of industrial adjustment policy since it became a means to cope with industrial decline, protectionism under the trade frictions, strengthening competitiveness and relocation of resources to other promising industries. TAA programs offered income support, job training and financial help for relocation to dislocated workers, and financial loan and technical assistance to firms, etc. The findings are as follows. Firstly, it is surprising that TAA policies continued over 50 years, while undergoing changes and transition, even if its legitimacy sometimes came into question. Its scope included not only the 'injury' (e.g. job loss) sustained by the surge in imports but also the 'injury' by the shifting of production abroad. Considering that the U.S. economy has been involved increasingly to the global economy in both trade and direct investment, this is understandable. In addition, the policies related to the TAA such as employment policies and trade policies were also incorporated within TAA. Secondly, although the TAA policies were established as a sort of industrial adjustment policies, the degree of government assistance was not so high in proportion to the U.S. economy. The Americans placed reliance rather on market mechanism and 'self-help' culture. TAA certifications peaked in the latter half of the 1970s and 1980 and the main industries were non-rubber shoes, textile and apparel, steel, automobile and electronics. But in aggregate, the budget scale and the number of users were not so considerable. Regarding the interaction between these economic policies and the market mechanism, further investigation should be conducted.
    Date: 2013–03
  32. By: Valli Vittorio (University of Turin)
    Abstract: Japan’ economy has experienced a period of very rapid economic growth in the 1950-1973 years, a partial slowing down of the rate of growth up to the end of the 1980s and then a prolonged severe structural crisis in the last two decades. The paper gives an overview of Japan’s main economic trends and policies in the post-war period and tries explaining the period of rapid growth and the period of structural crisis with an interpretative framework that can in part account for both phases.
    Date: 2012–04
  33. By: Joaquín Viloria de La Hoz
    Abstract: The main purpose of this article is to analyze the commercial activities in La Guajira, Colombia, as well as the in titutional and geographical constraints traders faced between 1870s and 1930s. The result that La Guajira developed a frontier economy, characterized by a weak institutional presence, economic practices with few state surveillance, wide presence of indigenous population, inhospitable zones for colonization and active trade with neighboring countries. The lack of institutions allowed the traders to grow without further controls. The entrepreneurs and regional leaders, linked to extractive activities such as: salt, pearls and logwood, as well as trade, could not create the adequate institutions and business environment to consolidate the departments economy with a production structure based on endogenous production, competitive companies and a job market adjusted to the national legislation. RESUMEN: El objetivo del presente documento es analizar las actividades comerciales en el territorio de La Guajira colombiana, así como las limitaciones institucionales y naturales a que se vieron sometidos sus comerciantes entre las décadas de 1870 y 1930. El estudio plantea que en La Guajira se desarrolló una economía de frontera, caracterizada por la escasa presencia institucional, prácticas económicas con escasa vigilancia estatal, amplia presencia de población indígena, zonas inhóspitas para la colonización y activo comercio con países vecinos. La falta de Estado permitió que los negociantes adelantaran sus actividades sin mayores controles. Los empresarios y dirigentes regionales vinculados a las actividades extractivas como sal, perlas, palo de tinte, así como al comercio, no pudieron crear las instituciones ni el ambiente empresarial propicio para que en la economía guajira se consolidara un tejido productivo basado en la producción endógena, con empresas competitivas y un mercado de trabajo ajustado a la legislación nacional.
    Date: 2013–02–20
  34. By: Grosfeld, Irena; Zhuravskaya, Ekaterina
    Abstract: We use spatial regression discontinuity analysis to test whether the historical partition of Poland among three empires—Russia, Austria-Hungary, and Prussia—has a persistent effect on political outcomes in contemporary Poland and to examine the channels of this influence. We find that the main difference in voting across Polish territories attributed by many observers to the legacy of empires is driven by omitted variables. However, empires do have a significant causal effect. The lands that belonged to Prussia (compared with those that belonged to Russia) vote more for anticommunist (post-Solidarity) parties. This difference is largely explained by the persistent effect of infrastructure built by Prussians at the time of industrialization. The former Austrian lands (compared with former Russian lands) votes more for religious conservatives and for liberals. The difference in the vote for religious conservatives is explained by persistent differences in church attendance driven by vastly different policies of the two empires toward the Catholic Church. Higher support for liberals on the Austrian side is partly explained by a persistent belief in democracy, which is a legacy of decentralized democratic governance of the Austrian empire.
