New Economics Papers
on Business, Economic and Financial History
Issue of 2014‒04‒18
sixty papers chosen by

  1. Discovering Chinese Economic History from Footnotes: the Living Tale of a Private Merchant Archive (1800-1850) By Ma, Debin; Yuan, Weipeng
  2. Economic Freedom in the Long Run: Evidence from OECD Countries (1850-2007) By Leandro Prados de la Escosura
  3. Corporate Ownership and Control in Victorian Britain By Acheson, Graeme; Campbell, Gareth; Turner, John D.; Vanteeva, Nadia
  4. Africa's Growth Prospects in a European mirror: a Historical Perspective By Broadberry, Stephen; Gardner, Leigh
  5. African economic growth in a European mirror: a historical perspective By Stephen Broadberry; Leigh Gardner
  6. Long-Term Barriers to Economic Development By Spolaore, Enrico; Wacziarg, Romain
  7. Gibrat’s Law and the British Industrial Revolution By Klein, Alexander; Leunig, Tim
  8. Twentieth Century Growth By Crafts, Nicholas; O’Rourke Hjortshøj, Kevin
  9. The Evolution of Bank Supervision: Evidence from U.S. States By Mitchener, Kris James
  10. Twenty-five years of materialism: do the US and Europe diverge? By Stefano Bartolini; Francesco Sarracino
  12. Co-evolution of Technology and Institutions: Government Regulation and Technological Creativity in the Swedish Moped History 1952–70 By Blomkvist, Pär; Emanuel, Martin
  13. Critical Junctures: Independence Movements and Democracy in Africa By Wantchekon, Leonard; Garcia-Ponce, Omar
  14. Not the Opium of the People: Income and Secularization in a Panel of Prussian Counties By Becker, Sascha; Woessmann, Ludger
  15. War and Inquisition: Repression in Early Modern Spain By Vidal-Robert, Jordi
  16. Colonial Institutions, Commodity Booms, and the Diffusion of Elementary Education in Brazil, 1889-1930 By Aldo Musacchio; Andre Martinez; Martina Viarengo
  17. Urbanism, an overview By André De Palma; Alexandre Guimard
  18. Political Campaigns Of The Stalin Period: Their Content, Peculiarities And Structure By Anna S. Kimerling
  19. Discrimination or Social Networks? Industrial Investment in Colonial India By Gupta, Bishnupriya
  20. Previous financial crises leading to stagnation – selected case studies By Nina Dodig; Hansjorg Herr
  21. Efficiency, Distortions and Factor Utilization during the Interwar Period By Klein, Alexander; Otsuy, Keisuke
  22. Unfavorable Land Endowment, Cooperation, and Reversal of Fortune By Litina, Anastasia
  23. Business Fluctuations in Imperial Austria's Regions, 1867-1913: New Evidence By Carlo Ciccarelli; Anna Missiaia
  24. Porto Marghera and the Industrial Ecology Challenge: Why it did not become an Eco-Industrial Park By Mannino, Ilda; Ninka, Eniel; Turvani, Margherita
  25. Financial, economic and social systems: French Regulation School, Social Structures of Accumulation and Post-Keynesian approaches compared. By Eckhard Hein; Nina Dodig; Natalia Budyldina
  26. In old Chicago: Simons, Friedman and the development of monetary-policy rules By George S. Tavlas
  27. The hidden side of innovation: why tinkerers matter By Marco Bettiol; Vladi Finotto; Eleonora Di Maria; Stefano Micelli
  28. The Great Compression of the French Wage Structure, 1969-2008 By Verdugo, Gregory
  29. The (Changing) Knowledge Production Function: Evidence from the MIT Department of Biology for 1970-2000 By Annamaria Conti; Christopher C. Liu
  30. Reagan’s Innovation Dividend? Technological Impacts of the 1980s US Defense Build-Up By Draca, Mirko
  31. Trajectories and outcomes of the 'Arab Spring' : comparing Tunisia, Egypt, Libya and Syria By Darwisheh, Housam
  32. Chartbook of economic inequality By Anthony B. Atkinson; Salvatore Morelli
  33. Algorithms and the Changing Frontier By Hezekiah Agwara; Philip Auerswald; Brian Higginbotham
  34. Theories of Financial Crises By Daniel Detzer; Hansjorg Herr
  35. The Evolution of Occupational Segregation in the U.S., 1940-2010: The Gains and Losses of Gender-Race/Ethnicity Groups By Coral del Rio; Olga Alonso-Villar
  36. Varieties of Sovereign Crises: Latin America 1820-1931 By Graciela Laura Kaminsky; Pablo Vega-García
  38. Governance and missionary effectiveness of the Company of Jesus: lessons from an extended theory of governance By Peter Wirtz
  39. Maurice Allais on Equilibrium and Capital in some of his 1940s Writings By Ariel Dvoskin
  40. Two centuries of trend following By Y. Lemp\'eri\`ere; C. Deremble; P. Seager; M. Potters; J. P. Bouchaud
  41. Does “Skin in the Game” Reduce Risk Taking? Leverage, Liability and the Long-Run Consequences of New Deal Financial Reforms By Mitchener, Kris James; Richardson, Gary
  42. Globalization and Child Health in Developing Countries: The Role of Democracy By Welander, Anna; Lyttkens, Carl Hampus; Nilsson, Therese
  43. Did Railroads Make Antebellum U.S. Banks More Sound? By Jeremy Atack; Matthew S. Jaremski; Peter L. Rousseau
  44. Empirical testing of genuine savings as an indicator of weak sustainability: a three-country analysis of long run trends By Blum, Matthias; Greasley, David; Hanley, Nicholas; Kunnas, Jan; McLaughlin, Eoin; Oxley, Les; Warde, Paul
  45. What Does the 1930s’ Experience Tell Us about the Future of the Eurozone? By Crafts, Nicholas
  46. Impact of Federal Government Budget Deficits on the Longer-term Real Interest Rate in the U.S.: Evidence Using Annual and Quarterly Data, 1960-2013 By Cebula, Richard
  47. The Monetary Profit Paradox and a Sustainable Economy - A Fundamental Approach By de la Fonteijne, Marcel
  48. Immigrants and Religion By Chiswick, Carmel U.
  49. The impact of trade liberalization on producing regions in an importing country and a successful region: The case of Japanese orange industry and Mikkabi-town, 1970s – 1980s By MATSUBARA, Hideto
  50. Women Economists in Italy: A Bibliometric Analysis of their Scientific Production in the Past Decade By Marcella Corsi; Giulia Zacchia
  51. The motorcycle Kuznets curve By Shuhei Nishitateno; Paul J. Burke
  52. Understanding the Kuznets Process: An Empirical Investigation of Income Inequality in China 1978-2011 By Wenli Cheng; Yongzheng Wu; CEMA; College of Mathematics and Computer Science, Hunan Normal University
  53. Learning from financial crises By Lim , Jamus Jerome; Minne, Geoffrey
  54. Financialisation, distribution, growth and crises – long-run tendencies By Eckhard Hein; Nina Dodig
  55. International trends in technological progress: stylized facts from patent citations, 1980-2011 By Soonwoo Kwon; Jihong Lee; Sokbae 'Simon' Lee
  56. Bank-based versus market-based financial systems: a critique of the dichotomy By Malcolm Sawyer
  57. Where Has the Currency Gone? And Why? The Underground Economy and Personal Income Tax Evasion in the U.S., 1970-2008 By Cebula, Richard
  58. Um estudo sobre os ciclos de negócios brasileiro (1900-2012) By Vieira, Heleno Piazentini; Valls Pereira, Pedro L.
  59. Shortages and the Informal Economy in the Soviet Republics: 1965-1989 By Kim, Byung Yeon; Shida, Yoshisada
  60. The unsolved contradictions of the modernists. Economic policy expectations and political crisis in France 1978-2012 By Bruno Amable

  1. By: Ma, Debin (London School of Economics); Yuan, Weipeng (Chinese Academy of Social Science, Beijing)
    Abstract: This article recounts our unique encounter –through the last seven years of our research - with the Tong Taisheng (统泰升) merchant account books in the Ninjing county of Northern China in 1800-1850. By tracing the personal history of the original owner or donor, we address a large historiographical and epistemological issue behind the current Great Divergence debate on why Industrial Revolution occurred in England but not in China. Our article showcases how the development of political ideology and academic discipline in the modern era impacts our understanding of historical statistics and realities of the early modern era, a critical issue largely neglected in the current Great Divergence debate.
