New Economics Papers
on Business, Economic and Financial History
Issue of 2013‒06‒30
fourteen papers chosen by

  1. The High Wage Economy and the Industrial Revolution: A Restatement By Robert C. Allen
  2. Structural change, collective action, and social unrest in 1930s Spain By Jordi Domènech Feliu; Thomas Jeffrey Miley
  3. Siting the New Economic Science: The Cowles Commission's Activity Analysis Conference of June 1949 By Till Dueppe; E. Roy Weintraub
  4. Narrow banking, real estate, and financial stability in the UK, c.1870-2010 By Avner Offer
  5. Party Representation in English and Welsh Constituencies, 1690-1740 By Dan Bogart; Robert Oandasan
  6. The State, Capital and Development in ‘Emerging’ India By Mazumdar, Surajit
  7. Solow’s Harrod: Transforming Cyclical Dynamics into a Model of Long-run Growth By Verena Halsmayer; Kevin D. Hoover
  8. Market potential and city growth: Spain 1860-1960 By Rafael González-Val; Daniel A. Tirado-Fabregat; Elisabet Viladecans-Marsal
  9. Oceanic Travel Conditions and American Immigration, 1890-1914 By Keeling, Drew
  10. Did liberalising English and Welsh bar hours cause traffic accidents? By Colin Green; John Heywood; Maria Navarro Paniagua
  11. Gestión de la propiedad intelectual en las organizaciones. Una revisión de la literatura reciente By Lis-Gutiérrez, Jenny-Paola
  12. Corporate Governance and Leadership : white paper By Patricia Charléty
  13. Export variety, technological content and economic performance: The case of Portugal By Francisco Rebelo; Ester Gomes da Silva
  14. Large global volatility shocks, equity markets and globalisation: 1885-2011 By Arnaud Mehl

  1. By: Robert C. Allen (Dept of Economics and Nuffield College, University of Oxford)
    Abstract: This article responds to Professor Jane Humphries’ critique of my assessment of the high wage economy of eighteenth century British and its importance for explaining the Industrial Revolution. New Evidence is presented to show that women and children participated in the high wage economy. It is also shown that the high wage economy provides a good explanation of why the Industrial Revolution happened in the eighteenth century by showing that increases of women’s wages around 1700 greatly increased the profitability of using spinning machinery. The relationship between the high wage economy of the eighteenth century and the inequality and poverty in Britain in the nineteenth century is explored.
    Date: 2013–06–01
  2. By: Jordi Domènech Feliu; Thomas Jeffrey Miley
    Abstract: The Spanish 2nd Republic (1931-1936) witnessed one of the fastest and deepest processes of popular mobilization in interwar Europe, generating a decisive reactionary wave that brought the country to the Civil War (1936-1939). We show in the paper that both contemporary comment and part of the historiography makes generalizations about the behaviour of the working classes in the period that stress idealistic, re-distributive and even religious motives to join movements of protest. In some other cases, state repression, poverty, and deteriorating living standards have been singled out as the main determinants of participation. This paper uses collective action theory to argue that key institutional changes and structural changes in labour markets were crucial to understand a significant part of the explosive popular mobilization of the period. We argue first that, before the second Republic, temporary migrants had been the main structural limitation against the stabilization of unions and collective bargaining in agricultural labour markets and in several service and industrial sectors. We then show how several industries underwent important structural changes since the late 1910s which stabilized part of the labour force and allowed for union growth and collective bargaining. In agricultural labour markets or in markets in which unskilled temporary workers could not be excluded, unions benefitted from republican legislation restricting temporary migrations and, as a consequence, rural unions saw large gains membership and participation. Historical narratives that focus on state repression or on changes in living standards to explain collective action and social conflict in Spain before the Civil War are incomplete without a consideration of the role of structural changes in labour markets from 1914 to 1931.
