New Economics Papers
on Business, Economic and Financial History
Issue of 2014‒07‒05
fourteen papers chosen by

  1. The roots of "Western European societal evolution" By Zsinka, László
  2. Inherited Wealth over the Path of Development: Sweden, 1810–2010 By Ohlsson, Henry; Roine, Jesper; Waldenström, Daniel
  3. Reverse assimilation? Immigrants in the Canadian labour market during the Great Depression By Kris Inwood; Chris Minns; Lee Summerfield
  4. Mutual Assistance between Federal Reserve Banks, 1913-1960 as Prolegomena to the TARGET2 Debate By Barry Eichengreen; Arnaud J. Mehl; Livia Chițu; Gary Richardson
  5. The 1883 convention and the impossible unification of industrial property By Gabriel Galvez-Behar
  6. A Historical Sketch of Macroeconometrics By Rahmanov, Ramiz
  7. Income Inequality in the 21st Century -- A biased summary of Piketty's Capital in the Twenty-First Century By Dietrich Stauffer
  8. Navigating Constraints: The Evolution of Federal Reserve Monetary Policy, 1935-59 By Carlson, Mark A.; Wheelock, David C.
  9. From Long-Run Utopia to Technical Expertise: Solow's Growth Model as a Multipurpose Design By Verena Halsmayer
  10. Similar Challenges - Different Responses: Housing Policy in Germany and Russia between the Two World Wars By Konstantin A. Kholodilin; Mark G. Meerovich
  11. Globalisation and maritime labour in Norway after World War II. By Tenold, Stig
  12. Atanasoff’s invention input and early computing state of knowledge By Rouchy, Philippe
  13. Women, Working Families, and Unions By Janelle Jones; John Schmitt; Nicole Woo
  14. Do economists need virtues? By David Lipka

  1. By: Zsinka, László
    Abstract: Jenő Szűcs wrote his essay entitled Sketch on the three regions of Europe in the early 1980s in Hungary. During these years, a historically well-argued opinion emphasising a substantial difference between Central European and Eastern European societies was warmly received in various circles of the political opposition. In a wider European perspective Szűcs used the old “liberty topos” which claims that the history of Europe is no other than the fulfillment of liberty. In his Sketch, Szűcs does not only concentrate on questions concerning the Middle Ages in Western Europe. Yet it is this stream of thought which brought a new perspective to explaining European history. His picture of the Middle Ages represents well that there is a way to integrate all typical Western motifs of post-war self-definition into a single theory. Mainly, the “liberty motif”, as a sign of “Europeanism” – in the interpretation of Bibó’s concept, Anglo-saxon Marxists and Weber’s social theory –, developed from medieval concepts of state and society and from an analysis of economic and social structures. Szűcs’s historical aspect was a typical intellectual product of the 1980s: this was the time when a few Central European historians started to outline non-Marxist aspects of social theory and categories of modernisation theories, but concealing them with Marxist terminology.
    Keywords: liberty topos, eurocentrism, structure analysis
    JEL: N01
    Date: 2014
  2. By: Ohlsson, Henry (Department of Economics); Roine, Jesper (Stockholm School of Economics); Waldenström, Daniel (Department of Economics)
    Abstract: Inherited wealth has attracted much attention recently, much due to the research by Thomas Piketty (Piketty, 2011; 2014). The discussion has mainly revolved around a long-run contrast between Europe and the U.S., even though data on explicit historical inheritance flows are only really available for France and to some extent for the U.K. We study the long-run evolution of inherited wealth in Sweden over the past two hundred years. The trends in Sweden are similar to those in France and the U.K: beginning at a high level in the nineteenth century, falling sharply in the interwar era and staying low thereafter, but tending to increase in recent years. The levels, however, differ greatly. The Swedish flows were only half of those in France and the U.K. before 1900 and also much lower after 1980. The main reason for the low levels in the nineteenth century is that the capital-income ratio is much lower than in “Old Europe”. In fact, the Swedish capital-income ratio was similar to that in the U.S., but the savings and growth rates were much lower in Sweden than in the U.S. Rapid income growth following industrialization and increasing savings rates were also important factors behind the development of the capital-income ratio and the inheritance flow during the twentieth century. The recent differences in inheritance flows have several potential explanations related to the Swedish welfare state and pension system. Sweden was “un-European” during the nineteenth century because the country was so poor, Sweden is “un-European” today because so much wealth formation has taken place within the welfare state and the occupational pension systems.
    Keywords: Inheritance; Capital accumulation; Inverse mortality multiplier
    JEL: D30 J10 N10
    Date: 2014–06–30
  3. By: Kris Inwood; Chris Minns; Lee Summerfield
    Abstract: This paper uses Canadian Census data from 1911 to 1931 to trace the labour market assimilation of immigrants up to the onset of the Great Depression. We find that substantial earnings convergence between 1911 and 1921 was reversed between 1921 and 1931, with immigrants from Continental Europe experiencing a sharp decline in earnings relative to the native-born. The effect of Depression labour market conditions were particularly pronounced among older immigrants with long tenures in Canada.
