nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2014‒11‒12
eighteen papers chosen by

  1. Doctrinal Determinants, Domestic and International of Federal Reserve Policy, 1914-1933 By Eichengreen, Barry
  2. Perché il Sud è rimasto indietro? Il Mezzogiorno fra storia e pubblicistica By Daniele, Vittorio; Malanima, Paolo
  3. Schumpeter y la Historia del Pensamiento Económico By Estrada, Fernando
  4. Living standards and rural-urban height gap during the early stages of modern economic growth in Spain By José M. Martínez-Carrión; Pedro M. Pérez-Castroviejo; Javier Puche-Gil; Josep M. Ramon-Muñoz
  5. Cities of Commerce: how can we test the hypothesis? By Guillaume Daudin
  6. On the Rise of Bayesian Econometrics after Cowles Foundation Monographs 10, 14 By Nalan Basturk; Cem Cakmakli; S. Pinar Ceyhan; Herman K. van Dijk
  7. Family Size as a Social Leveller for Children in the Second Demographic Transition By Tony Fahey
  8. Death of a Reserve Currency By Quinn, Stephen F.; Roberds, William
  9. Acquisitions, productivity, and profitability : Evidence from the Japanese cotton spinning industry By Serguey Braguinsky; Atsushi Ohyama; Tetsuji Okazaki; Chad Syverson
  10. Taiwan strait crises and Chiang Kai-shek's strategic thinking : a perspective from the Taiwan's archive By Matsumoto, Haruka
  11. This Could Be the Start of Something Big: Linking Early Managerial Choices with Subsequent Organizational Performance By Kelman, Steven; Hong, Sounman
  12. La visión del desarrollo económico de Colombia durante el último siglo en perspectiva histórica By Alcides Gómez Jiménez
  13. Patents, Innovation and Economic Geography By Francesco LISSONI; Ernest MIGUELEZ
  14. Potencialidades y límites de la Industrialización Sustitutiva Argentina (1935-1975). Análisis desde una perspectiva actual y mundial By Juan M. Graña
  15. 20 años de políticas de competitividad en Colombia By Mauricio Reina; Felipe Castro
  16. Is there an Environmental Kuznets Curve for South Africa? A Co-Summability Approach Using a Century of Data By Adnen Ben Nasr; Rangan Gupta; Joao Ricardo Sato
  17. El libre comercio y la economía mundial según Ha-Joon Chang y Michael Spence By José A. Tapia Granados
  18. Accounting for the Corporate Cash Increase By Jake Zhao

  1. By: Eichengreen, Barry (University of California, Berkeley)
    Abstract: This paper describes the doctrinal foundations of Federal Reserve policy from the establishment of the institution through the early 1930s, focusing on the role of international factors in those doctrines and conceptions. International considerations were at most part of the constellation of factors shaping the Federal Reserve’s outlook and policies even in the high gold standard era that ended in 1933. However, neither was the influence of international factors absent, much less negligible. Nor were the Fed’s policies without consequences for the rest of the world. Having described the doctrinal foundations of Federal Reserve policy, I analyze how the doctrines in question influenced the central bank’s actions and shaped the impact of monetary policy on a number of key occasions, focusing in particular on episodes where the international economy and the rest of the world played an important role.
    JEL: E4 E5
    Date: 2014–10–01
  2. By: Daniele, Vittorio; Malanima, Paolo
    Abstract: The recent work by E. Felice, Perché il Sud è rimasto indietro, il Mulino, Bologna, 2013, is rather a pamphlet than a book of economic history. In the present article, we discuss both the statistical series of regional GDP from 1871 until 2001 worked out by Felice (section 1), and the in-terpretation of the North-South disparity in the long term (section 2). In section 3 we contrast our approach to the Italian regional disparities with that by Felice. While, according to Felice, the Italian North-South divide depends on social and institutional factors, and, in particular, on the mistakes of the Southern ruling class in the past, in our view it is the consequence of the interplay of economic factors during the Italian industrialisation starting at the end of the Nineteenth cen-tury
    Keywords: Mezzogiorno; Italy; Regional development
    JEL: N0 N00 N93 N94
    Date: 2013–11–01
  3. By: Estrada, Fernando
    Abstract: The History Schumpeter´s of Economic Analysis, is a tour de forcé of scholarship. The display of erudition is 'truly unbelievable. How could one man have acquired and then digested so much knowledge? Not only does the History offer two thousand years of economics, from Aristotle to Paul Samuelson, but also it ranges most expertly over all the other social sciences, history and belles lettres as well. For more than 1,100 pages the prose flows on in a way that one has come to expect from Schumpeterthe fluent style, the vivid analogy, the striking metaphor, the arresting aside. Our goal is to present the central ideas of Schumpeter on the complex relationships between Economic History and Epistemology of Science. This design has three aspects that interest us: (a) its amplitude to conceive the economy as part of the overall development of scientific knowledge; (b) its relevance applied and the examples used by the author; (c) its currently facing tremendous methodological problems facing the economy with the other sciences.