    Keywords: Industrial Revolution
    Date: 2013
  2. By: Leandro Prados de la Escosura (Universidad Carlos III, London School of Economics, CEPR)
    Abstract: This paper presents historical indices for the main dimensions of economic freedom and an aggregate index for nowadays developed countries -(pre-1994) OECD, for short-. Economic liberty expanded over the last one-and-a-half centuries, reaching two thirds of its maximum possible. Its evolution has been, however, far from linear. After a substantial improvement since mid-nineteenth century, World War I brought a major setback. The post-war recovery up to 1929 was followed by a dramatic decline in the 1930s and significant progress took place during the Golden Age but fell short from the pre-World War I peak. A steady expansion since the early 1980s has resulted in the highest levels of economic liberty of the last two centuries. Each main dimension of economic freedom exhibited a distinctive trend and its contribution to the aggregate index varied over time. Nonetheless, improved property rights provided the main contribution to the long-run advancement of economic liberty.
    Keywords: Negative Freedom, Economic Liberty, OECD
    JEL: N10 O17 P10
    Date: 2014–03
  3. By: Acheson, Graeme; Campbell, Gareth; Turner, John D.; Vanteeva, Nadia
    Abstract: Using ownership and control data for 890 firm-years, this paper examines the concentration of capital and voting rights in British companies in the second half of the nineteenth century. We find that both capital and voting rights were diffuse by modern-day standards. This implies that ownership was separated from control in the UK much earlier than previously thought, and given that it occurred in an era with weak shareholder protection law, it undermines the influential law and finance hypothesis. We also find that diffuse ownership is correlated with large boards, a London head office, non-linear voting rights, and shares traded on multiple markets. --
    Keywords: Corporate ownership and control,Law and finance hypothesis,British financial history,Shareholder protection law
    JEL: G32 K22 N24
    Date: 2014
  4. By: Broadberry, Stephen (London School of Economics and CAGE); Gardner, Leigh (London School of Economics)
    Abstract: Drawing on recent quantitative research on Europe reaching back to the medieval period, and noting a relationship between the quality of institutions and economic growth, this paper offers a reassessment of Africa’s growth prospects. Periods of positive growth driven by trade, followed by growth reversals which wiped out the gains of the previous boom, characterized pre-modern Europe as well as twentieth century Africa. Since per capita incomes in much of sub-Saharan Africa are currently at the level of medieval Europe, which did not make the breakthrough to modern economic growth until the nineteenth century, we caution against too optimistic a reading of Africa’s recent growth experience. Without the institutional changes necessary to facilitate structural change, growth reversals continue to pose a serious threat to African prosperity. Only if growth continues after a downturn in Africa’s terms of trade can we be sure that the corner has been turned.
    Keywords: Africa, Growth prospects.
    Date: 2013
  5. By: Stephen Broadberry; Leigh Gardner
    Abstract: New research on historical national accounting has provided a more comprehensive picture of European economic performance from the medieval period through industrialization and the transition to modern economic growth. These data confirm anecdotal arguments that pre-industrial economies were not stagnant but rather experienced periods of growth followed by reversals which erased gains in living standards. They also provide a framework for comparing the absolute level of economic development in different times and places, using a common unit of account. These data are used here to re-assess the economic performance of African economies during the twentieth century. While African economies have been growing rapidly in recent decades, levels of per capita income remain low and this growth has not always been accompanied by the institutional and structural change witnessed in Europe during the transition to modern economic growth. As a result, growth reversals continue to pose a serious threat to African prosperity, and measures of structural change and institutional quality should be given more weight in assessing the extent to which individual countries have moved closer to achieving sustained economic growth.
    Keywords: growth; structural change; institutions; Africa; Europe
    JEL: N0
    Date: 2014–04
  6. By: Spolaore, Enrico (Tufts University); Wacziarg, Romain (UCLA, NBER and CEPR)
    Abstract: What obstacles prevent the most productive technologies from spreading to less developed economies from the worlds technological frontier? In this paper, we seek to shed light on this question by quantifying the geographic and human barriers to the transmission of technologies. We argue that the intergenerational transmission of human traits, particularly culturally trans- mitted traits, has led to divergence between populations over the course of history. In turn, this divergence has introduced barriers to the di¤usion of technologies across societies. We provide measures of historical and genealogical distances between populations, and document how such distances, relative to the worlds technological frontier, act as barriers to the di¤usion of devel- opment and of speci…c innovations. We provide an interpretation of these results in the context of an emerging literature seeking to understand variation in economic development as the result of factors rooted deep in history.
    Keywords: Long-run growth, genetic distance, intergenerational transmission, di¤usion of innovations.
    Date: 2013
  7. By: Klein, Alexander (University of Kent); Leunig, Tim (London School of Economics)
    Abstract: This paper examines Gibrat’s law in England and Wales between 1801 and 1911using a unique data set covering the entire settlement size distribution.We find that Gibrat’s law broadly holds even in the face of population doubling every fifty years,an industrial and transportrevolution, and the absence of zoning laws to constrain growth. The result is strongest for the later period, and in counties most affected by the industrial revolution. The exception were villages in areas bypassed by the industrial revolution.We argue that agglomeration externalities balanced urban disamenities such as commuting costs and poor living conditions to ensure steady growth of many places, rather than exceptional growth of few.
    Keywords: Gibrat’s law, city-size distribution, industrial revolution
    Date: 2013
  8. By: Crafts, Nicholas (University of Warwick); O’Rourke Hjortshøj, Kevin (All Souls College, Oxford)
    Abstract: This paper surveys the experience of economic growth in the 20th century with a focus on technological change at the frontier together with issues related to success and failure in catch-up growth. A detailed account of growth performance based on historical national accounts data is given and is accompanied by a review of growth accounting evidence on the sources of economic growth. The key features of our analysis of divergence in growth outcomes are an emphasis on the importance of ‘directed’ technical change, of institutional quality, and of geography. We provide brief case studies of the experience of individual countries to illustrate these points.
    Keywords: catch-up growth; divergence; growth accounting; technical change
    Date: 2013
  9. By: Mitchener, Kris James (University of Warwick)
    Abstract: We use a novel data set spanning 1820-1910 to examine the origins of bank supervision and assess factors leading to the creation of formal bank supervisory institutions across U.S. states. We show that it took more than a century for the widespread adoption of independent supervisory institutions tasked with maintaining the safety and soundness of banks. State legislatures initially pursued cheaper regulatory alternatives, such as double liability laws; however, banking distress at the state level as well as the structural shift from note-issuing to deposit-taking commercial banks propelled policymakers to adopt costly and permanent supervisory institutions.
    Keywords: bank supervision, U.S. States
    Date: 2014
  10. By: Stefano Bartolini; Francesco Sarracino
    Abstract: Using data from the World Values Survey and the European Values Study, we compare the trends of materialism over the last quarter of century among the US and six major European countries: France, Spain, Italy, Germany, Great Britain and Sweden. We use the definition of materialism adopted by positive psychologists. We find that the trends in Europe and in the US diverged. In the US materialism increased, while in Europe it decreased. However, some mixed patterns arise. In particular, Great Britain, Spain and Sweden showed some symptoms of an increase of materialistic values, although they were far less pronounced compared to the American ones. As far as the levels of materialism are concerned, the US started from relatively less materialistic positions. However, towards the end of our period of observation, they scored very high in the ranking of materialism in our sample of countries.
