New Economics Papers
on Business, Economic and Financial History
Issue of 2014‒03‒08
sixteen papers chosen by

  1. Navigating in Troubled Waters: South American Exports of Food and Agricultural Products in the World Market, 1900-1938 By Vicente Pinilla; Gema Aparicio
  2. Coal, Smoke, and Death: Bituminous Coal and American Home Heating By Barreca, Alan I.; Clay, Karen; Tarr, Joel
  3. Of Firms and Captives: Railway Infrastructures and the Economics of Forced Labour (Spain, 1937 – 1957) By Fernando Mendiola
  4. On the Definition of Public Goods. Assessing Richard A. Musgrave's contribution By Maxime Demarais-Tremblay
  5. Institutions, Human Capital and Development By Daron Acemoglu; Francisco A. Gallego; James A. Robinson
  6. Previous financial crises leading to stagnation: Selected case studies By Dodig, Nina; Herr, Hansjörg
  7. Financial, economic and social systems: French Regulation School, Social Structures of Accumulation and Post-Keynesian approaches compared By Hein, Eckhard; Dodig, Nina; Budyldina, Natalia
  8. Backhouse and Boianovsky on 'disequilibrium theory'. A review article of Transforming modern macroeconomics. Exploring disequilibrium microfoundations, 1956-2003 By Michel DE VROEY
  9. Human Trafficking, Globalisation and Transnational Feminist Responses By Truong, T-D.
  10. Grundzüge der wirtschaftlichen Entwicklung und ihre ordnungspolitischen Leitbilder in der VR China seit 1949 By Taube, Markus
  11. From Rags to Riches back to Rags? The Slow Economic Decline of a Successful Nation: Italy 1950–2013 By Gianluigi Pelloni; Marco Savioli
  12. Ambient Temperature During Gestation and Cold-Related Adult Mortality in a Swedish Cohort, 1915 to 2002 By Bruckner, Tim A.; van den Berg, Gerard J.; Smith, Kirk R.; Catalano, Ralph A.
  13. Theories of financial crises: An overview By Detzer, Daniel; Herr, Hansjörg
  14. The Network Origins of Large Economic Downturns By Daron Acemoglu; Asuman E. Ozdaglar; Alireza Tahbaz-Salehi
  15. Social Security and the Rise in Health Spending By Kai Zhao
  16. Short and long run determinants of brain drain : Evidence from Pakistan By Mohamed Arouri; Yahya Rashid; Muhammad Shahbaz; Frédéric Teulon

  1. By: Vicente Pinilla (Faculty of Economics and Business Studies, University of Zaragoza, Zaragoza, Spain); Gema Aparicio (Agri-food Economic History Group, University of Zaragoza, Zaragoza, Spain)
    Abstract: The present study offers a new quantitative base to analyze the evolution of exports of agricultural and food products from South America in the complicated period between 1900 and 1938. The data base has been elaborated from the information published by the International Institute of Agriculture (IIA), in those years. The paper also constructs a terms of trade series for South American agricultural exports, using the data of Grilli-Yang (1988), updated by Pfaffenzeller (2007). It is considered to be the first time of offering for this period a series for the evolution for the terms of trade in the region which takes into account in its construction the relative weight of the exports of the distinct agricultural products. An explanation is provided of the position of South America in the world market for agricultural products on the eve of the First World War. Then it is analyzed first the impact of the war on the volume of agricultural exports from the region and in second place that of the Great Depression. Finally the evolution of the terms of trade of South American agricultural exports throughout the period is analyzed..
    Keywords: Latin American Economic History, International Agrifood Trade, Great Depression.
    JEL: J20 F14 N56 N70 N76 Q17
    Date: 2014–03
  2. By: Barreca, Alan I. (Tulane University); Clay, Karen (Carnegie Mellon University); Tarr, Joel (Carnegie Mellon University)
    Abstract: Air pollution was severe in many urban areas of the United States in the first half of the twentieth century, in part due to the burning of bituminous coal for heat. We estimate the effects of this bituminous coal consumption on mortality rates in the U.S. during the mid-20th century. Coal consumption varied considerably during the 20th century due to coal-labor strikes, wartime oil and gas restrictions, and the expansion of gas pipelines, among other reasons. To mitigate the influence of confounding factors, we use a triple-differences identification strategy that relies on variation in coal consumption at the state-year-season level. It exploits the fact that coal consumption for heating was highest in the winter and uses within-state changes in mortality in non-winter months as an additional control group. Our estimates suggest that reductions in the use of bituminous coal for heating between 1945 and 1960 decreased winter all-age mortality by 1.25 percent and winter infant mortality by 3.27 percent, saving 1,923 all age lives per winter month and 310 infant lives per winter month. Our estimates are likely to be a lower bound, since they primarily capture short-run relationships between coal and mortality.
