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on Business, Economic and Financial History |
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Issue of 2014‒06‒28
fourteen papers chosen by |
| By: | Peter H. Lindert |
| Abstract: | Thomas Piketty’s monumental Capital in the Twenty-First Century has transported us to a higher understanding of historical movements in inequality. This essay ranks the promise of different paths that scholars can usefully follow from the point to which his book has guided us. The main path to follow is the income inequality history so well paved by Piketty and his team, supported by the book’s history of twentieth-century shocks and political responses. Less promising is the book’s emphasis on wealth, capital, and the rate of return. Following the income route to better inequality predictions requires merging his team’s history of top income shares with the history of inequality movements within the lower 90 percent. It also invites a merger with other scholarship that has shown positive growth effects of the kind of democracy Piketty calls for. |
| JEL: | D31 D63 E01 H20 N10 N30 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20232&r=his |
| By: | Frédéric TEULON; Bruno FISCHER |
| Abstract: | Jacques Léon Rueff (1896-1978) is one of the great French economists of the twentieth century, yet today it is largely unknown. The recurrence of financial crises around the world is an opportunity to rediscover the originality of thought of that great liberal writer who was an advisor to Raymond Poincaré in 1926 during the crisis of the franc, and actor of recovery of the French economy in 1958. Fascinated by the system of the gold standard, Rueff denounces U.S. monetary hegemony and international monetary disorder for years 1960/1970. |
| Keywords: | History of Economic Thought, International Monetary system, Monetary history. |
| Date: | 2014–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-335&r=his |
| By: | Kopsidis, Michael; Bromley, Daniel W. |
| Abstract: | Our purpose here is to challenge the big-bang approach to economic history in which some alleged institutional imposition - a deus machine - is claimed to launch a series of new economic behaviors. This so-called prime mover is then carried forward by the inexorable forces of path dependency to change the course of history. The specific creation story under investigation here is the French Revolution and the subsequent Napoleonic conquest of parts of Germany. We show that recent efforts to re-write German economic history using this theoretical model cannot be supported by the abundant and concerted empirical evidence. -- |
| Keywords: | institutional change,French Revolution,Germany,Prussian reforms,agricultural development,industrialization |
| JEL: | N43 N53 N63 O43 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iamodp:149&r=his |
| By: | Naomi R. Lamoreaux |
| Abstract: | The legal rules governing businesses’ organizational choices have varied across nations along two main dimensions: the number of different forms that businesses can adopt; and the extent to which businesses have the contractual freedom to modify the available forms to suit their needs. Until the last quarter of the twentieth century, businesses in the U.S. had a narrower range of forms from which to choose than their counterparts in these other countries and also much less ability to modify the basic forms contractually. This article uses the case of Pennsylvania to argue that the sources of this “American exceptionalism” reside in the interplay between the early achievement of universal (white) manhood suffrage and elite efforts to safeguard property rights. |
| JEL: | K2 N41 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20231&r=his |
| By: | Mario J. Crucini; Gregor W. Smith |
| Abstract: | We study the role of distance and time in statistically explaining price dispersion for 14 commodities from 1732 to 1860. The prices are reported for US cities and Swedish market towns, so we can compare international and intranational dispersion. Distance and commodity-specific fixed effects explain a large share—roughly 60%—of the variability in a panel of more than 230,000 relative prices over these 128 years. There was a negative "ocean effect": international dispersion was less than would be predicted using distance, narrowing the effective ocean by more than 3000 km. The absolute effect of distance declined over time beginning in the 18th century. This process of convergence was broad- based, across commodities and locations (both national and international). But there was a major interruption in convergence in the late 18th and early 19th centuries, at the time of the Napoleonic Wars, stopping the process by two or three decades on average. |
| JEL: | N70 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20247&r=his |
| By: | Thorvald Grung Moe (Norges Bank) |
| Abstract: | The 1951 Treasury–Federal Reserve Accord is an important milestone in central bank history. It led to a lasting separation between monetary policy and the Treasury's debtmanagement powers and established an independent central bank focused on price and macroeconomic stability. This paper revisits the history of the Accord and elaborates on the role played by Marriner Eccles in the events leading up to the Accord. As chairman of the Board of Governors since 1934, Eccles was also instrumental in drafting key banking legislation that enabled the Federal Reserve System to assume a more independent role following the Accord. The global financial crisis has generated renewed interest in the Accord and its lessons for central bank independence. This paper shows that Eccles' support for the Accord—and central bank independence—was clearly linked to the strong inflationary pressures in the US economy at the time, and that he was equally supportive of deficit financing in the 1930s. This broader interpretation of the Accord holds the key to a more balanced view of Eccles's role at the Federal Reserve, where his contributions from the mid-1930s up to the Accord are seen as equally important. Accordingly, the Accord should not be viewed as the final triumph of central bank independence, but rather as an enlightened vision for a more symmetric policy role for central banks, with equal weight given to fighting inflation and preventing depressions. |