    Keywords: materialism, trends, positive psychology, United States, Europe
    JEL: D64 I31 O57
    Date: 2013–11
  11. By: Broadberry, Stephen (London School of Economics and CAGE)
    Keywords: This paper “accounts” for the Great Divergence between Europe and Asia in two ways. In the sense of measurement: (1) the traditional view, in which the Great Divergence had late medieval origins and was already well under way during the early modern period, is confirmed (2) However, revisionists are correct to point to regional variation within both continents (3) There was a Little Divergence within Europe, with a reversal of fortunes between the North Sea Area and Mediterranean Europe. (4) There was a Little Divergence within Asia, with Japan overtaking China and India. However, Japan started at a lower level of per capita income than the North Sea Area and grew at a slower rate, so continued to fall behind until after the Meiji Restoration of 1868. Any explanation needs to be able to account for the Little Divergences within Europe and Asia as well as the Great Divergence between the two continents. The divergences arose from the differential impact of shocks hitting economies with different structural features. The structural factors include: (1) The large share of pastoral farming in agriculture which helped to put the North Sea Area on the path to high-value-added, capital-intensive, non-human-energy intensive production. (2) Late marriage in the North Sea Area, which lowered fertility and encouraged human capital formation (3) Labour supply, with an industrious revolution helping to explain the Little Divergences within both Asia and Europe (4) Institutions, with the role of the state helping to explain the success of the North Sea Area. The two key shocks were (1) The Black Death, which led to a permanent per capita income gain in the North Sea Area, but not in the rest of Eurasia (2) The new trade routes which opened up from Europe to Asia and the Americas around 1500.; Great Divergence; living standards; measurement; explanation
    Date: 2013
  12. By: Blomkvist, Pär (Department of Industrial Economics and Management, Royal Institute of Technology, Stockholm); Emanuel, Martin (Department of Industrial Economics and Management, Royal Institute of Technology, Stockholm)
    Abstract: The first of July 1952, the moped was legislatively excluded from existing restrictions for heavier two-wheeled motorized vehicles. A driver/owner of a “bicycle with auxiliary engine” – this was the original denomination of the vehicle – thus needed no registration, driver’s license or insurance, nor pay any vehicle tax. The legislators did, however, postulate some technical requirements. Besides regulation of the engine, the vehicle should be “bicycle-like” and have pedals. It should thus be driven primarily by means of human, not mechanical, power (i.e., it was not supposed to be a lighter version of a motorcycle). In terms of social and economic goals, the state assumed workers to be the primary users, and a utilitarian use rather than one connected to pleasure and spare time. Very quickly, however, the moped lost all resemblance with the ordinary bicycle (except for the pedals). In a new legislation in 1961, the state yielded to the technical development. The moped no longer needed to resemble a bicycle or have pedals. Meanwhile, the moped also became more of a toy for boys – a vehicle for freedom – rather than the useful tool the state had wished for. In fact, we argue that the demands from user groups not foreseen played a crucial role in changing the legal technical requirements of the moped.This paper deals with the co-evolution, technically and institutionally, of the moped during the period 1952–75. Using a method inspired by evolutionary theory, the moped models released in Sweden in these years are grouped in “families” with distinctive technical features and accompanying presumed uses. We analyze this development using concepts from the theoretical fields of innovation studies and the history of technology (STS/SCOT).
    Keywords: bicycle; co-evolution of technology and institutions; demand specification; dominant design; evolutionary theory; history of technology; industrial dynamics; moped; motorcycle; road traffic legislation; technology studies; transport history
    JEL: B25 B52 L51 L61 N74 O31 O33 Z18
    Date: 2014–04–11
  13. By: Wantchekon, Leonard (Princeton University); Garcia-Ponce, Omar (New York University)
    Abstract: We show that current levels of democracy in Africa are linked to the nature of its independence movements. Using different measures of political regimes and historical data on anti-colonial movements, we find that countries that experienced rural insurgencies tend to have autocratic regimes, while those that faced urban protests tend to have more democratic institutions. We provide evidence for causality in this relationship by using rough terrain as an instrument for rural insurgency, and by performing a sensitivity analysis. Finally, the evidence suggests that the adoption of rural insurgency perpetuated the use of violence as a form of conflict resolution.
    Keywords: Africa, Colonial History, Critical Junctures, Democracy, Modernization.
    Date: 2013
  14. By: Becker, Sascha (University of Warwick); Woessmann, Ludger (University of Munich)
    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 firstdifferenced 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 religioneconomy nexus in Prussian secularization
    Keywords: Religion, secularization, Prussian economic history
    Date: 2013
  15. By: Vidal-Robert, Jordi (University of Warwick)
    Abstract: The Spanish Inquisition (1478-1834) lasted for more than three centuries and conducted more than 100,000 trials. Why would the Spanish Crown adopt this type of repressive institution? What were the actual motives of its activity? This paper explores the role of the Spanish Inquisition as a repressive tool of the Spanish Crown. When the Crown had to move military resources abroad to fight a war, the likelihood of an internal revolt against the Crown increased. To minimize the threat of rebellion, the Crown would use the Inquisition to increase repression (trials) in Spain. In a theoretical framework, I show that while the Inquisition would conduct more trials the higher the intensity of the wars fought abroad, it would however decrease its level of repression (trials) if the likelihood of an internal revolt were large enough. This behavior indicates an inverse-U relationship between inquisitorial and war intensity. To test this prediction, I assemble time series data for seven Spanish inquisitorial districts on annual trials of the Inquisition and wars conducted by the Spanish Crown between 1478 and 1808. I show that there is an inverse-U relationship between wars and inquisitorial activity. My results are robust to the inclusion of data on the severity of the weather (droughts) and to adjustments for spillover e.ects from districts other than the main district under analysis. Moreover, using a new database of 35,000 trials of the Inquisition, I show that religious persecution was especially significant during early stages of the Inquisition, while repressive motives better explain its behavior in later periods.
    Date: 2013
  16. By: Aldo Musacchio; Andre Martinez; Martina Viarengo
    Abstract: We explain how the decentralization of fiscal responsibility among Brazilian states between 1889 and 1930 promoted a unequal expansion in public schooling. We document how the variation in state export tax revenues, product of commodity booms, explains increases in expenditures on education, literacy, and schools per children. Yet we also find that such improvements did not take place in states that either had more slaves before abolition or cultivated cotton during colonial times. Beyond path-dependence, ours story emphasizes the interaction between colonial institutions and subsequent fiscal changes to explain radical changes in the ranking of states which persists until today.
    JEL: H40 N46
    Date: 2014–04
  17. By: André De Palma (ENS Cachan - École Normale Supérieure de Cachan - École normale supérieure [ENS] - Cachan); Alexandre Guimard (ENS Cachan - École Normale Supérieure de Cachan - École normale supérieure [ENS] - Cachan)
    Abstract: Past and current experiences can be studied in order to understand the main phenomena driving urbanization and thus to better anticipate the future challenges for cities. We distinguish between the main historical time periods of cities. Then, we discuss some regularities related to the internal structure and the spatial distribution of cities. We present some main demographic forecasts up until the end of the century, and highlight the major challenges for cities. We conclude with the need for Policymakers to take into account externalities (among regions and cities), and to define policy targets at the inter-city level.