    Keywords: Canada; Immigrants; Assimilation; Earnings; Wages; Early 20th Century; Great Depression; Labour Markets
    JEL: O51 N0 F54 J61
    Date: 2014–06
  4. By: Barry Eichengreen; Arnaud J. Mehl; Livia Chițu; Gary Richardson
    Abstract: This paper reconstructs the forgotten history of mutual assistance among Reserve Banks in the early years of the Federal Reserve System. We use data on accommodation operations by the 12 Reserve Banks between 1913 and 1960 which enabled them to mutualise their gold reserves in emergency situations. Gold reserve sharing was especially important in response to liquidity crises and bank runs. Cooperation among reserve banks was essential for the cohesion and stability of the US monetary union. But fortunes could change quickly, with emergency recipients of gold turning into providers. Because regional imbalances did not grow endlessly, instead narrowing when region-specific liquidity shocks subsided, mutual assistance created only limited tensions. These findings speak to the current debate over TARGET2 balances in Europe.
    JEL: F30 N20
    Date: 2014–06
  5. By: Gabriel Galvez-Behar (IRHiS - Institut de Recherches Historiques du Septentrion - CNRS : UMR8529 - Université Lille III - Sciences humaines et sociales)
    Abstract: Symbol of a global policy, the TRIPS agreement is often considered as a way to impose a Western intellectual property regime and, thus, as a form of neocolonialism. Some critical analysis of the Western intellectual property invite us to historicize its development and refuse therefore to consider the TRIPS agreement as the inevitable outcome of a teleological process. Characterized by an early international regulation - with the creation of the 1883 Paris Convention on patents and trademarks, and with the 1886 Berne Convention on copyright - the history of intellectual property gives rise, it is true, to such a finalist perspective. For some, insofar as they were concluded when the Western countries shared Africa and the world, these treaties symbolize the first step of an imperial vision of intellectual property. The parallel is tempting : the late 19th century conventions would be to imperialism what the TRIPS agreement is to neo-colonialism. However, concerning the industrial property, this analogy is problematic and threatens to revive the teleological perspective which is denounced. To what extent, in fact, did the 1883 convention constitute a form of imperialism ? How were the territories under the domination of Western countries embedded in the development of industrial property in the 19th century and the early 20th century ? Our paper has no other purpose than to offer some considerations about the patent right relating with these questions. First, we will consider the issue of international but also sub-national diversity : culture can not be only considered from a national point of view and even in industrialized countries traditional knowledge, for example, was excluded from the field of patentability. Then we will focus on the emergence of the Paris convention, which constituted, at the same time, a French attempt to homogenize the international patent practices and a way to close the patent controversy. At last, our paper will deal with the integration of colonies in the Paris Union, which occurred in the Interwar period and especially with the Hague Conference (1925), which will be analyzed more specifically.
    Keywords: brevets d'invention; propriété industrielle; histoire; innovation; Union de Paris
    Date: 2014–05–15
  6. By: Rahmanov, Ramiz
    Abstract: The paper describes the evolutionary history of Macroeconometrics over the last one hundred years. Three main approaches are distinguished, their underlying principles are discussed and the weakness of each principle is considered. The paper also shows the current developments in the field and indicates the directions of the research currently undertaken.
    Keywords: Macroeconometrics, history, Cowles Commission, VAR, VECM, DSGE
    JEL: B41 C50 C6 C60
    Date: 2014
  7. By: Dietrich Stauffer
    Abstract: Capital usually leads to income, and income is more accurately and easily measured. Thus we summarize income distributions in USA, Germany, etc.
    Date: 2014–06
  8. By: Carlson, Mark A. (Board of Governors of the Federal Reserve System (U.S.)); Wheelock, David C. (Federal Reserve Bank of St. Louis)
    Abstract: The 1950s are often pointed to as a decade in which the Federal Reserve operated a particularly successful monetary policy. The present paper examines the evolution of Federal Reserve monetary policy from the mid-1930s through the 1950s in an effort to understand better the apparent success of policy in the 1950s. Whereas others have debated whether the Fed had a sophisticated understanding of how to implement policy, our focus is on how the constraints on the Fed changed over time. Roosevelt Administration gold policies and New Deal legislation limited the Fed's ability to conduct an independent monetary policy. The Fed was forced to cooperate with the Treasury in the 1930s, and fully ceded monetary policy to Treasury financing requirements during World War II. Nonetheless, the Fed retained a policy tool in the form of reserve requirements, and from the mid-1930s to 1951, changes in required reserve ratios were the primary means by which the Fed responded to expected inflation. The inability of the Fed to maintain a credible commitment to low interest rates in the face of increased government spending and rising inflation led to the Fed-Treasury Accord of March 1951. Following the Accord, the external pressures on the Fed diminished significantly, which enabled the Fed to focus primarily on macroeconomic objectives. We conclude that a successful outcome requires not only a good understanding of how to conduct policy, but also a conducive environment in which to operate.