    Keywords: air pollution, coal, mortality, infant mortality, heating
    JEL: Q53 N72 I18 N32 N52
    Date: 2014–02
  3. By: Fernando Mendiola (Universidad Pública de Navarra / Nafarroako Unibertsitate Publikoa, Iruñea – Pamplona, Spain)
    Abstract: This article deals with the main economic keys that explain the evolution in the deployment of prisoners and prisoners of war on extending and reconstructing the railways. The first part presents a list of the works carried out during the Spanish civil war and the Francoist dictatorship. Subsequently, an analysis is made of the three main variables of work according to institutional change and the business structure of the Spanish railway. Thanks to this variety of situation, we can better understand to which extent labour supply and productivity levels are on the basis of the evolution of enterprises strategies towards this kind of labour in different situations, such as war economy, after-war reconstruction, and dictatorship, until 1957.
    Keywords: forced labour, railway infrastructures, railway companies, Franco´s Dictatorship, coercion
    JEL: J20 N84 N44 N34 L92
    Date: 2014–03
  4. By: Maxime Demarais-Tremblay (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne, 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
    Date: 2014–01
  5. By: Daron Acemoglu; Francisco A. Gallego; James A. Robinson
    Abstract: In this paper we revisit the relationship between institutions, human capital and development. We argue that empirical models that treat institutions and human capital as exogenous are misspecified both because of the usual omitted variable bias problems and because of differential measurement error in these variables, and that this misspecification is at the root of the very large returns of human capital, about 4 to 5 times greater than that implied by micro (Mincerian) estimates, found in some of the previous literature. Using cross-country and cross-regional regressions, we show that when we focus on historically-determined differences in human capital and control for the effect of institutions, the impact of institutions on long-run development is robust, while the estimates of the effect of human capital are much diminished and become consistent with micro estimates. Using historical and cross-country regression evidence, we also show that there is no support for the view that differences in the human capital endowments of early European colonists have been a major factor in the subsequent institutional development of these polities.
    Keywords: Economic Development, Institutions, Human Capital
    JEL: I25 P16 O10
    Date: 2014
  6. By: Dodig, Nina; Herr, Hansjörg
    Abstract: This paper analyses several severe financial crises observed in the history of capitalism which led to a longer period of stagnation or low growth. Comparative case studies of the Great Depression, the Latin American debt crisis of the 1980s and the Japanese crisis of the 1990s and 2000s are presented. The following questions are asked: What triggered big financial crises? Which factors intensified financial crises? And most importantly, which factors prevented the return of prosperity for a long time? The main conclusion is that stagnation after big financial crises becomes likely when the balance sheets of economic units are not quickly cleaned, when the nominal wage anchor breaks, and when there is no big and longer growth stimulus by the state. Some tentative conclusions for the subprime financial crisis and the Great Recession are drawn. --
    Keywords: financial crises,stagnation,deflation,lost decade,Great Depression,Latin American debt crisis,Japanese crisis,Great Recession
    JEL: E65 G01 N12 N15 N16
    Date: 2014
  7. By: Hein, Eckhard; Dodig, Nina; Budyldina, Natalia
    Abstract: This paper surveys some of the important literatures on financial, economic and social systems with an eye towards explaining the tendencies towards 'financialisation'. We focus on important strands of this literature: the French Regulation School, the US-based Social Structures of Accumulation approach, the contributions by several Post-Keynesian authors, with a focus on the long-run views contained in Hyman Minsky's work, in particular. In our comparative assessment of these approaches, we adopt the following four steps procedure: First, we sketch the basic structure of the approaches in order to single out how each of them views the interaction between social institutions and the economy and the related dynamics regarding the development of the institutional structure and the associated stages or regimes of economic development. Second, we describe how these approaches view the structural breaks or the regime shifts in the long-run development of modern capitalism, which has triggered or at least has contributed to the emergence of a type of capitalism dominated by finance (financialisation). Third, we outline how these different approaches view the main characteristics and features of financialisation. Fourth, we deal with the respective views on the consequences of financialisation for long-run economic and social development including the crisis of this stage of development. --