    Keywords: Structural change, Social conflict, Labour markets, Spain, Civil War, Interwar Europe, Migration, 2nd Republic
    JEL: N14 N34 N44 P16 J21 J43 J51 J52 J53 J61 J88
    Date: 2013–06
  3. By: Till Dueppe; E. Roy Weintraub
    Abstract: In the decades following WWII, the Cowles Commission for Research in Economics came to represent new technical standards that informed most advances in economic theory. The public emergence of this community was manifest at a conference held in June 1949 titled Activity Analysis of Production and Allocation. Our history of this event situates the Cowles Commission among the institutions of post-war science in-between National Laboratories and the supreme discipline of Cold War academia, mathematics. Although the conference created the conditions under which economics, as a discipline, would transform itself, the participants themselves had little concern for the intellectual battles that had defined prewar university economics departments. The conference bore witness to a new intellectual culture in economic science based on shared scientific norms and techniques un-interrogated by conflicting notions of the meaning of either science or economics.
    Keywords: Cowles Commission, activity analysis, linear programming, general equilibrium theory, von Neumann, Koopmans, Dantzig, fixed point theorems
    JEL: B2 C0
    Date: 2013
  4. By: Avner Offer (All Souls College, University of Oxford)
    Abstract: Banking in the UK was stable for more than a century after 1866. Financial institutions were differentiated according to function. The core banks did not engage in maturity transformation, but in managing a payments system for business. Real estate was a potential source of instability due to high credit elasticity of demand and to long maturities, but credit was successfully rationed by building societies, who relied on the funds that their savers had actually withdrawn from consumption. After 1945, credit rationing came under pressure from consumers and housebuyers. Incremental liberalisations after 1971 released a tide of credit which created a property windfall economy. Borrowers and lenders both prospered until the system collapsed under its own weight in 2007.
    Date: 2013–06–02
  5. By: Dan Bogart (Department of Economics, University of California-Irvine); Robert Oandasan (Compass Lexecon)
    Abstract: The Whig and Tory parties played an important role in British politics in the decades following the Glorious Revolution. Scholars have used The History of Parliament series as a key source for data on political parties, yet most editions omit tabular data on the party affiliation of individual MPs. In this paper, we introduce newly created data on the political affiliation of all MPs serving in England and Wales between 1690 and 1740. We then measure the strength of Whig Party representation across English and Welsh constituencies and for the first time present maps of party representation. The Whigs are shown to be more strongly represented in municipal boroughs compared to counties and they were stronger in small and oligarchical boroughs compared to large and more democratic boroughs. We also find that the Whigs were stronger in southeastern boroughs and counties. The patterns are broadly similar during the Rage of Party (1690 to 1721) and the Walpole Era (1722 to 1740). The main difference is that the Whigs lost strength in the North during the Walpole Era and they were weaker in constituencies with contested elections under Walpole.
    Keywords: Political parties; Whigs; Tories; Rage of Party; Walpole; Glorious Revolution
    JEL: N43 P16 D72
    Date: 2013–06
  6. By: Mazumdar, Surajit
    Abstract: India’s story of the last two decades since the country made a transition to a liberal economic policy regime has many sides to it that may be considered somewhat remarkable in the light of her historical legacy. India has in this period certainly been an important part of the story of the ‘rise of the rest’ and appears to be one of the most successful cases of increased integration into the global economy despite her less remarkable history of industrialization. Instead of losing ground in global competition, Indian big business which till then had grown in the sheltered environment provided by protectionism has experienced a growth more rapid than in the past and stepped on to the global stage. Two decades of development under liberalization, however, has also had a very exclusive character, its narrow social base precluding the possibility of any broad social consensus on liberalization. The durability of such a process in the background of India’s long and stable history of having a formal political structure of representative democracy based on universal adult suffrage is then another of its remarkable features. This paper tries to explain how these phenomena that may appear surprising at first sight, are mutually interrelated and linked up with the process of liberalization itself.
