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on Business, Economic and Financial History |
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Issue of 2014‒02‒21
twenty papers chosen by |
| By: | Remi Jedwab (Department of Economics/Institute for International Economic Policy, George Washington University); Alexander Moradi (University of Sussex) |
| Abstract: | What is the impact of modern transportation technology on economic change in poor countries? Rail construction in colonial Africa provides a natu-ral experiment. Using new data on railroads and cities over one century within one country, Ghana, and Africa as a whole, we ï¬nd large permanent effects of transportation technology on economic development. First, railroads had strong effects on agriculture and urbanization before independence. Second, using the fact that railroads collapsed post-independence, we show they had a persistent impact. Evidence suggests that railroad cities persisted because their emergence served as a mechanism to coordinate investments for each subsequent period. Historical shocks can thus trigger an equilibrium in which cities will emerge to facilitate the accumulation of factors, which promotes long-term development. |
| Keywords: | Transportation Technology; Development; Path Dependence; Africa |
| JEL: | O1 O3 O18 R4 R1 N97 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2014-03&r=his |
| By: | José Serrano Álvarez |
| Abstract: | In the 19th Century the Spanish State privatised large areas of common lands and took over management of common wastelands and woodlands, thus stripping the peasants of all the control they had over them. Just as in many other parts of Spain, State intervention in wastelands and woodlands in León was a controversial issue because it was a symptom of conflicting visions or interests: between the State that promoted forestry uses and the peasants whose livelihood, based on agriculture and cattle, depended on common lands. The aim of this paper is to study the motivation behind peasant resistances to State intervention in Northwest Spain in the period 1870-1936. Although the conflicts have been explained from different perspectives (as resistance to market penetration, as "weapons of the poor", or as environmental conflicts), here we argue that the tensions and disputes over the common lands represent the peasants' defence of their livelihoods as well as the struggle for the "opportunities" the market offered. |
| Keywords: | Northwest Spain, Common lands, Peasant resistances, Forest crime |
| JEL: | D70 L73 N54 P32 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:seh:wpaper:1402&r=his |
| By: | Wolfgang Karl Härdle; Annette B. Vogt; ; |
| Abstract: | Ladislaus von Bortkiewicz (1868 - 1931) was a European statistician. His scientific work covered theoretical economics, stochastics, mathematical statistics and radiology, today we would call him a cross disciplinary scientist. With his clear views on mathematical principles with their applications in these fields he stood in conflict with the mainstream economic schools in Germany at the dawn of the 20th century. He had many prominent students (Gumbel, Leontief, Freudenberg among them) and he carved out the path of modern statistical thinking. He was a true European intellectual with a career path from St. Petersburg via Gottingen to Straßburg and finally the Berliner Universität, now Humboldt-Universität zu Berlin. He is known for the precise calibration of insurance claims applying the - at that time hardly known - Poisson distribution to Prussian horse kick and child suicide data. He proposed a simple solution to the Marxian transformation problem and wrote numerous articles and books on the mathematical treatment of statistical (including radiological physical) data. In this article we sketch his life and work and point out the prominent role that he has in today's statistical thinking. |
| Keywords: | History of science, Statistics, Horse kicks, Bortkiewicz |
| JEL: | N01 D02 B14 B16 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2014-015&r=his |
| By: | Renato Colistete; Maria Lucia Lamounier |
| Abstract: | This article examines the distribution of land ownership in the northeastern part of the state of São Paulo, Brazil, the leading coffee export region in the world during the early twentieth century. Based on a detailed agricultural census, we find a widespread presence of small and medium-size farms, with varied degrees of land concentration across subregions and municipalities. Still, large farms and latifundia controlled most of the productive resources in northeast São Paulo, resulting in high levels of inequality when compared to those of other export regions in South and North America. |
| Keywords: | Land Inequality; Coffee; São Paulo; Brazil |
| JEL: | N5 N50 Q15 |
| Date: | 2014–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2014wpecon1&r=his |
| By: | Remi Jedwab (Department of Economics/Institute for International Economic Policy, George Washington University); Edward Kerby (London School of Economics and Political Science); Alexander Moradi (University of Sussex) |