    Keywords: Schumpeter, History of economics, Epistemology, Economtric, Industrial
    JEL: B12 B13 B15 B25 B31 H5 P12 P14 P16 Z1 Z13
    Date: 2014
  4. By: José M. Martínez-Carrión; Pedro M. Pérez-Castroviejo; Javier Puche-Gil; Josep M. Ramon-Muñoz
    Abstract: This paper examines the urban-rural differences of the height during the early stages of modern economic growth and industrialization in Spain. Its aim is to explore the extent of the urban penalty, and the changes of biological welfare in the cities and villages, in the rural and urban areas. We use height data of military recruitment records between 1857 and 1936, that provide information on the health and net nutrition of cohorts 1837-1915. We note that previous studies reported higher penalty in rural areas than in cities, and that the height deteriorated in the most industrialized cities due to unhealthy environments, child labor and spread of infections. The new data shows that in some rural areas had better nutritional status that in urban areas with better care resources, so the rural-urban gap was more diverse than we thought, not only by environmental factors but institutions. Data suggests more research on height by social classes in the diverse Spanish geography.
    Keywords: Rural-Urban Gap, Height, Biological Well-being, Living Standard, Spanish industrialization
    JEL: N33 D63 I12 I31
    Date: 2014–10
  5. By: Guillaume Daudin (PSL, Université Paris-Dauphine, LEDa, IRD UMR DIAL, SciencesPo, OFCE, Paris, France)
    Abstract: This paper discusses Gelderblom’s hypothesis that urban competition (including a large number of competing cities, footloose foreign traders and municipal autonomy) was central to the rise of inclusive trade institutions in Europe. The first part discusses the precise behaviour of traders, town authorities and sovereigns underlying Gelderblom’s explanatory framework. The second part presents some challenges to the generalisation of the book’s thesis to the history of Europe, including Italy and Britain. The last part advances a short econometric exercise to check this generalisation. Urban competition combined with starting institutional quality does not emerge as a positive factor for the growth of European cities in general: this is interpreted as a call for more research rather a decisive counter-argument. _________________________________ Cet article discute l’hypothèse de Gelerblom selon laquelle la compétition urbaine (incluant un grand nombre de villes concurrentes entre elles, des négociants se déplaçant facilement, et l’autonomie urbaine) a été centrale pour la généralisation d’institutions de commerce ouvertes à tous en Europe. La première partie examine le comportement précis des négociants, autorités municipales et souverains qui sont au coeur du schéma explicatif de Gelderblom. La deuxième partie présente quelques difficultés qui s’opposent à la généralisation de la thèse de l’ouvrage à l’ensemble de l’histoire européenne, notamment en Italie et en Grande-Bretagne. La dernière partie propose un petit exercice économétrique pour tester cette généralisation. La compétition urbaine combinée à des institutions de bonne qualité n’apparaît pas comme un facteur de croissance pour les villes urbaines dans leur ensemble : ce résultat est interprété plus comme un appel à plus de recherche qu’un contre-argument décisif.
    Keywords: Europe, modern history, urbanisation, institutions, Histoire Moderne, Urbanisation.