    Keywords: 'Emerging' India, State and Capital, Liberalization and Development
    JEL: O1 O11 O14 O2 O53 P16
    Date: 2012–09
  7. By: Verena Halsmayer; Kevin D. Hoover
    Abstract: Modern growth theory derives mostly from Robert Solow’s “A Contribution to the Theory of Economic Growth” (1956). Solow’s own interpretation locates the origins of his “Contribution” in his view that the growth model of Roy Harrod implied a tendency toward progressive collapse of the economy. He formulates his view in terms of Harrod’s invoking a fixed-coefficients production function. We challenge Solow’s reading of Harrod’s “Essay in Dynamic Theory,” arguing that Harrod’s object in providing a “dynamic” theory had little to do with the problem of long-run growth as Solow understood it, but instead addressed medium-run fluctuations, the “inherent instability” of economies. It was an attempt to isolate conditions under which the economy might tend to run below potential. In making this argument, Harrod does not appeal to a fixed-coefficients production function – or to any production function at all, as that term is understood by Solow. Solow interpreted Harrod’s “Essay” in the light of a particular culture of understanding grounded in the practice of formal modeling that emerged in economics in the post-World War II period. The fate of Harrod’s analysis is a case study in the difficulties in communicating across distinct interpretive communities and of the potential for losing content and insights in the process. From Harrod’s English Keynesian point of view, Solow’s interpretation arose out of a culture of misunderstanding, and his objects – particularly, of trying to account for a tendency of the economy toward chronic recessions – were lost to the mainstream literature.
    Keywords: economic growth, Roy Harrod, Robert Solow, dynamics, dynamic instability, knifeedge, warranted rate of growth, natural rate of growth
    JEL: B22 O4 E12 E13 N1 B31
    Date: 2013
  8. By: Rafael González-Val (Universidad de Zaragoza & IEB); Daniel A. Tirado-Fabregat (Universitat de València); Elisabet Viladecans-Marsal (Universitat de Barcelona & IEB)
    Abstract: A few attempts have been made to analyse whether market potential might also have an impact on urban structures. In this paper we employ parametric and non-parametric techniques to analyse the effect of market potential on the growth of Spanish cities during the period 1860-1960. This period is especially interesting because it is characterized by the advance in the economic integration of the national market together with an intense process of industrialization. Our results show a clear positive influence of market potential on city growth.
    Keywords: Market potential, urban structure, city growth, economic history
    JEL: R0 N9 O18 N64 F14
    Date: 2013
  9. By: Keeling, Drew
    Abstract: The pace and incidence of improvements to oceanic travel conditions for American immigrants, during the quarter century preceeding the First World War, were significantly constrained by shipping lines’ capacity considerations. The improvements had no detectable impact on the overall volume of migration, but did influence the flow by route and, probably, the frequency of repeat crossings. Data gathered from transatlantic shipping sources quantify the evolution of travel accommodations for migrants, as “closed berth” cabins, for two to eight passengers each, slowly supplanted older and less comfortable “open-berth” dormitory style quarters. By 1900, roughly 20% of North Atlantic second and steerage (third) class passenger capacity was in closed berths; by 1914, 35%. Steerage alone went from about 10% to 24% closed berths. Accommodation of migrants in closed berths came sooner for northern Europe routes and later for the southern. Prior suggestions attributing the pace of the conversion to competitive impediments, and to discrimination against southern European passengers, are not corroborated. Closed berths for migrants came gradually to all routes regardless of shifting cartel effectiveness, passenger cartels enhanced non-price competition (e.g. in on-board conditions) and differentiation was much more by travel route than by passenger ethnicity. Instead, closed berths were significantly related to the incidence of tourist traffic (highest for north Europe, and seasonally somewhat opposite to migration) because capacity utilization could be raised by using the same quarters for tourists and migrants, provided that the thus interchanged units were closed berth cabins. Growing rates of repeat migration seem to have been mostly a (further contributing) cause, but also partly an effect, of conversion from open to closed berths. Travel condition improvements on North Pacific migration routes lagged the North Atlantic, possibly due to the Pacific’s lower percentage of seasonally offsetting tourism, its less-concentrated migrant flows, and its smaller ships with lower scale economies.
    Keywords: Migration, repeat migration, immigration, transportation, shipping, travel, travel conditions, corporate capacity management, U.S. immigration policy
    JEL: F22 J68 L91 M10 N30 N70
    Date: 2013–06–26
  10. By: Colin Green; John Heywood; Maria Navarro Paniagua
    Abstract: Legal bar closing times in England and Wales have historically been early and uniform. Recent legislation liberalised closing times with the object of reducing social problems thought associated with drinking to "beat the clock." Indeed, we show that one consequence of this liberalization was a decrease in traffic accidents. This decrease is concentrated heavily among younger drivers. Moreover, we provide evidence that the effect was most pronounced in the hours of the week directly affected by the liberalization; late nights and early mornings on weekends. This evidence survives a series of robustness checks and suggests at least one socially positive consequence of expanding bar hours.
