nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2014‒11‒01
29 papers chosen by

  1. Did Science Cause the Industrial Revolution? By Cormac Ó Gráda
  2. On Early Russian Reception Of Mikhail Bakhtin’s Work: The Case Of Vladimir Turbin, Or Staying At The “Boundary Of Silence” By Natalia M. Dolgorukova
  3. Modern secondary education and economic performance: the introduction of the Gewerbeschule and Realschule in nineteenth-century Bavaria By Semrad, Alexandra
  4. Commodity Currencies vs Fiat Money; Automaticity vs Embedment By Kenneth Hermele
  5. The Long-Term Effects of the Printing Press in Sub-Saharan Africa By Julia Cage; Valeria Rueda
  6. Shocking Labor Supply: A Reassessment of the Role of World War II on Women's Labor Supply By Goldin, Claudia D.; Olivetti, Claudia
  7. The Competitive Issue of Paper Money in Switzerland after the Liberal Revolutions in the 19th Century Creation Date: 1990 By E.J. Weber
  8. A counterfactual analysis of the bank-industry relationship in Italy, 1913-1936 By Carlo Drago; Roberto Ricciuti; Alberto Rinaldi; Michelangelo Vasta
  9. The Great Mortgaging: Housing Finance, Crises, and Business Cycles By Oscar Jorda; Moritz Schularick; Alan M. Taylor
  10. Joint-stock companies dynamics, legal institutions and regional economic disparities in Italy (1858-1914) By Pierangelo Toninelli; Claudio Pavese
  11. Date stamping historical oil price bubbles: 1876 - 2014 By Itamar Caspi; Nico Katzke; Rangan Gupta
  12. "Non-Legal-Tender Paper Money: The Structure and Performance of Maryland’s Bills of Credit, 1767-1775" By Jim Celia; Farley Grubb
  13. It takes a quarter of a century to build a dynamic capability : Supplier relations management at Renault (1975-1999) By Carole Donada; Gwenaëlle Nogatchewsky; Anne Pezet
  14. Growth Poles: Agglomeration Economies and Economic Growth in Switzerland from 1860 to 2008 By Christian Stohr;
  15. Family Structure and the Education Gender Gap: Evidence from Italian Provinces By Graziella Bertocchi; Monica Bozzano
  16. The Price of Stability. The balance sheet policy of the Banque de France and the Gold Standard (1880-1914). By G. Bazot; M. D. Bordo; E. Monnet
  17. Physiological Constraints and Comparative Economic Development By Carl-Johan Dalgaard; Holger Strulik
  18. Capital Inflows, Current Accounts and Investment Cycle in Italy: 1861-1913 By Barbara Pistoresi; Alberto Rinaldi
  19. Enfranchisement and Representation: Italy 1909-1913 By Valentino LARCINESE
  20. Human Capital in European Regions since the French Revolution By Ralph Hippe
  21. The Pound of Money of Account in Basle During the Late Middle Ages Creation Date: 1995 By E.J. Weber
  22. Why Convicts (i): An economic analysis of colonial attitudes to the introduction of convicts Creation Date: 1981 By P.C. Statham
  23. Whose values? The Rise, Fragmentation and Marginalization of Collective Choice in Postwar Economics, 1940-1981 By Béatrice CHERRIER; Jean-Baptiste FLEURY
  24. The secular stagnation hypothesis: a review of the debate and some insights By Patrizio Pagano; Massimo Sbracia
  25. John Stuart Mill on Colonies and Colonization Creation Date: 1985 By R.N. Ghosh
  26. Ten Years of the PhD Conference in Economics and Business Creation Date: 1999 By Y. Qiang; K.W. Clements
  27. Regime Switching Model of US Crude Oil and Stock Market Prices: 1859 to 2013 By Mehmet Balcilar; Rangan Gupta; Stephen M. Miller
  28. UWA Discussion Papers in Economics: The first 350 Creation Date: 1996 By V. Karagiannis; L. Neo
  29. The Demand for Alcohol in the U.K. 1920-1938: An econometric study Creation Date: 1988 By A.Y-T. Wong

  1. By: Cormac Ó Gráda (University College Dublin)
    Abstract: This paper reviews debates about the role of science and technology before and during the British Industrial Revolution.
