New Economics Papers
on Business, Economic and Financial History
Issue of 2014‒08‒09
twenty-two papers chosen by

  1. The roots of "Western European societal evolution" By Zsinka, László
  2. Wine historical statistics: A quantitative approach to its consumption, production and trade, 1840-1938 By Vicente Pinilla
  4. Engineers, Innovative Capacity and Development in the Americas By William F. Maloney; Felipe Valencia Caicedo
  5. The Wind of Change: Maritime Technology, Trade and Economic Development By Pascali, Luigi
  6. Gibrat's Law and the British industrial revolution By Alexander Klein; Tim Leunig
  7. History of American Corporate Governance: Law, Institutions, and Politics By Eric Hilt
  8. Australia’s Role in the Pacific By Malcolm Fraser
  9. Kinetic Exchange Models in Economics and Sociology By Sanchari Goswami; Anirban Chakraborti
  10. Rainfall risk and religious membership in the late Nineteenth-Century United States By Philipp Ager; Antonio Ciccone
  11. Latin America's socail imagination since 1950. From one type of ‘absolute certainties’ to another — with no (far more creative)‘uncomfortable uncertainties’ in sight, By José Gabriel Palma
  12. Technology in Colonial India: Three Discourses By Roy, Tirthankar
  13. Das Scheitern historischer Währungsräume: Kann sich die Geschichte auch für die Eurozone wiederholen? By Berthold, Norbert; Braun, Stella; Coban, Mustafa
  14. Discurso e contexto: política siderúrgica no primeiro governo Vargas (1930-1937) By Barros, Gustavo
  15. The Causal Effect of Environmental Catastrophe on Long-Run Economic Growth: Evidence From 6,700 Cyclones By Solomon M. Hsiang; Amir S. Jina
  16. The Changing Face of World Oil Markets By James D. Hamilton
  17. National Saving in Canada and the United States, 1926 to 2011 By Lafrance, Amelie; Macdonald, Ryan
  18. The Federal Reserve: Looking Back, Looking Forward : a speech at the Annual Meeting of the American Economic Association, Philadelphia, Pennsylvania, January 3, 2014 By Bernanke, Ben S.
  19. The Economics of Density: Evidence from the Berlin Wall By Gabriel M. Ahlfeldt; Stephen J. Redding; Daniel M. Sturm; Nikolaus Wolf
  20. The Patriarchy Index: a comparative study of power relations across historic Europe By Siegfried Gruber; Mikolaj Szoltysek
  21. De la Reforma Agraria al desplazamiento forzado en Colombia, 1900-2010 By Laura Elena Salas Noguera
  22. Precios inmobiliarios de vivienda en Bogotá 1970-2013 By Samuel Jaramillo González; Nicolás Cuervo Ballesteros

  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: Vicente Pinilla
    Abstract: This working paper provides a compilation of statistics on international wine consumption, production and trade from the mid-nineteenth century until the beginning of the Second World War. The statistical data is structured in three parts dealing with consumption, production and trade both at the world level and for a broad sample of countries. The data presented for Spain, France and Italy, the leading three nations in the wine market, are especially wide-ranging.
    Keywords: wine trade, wine production, wine consumption, agricultural trade, historical statistics
    JEL: N50 N70 Q11 Q17
    Date: 2014–07
  3. By: Reckendrees, Alfred
    Abstract: In the early 19th century coal mining in the region of Aachen (Prussian Rhine Province) developed to an industrial scale within few decades production was mechanised and new types of industrial organization emerged that allowed for concentration on production and economies of scale. The region hosted two mining areas (the Wurm area and the Inde area) showing rather different patterns of development; while the industry on the Inde was al-ready concentrated at the turn of the century, and industrial modes of production emerged earlier, the industry on the Wurm developed slowly more slowly. Decentralized ownership prohibited scale economics before the mid-1830s. Then, new joint stock companies allowed for concentration of ownership, rationalisation of production and efficient governance. The analysis shows that these different patterns result from different pre-industrial institutional arrangements that were only harmonized during the French occupation of the Rhineland. The ms. [written in German] containes 189p., 24 figures and maps, 49 tables on regional industrial production; the data is available from the author.