    Keywords: urbanization, urban-growth, demography, forecasts, Zipf's law, externalities
    Date: 2014–03–16
  18. By: Anna S. Kimerling (National Research University Higher School of Economics)
    Abstract: The article examines the content, peculiarities and procedures of mass political campaigns that took place between 1946 and 1953 as part of Stalinist policy. The author analyzes the term 'campaign', describes the role of 'letters to the authorities' (complaints) and examines two types of political campaigns: 1) campaigns mobilizing the population for 'the construction of Socialism' and 2) repressive campaigns to eliminate enemies. Archive and newspaper materials help reconstruct the procedure of campaigns where each stage had its functions.
    Keywords: political campaign, letters to the authorities, Stalinist period, Soviet history, Soviet press
    JEL: N34
    Date: 2014
  19. By: Gupta, Bishnupriya (University of Warwick)
    Abstract: Industrial investment in Colonial India was segregated by the export oriented industries, such as tea and jute that relied on British firms and the import substituting cotton textile industry that was dominated by Indian firms. The literature emphasizes discrimination against Indian capital. Instead informational factors played an important role. British entrepreneurs knew the export markets and the Indian entrepreneurs were familiar with the local markets. The divergent flows of entrepreneurship can be explained by the comparative advantage enjoyed by social groups in information and the role of social networks in determining entry and creating separate spheres of industrial investment.
    Date: 2013
  20. By: Nina Dodig (Berlin School of Economics and Law, and Institute for International Political Economy Berlin (IPE)); Hansjorg Herr (Berlin School of Economics and Law, and Institute for International Political Economy Berlin (IPE))
    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: 2014–02–15
  21. By: Klein, Alexander (University of Kent); Otsuy, Keisuke (University of Kent)
    Abstract: In this paper, we analyze the International Great Depression in the US and Western Europe using the business cycle accounting method a la Chari, Kehoe and McGrattan (CKM 2007). We extend the business cycle accounting model by incorporating endogenous factor utilization which turns out to be an important transmission mechanism of the disturbances in the economy. Our main …ndings are that in the U.S. labor wedges account for roughly half of the drop in output while efficiency and investment wedges each account for a quarter of it during the 1929-1933 period while in Western Europe labor wedges account for more than one-third of the output drop and efficiency, government and investment wedges are responsible for the remaining during the 1929-1932 period. Our …ndings are consistent with several strands of existing descriptive and empirical literature on the International Great Depression.
    Keywords: International Great Depression; Business Cycle Accounting; Efficiency, Market Distortions
    Date: 2013
  22. By: Litina, Anastasia (University of Luxembourg)
    Abstract: This research advances the hypothesis that reversal of fortunes in the process of economic development can be traced to the effect of natural land productivity on the desirable level of cooperation in the agricultural sector. In early stages of development, unfavorable land endowment enhanced the economic incentive for cooperation in the creation of agricultural infrastructure that could mitigate the adverse effect of the natural environment. Nevertheless, despite the benefcial effects of cooperation on the intensive margin of agriculture, low land productivity countries lagged behind during the agricultural stage of development. However, as cooperation, and its persistent effect on social capital, have become increasingly important in the process of industrialization, the transition from agriculture to industry among unfavorable land endowment economies was expedited, permitting those economies that lagged behind in the agricultural stage of development, to overtake the high land productivity economies in the industrial stage of development. Exploiting exogenous sources of variations in land productivity across countries the research further explores the testable predictions of the theory. It establishes that: (i) reversal of fortunes in the process of development can be traced to variation in natural land productivity across countries. Economies characterized by favorable land endowment dominated the world economy in the agricultural stage of development but were overtaken in the process of industrialization; (ii) lower level of land productivity in the past is associated with higher levels of contemporary social capital; (iii) cooperation, as reflected by agricultural infrastructure, emerged primarily in places were land was not highly productive and collective action could have diminished the adverse effects of the environment and enhance agricultural output.
    Keywords: Land productivity, Cooperation, Social Capital, Trust, Economic development, Agriculture, Industrialization
    Date: 2013
  23. By: Carlo Ciccarelli (CEIS, University of Rome "Tor Vergata"); Anna Missiaia (London School of Economics)
    Abstract: This paper presents annual estimates of total and per-capita GDP at 1910 prices for the regions of Imperial Austria from the origin of the Dual Monarchy (1867) to the eve of WWI (1913). The time paths of regional GDP are estimated from the yield of the tax on the transfer of real and financial property which is itself very highly correlated with the Schulze (2007) estimates of regional GDP for census years (1870, 1880, 1890, 1900, and 1910). The relative continuity or discontinuity of per-capita GDP growth partitions Austria's regions into two groups. Clear evidence of discontinuity (a "take-off") is present in Carniola, Carinthia, Salzburg, Styria, Littoral, Tyrol, and to some extent Moravia. In Lower and Upper Austria, Bohemia, Silesia, Galicia, Bukovina, and Dalmatia there is instead no evidence of structural break in their growth rates. Significant drops in the level of per-capita GDP do occur (as in Lower Austria and Bohemia after the 1873 financial crash) but have moderate effects on the growth of subsequent years. Regional (per-capita) inequality is also evaluated using standard measures. The coefficient of variation and Theil index follow a U-shaped curve: after a decline lasted about 15 years they both rise and point to, from ca. 1885, growing divergence.
    Keywords: Austria, Regions, GDP, Trend, Cycle, Convergence
    JEL: E32 N33 R11
    Date: 2014–04–11
  24. By: Mannino, Ilda; Ninka, Eniel; Turvani, Margherita
    Abstract: A set of factors facilitate the role of Eco-Industrial Parks in addressing the many environmental challenges arising with economic development: among such factors the local context in which the EIP is embedded, i.e. the cohesion of the community, the cooperation among actors, the proximity and the adaptability, as well as the global context and economic phase play a major role. EIPs’ evolution process is path-dependent, hence also history and choices made in the past as well as the context of the industrial sector are very important in determining their success. We study the industrial area of Venice, namely Porto Marghera, as a showcase, in order to understand how history can twist the evolution of an industrial area and determine its destiny. The analysis covers Industrial Symbiosis leverage factors, as well as the local, national and international context drivers that, over time, promoted or hindered the development and evolution of the area. We show how, due to the action of such multiple factors, such large and major Italian industrial area presenting just few years ago characteristics that could have favoured its development as an EIP, resulted eventually in a failure and the closing down of the most relevant economic activities supporting the functioning of the EIP itself. Context factors and single specific shocks, related to local issues as well as to the global, regional, and national scale, shifted the evolutionary path of a well-integrated EIP, even though the technical and internal characteristics of the industrial area were in place.
    Keywords: Industrial Symbiosis, Eco-industrial Park, Chemistry sector, Italy
    JEL: L23 L61 L65 Q51 Q53
    Date: 2014–04–10
  25. By: Eckhard Hein (Berlin School of Economics and Law, and Institute for International Political Economy Berlin (IPE)); Nina Dodig (Berlin School of Economics and Law, and Institute for International Political Economy Berlin (IPE)); Natalia Budyldina (Berlin School of Economics and Law, and Institute for International Political Economy Berlin (IPE))
    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: 2014–02–15
  26. By: George S. Tavlas (Bank of Greece)
    Abstract: This paper examines the different policy rules proposed by Henry Simons, who, beginning in the mid-1930s, advocated a price-level stabilization rule, and by Milton Friedman, who, beginning in the late-1950s, advocated a rule that targeted a constant growth rate of the money supply. Although both rules shared the objective of eliminating the policy uncertainty emanating from discretion, they differed because of the different views of Simons and Friedman about the stability of secular relationships. Simons' rule relates to modern rules which emphasize the pursuit of price stability as representing optimal monetary policy.