    Keywords: economic history, science, human capital
    JEL: N13 O10 O30
    Date: 2014–10–07
  2. By: Natalia M. Dolgorukova (National Research University Higher School of Economics)
    Abstract: The history of the Soviet reception of Mikhail Bakhtin’s heritage and ideas has not been written yet. The present working paper is a case study of works by Vladimir N. Turbin (1927—1993) who was one of the early Bakhtin’s followers in the USSR. The paper examines Turbin’s books (A Short While Before Aquarius, A Farewell to Epos) and his articles in different years (including published posthumously) related to Bakhtin, his life, theories, and ideas. The careful exploration of these works enables to explain why the proper reception of Bakhtin’s heritage in the USSR in the 1960-70s did not take place and why the book Turbin wanted to write about his teacher has not been written. Turbin’s case allows to argue that Bakhtin’s reception was not successful because of different nature as compared to all of his contemporaries and conversation partners.
    Keywords: Mikhail Bakhtin, Vladimir Turbin, history of reception, history of Russian thought and aesthetics.
    JEL: Z
    Date: 2014
  3. By: Semrad, Alexandra
    Abstract: Do new school types focusing on practical and business-related knowledge lead to increased economic performance? To analyze this question, this paper examines the introduction of two types of modern secondary education, the Gewerbeschule and its successor, the Realschule, in nineteenth-century Bavaria. Since opening of these schools is arguably endogenous – as it were mainly the prosperous, big cities that opened one – the estimated treatment effect capturing the economic influence of the Gewerbeschule/Realschule will lead to biased results. To alleviate this bias, I adopt propensity score matching to compare relatively alike counties with and without these schools. Using historical county-level data on business formations, tax revenues, employment structure, and patent holdings, OLS regression analysis shows that the opening of a modern secondary school is in general positively associated with economic performance several years later.
    Keywords: human capital; secondary education; economic history; economic development; Bavaria
    JEL: I25 N33
    Date: 2014–08
  4. By: Kenneth Hermele (Lund University, Human Ecology Division, Department of Human Geography.)
    Abstract: Commodity currencies have been stood against fiat money in the discourses on the history of money, implying a development from primitive forms of money – which needed anchor in a real commodity to gain acceptance, for instance gold, silver or copper – to a more sophisticated monetary regime based solely on confidence and trust. This paper argues that the idea of a gradual replacement of the former form of money by the latter is an ahistoric construct: commodity and fiat monies have replaced each other over the millennia, and the latest craze for commodity currency was as recent as the 1920’s when numerous European currencies were based on gold. More fundamentally, money is here viewed as a social relationship, where the anchoring of money in commodities over the centuries may be seen either as strengthening the social contract between the regent and the people, or as undermining it by reducing the space of politics at the expense of automatic regulators. With the break-through of democracy in the early 20th century, the benefits of automaticity were increasingly questioned, and finally abandoned in the 1930’s. In this light, the Bretton Woods regime (1945-1970), although based on dollar-gold convertibility, is not to be interpreted as a commodity currency system but rather as one where politics took the lead over market forces, ushering post-WWII Europe, North America and Japan into a stage of embedded liberalism. It is customary to pin the demise of this era to the misuse of the USA of its de facto international currency monopoly, but the crucial shift was rather the advent of neoliberal political domination of the 1980’s which disembedded markets from politics once again, not the over-reach of the USA. The tying of the hands of politics, and thus of democracy, of disembedding the markets, took another leap forward with the convergence criteria established by the EU as a precondition for joining the euro zone. The paper concludes that just as the embedding of the markets post-WWII grew out of the interwar years’ dismal economic, social, political and military experiences, so, too, a re- embedment of markets may take its point of departure in the economic, social and political catastrophes following the financial crisis of 2008, and the difficulty of dealing with its consequences which have beset the euro zone countries ever since. If such a trend begins to take hold, it is argued, it is the political embedding of markets which we should focus on, not the tying of currencies to a commodity anchor.