    Keywords: Industrialization, Regional Industrialization, Coal mining, Germany, Rhineland, Prussia
    JEL: N53 N93 O12
    Date: 2014–07
  4. By: William F. Maloney; Felipe Valencia Caicedo
    Abstract: Using newly collected national and sub-national data and historical case studies, this paper argues that differences in innovative capacity, captured by the density of engineers at the dawn of the Second Industrial Revolution, are important to explaining present in come differences, and, in particular, the poor performance of Latin America relative to North America. This remains the case after controlling for literacy, other higher order human capital, such as lawyers, as well as demand side elements that might be confounded with engineering. The analysis then finds that agglomeration, certain geographical fundamentals, and extractive institutions such as slavery affect innovative capacity. However, a large effect associated with being a Spanish colony remains suggesting important inherited factors.
    Keywords: Innovative Capacity, Engineers, Technology Diffusion, Human Capital, Growth, Development, History
    JEL: O1 O31 O33 O4 N1
    Date: 2014–06–19
  5. By: Pascali, Luigi (The University of Warwick)
    Abstract: The 1870-1913 period marked the birth of the first era of trade globalization. How did this tremendous increase in trade affect economic development? This work isolates a causality channel by exploiting the fact that the steamship produced an asymmetric change in trade distances among countries. Before the invention of the steamship, trade routes depended on wind patterns. The introduction of the steamship in the shipping industry reduced shipping costs and time in a disproportionate manner across countries and trade routes. Using this source of variation and a completely novel set of data on shipping times, trade, and development that spans the great majority of the world between 1850 and 1900, I find that 1) the adoption of the steamship was the major reason for the firrst wave of trade globalization, 2) only a small number of countries that were characterized by more inclusive institutions benefited from globalization, and 3) globalization exerted a negative effect on both urbanization rates and economic development in most other countries.
    Keywords: Steamship, Gravity, Globalization
    Date: 2014
  6. By: Alexander Klein; Tim Leunig
    Abstract: This paper examines Gibrat’s law in England and Wales between 1801 and 1911 using 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 transport revolution, 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
    JEL: I3
    Date: 2013–09
  7. By: Eric Hilt
    Abstract: This paper presents an overview of the history of corporate governance in the United States, emphasizing the period before the advent of federal securities laws and the Securities and Exchange Commission (SEC). Recent research has overturned many widely accepted beliefs about corporate governance during this period. In particular, the evolution of American corporate governance has not followed a simple, linear trajectory, beginning with small, well-governed firms and ending with large, poorly governed ones. Over time, economic and institutional changes have given rise to successive generations of corporations with their own governance problems and their own mechanisms to address those problems. When existing governance mechanisms failed, the United States experienced corporate governance crises—episodes that shattered investors’ faith in corporate management and the legal institutions intended to protect their rights. The resolutions of these crises have sometimes been found in legal innovations, and in other cases, in institutional or market-based solutions.
    JEL: G3 N21 N81
    Date: 2014–07
  8. By: Malcolm Fraser
    Abstract: For all its history, Australia has been dependent upon a major power for security. Before federation, the colonies looked to Britain. That attitude continued until World War II. Britain was then unable to defend us, and Australia was vulnerable. Strategic dependence upon a major power was in the Australian psyche. A necessity forced us to transfer that sense of dependence to the United States. This was a justifiable policy until the fall of the Soviet Union. Now, changes in the United States itself, the absence of a global threat, and changes within the Pacific theatre all point to the need for Australia to abandon its traditional policies, to stand more independently, and to carve out a future for itself.
    Keywords: foreign policy; strategic allies; strategic dependence; national interest; sovereignty
  9. By: Sanchari Goswami; Anirban Chakraborti
    Abstract: In this article, we briefly review the different aspects and applications of kinetic exchange models in economics and sociology. Our main aim is to show in what manner the kinetic exchange models for closed economic systems were inspired by the kinetic theory of gas molecules. The simple yet powerful framework of kinetic theory, first proposed in 1738, led to the successful development of statistical physics of gases towards the end of the 19th century. This framework was successfully adapted to modeling of wealth distributions in the early 2000's. In later times, it was applied to other areas like firm dynamics and opinion formation in the society, as well. We have tried to present the flavour of the several models proposed and their applications, intentionally leaving out the intricate mathematical and technical details.
    Date: 2014–08
  10. By: Philipp Ager; Antonio Ciccone
    Abstract: Building on the idea that religious communities provide mutual insurance against some idiosyncratic risks, we argue that religious membership is more valuable in societies exposed to greater common risk. In our empirical analysis we exploit rainfall risk as a source of common economic risk in the nineteenth-century United States and show that religious communities were larger in counties where they faced greater rainfall risk. The link between rainfall risk and the size of religious communities is stronger in counties that were more agricultural, that had lower population densities, or that were exposed to greater rainfall risk during the growing season.