    JEL: N13 N23 N94
    Date: 2014–10
  6. By: Nalan Basturk (Erasmus University Rotterdam); Cem Cakmakli (Koc University, Turkey); S. Pinar Ceyhan (Erasmus University Rotterdam); Herman K. van Dijk (Erasmus University Rotterdam, the Netherlands)
    Abstract: This paper starts with a brief description of the introduction of the likelihood approach in econometrics as presented in Cowles Foundation Monographs 10 and 14. A sketch is given of the criticisms on this approach mainly from the first group of Bayesian econometricians. Publication and citation patterns of Bayesian econometric papers are analyzed in ten major econometric journals from the late 1970s until the first few months of 2014. Results indicate a cluster of journals with theoretical and applied papers, mainly consisting of Journal of Econometrics , Journal of Business and Economic Statistics and Journal of Applied Econometrics which contains the large majority of high quality Bayesian econometric papers. A second cluster of theoretical journals, mainly consisting of Econometrica and Review of Economic Studies contains few Bayesian econometric papers. The scientific impact, however, of these few papers on Bayesian econometric research is substantial. Special issues from the journals Econometric Reviews , Journal of Econometrics and Econometric Theory received wide attention. Marketing Science shows an ever increasing number of Bayesian papers since the middle nineties. The International Economic Review and the Review of Economics and Statistics show a moderate time varying increase. An upward movement in publication patterns in most journals occurs in the early 1990s due to the effect of the 'Computational Revolution'. … More abstract in the paper.
    Keywords: History, Bayesian Econometrics
    JEL: C01
    Date: 2014–07–08
  7. By: Tony Fahey (School of Applied Social Science, University College Dublin)
    Abstract: Steep socio-economic gradients in family size were a major source of disparities for children in the early 20th century and prompted much social research and public commentary. By the 1960s, a scholarly consensus was emerging that SES differentials in women’s fertility in western countries were tending to narrow but developments since then have received limited attention and a children’s perspective relating to the distinct question of sibling numbers (or ‘sibsize’) has been lacking. Drawing mainly on data from the United States but with some comparative information for other western countries, this paper finds that a sharp reduction in social disparities in sibsize occurred in the final third of the twentieth century and acted as an important (though in the US case, incomplete) social leveller for children. This development is significant as a counter to other aspects of socio-demographic change in the same period which have been found to widen social inequalities for children. A key implication is that until we pay closer attention to sibsize patterns, our picture of how socio-demographic change has affected social inequalities among children in recent decades may be both incomplete and unduly negative.
    Keywords: Children, Family, Social inequality, Social stratification
    Date: 2014–10–23
  8. By: Quinn, Stephen F. (Texas Christian University); Roberds, William (Federal Reserve Bank of Atlanta)
    Abstract: The Dutch bank florin was the dominant currency in Europe during much of the 17th and 18th centuries. The florin, a fiat money, was managed by an early central bank, the Bank of Amsterdam. Using a new reconstruction of the Bank of Amsterdam's balance sheet, we analyze the florin's loss of reserve currency status during the period 1781–92. The reconstruction shows that by 1784, accommodative policies rendered the Bank of Amsterdam "policy insolvent," meaning that its net worth would have been negative under continuation of its policy objectives. Policy insolvency coincided with the Bank of Amsterdam's loss of control over the value of its money.
    Keywords: central banks; reserve currency; policy insolvency
    JEL: E58 F33 N13
    Date: 2014–09–01
  9. By: Serguey Braguinsky (Carnegie Mellon University); Atsushi Ohyama (Hokkaido University); Tetsuji Okazaki (University of Tokyo); Chad Syverson (University of Chicago Booth School of Business and NBER)
    Abstract: We explore how changes in ownership and managerial control affect the productivity and profitability of producers. Using detailed operational, financial, and ownership data from the Japanese cotton spinning industry at the turn of the last century, we find a more nuanced picture than the straightforward “higher productivity buys lower productivity” story commonly appealed to in the literature. Acquired firms’ production facilities were not on average less physically productive than the plants of the acquiring firms before acquisition, conditional on operating. They were much less profitable, however, due to consistently higher inventory levels and lower capacity utilization—differences that reflected problems in managing the uncertainties of demand. When purchased by more profitable firms, these less profitable acquired plants saw drops in inventories and gains in capacity utilization that raised both their productivity and profitability levels, consistent with acquiring owner/managers spreading their better demand management abilities across the acquired capital.