    Keywords: commodity currency, gold standard, fiat money, automaticity, embedded liberalism, Bretton Woods, disembedment, minting monopoly, seigniorage, social contract, mercantilism
  5. By: Julia Cage (Département d'économie); Valeria Rueda (Département d'économie (ECON))
    Abstract: This article delves into the relationship between newspaper readership and civic attitudes, and its effect on economic development. To this end, we investigate the long-term consequences of the introduction of the printing press in the 19th century. In sub-Saharan Africa, Protestant missionaries were the first both to import the printing press technology and to allow the indigenous population to use it. We build a new geocoded dataset locating Protestant missions in 1903. This dataset includes, for each mission station, the geographic location and its characteristics, as well as the educational and health-related investments undertaken by the mission. We show that, within regions located close to missions, proximity to a printing press significantly increases newspaper readership today. We also document a strong association between proximity to a printing press and contemporary economic development. Our results are robust to a variety of identification strategies.
    Keywords: historical persistence, printing press, Protestant missions, newspaper readership, political participation, economic development.
    JEL: D72 N37 N77 O33 Z12 Z13
    Date: 2014–10
  6. By: Goldin, Claudia D.; Olivetti, Claudia
    Abstract: The most prominent feature of the female labor force across the past hundred years is its enormous growth. But many believe that the increase was discontinuous. Our purpose is to identify the short- and long-run impacts of WWII on the labor supply of women who were currently married in 1950 and 1960. Using WWII mobilization rates by state, we find a wartime impact on weeks worked and the labor force participation of married white (non-farm) women in both 1950 and 1960. The impact, moreover, was experienced almost entirely by women in the top half of the education distribution.
    Date: 2013
  7. By: E.J. Weber
  8. By: Carlo Drago; Roberto Ricciuti; Alberto Rinaldi; Michelangelo Vasta
    Abstract: Until the Banking reform in 1936, banks and industrial companies in Italy were strongly intertwined (both in terms on ownership and interlocking directorates). Using Imita.db – a large a dataset containing data on over 300,000 directors of Italian joint stock companies – this paper analyses what would have happened to the Italian corporate network in the years 1913, 1921, 1927 and 1936 if the “mixed banks” and their directors would have not been there. Our experiments show that new centers of the system would have emerged (financial and electricity and phone companies), confirming the interconnected nature of the Italian capitalism. We also analyze two industries, textiles and iron and steel, characterized by different labor-to-capital intensities to check for sectoral differences. Contrary to conventional wisdom, we find that local banks were important in funding both industries. Overall we call into question the role of mixed banks.
    Keywords: corporate governance, economic history, network analysis
    Date: 2013–05
  9. By: Oscar Jorda (Federal Reserve Bank of San Francisco and University of California, Davis); Moritz Schularick (University of Bonn and Centre for Economic Policy Research and Hong Kong Institute for Monetary Research); Alan M. Taylor (University of California, Davis and National Bureau of Economic Research and Centre for Economic Policy Research)
    Abstract: This paper unveils a new resource for macroeconomic research: a long-run dataset covering disaggregated bank credit for 17 advanced economies since 1870. The new data show that the share of mortgages on banks' balance sheets doubled in the course of the 20th century, driven by a sharp rise of mortgage lending to households. Household debt to asset ratios have risen substantially in many countries. Financial stability risks have been increasingly linked to real estate lending booms which are typically followed by deeper recessions and slower recoveries. Housing finance has come to play a central role in the modern macroeconomy.