    Keywords: culture; empires; infrastructure; Partitions of Poland; persistence; Poland
    JEL: O10 P43 P48 P50 Z12
    Date: 2013–03
  35. By: Desmet, Klaus; Rappaport, Jordan
    Abstract: This paper studies the long run development of U.S. counties and metro areas from 1800 to 2000. In earlier periods smaller counties converge whereas larger counties diverge. Over time, due to changes in the age composition of locations and net congestion, convergence dissipates and divergence weakens. Gibrat's law emerges gradually without fully attaining it. Our findings suggest that orthogonal growth is a consequence of reaching a steady state population distribution, rather than an explanation of that distribution. A simple one-sector model, with entry of new locations, a growth friction, and decreasing net congestion closely matches these and related dynamics.
    Keywords: Gibrat's law; growth across space; long-term development; settlement of US; spatial distribution of population
    JEL: N91 N92 O18 R11 R12
    Date: 2013–02
  36. By: Josheski, Dushko; Fotov, Risto
    Abstract: In this paper issue of gravity modeling in international trade has been investigated. Standard gravity equation augmented with other variables to control for transportation cost, whether trade partners are neighbors and whether country is landlocked, or countries participants in trade have had colonial history together. Also in our model we control whether traded commodities are homogenous, differentiated or high tech , as well referenced. Variable to denote technology are :TAI index, which stands for technological achievement index, also variables for creation and diffusion of technology , as measured by the number of patents from the residents and royalty and license fees receipts, by the foreign citizens. Results are as expected and the show that trade is highly dependent on the exporters and importers levels of technology --
    Keywords: gravity model,bilateral trade
    JEL: F11 F41
    Date: 2013–03–26
  37. By: Anderson, Kym
    Abstract: Historically, earnings from farming in many developing countries have been depressed by a pro-urban bias in own-country policies, as well as by governments of richer countries favouring their farmers with import barriers and subsidies. Both sets of policies reduced global economic welfare and agricultural trade, and added to global inequality and poverty. Over the past three decades, much progress has been made in reducing agricultural protection in high-income countries and agricultural disincentives in developing countries. However, plenty of price distortions remain. As well, the propensity of governments to insulate their domestic food market from fluctuations in international prices has not waned. Such insulation contributes to the amplification of international food price fluctuations, yet it does little to advance national food security when food-importing and food-exporting countries equally engage in insulating behaviour. Thus there is still much scope to improve global economic welfare via multilateral agreement not only to remove remaining trade distortions but also to desist from varying trade barriers when international food prices gyrate. This paper summarizes indicators of trends and fluctuations in farm trade barriers before examining unilateral or multilateral trade arrangements, together with complementary domestic measures, that could lead to better global food security outcomes.
    Keywords: export taxation; Farmer protection; food price spikes; trade policy history
    JEL: F13 F14 Q17 Q18
    Date: 2013–01
  38. By: Tangermann, Stefan; von Cramon-Taubadel, Stephan
    Abstract: [Conclusions] All policy making, including for the agricultural sector, is of idiosyncratic nature and differs widely from country to country. However, due to its supra-national dimension the EUs Common Agricultural Policy is a very special case that is in no way even vaguely comparable to the agricultural policy regime in any other part of the world. The specificity of the CAP relates to several factors, including the historical origin, the process of decision making, the financing regime, and the global significance of the EUs agricultural sector. [...] --
    Date: 2013

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