    Keywords: Federal Reserve; monetary policy; reserve requirements; Fed-Treasury Accord; inflation
    JEL: E52 E58 N12
    Date: 2014–06–09
  9. By: Verena Halsmayer
    Abstract: Combining concrete policy-oriented modeling strategies of World War II with what was received as traditional neoclassical theory, in 1956 Robert Solow constructed a simple, clean, and smooth-functioning “design” model that served many different purposes. As a working object it enabled experimentation with long-run equilibrium growth. As an instrument of measurement it was applied to time series data. As a prototype it was supposed to feed into larger-scale econometric models that were, in turn, thought of as technologies for policy advice. Used as a teaching device, Solow’s design became a medium of “spreading the technique,” and one of the symbols for neoclassical macroeconomics that soon became associated with MIT.
    Keywords: model, modeling, Robert Solow, growth theory, growth, neoclassical growth model, linear programming, dynamic programming, design model, Harvard Economic Research Project, Massachusetts Institute of Technology
    JEL: B22 B23 B31 B40 O4 Z1
    Date: 2014
  10. By: Konstantin A. Kholodilin; Mark G. Meerovich
    Abstract: The World War I played a key role in shaping modern housing policy. While in the pre-War time virtually no housing policy existed, the beginning of hostilities led to an almost immediate and comprehensive state intervention in the housing market, particularly among those engaged in the war. Despite initially similar conditions and challenges induced by the war, housing policy was carried out in different countries differently. This is particularly true for Germany and Russia. Even though both went through similar processes during the inter-war era, the different objective functions pursued by their political regimes shaped their housing policies in completely different manners. This paper compares the housing policies in Germany and Russia, identifying the similarities and differences.
    Keywords: Germany, Russia, housing policy, World War, rationing, tenant eviction, rent control
    JEL: N44 N94 P25 R38
    Date: 2014
  11. By: Tenold, Stig (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: This paper looks at how "Globalisation" – narrowly defined as the causes and effects of increased international economic integration – has influenced the demand for and supply of maritime products and services, with a particular emphasis on maritime labour. A central argument is that the manner in which maritime labour has been affected varies enormously among the maritime industries, and there is also variation among different occupations. Today, the Norwegian maritime industries have found "a new equilibrium", where old and national traditions have successfully merged with the new and global realities. The discussion paper is structured around six propositions about the relationship between globalisation and Norwegian maritime labour, and these propositions are discussed and linked to empirical data.
    Keywords: Globalisation; maritime economics; maritime history; Norway; seamen; shipping.
    JEL: F16 J82 N34 N74
    Date: 2014–06–30
  12. By: Rouchy, Philippe (CSIR, Blekinge Inst of Technology)
    Abstract: This article investigates the dynamic relationship between a single pursue of an invention and the general US supply of similar activities in early computing during the 1930-1946 period. The objective is to illustrate how an early scientific state of knowledge affects the efficiency with which an theoretical effort is transformed into an invention. In computing, a main challenge in the pre-industrial phase of invention concerns the lack of or scattered demand for such ground-breaking inventions. I present historiographical evidences of the early stage of US computing providing an improved understanding of the dynamics of the supply of invention. It involves solving the alignment between a single inventor’s incentives to research with the suppliers of technology. This step conditions the constitution of a stock of technical knowledge, and its serendipitous but purposeful organisation.
    Keywords: invention input; computing; technological change
    JEL: B25 L63 N12 O14
    Date: 2014–06–23
  13. By: Janelle Jones; John Schmitt; Nicole Woo
    Abstract: One of every nine women in the United States (11.8 percent in 2013) is represented by a union at her place of work. The annual number of hours of paid work performed by women has increased dramatically over the last four decades. In 1979, the typical woman was on the job 925 hours per year; by 2012, the typical woman did 1,664 hours of paid work per year. Meanwhile, women's share of unpaid care work and housework has remained high. Various time-use studies conclude that women continue to do about two-thirds of unpaid child-care (and elder-care) work and at least 60 percent of routine housework. The research reviewed here suggests that unions can provide substantial support to women trying to balance their paid work and their unpaid care responsibilities.
    Keywords: unions, women,
    JEL: J J1 J10 J18 J5 J16 J50 J58 J15 J88 J8
    Date: 2014–06
  14. By: David Lipka
    Abstract: In many works Deirdre McCloskey criticizes professional economics for ignoring virtues. Even though I disagree with details of her analysis I concur with her general conclusions. In the paper I sketch my own perspective on how economists could profit from the virtue discourse as developed by Adam Smith. My argument is intended for economists who believe economics is about implications of individual choice. I distinguish behaviorist and mentalist interpretation and criticize the former. We all should be mentalists and admit the existence of the problem of interpretation. I briefly discuss neuroeconomics and evolutionary psychology as theories of interpretation and show that moral psychology can be viewed as one in morally relevant situations. I read Adam Smith’s Theory of Moral Sentiments as an important contribution to the moral psychology. I outline the Smithian system and show what economists can learn from it. They can improve their interpretive skills but also cultivate their general outlook of the world by understanding how knowledge of the market process shapes interpretation of the choice problem. Their general outlook can do better provided that it is balanced with the complete array of virtues. If not it may provide a distorted picture of reality.
    Keywords: Moral sentiments, Adam Smith, Virtue, Interpretation, mentalism, behaviorism
    JEL: B12 D01 D83
    Date: 2014–06

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