| Keywords: | Marriner Eccles; Central Banking; Monetary Policy; Fiscal Policy |
| JEL: | B31 E52 E58 E63 N12 |
| Date: | 2014–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2014_06&r=his |
| By: | Peter Rosenkranz; Tobias Straumann; Ulrich Woitek |
| Abstract: | In historical accounts of the world economic crisis of the 1930s, Switzerland is known for its staunch defense of the gold standard and the rise of corporatist policies. Yet, so far, the literature has not discussed the implications of these two features. This paper tries to show how the combination of hard-currency policy and nominal rigidities introduced by corporatist policies proved to be fatal for growth. Estimating a New Keynesian small open economy model for the period 1926-1938, we show that the decision to participate in the Gold Bloc after 1933 at an overvalued currency can be identified as the main reason for the unusual long lasting recession and that price rigidities from 1931 to 1936 significantly slowed down the adjustment process. |
| Keywords: | Great Depression, Switzerland, New Keynesian Business Cycle Model |
| JEL: | E12 E32 N14 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:164&r=his |
| By: | Pauline Grosjean (School of Economics, Australian School of Business, the University of New South Wales); Rose Khattar (School of Economics, Australian School of Business, the University of New South Wales) |
| Abstract: | We document the implications of missing women in the short and long run. We exploit a natural historical experiment, which sent large numbers of male convicts and far fewer female convicts to Australia in the 18th and 19th century. In areas with higher gender imbalance, women historically married more, worked less, and were less likely to occupy high-rank occupations. Today, people living in those areas have more conservative attitudes towards women working and women are still less likely to have high-ranking occupations. We document the role of vertical cultural transmission and of homogamy in the marriage market in sustaining cultural persistence. Conservative gender norms may have been beneficial historically, but are no longer necessarily so. Historical gender imbalance is associated with an aggregate income loss estimated at $800 per year, per person. Our results are robust to a wide array of geographic, historical and present-day controls, including migration and state fixed effects, and to instrumenting the overall sex ratio by the sex ratio among convicts. |
| Keywords: | Culture, gender roles, sex ratio, natural experiment, Australia |
| JEL: | I31 N37 J16 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2014-29&r=his |
| By: | Pierre de Gioia-Carabellese (School of Management and Languages, Heriot-Watt University) |
| Abstract: | A jurisdiction such as the Scottish one, reputedly with solid Roman roots, is practically bereft of the fundamental concept of a deposit in the concluding passage of the missives. Alternatively, the relevant "ancestor" (Roman law) has been profoundly permeated, throughout the course of its history, by the notion of an arrha (the earnest) in the conclusion of a contract annexed to the transfer of heritable properties. Moreover, in contemporary times and outwith Scotland, a Continental jurisdiction (the Italian one) is resolutely lingering on the Roman caparra penitenziale while, ironically, the English system (comprehensively "un-Roman" in its formation) has expressly adopted the "deposit" as part of the closing particulars. These asymmetries and crossovers, brim-full with inviting legal ingredients, seem, in the present work, to conjure up an intriguing and captivating plot worthy of an Indiana Jones' film, where the lost treasure can be deemed replaceable, for the distracted reader, by the ancient Roman notion of an arrha, so evidently not inherited by the contemporary Scottish jurisprudence. Ultimately, the contribution engenders the usual unsettling query: in the light of the phenomenology of the arrha so neglected in Scotland in contemporary times, is Scottish law still a mixed legal system or, conversely, a jurisdiction progressively getting closer to the English common law counterpart? |
| Keywords: | Missives, Scots law, Sale of heritable properties, Italian Law, English Law, Comparison, historical development of the concept of arrha |
| JEL: | K |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:vnm:wpdman:81&r=his |
| By: | Aoki, Masahiko (Asian Development Bank Institute) |
| Abstract: | Economists often identify a reduction in the share of agricultural employment as a quantitative indication of the economic growth of nations. But this process did not occur in earnest in the People’s Republic of China until the 1980s and to some extent in Japan until well into the mid-20th century. Were extractive political regimes, commonly regarded as the primary drivers of economic performance, solely responsible for the lateness of these developments? This paper deals with this question from a strategic perspective by examining the interactions between the polity and the economy in both countries. It begins by characterizing the complementary nature of the peasant-based economy and the agrarian-tax state in premodern China and Japan. It then describes how endogenous strategic forces evolved from among the intermediate organizations in each country to challenge the incumbent dynastic ruler in response to the commercialization of the peasant-based economy on one hand and the fiscal and military weakening of the agrarian-tax state on the other. The paper then introduces a three-person game model between a ruler and two challenging organizations, and derives conditions for multiple equilbria and their comparative static. The analytical results help to identify the endogenous strategic forces that led the Meiji Restoration and the Xinhai Revolution to move from a premodern state of play to nation-state building and modern economic regimes in each country. |