| Abstract: | Little is known about the extent and forces of urban path dependence in developing countries. Railroad construction incolonialKenyaprovidesanaturalexperimenttostudytheemer- gence and persistence of this spatial equilibrium. Using new data ataï¬nespatialleveloveronecenturyshowsthatcolonialrailroads causally determined the location of European settlers, which in turn decided the location of the main cities of the country at inde- pendence. Railroads declined and settlers left after independence, yet cities persisted. Their early emergence served as a mechanism to coordinate investments in the post-independence period, yield- ing evidence for how path dependence influences development. |
| Keywords: | Path Dependence; Urbanisation; Transportation; Colonialism |
| JEL: | R11 R12 R40 O18 O33 N97 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2014-02&r=his |
| By: | Tobias A. Jopp (University of Regensburg) |
| Abstract: | This study uses prices for the German 3 percent imperial loan issued in several tranches since 1890 and still traded during World War I to measure capital market players’ real-time perceptions of the prospects for Germany as the war proceeded. Price data are gathered from the Amsterdam market for government bonds; the Netherlands remained neutral throughout war. Focusing on the window from August 24th 1915 to August 11th 1919, ten (twelve) turning points are identified in a baseline (extended) model. Each implies a significant adjustment of lenders’ confidence in Germany being able, or willing, to service its debts in the future. Two turning points stand out. In early January 1916, the price plummeted by 14.3 percent between the first and eleventh of the month, which was most likely due to the Military Service Act discussed in the British parliament. On September 19th 1918, the price dropped by 17.5 percent compared to the last available price quote from the end of July. This coincides with the Allied Powers’ revival on all fronts since the summer, leading to the ultimate collapse of the German lines. |
| Keywords: | Market Amsterdam, Bonds, Capital market, Confidence, Expectations, Germany, Sovereign debt, Structural breaks, World War I |
| JEL: | C22 G14 H63 N01 N24 N44 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:hes:wpaper:0052&r=his |
| By: | Serguey Braguinsky; Atsushi Ohyama; Tetsuji Okazaki; Chad Syverson |
| Abstract: | We explore how changes in ownership and managerial control affect the productivity and profitability of producers. Using detailed operational, financial, and ownership data from the Japanese cotton spinning industry at the turn of the last century, we find a more nuanced picture than the straightforward “higher productivity buys lower productivity” story commonly appealed to in the literature. Acquired firms’ production facilities were not on average less physically productive than the plants of the acquiring firms before acquisition, conditional on operating. They were much less profitable, however, due to consistently higher inventory levels and lower capacity utilization—differences which reflected problems in managing the uncertainties of demand. When purchased by more profitable firms, these less profitable acquired plants saw drops in inventories and gains in capacity utilization that raised both their productivity and profitability levels, consistent with acquiring owner/managers spreading their better demand management abilities across the acquired capital. |
| JEL: | D2 G3 L2 L6 O3 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19901&r=his |
| By: | Stephen Pollock |
| Abstract: | This essay was written to accompany a lecture to beginning students of the course of Economic Analytics, which is taught in the Institute of Econometrics of the University of Lodz in Poland. It provides, within a few pages, a broad historical account the development of econometrics. It begins by describing the origin of regression analysis and it concludes with an account of cointegration analysis. The purpose of the essay is to provide a context in which the students can locate various aspects of econometric analysis. A distinction must be made between the means by which new ideas were propagated and the manner and the circumstances in which they have originated. This account is concerned primarily with the propagation of the ideas. |
| Keywords: | econometrics, regression analysis, cointegration analysis, statistical analysis |
| JEL: | B16 B23 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:14/05&r=his |
| By: | Farley Grubb |