    Keywords: Religious community size, agricultural risk, informal insurance.
    Date: 2014–07
  11. By: José Gabriel Palma
    Abstract: Latin America is a region whose critical social imagination has stalled, changing from a uniquely prolific period during the 1950s and 1960s — revolving around structuralism, ‘dependency analyses’, Baran and Sweezy’s-type analysis of ‘monopoly capitalism’, French structuralism, the German Historical School, Keynesian and macroeconomics, and the ideas of endogenous intellectuals (such as Mariátegui) — to an intellectually barren one since the 1982 debt crisis and the fall of the Berlin Wall. Although this has happened in most of the world, in Latin America both the process of re-legitimisation of capital, and the downswing of the cycle of critical thinking have been particularly pronounced as neo-liberalism has conquered the region, including most of its progressive intelligentsia, just as completely (and just as fiercely) as the Holy Inquisition conquered Spain — transforming critical thinkers into an endangered species. As pre-1980 critical analytical work had been characterised by an unremitting critique of the economy, once the mainstream left conceded the economy as the fundamental hub of the struggle, there seemed to have been little else left in terms of basic ideological principles to hold onto in a thoughtful way — i.e., it was as if the mainstream left had lost not just some but all its ideological relevance, making it particularly difficult for them to move forward in an innovative way. As a result, in terms of development strategies and economic policies both the traditional and the ‘new-left’ are in one way or another still stuck in the past. While in some countries the former basically wants to recreate the past, in others the latter seems to be unable to do anything more imaginative than to attempt to create a future which is simply the exact opposite of that past — the main guiding economic policy principle being to transform practically anything that before was considered “virtue” into “vice”, and vice-versa. This narrow ‘reverse-gear’ attitude of the ‘new-left’ has delivered not only a disappointing economic performance (particularly in terms of productivity-growth), but also rather odd political settlements characterised by a combination of an insatiable capitalist elite, a captured and unimaginative progressive political élite (the dominant classes are quite happy to let them govern as long as they do not forget who they are), passive citizens, and a stalled social imagination — a dull mélange that from time to time is sparked off by spontaneous outbursts of students’ discontent. Meanwhile, the world (with its new technological and institutional paradigms) moves on, and Asia forges ahead.
    Keywords: Latin America, Ideology, Critical Thinking, Structuralism, Dependency,Neoliberalism,Fundamentalism, ‘New Left’, Top 1%, Keynes, Foucault, Prebisch, Hirschman.
    JEL: B5 D3 E2 F13 F59 J20 L52 N16 N36 O16 O4 P5
    Date: 2014–06–19
  12. By: Roy, Tirthankar (London School of Economics)
    Abstract: The historiography of the development and diffusion of technology in the modern world has grown as a collection of discourses, which differ in points of emphasis. The three common points of emphasis are state intervention, cultural makeup of societies, and economic calculations. The disjointedness characterizes the literature on colonial India (1857-1947) as well, complicated further by the need to understand the role that British colonial rule played in these processes. The present survey discusses, compares, and evaluates the diverse narratives.
    Keywords: Colonial India, Technology
    Date: 2014
  13. By: Berthold, Norbert; Braun, Stella; Coban, Mustafa
    Abstract: In den letzten drei Jahrhunderten wurde mehrmals der Versuch gestartet, eine stabile Währungsunion aus souveränen Staaten zu bilden. Vier historische Beispiele sollen durch ihre Entstehungsgeschichte und ihren Zerfall Aufschluss darüber geben, welche Gründe und Ursachen die Instabilität von Währungsräumen vorantreibt. Die Geschichte zeigt in bestimmten Punkten Parallelen zur heutigen Situation der Europäischen Währungsunion. Austrittsgründe der historischen Unionsmitglieder und die Stärke der Austrittsbemühungen lassen sich zum Teil auf die heutige Eurozone projizieren. -- In the last three centuries it has been attempted to constitute a stable monetary union of souvereign states. The history and the collapse of four historical examples shed light on the reasons and causes that drive the instability of currency areas. The history shows parallels to the current situation of the European Monetary Union. Reasons for the exit of historical Union members as well as the strength of their efforts to pot out, can partly be transferred to the current euro zone.