| Keywords: | endogenous institutional change; institutional complementarity; Chinese economy; Meiji Restoration; tax state; peasant-based economy; three person politico-economic game |
| JEL: | B52 C72 N40 N45 O10 P51 |
| Date: | 2014–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0486&r=his |
| By: | Daniel Vaughan |
| Abstract: | Using a novel biographical database including all Presidents and presidential candidates in Colombia for the period 1833-2010 I show that the value of a political connection can be quantified in terms of the votes transferred within a political network. I consider three types of political networks depending on whether links are created by a cabinet or foreign service appointment and a family connection. I find that a one standard deviation increase in votes received by connections generates a maximum gain of three-fourths of a standard deviation. I also reject for the presence of network endogeneity that may bias the estimates. |
| Keywords: | Political Networks, Political Dynasties, Economic and Political History, Colombia, Elites |
| JEL: | D85 P16 D72 N46 O54 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2013-18&r=his |
| By: | Stephan Schulmeister (WIFO) |
| Abstract: | The economic policy of Roosevelt's New Deal stays in sharp contrast to the course followed by European policy since 2009. At first, Roosevelt focussed on fighting the desperate feelings of people and the generally pessimistic mood of the public, on strictly regulating the financial sector and on setting up investment and employment programs. After that, structural reforms were carried out in order to strengthen confidence and social coherence. The most important measures were the introduction of unemployment insurance and of a public pension scheme as well as regulations to ensure "fair" labour conditions. The New Deal policy was successful: GDP expanded in the USA between 1933 and 1937 by 43 percent, mainly due to a boom in investments (+140 percent). By fighting the social-psychological depression and "speculation with other people's money", Roosevelt anticipated those two main messages of Keynes' "General Theory" (1936) which were later forgotten: first, the importance of uncertainty and the "state of confidence" and, second, the necessity to radically restrict financial speculation. |
| Keywords: | Makroökonomische Politik, Depressionen, New Deal |
| Date: | 2014–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2014:i:473&r=his |
| By: | Maddison, David; Rehdanz, Katrin |
| Abstract: | Records of rental agreements for agricultural land in England between 1690 and 1914 are used to develop an annual rental price index for agricultural land. This index displays a long run cointegrating relationship with indices for the price of agricultural output and agricultural wage rates. A vector error correction model illustrates the powerful long run causal influence of the price of agricultural output and wage rates on rents. By contrast, there is no evidence that rents cause wage rates or the price of agricultural output. Such results suggest that Ricardo was right when he posited that rent was a residual driven by increases in the price of agricultural output rather than the other way around. Matters are different however when the price of individual agricultural commodities is used rather than the price of agricultural output. In this situation there emerges a bidirectional causal relationship of the type envisaged by Jevons. Lastly our framework can also be used to measure the rate of technical progress in agriculture. While we cannot find a statistically significant level of technical progress before the industrial revolution, after 1785 the rate of technical progress is a brisk 1.8 percent per annum. |
| Keywords: | Ricardo, Land Rents, Causality, Community/Rural/Urban Development, Consumer/Household Economics, International Development, Land Economics/Use, B31, Q15, |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc14:169733&r=his |
| By: | Ernesto Clar (Universidad de Zaragoza,Zaragoza,Spain); Vicente Pinilla (Universidad de Zaragoza,Zaragoza,Spain); Raúl Serrano (Universidad de Zaragoza,Zaragoza,Spain) |
| Abstract: | Este trabajo analiza la evolución del comercio agroalimentario español en el período en el que han tenido lugar las más hondas transformaciones de la economía española, la segunda mitad del siglo XX y la primera década del XXI. El artículo estudia la evolución de las exportaciones e importaciones agroalimentarias españolas desde 1951 y hasta 2011, junto al saldo de la balanza comercial correspondiente. Asimismo, sigue con detalle los cambios en la composición de las compras y ventas exteriores para este tipo de productos, como un reflejo de los cambios económicos de fondo. Para las exportaciones se realiza un ejercicio econométrico para evaluar sus principales determinantes en el caso español. Las conclusiones apuntan hacia una mayor diversificación y transformación de los productos comerciados, tras las cuales se hallan, a nivel microeconómico, la mejora en la renta y los cambios en las preferencias, y a nivel macroeconómico, el fuerte efecto de la integración de España en la UE desde 1986 y el desarrollo de la agroindustria al crecer el tamaño del mercado doméstico (home market effect). |
| Keywords: | Palabras clave: Comercio agroalimentario, Agricultura española. |
| JEL: | N54 N74 Q17 F14 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:ahe:dtaehe:1414&r=his |