    Keywords: Milton Friedman; Henry Simons; monetary-policy rules
    JEL: B22 E52
    Date: 2014–03
  27. By: Marco Bettiol (Dept. of Economics and Management, University of Padova); Vladi Finotto (Dept. of Management, Università Ca' Foscari Venice); Eleonora Di Maria (Dept. of Economics and Management, University of Padova); Stefano Micelli (Dept. of Management, Università Ca' Foscari Venice)
    Abstract: Theories of innovation have drawn on the dominant form that the process took in the 1960s and 1970s: one characterized by high-tech endeavors, usually based on formal research and scientific investigations, involving patenting and corporations' research laboratories. Those specific assumptions and conceptions of the innovation process overshadowed the role of material action and of materiality in creating new knowledge. The paper points out how materiality Ðin particular the physical creation of artifacts out of available resourcesÐ is a fundamental element in innovation, in particular in generating novel knowledge. We advance an analytical and theoretical framework to think about the role of ÒmakingÓ things Ð defined as ÒtinkeringÓ Ð in innovation processes. We identify three functions to tinkering. First, tinkering is conceived as a form of epistemic action that generates abstract knowledge in and of itself. Second, tinkering orients the emergence of filieres and artifacts towards contributions to specialized innovative labor. Finally, we posit that tinkering is a way of framing innovation and of mobilizing resources and attention to obtain legitimation in industries and in markets. In order to ground our definition and conceptual framing of tinkering, we illustrate the case of the airplane and of the historical development of the aircraft industry as an example to clarify our propositions. The paper closes by proffering avenues for further investigations.
    Keywords: innovation, tinkering, bricolage, materiality
    JEL: O32 M1
    Date: 2014–04
  28. By: Verdugo, Gregory (Bank of France)
    Abstract: Wage inequality decreased continuously in France from 1969 to 2008. In contrast to the US and the UK, this period was also characterised by a substantial increase in the educational attainment of the labour force. This paper investigates whether differences in the timing of educational expansion over the last forty years can explain the divergent evolution of upper tail wage inequality in France relative to other countries. Using a model with imperfect substitution between experience groups, the estimates suggest that the rapid increase in the supply of educated workers during the 1970s and 1990s produced a substantial decline in the skill premium within cohorts. As a result, between a third and half of the decline in wage inequality at the top of the distribution in France during this period is explained by the increase in the educational attainment of the labour force.
    Keywords: wage inequality, France
    JEL: J31
    Date: 2014–03
  29. By: Annamaria Conti; Christopher C. Liu
    Abstract: Considerable attention has been focused, in recent years, on the role that graduate and postdoc students play in the production of academic knowledge. Using data from the MIT Department of Biology for the period 1970-2000, we analyze the evolution over time of four fundamental aspects of their productivity: i) training duration; ii) time to a first publication; iii) productivity over the training period; and iv) collaboration with other scientists. We identified four main trends that are common to graduate students and postdocs. First, training periods have increased for later cohorts of graduate and postdoc students. Second, later cohorts tend to publish their initial first-author article later than the earlier cohorts. Third, they produce fewer first-author publications. Finally, collaborations with other scientists, as measured by the number of coauthors on a paper, have increased. This increase is driven by collaborations with scientists external to a trainee’s laboratory. We interpret these results in light of the following two paradigms: the increased burden of knowledge that later generations of scientists face and the limited availability of permanent academic positions.
    JEL: D2 H41 I2 I20 I28
    Date: 2014–04
  30. By: Draca, Mirko (University of Warwick)
    Abstract: US government spending since World War II has been characterized by large investments in defense related goods, services and R&D. In turn, this means that the Department of Defense (DoD) has had a large role in funding corporate innovation in the US. This paper looks at the impact of military procurement spending on corporate innovation among publicly traded firms for the period 1966-2003. The study utilizes a major database of detailed, historical procurement contracts for all Department of Defense (DoD) prime contracts since 1966. Product-level spending shifts – chiefly centered around the Reagan defense build-up of the 1980s – are used as a source of exogenous variation in firm-level procurement receipts. Estimates indicate that defense procurement has a positive absolute impact on patenting and R&D investment, with an elasticity of approximately 0.07 across both measures of innovation. In terms of magnitudes, the contribution of defense procurement to innovation peaked during the early Reagan build-up, accounting for 11.4% of the total change in patenting intensity and 6.5% for R&D. This compares to a defense sector share in output of around 4%. The later defense cutbacks under Bush Senior and Clinton then curbed the growth in technological intensity by around 2%.
    Keywords: Regan, Military, procurement
    Date: 2013
  31. By: Darwisheh, Housam
    Abstract: Almost three years have passed since the 'Arab Spring' began in late 2010. In the major sites of popular uprisings, political conditions remain unsettled or violent. Despite similarities in their original opposition to authoritarian rule, the outcomes differed from country to country. In Tunisia and Egypt, processes of transiting from authoritarian rule produced contrasting consequences for democratic politics. Uprisings led to armed rebellion in Libya and Syria, but whereas Gaddafi was overthrown, Asad was not. What explains the different trajectories and outcomes of the Arab Spring? How were these shaped by the power structure and levels of social control of the pre-uprising regimes and their state institutions, on the one hand, and by the character of the societies and oppositional forces that rose against them? Comparing Tunisia with Egypt, and Libya with Syria, this paper discusses various factors that account for variations in the trajectories and outcomes of the Arab Spring, namely, the legacy of the previous regime, institutional and constitutional choices during "transition" from authoritarian rule, socioeconomic conditions, and the presence of absence of ethnic, sectarian and geographic diversity.
    Keywords: Middle East & Norht Africa, Tunisia, Egypt, Libya, Syria, Revolutions, Internal politics, Democratization, People's movement, Institutions, Transition, Islamists
    JEL: N15 N17 P16
    Date: 2014–03
  32. By: Anthony B. Atkinson (Nuffield College, Oxford, LSE and Institute for New Economic Thinking at the Oxford Martin School); Salvatore Morelli (CSEF – University of Naples – Federico II and Institute for New Economic Thinking at the Oxford Martin School)
    Abstract: The purpose of this Chartbook is to present a summary of evidence about long-run changes in economic inequality – primarily income, earnings, and wealth – for 25 countries covering more than one hundred years. There is a range of countries and they account for more than a third of the world’s population: Argentina, Brazil, Australia, Canada, Finland, France, Germany, Iceland, India, Indonesia, Italy, Japan, Malaysia, Mauritius, Netherlands, New Zealand, Norway, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, the UK and the US. The results are presented in 25 charts, one for each country, together with a description of the sources. The underlying figures are available for download at
    Date: 2014–03
  33. By: Hezekiah Agwara; Philip Auerswald; Brian Higginbotham
    Abstract: We first summarize the dominant interpretations of the “frontier” in the United States and predecessor colonies over the past 400 years: agricultural (1610s-1880s), industrial (1890s-1930s), scientific (1940s- 1980s), and algorithmic (1990s-present). We describe the difference between the algorithmic frontier and the scientific frontier. We then propose that the recent phenomenon referred to as “globalization” is actually better understood as the progression of the algorithmic frontier, as enabled by standards that in turn have facilitated the interoperability of firm-level production algorithms. We conclude by describing implications of the advance of the algorithmic frontier for scientific discovery and technological innovation.
    JEL: D30 L15 O31 O32 O33
    Date: 2014–04
  34. By: Daniel Detzer (Berlin School of Economics and Law, and Institute for International Political Economy Berlin (IPE)); Hansjorg Herr (Berlin School of Economics and Law, and Institute for International Political Economy Berlin (IPE))
    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 fruitfully can be combined. 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: 2014–02–15
  35. By: Coral del Rio (Universidade de Vigo and EQUALITAS); Olga Alonso-Villar (Universidade de Vigo, Facultade de CC. Economicas, Departamento de Economia Aplicada)
    Abstract: The aim of this paper is twofold: a) To explore the evolution of occupational segregation of women and men of different racial/ethnic groups in the U.S. during the period 1940-2010; and b) to assess the consequences of segregation for each of them. For that purpose, this paper proposes a simple index that measures the monetary loss or gain of a group derived from its overrepresentation in some occupations and underrepresentation in others. This index has a clear economic interpretation. It represents the per capita advantage (if the index is positive) or disadvantage (if the index is negative) of the group, derived from its segregation, as a proportion of the average wage of the economy. Our index seems a helpful tool not only for academics but also for institutions concerned with inequalities related to gender, race, ethnicity, and migration status, among others, since it makes it possible to rank different groups in an economy or a target group across time according to its segregation nature.