    Keywords: Lateinische Münzunion,Skandinavische Münzunion,Kronenzone,Rubelzone,Historische Währungsräume,Latin Monetary Union,Scandinavian Monetary Union,Crown Zone,Ruble Zone,Historical Currency Areas
    JEL: E42 E52 N13 N14
    Date: 2014
  14. By: Barros, Gustavo
    Abstract: In February 1931, Getúlio Vargas delivered a well known speech in Belo Horizonte and made then one of his most important public interventions in the Brazilian steel-making debate. This speech made fortune in the historiography, above all for its incisive statement in favor of a national steel-making industry and, by extension, of industry in general, few months after the Revolution of 1930. We discuss and interpret here this speech, alongside with a comparison between what was defended in the speech and the steel-making policy which effectively followed it along the first Vargas government, but before the Estado Novo. We try to understand the reasons which led Vargas to state what he did about the steel-making problem, at that moment in Belo Horizonte, based on the history of the debate until then, on the position which the state of Minas Gerais occupied in it and on other propositions made by Vargas on the same occasion. Regarding the steel-making policy actually implemented by the government after the speech, we conclude that, if it was not nonexistent, we must at least consider it as disappointing, if compared to the expectations which the vehemence of his 1931 speech could give rise to.
    Keywords: Brazil; Getúlio Vargas; industrialization; steel-making; iron ore export; industrial policy
    JEL: N56 N66 O14 O25
    Date: 2014–07–30
  15. By: Solomon M. Hsiang; Amir S. Jina
    Abstract: Does the environment have a causal effect on economic development? Using meteorological data, we reconstruct every country's exposure to the universe of tropical cyclones during 1950-2008. We exploit random within-country year-to-year variation in cyclone strikes to identify the causal effect of environmental disasters on long-run growth. We compare each country's growth rate to itself in the years immediately before and after exposure, accounting for the distribution of cyclones in preceding years. The data reject hypotheses that disasters stimulate growth or that short-run losses disappear following migrations or transfers of wealth. Instead, we find robust evidence that national incomes decline, relative to their pre-disaster trend, and do not recover within twenty years. Both rich and poor countries exhibit this response, with losses magnified in countries with less historical cyclone experience. Income losses arise from a small but persistent suppression of annual growth rates spread across the fifteen years following disaster, generating large and significant cumulative effects: a 90th percentile event reduces per capita incomes by 7.4% two decades later, effectively undoing 3.7 years of average development. The gradual nature of these losses render them inconspicuous to a casual observer, however simulations indicate that they have dramatic influence over the long-run development of countries that are endowed with regular or continuous exposure to disaster. Linking these results to projections of future cyclone activity, we estimate that under conservative discounting assumptions the present discounted cost of "business as usual" climate change is roughly $9.7 trillion larger than previously thought.
    JEL: H87 O11 O44 Q51 Q54 R11
    Date: 2014–07
  16. By: James D. Hamilton
    Abstract: This year the oil industry celebrated its 155th birthday, continuing a rich history of booms, busts and dramatic technological changes. Many old hands in the oil patch may view recent developments as a continuation of the same old story, wondering if the high prices of the last decade will prove to be another transient cycle with which technological advances will again eventually catch up. But there have been some dramatic changes over the last decade that could mark a major turning point in the history of the world’s use of this key energy source. In this article I review five of the ways in which the world of energy may have changed forever.
    JEL: Q41
    Date: 2014–07
  17. By: Lafrance, Amelie; Macdonald, Ryan
    Abstract: This paper examines the composition of Canadian and United States gross national saving for a period spanning more than 80 years, using time series from the Bureau of Economic Analysis in the United States and a newly created dataset for Canada. The paper tracks short-term, year-to-year fluctuations, cyclical fluctuations and long-term compositional changes. It illustrates a substantial degree of national saving reallocation across sectors, annually and across business cycles. The national saving rate is more stable than sector saving rates, implying that sectoral changes have been largely offsetting.