    Keywords: French Regulation School,Social Structures of Accumulation,Post-Keynesian approach,Minsky,financialisation,stages of capitalist development,finance-led growth regime,global neoliberal SSA,finance-dominated capitalism,money manager capitalism,financial, economic and social systems
    JEL: E02 E11 E12 G01 P10 P16 P51
    Date: 2014
  8. By: Michel DE VROEY (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: In this review article of Backhouse and Boianovsky’s book, Transforming modern macroeconomics. Exploring disequilibrium microfoundations, 1956-2003, I make the following points: (a) Backhouse and Boianovsky’s too broad understanding of the disequilibrium approach results in their bringing together theories that should be kept separate. While the disequilibrium label fits the works of Patinkin, Clower and Leijonhuvud, it betrays the project of Barro and Grossman, Drèze and Benassy who strived at producing an equilibrium theory. (b) I put in question their claim that an inner link exists between disequilibrium and fixed price equilibrium theories and imperfect competition modeling. (c) I try to identify the deep nature of the controversy in which these authors were involved. (d) I put forward a few conjectures about the reason why fixed price modeling petered out.
    Keywords: Disequilibrium theory, non-Walrasian equilibrium models, Keynesian macroeconomics
    JEL: B E E
    Date: 2014–02–24
  9. By: Truong, T-D.
    Abstract: This paper presents a historical overview of feminist frameworks for analysis and advocacy on human trafficking. It traces the major differences and similarities in the forms of knowledge produced since the Anti-White Slavery campaigns nearly two centuries ago. It highlights how institutional and moral considerations – especially concerning the treatment of the female body as an instrument – have played a role in shaping the conceptual possibilities and directions of politics for change. By tracing the epistemological and ethical tensions in the body of knowledge about human trafficking and the power relations involved in interpreting the question of human dignity and agency, the paper hopes to open new lines for debate and cooperation to address the varying interpretations of the use of force as well as the nature of human agency, decision-making and choice in the business of human trafficking. Attention is given to how, under the forces of globalisation, the unprecedented re-writing the human body, and sexuality (as a source of labour, sexual pleasure, and life itself) demands innovative ways for rethinking the relationship between “sex”, “gender” and “power” – both in theoretical terms and as regards transnational social action.
    Keywords: human trafficking, transnational, global, international, gender, sexuality, prostitution, commercial surrogacy, governmentality, human rights, human dignity
    Date: 2014–01–15
  10. By: Taube, Markus
    Abstract: Der Beitrag zeichnet die zentralen Entwicklungs- und Wachstumslinien der chinesischen Volkswirtschaft seit Gründung der VR China nach und stellt die in verschiedenen Perioden verfolgten ordnungspolitisch-institutionellen Leitbilder dar. Die Darstellung geht explizit auf die entsprechenden Entwicklungen im Rahmen der chinesischen Zentralverwaltungswirtschaft, der Wirtschaftswunderjahre und der aktuellen Herausforderungen an eine Fortführung des Wachstumsprozesses ein. -- This paper discusses the major patterns of economic development and growth in the Chinese economy since the foundation of the PR China. In this context it highlights the institutional foundations and economic policy guidelines adhered to during various development periods. The paper deals with respective developments during China's central planning period, the economic miracle era as well as contemporary challenges to continued growth and development.
    Keywords: Wirtschaftliche Entwicklung,Wachstum,Institutionen,Wirtschaftssysteme,Ordnungspolitik,economic development,growth, institutions,economic systems,economic/regulatory policy
    Date: 2014
  11. By: Gianluigi Pelloni (Rimini Centre for Economic Analysis, Italy; Wilfrid Laurier University, Canada; Johns Hopkins Bologna Centre, Italy); Marco Savioli (Rimini Centre for Economic Analysis, Italy; University of Bologna, Italy)
    Abstract: In this paper we present the current crisis of the Italian economy as a phase of a major systemic decline. The social political system has led to a framework that has violated the fundamentals of sustained economic growth. An unhealthy implicit contract between the social-political elites and the civil society has imposed a “static” view of comparative advantage. The indispensable sectoral restructuring of the economy has not taken place, leading to stagnation. Defenceless positions have often been hiding the structural problem behind the screen of Italian exceptionalism. We stress that a growth strategy, though it has to be country and context specific, it cannot violate fundamentals. We suggest that Italy must take on again, as quickly as possible, a “dynamic” view of comparative advantage. That would entail a dramatic shift in its economic-political-social structure and it would be necessarily painful at different levels. However, this is the only route Italy could follow to stay on course for sustained economic growth.