    Keywords: Occupational segregation; local segregation; race; ethnicity; gender; wages; U.S.
    JEL: J15 J16 J71 D63
    Date: 2014–02
  36. By: Graciela Laura Kaminsky; Pablo Vega-García
    Abstract: The literature on sovereign defaults has focused on adverse shocks to debtors’ economies, suggesting that defaults are of an idiosyncratic nature. Still, many of the sovereign crises are of a systemic nature, clustered around panics in the financial centers. Crises in the financial centers are rare events and their effects on the periphery can only be captured by examining long episodes. This paper examines sovereign defaults in Latin America from 1820 to 1931. We find that systemic crises are different. The international collapse of liquidity is at their core. Default spells and recovery rates are also affected by liquidity crashes.
    JEL: F3 F34
    Date: 2014–04
  37. By: Jason M. Fletcher
    Abstract: A growing literature in economics and other disciplines has tied exposure to early health shocks, particularly in utero influenza, to reductions in a variety of socioeconomic and health outcomes over the life course. However, no current evidence exists that examines this health shock on mortality because of lack of available data. This paper uses newly released files from the large, representative National Longitudinal Mortality Study to explore the mortality effects of the 1918 influenza pandemic for those in utero. While the results on socioeconomic outcomes mimic those in the literature, showing reductions in completed schooling and income fifty years following influenza exposure, the findings also suggest no effect on overall mortality or by categories of cause-of-death. These results are counter-intuitive in their contrast with the many reported effects on cardiovascular health as well as the literature linking education with later mortality
    Date: 2014–03
  38. By: Peter Wirtz (Centre de Recherche Magellan - Institut d'Administration des Entreprises (IAE) - Lyon - Université Jean Moulin - Lyon III : EA3713)
    Abstract: From its very beginning, the governance of the Company of Jesus featured a certain number of specificities : vow of obedience to the pope, strong authority of the order's general, as well as the ignatian spirit which is transmitted through the spiritual exercises to all generations of jesuits. This article shows that the young Company's governance system played a decisive role for the order's missionary effectiveness. This is due, in great part, to its action as a cognitive and behavioral lever.
    Keywords: Governance, cognitive lever, behavioral lever, jesuits
    Date: 2014–04–02
  39. By: Ariel Dvoskin
    Abstract: The article discusses M. Allais’ contributions on equilibrium and capital during the 1940s. While in his Traité (1943) Allais formalizes for the first time an intertemporal general equilibrium (IGE) in a finitehorizon economy, he subsequently abandons this notion, and in the Économie (1947) resumes, instead, the more traditional method based on the notion of stationary equilibrium. The article argues: i) that Allais’ reasons to leave the IGE framework behind, of which the most important turn round his misgivings about the sufficiently correct foresight entailed by that notion, and that reflect the impossibility to establish a correspondence between observations and theory by means of the IGE method, are well-justified; ii) that his shift to the method based on the notion of stationary equilibrium to connect the results of neoclassical theory with observations cannot be accepted, since a notion of stationary equilibrium that would make this correspondence possible must face an insurmountable difficulty in the treatment of the factor capital.
    Keywords: Allais, Intertemporal Equilibrium, Stationary Equilibrium, Perfect Foresight, Centre of Gravitation
    JEL: B2 B30 B4 D50 D24
    Date: 2013–12
  40. By: Y. Lemp\'eri\`ere; C. Deremble; P. Seager; M. Potters; J. P. Bouchaud
    Abstract: We establish the existence of anomalous excess returns based on trend following strategies across four asset classes (commodities, currencies, stock indices, bonds) and over very long time scales. We use for our studies both futures time series, that exist since 1960, and spot time series that allow us to go back to 1800 on commodities and indices. The overall t-stat of the excess returns is $\approx 5$ since 1960 and $\approx 10$ since 1800, after accounting for the overall upward drift of these markets. The effect is very stable, both across time and asset classes. It makes the existence of trends one of the most statistically significant anomalies in financial markets. When analyzing the trend following signal further, we find a clear saturation effect for large signals, suggesting that fundamentalist traders do not attempt to resist "weak trends", but step in when their own signal becomes strong enough. Finally, we study the performance of trend following in the recent period. We find no sign of a statistical degradation of long trends, whereas shorter trends have significantly withered.
    Date: 2014–04
  41. By: Mitchener, Kris James (University of Warwick); Richardson, Gary (University of California, Irvine)
    Abstract: We examine how the Banking Acts of the 1933 and 1935 and related New Deal legislation influenced risk taking in the financial sector of the U.S. economy. Our analysis focuses on contingent liability of bank owners for losses incurred by their firms and how the elimination of this liability influenced leverage and lending by commercial banks. Using a new panel data set that compares balance sheets of state and national banks, we find contingent liability reduced risk taking, particularly when coupled with rules requiring banks to join the Federal Deposit Insurance Corporation. Leverage ratios are higher in states with limited liability for bank owners. Banks in states with contingent liability converted each dollar of capital into fewer loans, and thus could sustain larger loan losses (as a fraction of their portfolio) than banks in limited liability states. The New Deal replaced a regime of contingent liability with stricter balance sheet regulation and increased capital requirements, shifting the onus of risk management from banks to state and federal regulators. By separating investment banks from commercial banks, the Glass-Steagall Act left investment banks to manage their own leverage, a feature of financial regulation that, in part, depended on their partnership structure.
    Date: 2013
  42. By: Welander, Anna (Lund University); Lyttkens, Carl Hampus (Lund University); Nilsson, Therese (Research Institute of Industrial Economics (IFN))
    Abstract: Good health is crucial for human and economic development. In particular poor health in childhood seems to be of utmost concern since it causes irreversible damage and have implications later in life. Recent research suggests globalization is a strong force affecting adult and child health outcomes. Yet, there is much unexplained variation with respect to the globalization effect on child health, in particular in low- and middle-income countries. One factor that could explain such variation across countries is the quality of democracy. Using panel data for 70 developing countries between 1970 and 2009 this paper disentangles the relationship between globalization, democracy, and child health. Specifically the paper examines how globalization and a country's democratic status and historical experience with democracy, respectively, affect infant mortality. In line with previous economic research, results suggest that globalization reduces infant mortality and that the level of democracy in a country generally improves child health outcomes. We also find that democracy matters for the size of the globalization effect on child health. If e.g. Côte d'Ivoire was a democracy in the 2000–2009 period, this effect would translate into 1,200 fewer infant deaths in an average year compared to the situation without democracy.
    Keywords: Globalization; Democracy; Health; Developing Countries
    JEL: I15 P16
    Date: 2014–04–08
  43. By: Jeremy Atack; Matthew S. Jaremski; Peter L. Rousseau
    Abstract: We investigate the relationships of bank failures and balance sheet conditions with measures of proximity to different forms of transportation in the United States over the period from 1830-1860. A series of hazard models and bank-level regressions indicate a systematic relationship between proximity to railroads (but not to other means of transportation) and “good” banking outcomes. Although railroads improved economic conditions along their routes, we offer evidence of another channel. Specifically, railroads facilitated better information flows about banks that led to modifications in bank asset composition consistent with reductions in the incidence of moral hazard.