    Keywords: Leverage, Recessions, Mortgage Lending, Financial Crises, Business Cycles, Local Projections
    JEL: C14 C38 C52 E32 E37 E44 E51 G01 G21 N10 N20
    Date: 2014–09
  10. By: Pierangelo Toninelli; Claudio Pavese
    Abstract: The paper represents the outcome of an ongoing research program on the dynamics of joint stock companies in Italy between the 1861 Unification of the country and World War 1. It is based on a considerable quantity of data, the bulk of which is constituted by the very detailed set covering the 1883-1913 period, which started to be collected many years ago and has a very reliable empirical support, the weekly companies’ official bulletin. Furthermore evidence for the preceding years have requested accurate investigation about the disposable quantitative information, their homogeneity and comparability. Apart from commenting upon the result of this unique collection of quantitative information, the paper will hopefully provide a not negligible contribution to the explanation of the Italian first period of economic growth and - more specifically - to the origins and evolution of the country’s regional inequalities. It is aimed at enlightening internal economic and social disparities also in terms of the diverging rhythm of private capital formation between the northern and southern regions. It will inquire if and how the joint-stock companies long-term dynamics showed unequal regional concentration, therefore penalizing the economic growth of the areas less affected by the phenomenon.
    Keywords: Italy pre-1913, joint stock companies, corporate law
    JEL: N23 N13 K22
    Date: 2014–10
  11. By: Itamar Caspi (Research Department, Bank of Israel); Nico Katzke (Department of Economics, University of Stellenbosch); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: This paper sets out to date-stamp periods of historic oil price explosivity (or bubbles) using the Generalized sup ADF (GSADF) test procedure suggested by Phillips et al. (2013). The date-stamping strategy used in this paper is effective at identifying periodically collapsing bubbles; a feature found lacking with previous bubble detecting methods. We set out to identify bubbles in the real price and the nominal price-supply ratio of oil for the period 1876 - 2014. The recursive identification algorithms used in this study identifies several periods of significant explosivity, and as such provides future researchers with a reference for studying the macroeconomic impact of historical periods of significant oil price build-ups.
    Keywords: Oil-prices, Date-Stamping Strategy, Periodically Collapsing Bubbles, Explosivity, Flexible Window, GSADF Test, Commodity Price Bubbles
    JEL: C15 C22
    Date: 2014
  12. By: Jim Celia; Farley Grubb (Department of Economics,University of Delaware)
    Abstract: Maryland’s non-legal-tender paper money emissions between 1765 and 1775 are reconstructed to determine the quantities outstanding and their redemption dates, providing a substantial correction to the literature. Over 80 percent of this paper money’s current market value was expected real asset present value and under 20 percent was liquidity premium. It was primarily a real barter asset and not a fiat currency. The liquidity premium was positively related to the amount of paper money per capita in circulation. This paper money traded below face value only due to time-discounting and not depreciation. Past scholars have simply confused time-discounting with depreciation.
    Keywords: asset money, bills of credit, commodity money, fiat money, land banks, legal tender, liquidity premium, paper money, zero-coupon bonds, 1764 Currency Act
    JEL: E31 E42 E51 N11 N21 N41
    Date: 2014
  13. By: Carole Donada (Management Department - ESSEC Business School); Gwenaëlle Nogatchewsky (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris IX - Paris Dauphine); Anne Pezet (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris IX - Paris Dauphine)
    Abstract: Our analysis explores how a key managerial competence, the supplier relations dynamic capability, was progressively developed and implemented by Renault over a quarter of a century. As our historical approach will demonstrate, this construction process followed three main periods, each of which was characterized by specific external and internal circumstances that constitute turning points and triggers in the organization's transformation decision process. Most importantly, we will argue that this case brings to light that three phases are necessary for the supplier relations dynamic capability to fully develop: hybridization, combination and saturation, which open new perspectives on the construction process of dynamic capabilities in general.
    Date: 2014–09
  14. By: Christian Stohr;
    Abstract: This paper investigates the relation between agglomeration and economic growth in Switzerland from 1860 to 2008. I use a new detailed data set on regional employment, value added and labor productivity for two geographical levels with 97 and 16 regions respectively. I provide a description of spatial concentration and inequality in labor productivity over the entire time period and find that the Swiss economy was very dispersed around 1860 but spatial concentration of economic activity increased rapidly until 1930. Thereafter, a series of institutional settings limited spatial concentration. Regional inequality in terms of labor productivity followed a bell-¬â€shape evolution between 1860 and 1990 followed by a new upswing in regional inequality after 1990. I pursue by estimating the impact of agglomeration on labor productivity and employment growth and find that agglomeration economies contributed significantly to regional economic growth between 1888 and 1930. Thereafter, the Great Depression and regional redistribution policies have limited the effect of agglomeration economies. I argue that rapid urbanization has significantly contributed to Switzerland’s fast growth between 1860 and 1930, while anti-¬â€urban policies have contributed to the Swiss growth slack after 1970.