    Keywords: sustained growth, comparative advantage, technological progress, corruption, Italy
    JEL: O52 O38 O32 N14
    Date: 2014–01
  12. By: Bruckner, Tim A. (University of California, Irvine); van den Berg, Gerard J. (University of Mannheim); Smith, Kirk R. (University of California, Berkeley); Catalano, Ralph A. (University of California, Berkeley)
    Abstract: For all climatic regions, mortality due to cold exceeds mortality due to heat. We examine whether cold-related mortality in adulthood varies positively with unusually benign ambient temperature during gestation, using data on over 13,500 Swedes from the Uppsala Birth Cohort Study born in 1915-1929 and followed until 2003. We link daily thermometer temperatures in Uppsala (1914 to 2002) to subjects, from their estimated date of conception onwards. We estimate survival models with time-varying explanatory variables, focusing on the two leading causes of cold-related death in adulthood: ischaemic heart disease (IHD) and stroke. An increase in the prevalence of warm temperatures during gestation leads to a significantly higher rate of mortality due to cold-related IHD. However, we do not find such a relation for cold-related stroke mortality. Additional analyses show that birthweight percentile or gestational age do not mediate discovered findings. The IHD results indicate that ambient temperature during gestation – independent of birth month – modifies the relation between cold and adult mortality.
    Keywords: health, climate, cerebrovascular disorders, cold spells, fetal development, ischaemic heart disease, temperature regulation, migration
    JEL: I12 Q54
    Date: 2014–02
  13. By: Detzer, Daniel; Herr, Hansjörg
    Abstract: This paper analyses financial crises from a theoretical point of view. For this it reviews what different schools of economic thought have to say about financial crises. It examines first the approaches that regard financial crises as a disturbing factor of a generally stable real economy (Wicksell, Hayek, Schumpeter, Fisher, and the early Keynes). Thereafter, approaches, where the dichotomy between the monetary and the real sphere is lifted, are reviewed. Here in particular the later works of Keynes and the contributions of Minsky are of importance. Lastly, it is looked at the behavioural finance approaches. After having reviewed the different approaches, it is examined where those approaches have similarities and where they can be combined fruitfully. Based on this, we develop an own theoretical framework methodologically based on a Wicksellian cumulative process, however, overcoming the neoclassical dichotomy. The paper ends with some policy recommendations based on the developed theoretical framework. --
    Keywords: financial crisis,crisis theory,behavioral finance,Hayek,Keynes,Minsky,Schumpeter,Wicksell
    JEL: E12 E13 G01
    Date: 2014
  14. By: Daron Acemoglu; Asuman E. Ozdaglar; Alireza Tahbaz-Salehi
    Date: 2014–02–24
  15. By: Kai Zhao (University of Connecticut)
    Abstract: In a quantitative model of Social Security with endogenous health, I argue that Social Security increases the aggregate health spending of the economy because it redistributes resources to the elderly whose marginal propensity to spend on health is high. I show by using computational experiments that the expansion of US Social Security can account for over a third of the dramatic rise in US health spending from 1950 to 2000. In addition, Social Security has a spill-over effect on Medicare. As Social Security increases health spending, it also increases the payments from Medicare, thus raising its financial burden.
    Keywords: Social Security, Health Spending, Saving, Longevity
    JEL: E20 E60 H30 I00
    Date: 2014–01
  16. By: Mohamed Arouri; Yahya Rashid; Muhammad Shahbaz; Frédéric Teulon
    Abstract: This paper contributes to the literature by determining macroeconomic drivers of brain drain in case of Pakistan over the period of 1972-2012 using the ARDL bounds testing approach. Our findings show that economic growth and financial development have negative impact on brain drain. However, inflation, unemployment and trade openness aggravate brain drain. This study highlights macroeconomic insights for policy makers to control brain drain problem in Pakistan.
    Date: 2014–02–25

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