    JEL: N21 N71
    Date: 2014–04
  44. By: Blum, Matthias; Greasley, David; Hanley, Nicholas; Kunnas, Jan; McLaughlin, Eoin; Oxley, Les; Warde, Paul
    Abstract: Genuine Savings has emerged as a widely-used indicator of sustainable development. In this paper, we use long-term data stretching back to 1870 to undertake empirical tests of the relationship between Genuine Savings (GS) and future well-being for three countries: Britain, the USA and Germany. Our tests are based on an underlying theoretical relationship between GS and changes in the present value of future consumption. Based on both single country and panel results, we find evidence supporting the existence of a cointegrating (long run equilibrium) relationship between GS and future well-being, and fail to reject the basic theoretical result on the relationship between these two macroeconomic variables. This provides some support for the GS measure of weak sustainability. We also show the effects of modelling shocks, such as World War Two and the Great Depression.
    Keywords: cointegration; indicators; economic history; comprehensive investment; Genuine Savings; Weak sustainability
    Date: 2014–04
  45. By: Crafts, Nicholas (University of Warwick)
    Abstract: If the Eurozone follows the precedent of the 1930s, it will not survive. The attractions of escaping from the gold standard then were massive and they point to a strategy of devalue and default for today’s crisis countries. A fully-federal Europe with a banking union and a fiscal union is the best solution to this problem but is politically infeasible. However, it may be possible to underpin the Euro by a ‘Bretton-Woods compromise’ that accepts a retreat from some aspects of deep economic integration since exit entails new risks of financial crisis that were not present eighty years ago.
    Keywords: economic disintegration; Eurozone; financial repression; gold standard; macroeconomic trilemma; political trilemma
    Date: 2013
  46. By: Cebula, Richard
    Abstract: Using over a half century of data, this empirical study adopts a simple loanable funds model to investigate the impact of federal budget deficits in the U.S. on the ex post real interest rate yield on ten year U.S. Treasury notes. Three estimates using annual data for three different time periods (1960-2013, 1971-2013, 1980-2013) are provided; in addition, as a de facto modest test of robustness, one additional estimate using quarterly data for the period 1960.1 through 2013.4 is also provided. In each of the four empirical analyses, an autoregressive 2SLS estimate finds that the ex post real interest rate yield on ten year U.S. Treasury notes is an increasing function of the ex post real interest rate yield on Moody’s Baa-rated corporate bonds, the ex post real interest rate yield on three year Treasury notes, and the ex post real interest rate yield on high grade municipal bonds. This exploratory analysis also finds consistent evidence that federal budget deficit (relative to the GDP level) exercised a positive and statistically significant impact on the ex post real interest rate yield on ten year Treasury notes
    Keywords: real longer-term interest rate; government budget deficit
    JEL: E41 E43 E44 H62
    Date: 2014–03–24
  47. By: de la Fonteijne, Marcel
    Abstract: Main goal of this paper is to clarify the paradox of monetary profit. The definitions and formulas introduced will make it simple and straight forward to understand the paradox. In order to understand from where the profits or monetary profits of capitalists and firms emerge I examined the phrase of Marx, ‘Die Gesamtklasse der Kapitalisten kann nichts aus der Zirkulation herausziehen, was nicht vorher hineingeworfen war.’ and classified it as very confusing. I will show where this confusion comes from and show how to cope with problems alike in a systematic way by using definitions and formulas. As a bonus these formulas give us insight under which conditions the economy can be sustainable and that the relation between monetary profit for firms and savings for household defines a very limited solution space in which the economy can operate in a sustainable way and yet only considering the boundary condition for firm profit and household savings. It will also give us a clue where the motivation for participating in the economy comes from.
    Keywords: monetary profit, paradox, Marx, Keynes, Capitalists
    JEL: E11 E12 E20 E25
    Date: 2013–10–08
  48. By: Chiswick, Carmel U. (George Washington University)
    Abstract: Religious considerations affect the decision to immigrate as well as the choice of destination country, and religious behaviors change as immigrants adjust to the economic context of their new country. This paper considers the interaction between the Economics of Religion and the Economics of Immigration, and distinguishes between religiosity per se and an immigrant's religious identity (affiliation). Religious groups are described as quasi-enclaves and immigrant churches as a subset of these. Rising full prices (wage rates) and incomes during the adjustment process affect the religious behavior of immigrants. Religious institutions (referred to as churches) also respond to systematic changes in the religious behaviors of their members.
    Keywords: international migration, immigrant adjustment, quasi-enclave, immigrant church, religiosity, religion, social change
    JEL: Z12 J61 J11 J15
    Date: 2014–04
  49. By: MATSUBARA, Hideto
    Abstract: While the advance of globalization is significant today, market-opening is often viewed pessimistically from a perspective of a huge impact on local economies in an importing country. In Japan, a critical voice is raised to Trans-Pacific Strategic Economic Partnership Agreement (TPP) from the agricultural sector, which is especially uncompetitive and placed in difficult situation in local regions. However, the influence of market-opening is not necessarily insurmountable. From a historic perspective, some producing regions survived in a liberalized competitive market. As the illustration, this research discusses Japanese orange industry and the successful producing region, Mikkabi-town, in liberalization of the orange market in Japan.
    Date: 2014–04
  50. By: Marcella Corsi; Giulia Zacchia
    Abstract: The aim of this paper is to offer a contribution to the analysis of the under-representation of women economists in academic positions in Italy, focusing on publications. In Italy women’s proportion of PhDs in Economics and Statistics has increased from 39 to 52 per cent in the last decade. Despite this progressive feminization of doctoral degrees in economics, the share of women working as academic staff in departments of Economics at Italian universities is still low: women constitute 28.1% of academic economists in Italy; in particular, women account for 16% of full professors and 27% of associate professors (data for 2010). The much-debated reform of the Italian university system (so called ‘Gelmini’ reform) is stressing the importance of ‘merit evaluation’ for academics and consequently it is supporting the use of bibliometric indicators for the purposes of selection. In this context, we aim to assess whether the systematic differences between Italian men and women in terms of academic career in economics, can be explained by their productivity in the last ten years. In order to do so, we first study, from a gender perspective, how the profile of economists who have become full professors in the last decade has changed in terms of individual characteristics and scientific productivity. Then, we study gender differences in the scientific output of academic economists since 2001, in order to find out about differences between men and women and completethe picture of the gender gap in career for economists in the Italian University.
    JEL: J16 J70 D72
    Date: 2014–04–14
  51. By: Shuhei Nishitateno; Paul J. Burke
    Abstract: The evolution of motorcycle ownership is a crucial issue for road safety, as motorcyclists are highly vulnerable road users. Analyzing a panel of 153 countries for the period 1963-2010, we document a motorcycle Kuznets curve which sees motorcycle dependence increase and then decrease as economies develop. Upswings in motorcycle ownership are particularly pronounced in densely populated countries. We also present macro-level evidence on the additional road fatalities associated with motorcycles. Our results indicate that many low-income countries face the prospect of an increasing number of motorcycle-related deaths over coming years unless adequate safety initiatives are implemented.
    Keywords: motorcycles, economic development, Kuznets curve, road safety, road fatalities
    JEL: R41 O18 Q43
    Date: 2014
  52. By: Wenli Cheng; Yongzheng Wu; CEMA; College of Mathematics and Computer Science, Hunan Normal University
    Abstract: This paper investigates income inequality in the post-reform Chinese economy of 1978 to 2011. We identify a Kuznets inverted-U relationship between economic development and overall income inequality and provide evidence to suggest that this relationship was driven by the process of urbanization. We demonstrate that, after controlling for urbanization, low productivity in agriculture relative to that of the economy as a whole (dualism) was a significant contributing factor to income inequality. Inflation and the expansion of higher education are also found to have had an effect of widening inequality, but the effect of education does not appear to be robust.