    Keywords: Switzerland, agglomeration economies, growth poles, historical economic geography
    Date: 2014–09
  15. By: Graziella Bertocchi; Monica Bozzano
    Abstract: We investigate the determinants of the education gender gap in Italy in historical perspective with a focus on the influence of family structure. We capture the latter with two indicators: residential habits (nuclear vs. complex families) and inheritance rules (partition vs. primogeniture). After controlling for economic, institutional, religious, and cultural factors, we find that over the 1861-1901 period family structure is a driver of the education gender gap, with a higher female to male enrollment rate ratio in upper primary schools being associated with nuclear residential habits and equal partition of inheritance. We also find that only the effect of inheritance rules persists over the 1971-2001 period.
    Keywords: Education gender gap, Italian Unification, family types, inheritance, institutions, religion, convergence
    JEL: E02 H75 I25 J16 N33 O15
    Date: 2014–07
  16. By: G. Bazot; M. D. Bordo; E. Monnet
    Abstract: Under the classical gold standard (1880-1914), the Bank of France maintained a stable discount rate while the Bank of England changed its rate very frequently. Why did the policies of these central banks, the two pillars of the gold standard, differ so much? How did the Bank of France manage to keep a stable rate and continuously violate the “rules of the game”? This paper tackles these questions and shows that the domestic asset portfolio of the Bank of France played a crucial role in smoothing international shocks and in maintaining the stability of the discount rate. This policy provides a striking example of a central bank that uses its balance sheet to block the interest rate channel and protect the domestic economy from international constraints (Mundell’s trilemma).
    Keywords: gold standard, Bank of France, discount rate, central banking, money market.
    JEL: D41 E30 B41
    Date: 2014
  17. By: Carl-Johan Dalgaard (Department of Economics, Copenhagen University); Holger Strulik (Department of Economics, University of Goettingen)
    Abstract: It is a well known fact that economic development and distance to the equator are positively correlated variables in the world today. It is perhaps less well known that as recently as 1500 C.E. it was the other way around. The present paper provides a theory of why the "latitude gradient" seemingly changed sign in the course of the last half millennium. In particular, we develop a dynamic model of economic and physiological development in which households decide upon the number and nutrition of their offspring. In this setting we demonstrate that relatively high metabolic costs of fertility, which may have emerged due to positive selection towards greater cold tolerance in locations away from the equator, would work to sti fle economic development during pre-industrial times, yet allow for an early onset of sustained growth. As a result, the theory suggests a reversal of fortune whereby economic activity gradually shifts away from the equator in the process of long-term economic development.
    Keywords: long-run growth, evolution, nutrition, fertility, education, comparative development.