| Abstract: | A new approach to explaining the value of colonial paper money that relies on their distinctive character as bills of credit is presented. The market value of these bills is decomposed into their real asset present value and their liquidity premium value. This approach is applied to the newly reconstructed monetary data for colonial New Jersey. New Jersey’s bills were structured as zero-interest bearer bonds. They had defined future redemption payoff dates in specie equivalents. The New Jersey government redeemed their bills on time as legislatively promised under a fiscally credible redemption tax structure. The real asset present value of New Jersey bills accounted for at least 80 percent, whereas the value of these bills as “money” accounted for at most 10 to 20 percent, of their market value. Colonial paper money was not primarily a fiat currency. New Jersey’s paper money did not depreciate. It traded below face value due to time-discounting; not depreciation. A positive liquidity premium implies that New Jersey’s paper money actually traded at an appreciated value over its real asset present value. That liquidity premium was positively associated with the quantity of paper money per capita in circulation and the method of monetary injection. |
| JEL: | E31 E42 E51 N11 N21 N41 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19903&r=his |
| By: | Remi Jedwab (Department of Economics/Institute for International Economic Policy, George Washington University); Luc Christiaensen (Development Research Group, The World Bank); Marina Gindelsky (Department of Economics, George Washington University) |
| Abstract: | Standard models explain urbanization by rural-urban migration in response to an (expected) urban-rural wage gap. The Green Revolution and rural poverty constitute rural push factors of migration. The Indus- trial Revolution and the urban bias are urban pull factors. This paper offers an additional demographic mechanism, based on internal urban population growth, i.e. an urban push. Using newly compiled historical data on urban birth and death rates for 7 countries from Industrial Europe (1800-1910) and 33 developing countries (1960-2010), we show that many cities of to- day’s developing world are “mushroom cities†vs. the “killer cities†of In- dustrial Europe; fertility is high, while mortality is much lower. The high rates of urban natural increase have then accelerated urban growth and ur- banization in developing countries, with urban populations now doubling every 18 years (15 years in Africa), compared to every 35 years in Industrial Europe. This is further found to be associated with higher urban congestion, possibly mitigating the beneï¬ts from agglomeration and providing further insights into the phenomenon of urbanization without growth. Both migra- tion and urban demographics must be considered in debating urbanization. |
| Keywords: | Urbanization;DemographicTransition;Migration;Poverty;Slums |
| JEL: | O1 O18 R11 R23 J11 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2014-04&r=his |
| By: | Maxime Desmarais-Tremblay (Centre d'Economie de la Sorbonne et Centre Walras Pareto - Université de Lausanne) |
| Abstract: | This paper provides an explanation of the emergence of the standars textbook definition of public goods in the middle of the 20th century. It focuses on Richard Musgrave's contribution in defining public goods as non-rival and non-excludable – from 1939 to 1969. Although Samuelson's mathematical definition is generally used in models of public goods, the qualitative understanding of the specificity of pure public goods owes more to Musgrave's emphasis on the impossibility of exclusion. This paper also highlights the importance of the size of the group to which benefits of a public good accrue. This analysis allow for a reassessment of the Summary table of goods which first appeared in Musgrave and Musgrave (1973) textbook. |
| Keywords: | Richard A. Musgrave, social goods, public goods, non-rivalry, non-exclusion. |
| JEL: | H41 B29 A22 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:14004&r=his |
| By: | Du Rietz, Gunnar (Research Institute of Industrial Economics (IFN)); Johansson, Dan (Örebro University School of Business); Stenkula, Mikael (Research Institute of Industrial Economics (IFN)) |
| Abstract: | This paper describes the evolution of capital income taxation, including corporate, dividend, interest, capital gains and wealth taxation, in Sweden between 1862 and 2010. To illustrate the evolution, we present annual time-series data on the marginal effective tax rates on capital income (METR) for a marginal investment financed with new share issues, retained earnings or debt. Tax tables covering the period are presented. These data are unique in their consistency, thoroughness and time span covered. The METR is low, is stable and does not exceed five percent until World War I, when it starts to drift somewhat upward and vary depending on the source of finance. The outbreak of World War II starts a period when the magnitude and variation of the METR sharply increases. The METR peaks during the 1970s and 1980s and often exceeds 100 percent. The 1990–1991 tax reform and lower inflation reduce the magnitude and variation of the METR. The METR varies between 15 and 40 percent at the end of the examined period. |
| Keywords: | Cost of capital; Marginal effective tax rates; Marginal tax wedges; Tax reforms |
| JEL: | H21 H31 N44 |
| Date: | 2014–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1004&r=his |