    Keywords: Economic accounts, Intercity and international price comparisons, Prices and price indexes, Statistical methods
    Date: 2014–06–26
  18. By: Bernanke, Ben S. (Board of Governors of the Federal Reserve System (U.S.))
    Date: 2014–01–03
  19. By: Gabriel M. Ahlfeldt; Stephen J. Redding; Daniel M. Sturm; Nikolaus Wolf
    Abstract: This paper develops a quantitative model of internal city structure that features agglomeration and dispersion forces and an arbitrary number of heterogeneous city blocks. The model remains tractable and amenable to empirical analysis because of stochastic shocks to commuting decisions, which yield a gravity equation for commuting flows. To structurally estimate agglomeration and dispersion forces, we use data on thousands of city blocks in Berlin for 1936, 1986 and 2006 and exogenous variation from the city's division and reunification. We estimate substantial and highly localized production and residential externalities. We show that the model with the estimated agglomeration parameters can account both qualitatively and quantitatively for the observed changes in city structure.
    JEL: N34 O18 R12
    Date: 2014–07
  20. By: Siegfried Gruber (Max Planck Institute for Demographic Research, Rostock, Germany); Mikolaj Szoltysek (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: This paper stands at the confluence of three streams of historical social science analysis: the sociological study of power relations within the family, the regional demography of historical Europe, and the study of spatial patterning of historical family forms in Europe. It is a preliminary exercise in the design and application of the new “master variable” for cross-cultural studies of family organization and relations. This indexed composite measure, which we call the Index of Patriarchy, incorporates a range of variables related to familial behavior, including nuptiality and age at marriage, living arrangements, postmarital residence, power relations within domestic groups, the position of the aged, and the sex of the offspring. The index combines all these items, with each being given equal weight in the calculation of the final score, which represents the varying degrees of sex- and age-related social inequality (“patriarchal bias”) in different societal and familial settings. To explore the comparative advantages of the Index, we use information from census and census-like microdata for 91 regions of historic Europe covering more than 700,000 individuals living in 143,000 domestic groups from the Atlantic to the Urals. The index allows us to identify regions with different degrees of patriarchy within a single country, across the regions of a single country, or across and within many broader zones of historic Europe. The unprecedented patterning of the many elements of power relations and agency contained in the index generates new ways of accounting for both the geographies and the histories of family organization across the European landmass.
    Keywords: Europe, patriarchy
    JEL: J1 Z0
    Date: 2014–07
  21. By: Laura Elena Salas Noguera
    Abstract: Este trabajo analiza los efectos de largo plazo de la reforma agraria entendida como la asignación de tierras baldías sobre el desplazamiento forzado, el abandono y despojo de tierras, en un contexto concentración del poder político y aumentos en los retornos de la tierra. A partir de un estudio econométrico, se encuentra que en Colombia la adjudicación de baldíos en presencia de aumentos en los retornos de la tierra, tiene un efecto positivo y estadísticamente significativo en el desplazamiento forzado. Además, se evidencia una correlación positiva y significativa entre la adjudicación de baldíos, el abandono y el despojo de tierras.
    Keywords: reforma agraria, derechos de propiedad, conflicto, desplazamiento, despojo y abandono de tierras.
    JEL: Q15 R52 D74 N4
    Date: 2014–05–05
  22. By: Samuel Jaramillo González; Nicolás Cuervo Ballesteros
    Abstract: En este texto se actualizan los datos sobre precios inmobiliarios referidos a la vivienda en Bogotá producidos por el Observatorio del Mercado del Espacio Construido del CEDE, cuya última versión publicada data ya de una década. En este texto se presentan datos entre 1970 y 2013 de tres precios inmobiliarios claves: el monto del canon de alquiler, el precio de compraventa de las edificaciones y el precio del suelo destinado a vivienda. Los dos primeros son producidos por el CEDE a partir de las ofertas publicadas en los periódicos, y el último se apoya en los datos generados por la Lonja de Propiedad Raíz de Bogotá. Una característica importante de estos datos es que tienen control espacial y son enteramente compatibles entre sí: se refieren a siete áreas de vivienda en Bogotá, que se mantienen fijas durante estos 43 años. Las cifras de precios del suelo son anuales, las relacionadas con los precios y alquileres de los inmuebles son anuales hasta 1984 y de allí en adelante son semestrales. Se presentan cifras para tres estratos y un promedio general. Se realiza una estimación de la rentabilidad de la inversión en alquiler de vivienda y se compara con otras opciones de inversión similares. También se comparan las series aquí presentadas con cifras producidas por otras entidades: cifras de alquiler generadas por el DANE y cifras de vivienda usada producidas por el Banco de la República.
    Keywords: vivienda, mercado inmobiliario, precios del suelo, alquiler, precios de vivienda
    JEL: R31
    Date: 2014–06–06

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