    JEL: O11 I12 J13
    Date: 2014–10–08
  18. By: Barbara Pistoresi; Alberto Rinaldi
    Abstract: By relying on a new dataset, this paper presents an econometric strategy to test the Fenoaltea’s thesis with regard to both the genesis of current account fluctuations and of the investment cycle. We perform a Granger causality test that shows that the persistent current account deficits in the years from unification from WW1 were generated by variations in capital inflows, as pointed by Fenoaltea, and not by the dynamics of the GDP, as claimed by the Bonelli-Cafagna model. Finally, this paper supports the Fenoaltea’s thesis that these capital inflows prompted a general investment cycle which included both construction and industrial investments
    Keywords: Capital imports, current accounts, investment cycle, Italy, integration, cointegration and Granger causation analysis
    JEL: F43 O11 N1 N7
    Date: 2014–04
  19. By: Valentino LARCINESE (London School of Economics)
    Abstract: This paper presents evidence on the consequences of the 1912 introduction of quasi-universalmale su¤rage in Italy. The reform increased the electorate from slightly less than three million to 8,650,000 and left the electoral rules and the district boundaries unchanged. This allows us to exploit the heterogeneity in enfranchisement rates across electoral districts to identify the causal e¤ects of franchise extension on a number of political outcomes. The reform caused an increase in the vote share of social reformers (Socialists, Republicans and Radicals), together referred to as the Estrema. One standard deviation in the share of newly enfranchised voters over the total number of registered 1913 voters caused an increase of around 2% in votes for Estrema candidates but had no impact on their parliamentary net seat gains. Enfranchisement had also no impact on the parliamentary representation of aristocracy and traditional elites. Other outcomes (the chances of having candidates from the Estrema and the Her…ndel-Hirshman index of electoral competition) were also una¤ected, with the exception of turnout, which decreased. These …ndings show that de jure political equalization did not cause major changes to political representation, although the voting choices of the formerly and newly enfranchised citizens di¤ered on average. This apparent puzzle is the consequence of the heterogeneity of the e¤ect across a number of both social and political dimensions. The paper documents elites e¤ort to minimize the political impact of the reform.
    Keywords: democratization, voting, electoral competition, inequality, swing districts, political violence, Vatican, socialism
    Date: 2011–11
  20. By: Ralph Hippe (Grantham Research Institute on Climate Change and the Environment London School of Economics and Political Science)
    Date: 2014
  21. By: E.J. Weber
  22. By: P.C. Statham
  23. By: Béatrice CHERRIER (CREM CNRS UMR 6211, University of Caen Basse-Normandie, France); Jean-Baptiste FLEURY (THEMA, Université de Cergy-Pontoise)
    Date: 2014–05
  24. By: Patrizio Pagano (Bank of Italy); Massimo Sbracia (Banl of Italy)
    Abstract: Recent studies warn that the U.S. economy may return to a phase of secular stagnation. In the next 20 to 50 years, U.S. economic growth will be negatively affected by lower contributions of hours worked and education. But some studies also add that productivity could decelerate sharply and that GDP per capita, by focusing on the average household, neglects that income has already been stagnating in the last 30 years for the households in the bottom 99% of the income distribution. After reviewing recent long-run projections, we argue that similar warnings were issued in the past after all deep recessions. Interestingly, pessimistic predictions turned out to be wrong neither because they were built on erroneous theories or data, nor because they failed to predict the discovery of new technologies, but because they underestimated the potential of the technologies that already existed. These findings suggest that today we should not make the same mistake and undervalue the effects of the information technology. Finally, we discuss a number of issues that should be tackled by future research.
    Keywords: secular stagnation, technological change, income inequality
    JEL: O3 O4 O51 N1
    Date: 2014–09
  25. By: R.N. Ghosh
  26. By: Y. Qiang; K.W. Clements
  27. By: Mehmet Balcilar (Eastern Mediterranean University); Rangan Gupta (University of Pretoria); Stephen M. Miller (University of Nevada, Las Vegas and University of Connecticut)
    Abstract: This paper examines the relationship between US crude oil and stock market prices, using a Markov-Switching vector error-correction model and a monthly data set from 1859 to 2013. The sample covers the entire modern era of the petroleum industry, which typically begins with the first drilled oil well in Titusville, Pennsylvania in 1858. We estimate a two regime model that divides the sample into high- and low-volatility regimes based on the variance-covariance matrix of the oil and stock prices. We find that the high-volatility regime more frequently exists prior to the Great Depression and after the 1973 oil price shock caused by the Organization of Petroleum Exporting Countries. The low-volatility regime occurs more frequently when the oil markets fell largely under the control of the major international oil companies from the end of the Great Depression to the first oil price shock in 1973. Using the National Bureau of Economic research business cycle dates, we also find that the high-volatility regime more likely occurs when the economy experiences a recession.
    Keywords: Markov switching, vector error correction, oil and stock prices
    JEL: C32 E37
    Date: 2014–09
  28. By: V. Karagiannis; L. Neo
  29. By: A.Y-T. Wong

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