    Date: 2013
  11. By: Lis-Gutiérrez, Jenny-Paola
    Abstract: This paper makes a review of the literature on the intellectual property management (IPM) in organizations. The sources of the documentation reviewed are Scopus, Emerald, SciELO and SSRN indexed papers. This exploration includes works published from 2003 given that Hanel (2004) developed a comprehensive review of practices in IPM. This paper analyzes the relationship in the literature among IPM, organizations and Universities, as well as some case studies in the United States, China, Japan, Europe and Latin America. Este artículo tiene el propósito de realizar una revisión de la literatura sobre la gestión de la propiedad intelectual (GPI) en las empresas. La documentación revisada para su elaboración tiene como fuente los artículos indexados en el índice bibliográfico Scopus y en las bases Emerald, Scielo y SSRN. La presente exploración abarca trabajos publicados a partir de 2003, ya que Hanel (2004) elaboró una revisión exhaustiva sobre prácticas en la GPI. El documento aborda la relación existente en la literatura entre la GPI y, las organizaciones, la Universidad; así como algunos casos de estudio en Estados Unidos, China, Japón, Europa y América Latina.
    Keywords: propiedad intelectual, gestión, organizaciones, patentes, universidad, intellectual property management, organizations, patents, university.
    JEL: L20 M15 M51 O34
    Date: 2013–06–18
  12. By: Patricia Charléty (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris XIII - Paris Nord, Economics Department - ESSEC Business School, Council on Business and Society - ESSEC Business School - Keio Business School - School of Management. Fudan University - Tuck School of Business at Dartmouth - University of Mannheim Business School - Fundaçao Getulio Vargas)
    Abstract: On the occasion of the 1st International Forum of the Council on Business and Society that groups six of the world's leading business schools -ESSEC, Keio, Fudan, Tuck, Mannheim and FGV-EAESP - a White Paper was drafted by Professor Patricia Charléty of ESSEC Business School. The Paper deals with the question of Corporate Governance and Leadership and in particular analyses, draws conclusions and offers recommendations on Governance in relation to society, finance, corporate Boards and the CEO.
    Date: 2013
  13. By: Francisco Rebelo; Ester Gomes da Silva
    Abstract: Although the analysis of the relationship between international trade and economic growth has an important tradition in the economic literature, the specific focus on a related matter, the link between export variety and economic growth, remains a relatively unexplored field of research. Recently, a few studies have approached this issue, adopting a neo-Schumpeterian framework. In line with this general frame of analysis, in this paper we investigate the impact of export variety on economic growth, cross-relating the variety dimension with technological upgrading. Cointegration econometric results based on the Portuguese experience over the past four decades (1967-2010) show that increased related variety has led to a significant growth bonus, but only in the case of technology advanced sectors. The impact of export variety on economic performance seems, therefore, to be conditioned by the technological intensity of the products involved.
    Keywords: Trade, variety, economic growth, technical change, Portugal
    JEL: F10 O11 O30 O52
    Date: 2013–06
  14. By: Arnaud Mehl
    Abstract: I estimate the transmission of large global volatility shocks in international equity markets from the earlier (pre-1914) to the modern era of globalisation. To that end, I identify 43 such shocks over the period 1885-2011, defined as significant increases in unanticipated volatility in US equity markets, which I relate to well-known historical events. My estimates suggest that the response of global equity markets to these shocks in a panel of 16 countries is both statistically significant and large economically. On average, global equity market valuations correct by about 20% in the month when a shock occurs. There is substantial heterogeneity in responses both across countries and time, however, which can be partly explained by differences in global trade integration. I find no evidence that other potential theoretical determinants, such as output composition, country fundamentals or global policy responses matter, by contrast. These results shed light on a neglected aspect of globalisation, which creates opportunities but also heightens the exposure of economies to acute surges in global uncertainty and risk aversion.
    Keywords: Foreign exchange ; Financial markets
    Date: 2013

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