| By: | Heinrich R. Bohlmann (Department of Economics, University of Pretoria); Martin C. Breitenbach (Department of Economics, University of Pretoria) |
| Abstract: | This paper uses a dynamic CGE model to help explain some apparent contradictions between changes in the structure of the South African economy and movements in related variables over the 2006 to 2013 period. Most notably, an increase in the capital-labour ratio was identified, despite a relative increase in the price of capital rentals. To calibrate this result with conventional economic theory suggests that a change in the preferred capital-labour ratio of industries must have occurred. We quantify this change and comment on what this means for policymakers trying to reduce the country’s high level of unemployment. Other changes to the economy over this period are also quantified and explained. |
| Keywords: | CGE Simulation, South African Economy, Analysing changes, Primary Factors |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201405&r=his |
| By: | Robert J. Gordon |
| Abstract: | The United States achieved a 2.0 percent average annual growth rate of real GDP per capita between 1891 and 2007. This paper predicts that growth in the 25 to 40 years after 2007 will be much slower, particularly for the great majority of the population. Future growth will be 1.3 percent per annum for labor productivity in the total economy, 0.9 percent for output per capita, 0.4 percent for real income per capita of the bottom 99 percent of the income distribution, and 0.2 percent for the real disposable income of that group. The primary cause of this growth slowdown is a set of four headwinds, all of them widely recognized and uncontroversial. Demographic shifts will reduce hours worked per capita, due not just to the retirement of the baby boom generation but also as a result of an exit from the labor force both of youth and prime-age adults. Educational attainment, a central driver of growth over the past century, stagnates at a plateau as the U.S. sinks lower in the world league tables of high school and college completion rates. Inequality continues to increase, resulting in real income growth for the bottom 99 percent of the income distribution that is fully half a point per year below the average growth of all incomes. A projected long-term increase in the ratio of debt to GDP at all levels of government will inevitably lead to more rapid growth in tax revenues and/or slower growth in transfer payments at some point within the next several decades. There is no need to forecast any slowdown in the pace of future innovation for this gloomy forecast to come true, because that slowdown already occurred four decades ago. In the eight decades before 1972 labor productivity grew at an average rate 0.8 percent per year faster than in the four decades since 1972. While no forecast of a future slowdown of innovation is needed, skepticism is offered here, particularly about the techno-optimists who currently believe that we are at a point of inflection leading to faster technological change. The paper offers several historical examples showing that the future of technology can be forecast 50 or even 100 years in advance and assesses widely discussed innovations anticipated to occur over the next few decades, including medical research, small robots, 3-D printing, big data, driverless vehicles, and oil-gas fracking. |
| JEL: | D24 E02 E66 J11 J15 O11 O31 Q43 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19895&r=his |
| By: | Richard B. Freeman; Wei Huang |
| Abstract: | This study examines the ethnic identify of the authors of over 1.5 million scientific papers written solely in the US from 1985 to 2008. In this period the proportion of US-based authors with English and European names fell while the proportion of US-based authors with names from China and other developing countries increased. The evidence shows that persons of similar ethnicity co- author together more frequently than can be explained by chance given their proportions in the population of authors. This homophily in research collaborations is associated with weaker scientific contributions. Researchers with weaker past publication records are more likely to write with members of ethnicity than other researchers. Papers with greater homophily tend to be published in lower impact journals and to receive fewer citations than others, even holding fixed the previous publishing performance of the authors. Going beyond ethnic homophily, we find that papers with more authors in more locations and with longer lists of references tend to be published in relatively high impact journals and to receive more citations than other papers. These findings and those on homophily suggest that diversity in inputs into papers leads to greater contributions to science, as measured by impact factors and citations. |
| JEL: | J01 J1 J15 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19905&r=his |
| By: | Cláudia Frias Pinto (Instituto Politécnico de Leiria); Fernando Ribeiro Serra (Uninove – Universidade Nove de Julho); Manuel Portugal Ferreira (Instituto Politécnico de Leiria) |