    Keywords: Kuznets curve, income inequality in China, Theil index, urbanisation, dualism
    JEL: O15 O53
    Date: 2014–04
  53. By: Lim , Jamus Jerome; Minne, Geoffrey
    Abstract: This paper considers the question of whether international banks learn from their previous crisis experiences and reduce their lending to developing countries in the event of a financial crisis. The analysis combines a bank-level dataset of bank activity and ownership with country-level data on the stock of historical crisis events between 1800 and 2005. To circumvent selection and endogeneity concerns, the paper exploits temporal variations in the relative recency of crises as instruments for crisis experience. The results indicate that foreign banks with greater crisis experience reduced their lending significantly more relative to other foreign banks, which can be interpreted as evidence in favor of a learning effect. The findings survive robustness checks that include alternative measures of crisis experience, additional controls, and decompositions into different types of crises. The question of learning is also examined from the perspective of other measures of bank performance.
    Keywords: Banks&Banking Reform,Debt Markets,Access to Finance,Bankruptcy and Resolution of Financial Distress,Financial Crisis Management&Restructuring
    Date: 2014–04–01
  54. By: Eckhard Hein (Berlin School of Economics and Law, and Institute for International Political Economy Berlin (IPE)); Nina Dodig (Berlin School of Economics and Law, and Institute for International Political Economy Berlin (IPE))
    Abstract: In this paper we review the empirical and theoretical literature on the effects of changes in the relationship between the financial sector and the non-financial sectors of the economy associated with ‘financialisation’ on distribution, growth, instability and crises. We take a macroeconomic perspective and examine four channels of transmission of financialisation to the macroeconomy: first, the effect on income distribution, second, the effects on investment in capital stock, third, the effects on household debt and consumption, and fourth, the effects on net exports and current account balances. For each of these channels we briefly review some empirical and econometric literature supporting the presumed channels, some theoretical and modelling literature examining the macroeconomic effects via these channels, and finally, we present small models generating the most important macroeconomic effects. We show that, against the background of redistribution of income at the expense of the labour income share and depressed investment in capital stock, each a major feature of financialisation, short- to medium-run dynamic ‘profits without investment’ regimes may emerge, which can be driven by flourishing consumption demand or by rising export surpluses, compensating for low or falling investment in capital stock. However, each type of these regimes, the ‘debt- led consumption boom’ type and the ‘export-led mercantilist’ type, contains internal contradictions, with respect to household debt in the first regime and with respect to foreign debt of the counterpart current account deficit countries in the second regime, which finally undermine the sustainability of these regimes and lead to financial and economic crises.
    Keywords: financialisation, distribution, growth, instability, financial and economic crises, Kaleckian models, current account imbalances.
    JEL: E12 E22 E24 E44 F41 G01
    Date: 2014–02–15
  55. By: Soonwoo Kwon; Jihong Lee; Sokbae 'Simon' Lee (Institute for Fiscal Studies and Seoul National University)
    Abstract: We analyze cross-country trends in technological progress over the period of 1980-2011 by examining citations data from almost 4 million utility patents granted by the US Patent and Trademark Oce (USPTO). Our estimation results on patent quality and distance to the knowledge frontier reveal the following stylized facts. The emerging Asian economies of Korea, Taiwan and China have indeed achieved substantial catch-up towards the technology frontier. In the case of Korea and Taiwan, progress has been made in terms of patent quality as well as distance to the frontier. Chinese patents are of higher quality now than before but Chinese inventors have yet to reduce the citation lag relative to the frontier. In contrast, advanced economies of Europe and Japan have displayed steady decline in their patent quality. Finally, the US has maintained, and in some cases strengthened, its position as the world technology frontier.
    Date: 2014–03
  56. By: Malcolm Sawyer (University of Leeds)
    Abstract: The paper sets out different perspectives on the bank-based vs market-based typology of financial systems. It presents a general critique of the typology, paying particular attention to the ways in which the typology reflects a loanable funds approach, ignoring the roles of banks in the credit money creation process, and the neglect of different types of banks. It is argued that banks should be viewed as institutions engaged in market transactions and the equity markets as also institutions involved in markets.
    Keywords: bank-based financial system, market-based financial system
    JEL: G19 G20
    Date: 2014–01–20
  57. By: Cebula, Richard
    Abstract: Unaccounted for currency in the U.S. is argued to reflect the presence of widespread income tax evasion. This empirical study seeks to identify determinants of the underground economy in the U.S. in the form of federal personal income tax evasion over the period 1970-2008. In this study, we use the most recent data available on personal income tax evasion, data that are derived from the General Currency Ratio Model and measured in the form of the ratio of unreported AGI (adjusted gross income) to reported AGI. Other studies of federal income tax evasion for the U.S. are dated and do not use data this current. It is found that personal income tax evasion was an increasing function of the maximum marginal federal personal income tax rate, the percentage of federal personal income tax returns characterized by itemized deductions, and unpopular military engagements, in this case, the War in Iraq, and a decreasing function of the Tax Reform Act of 1986 (during its first two years of being implemented), the ratio of the tax free interest rate yield on high grade municipals to the interest rate yield on ten year Treasury notes (as a measure of the incentive effect of a better return to tax avoidance, which is legal), and higher audit rates of filed federal income tax returns (as a measure of risk from tax evasion) by IRS personnel.
    Keywords: underground economy; tax evasion; tax rates; audit rates
    JEL: H24 H26 H31 K42
    Date: 2014–04–12
  58. By: Vieira, Heleno Piazentini; Valls Pereira, Pedro L.
    Abstract: O presente artigo estuda os ciclos de negócios brasileiro no período dos anos 1900 até 2012. Como a série trimestral do PIB real só começa em 1980 é construida a série para o período de 1900 a 1979, utilizando um modelo estrutural de series de tempo com disagregação temporal para o primeiro período. A partir disso, um modelo com mudança Markoviana é proposto para que seja construída uma cronologia de ciclo de negócios. O modelo selecionado possui dois regimes distintos cenários de expansão e de recessão, a datação obtida é comparada com outros estudos sobre o tema e são propostas caracterizações das fases de crescimento que podem apoiar estudos sobre a história econômica do Brasil.
    Date: 2014–04–02
  59. By: Kim, Byung Yeon; Shida, Yoshisada
    Abstract: We measure the informal economy and shortages of consumer goods in the Soviet republics from 1965 to 1989 to estimate the relationships of these two variables. We use fixed-effect model and instrument variable approach and find that the informal economy and shortages reinforce each other. Results indicate that the Soviet central planning system is difficult to sustain in the long run. A substantial heterogeneity across the Soviet republics exists not only in the extent of the informal economy and shortages, but also in the associations of the two variables.
    Keywords: shortages, informal economy, Soviet republics
    JEL: P21 P27 P36
    Date: 2014–03
  60. By: Bruno Amable (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris 1 - Panthéon-Sorbonne, CEPREMAP - Centre pour la recherche économique et ses applications, IUF - Institut Universitaire de France - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique)
    Abstract: This paper analyses the French political crisis since the late 1970s by investigating the links between the social structure and the economic policy expectations of the electorate. To this end, data on post-electoral survey are used to estimate structural models of political support to political parties for 1978 and 2012, and the estimation results are used to propose an analysis of the French crisis. The enduring French political crisis is found to be the expression of contradictions between the economic policies implemented by the successive governments and the existence of a dominant social bloc, i.e. a coalition of social groups that would politically support the dominant political strategy. Since 1978, both the right and the left have failed to find a solution to the contradictions between the policies they implemented and the expectations of their social bases, which are themselves inhabited by tensions and contradictions that evolve with the structure of French capitalism. The failure of all governing coalitions so far is a new expression of that of the "modernists" to take into account the expectations of the popular classes.
    Keywords: France; political crisis; political economy; social base
    Date: 2014–03

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