| Abstract: | National cultures and cultural differences provide a crucial component of the context of international business (IB) research. We conducted a bibliometric study of the articles published in seven leading IB journals, over a period of three decades, to analyze how “national culture” has been impacting in IB research. Co-citation mappings permit us to identify the ties binding works dealing with culture and cultural issues in IB. We identify two main clusters of research each comprising two sub-clusters, with Hofstede’s (1980) work setting much of the conceptual and empirical approach on culture-related studies. One main cluster entails works on the conceptualization of culture and its dimensions and other cluster on cultural distance. This conceptual framework captures the extant IB research incorporating culture-related concepts and influences. |
| Keywords: | culture, culture in international business, bibliometric study, IB research |
| JEL: | M0 M1 |
| Date: | 2014–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:pil:wpaper:107&r=his |
| By: | Jean-Yves MOISSERON; Bruno-Laurent MOSCHETTO; Frédéric TEULON |
| Abstract: | In recent years, a number of Islamic banks have been created to cater to the growing demand, driven by globalization and the vast wealth of some Muslim states in the Middle East and Southeast Asia, and Islamic finance has moved from a niche position to become a mainstream component of the global banking system. Islamic banking refers to a financial system which is consistent with principles of Islamic law (or 'sharia') and guided by Islamic ethics. A large amount of research has been undertaken into this subject. This paper presents islamic finance’s role in the new world order. |
| Date: | 2014–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-093&r=his |
| By: | Gaël Giraud (Centre d'Economie de la Sorbonne - Paris School of Economics) |
| Abstract: | I offer a critical reading of Thomas Piketty's book, Le Capital au XXIème siècle, Seuil, 2013. |
| Keywords: | Capital, capitalism, inequality, Kaldor, Solow. |
| JEL: | B22 B4 H20 N10 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:14007&r=his |
| By: | Bertrand Candelon; Arnaud Dupuy |
| Abstract: | This paper proposes an equilibrium theory of the organization of work in an economy with an implicit market for productive time. In this market, agents buy or sell productive time. This implicit market gives rise to the formation of teams, organized in hierarchies with one leader (buyer) at the top and helpers (sellers) below. Relative to autarky, hierarchical organization leads to higher within and between team payo¤s/productivity inequality. This prediction is tested empir ically in the context of professional road cycling. We show that the observed rise in performance inequality in the peloton since the 1970s is merely due to a rise in help intensity within team and consistent with a change in the hierarchical organization of teams. |
| Keywords: | Hierarchical organization, productive time, helping time,inequality, professional cycling. |
| JEL: | D2 D3 L22 |
| Date: | 2014–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-044&r=his |
| By: | Elliott, Douglas J. (Asian Development Bank Institute) |
| Abstract: | As Asia considers greater harmonization and integration of its financial systems, it would be well-advised to consider the experience of Europe, particularly the eurozone. There are many lessons to be drawn from Europe about how to implement such integration, mostly negative. It is particularly evident that moving to a currency union had major unanticipated consequences for the ability to manage integration of financial systems within the eurozone. Monetary union sharply reduced the ability of the member states of the eurozone to manage their macroeconomic and macroprudential policies to preserve financial stability. Even setting aside these additional problems created by monetary union, Europe suffered substantial harm from integrating its financial systems so closely in many ways, while simultaneously establishing only very weak coordinating mechanisms among their national financial supervisors. It was also a mistake to forbid the European Central Bank from operating formally as a lender of last resort in a financial crisis. Europe’s experiences should not dissuade Asia from seeking appropriate further harmonization and integration. However, they do argue strongly for Asia to take the kind of careful, step-by-step, long-term approach for which many of the countries within Asia are well known. In particular, Asia should only move forward to the extent that it is willing to take the necessary steps toward common supervisory approaches, information sharing, and cooperation in crises. Trying to have the benefits of integration without the responsibilities would be a recipe for future disaster. |
| Keywords: | harmonization; integration; eurozone; asia; european union |
| JEL: | E44 F15 F36 |
| Date: | 2014–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0462&r=his |