    Date: 2014–10
  10. By: Matsumoto, Haruka
    Abstract: This paper uses Taiwan's archival documents to reexamine the two Taiwan Strait crises and the characteristics of Chiang Kai-shek's strategic thinking. Section 2 examines the oscillation of U.S. policy concerning the ROC's offensive toward mainland China and the defense of the Da-chen islands before and after the initiation of the First Taiwan Strait Crisis in 1954-1955. Doing so will highlight the contradictory U.S. attitude that contributed to the crisis and weakened its ability to control Chiang. Section 3 focuses on Chiang Kai-shek's strategic vision toward East Asia. In particular, this section focuses on his strategic thinking and tries to assess whether or not he was a "reckless" or "irrational" leader as often described in the previous research on his personality.
    Keywords: Taiwan, China, East Asia, United States, Foreign policy, Foreign relations, International conflicts, Archives, Chiang Kai-shek, Taiwan Strait Crises, Quemoy, Da-chen
    JEL: F51 N45 Z00
    Date: 2014–10
  11. By: Kelman, Steven (Harvard University); Hong, Sounman (Harvard University)
    Abstract: The influence of early events in the history of a country, a social phenomenon, or an organization on later developments has received significant attention in many social science disciplines. Often dubbed "path dependence," this influence occurs when early events influence later outcomes even when the original events do not re-occur. "Path dependence," however, has received little theoretical or empirical attention in public administration. This paper discusses how early events in an organization's history can come to influence later outcomes. The paper then empirically tests for the presence of path dependence using data from Crime and Disorder Reduction Partnerships in England and Wales, a cross-organizational collaboration inside local government. We find that early choices by the leader of the collaboration about which activities to prioritize to create collaboration set in motion a path creating collaborations that were more-successful and less-successful, producing differences in crime results almost a decade later. The most-successful early priorities involved getting partner organizations to act in collaborative ways, rather than working to improve the attitudes of these organizations towards collaboration. We argue that path dependence should be examined in public administration research from a prospective, prescriptive point of view, to learn more about what early managerial actions can produce better later results.
    Date: 2013–10
  12. By: Alcides Gómez Jiménez
    Abstract: Resumen: Se confrontan las visiones sobre el desarrollo económico de Colombia en el lapso de unsiglo (1905-2008) en las obras representativas principalmente de Salomón Kalmanovitz y deJosé Antonio Ocampo respecto a la evolución del PIB por habitante en las distintas fases delcrecimiento económico del país, con una pérdida de dinamismo gradual al pasar del tiempo yse indaga particularmente el significado de la tendencia más pronunciada con la pérdida de vigordel crecimiento de la productividad del trabajo. En la comparación internacional (1900-2008) deOcampo, se cuestiona el punto de partida en 1900 y se señala, a partir de sus cifras, cómo seobtienen resultados de tendencia diametralmente opuestos con sus datos para el período 1913-2008. Finalmente se destaca que el gran obstáculo para el desarrollo radica en las desigualdadeshistóricamente crecientes respecto al acceso a recursos (tierra) y a los ingresos.
    Keywords: Transición demográfica, crecimiento y desarrollo económico, fases, PIB por habitante, productividad, desigualdad, economic growth, GDP per capita, inequality, demographic transition
    JEL: J11 E25 E3
    Date: 2013–06–27
  13. By: Francesco LISSONI; Ernest MIGUELEZ
    Abstract: In this paper we review 20 years of quantitative research in the geography of innovation, to whose advancement patent data have contributed in a decisive way. We know now that the importance attributed by the earliest studies to knowledge externalities as an agglomeration force was excessive. Localized knowledge flows exist, and explain agglomeration, but they are largely mediated by the labor market and markets for technologies. Besides, we know now that physical distance may affect knowledge diffusion, but so do social distance between inventors as well as inter- and intra-national borders. We also witness an ongoing widening of the research focus, from local/regional to international, with migration issues concerning inventors coming to the forefront.
    Keywords: economic geography, patents, intellectual property, innovation, inventors, spillovers, migration
    JEL: F22 J61 O31 R11 R12
    Date: 2014
  14. By: Juan M. Graña
    Abstract: Resumen: La etapa de la industrialización sustitutiva (ISI) es vista retrospectivamente como una época gloriosa donde las economías latinoamericanas podían encontrar su forma de acceso al mundo “desarrollado”. Esa impresión surge por contraste con lo que sucedió en el período “neoliberal” que comienza en la década del setenta con las condiciones de vida de los trabajadores. En este artículo intentaremos discutir qué condiciones tenía esa industrialización de manera de evaluar profundamente sus perspectivas y las causas de su abandono. Para ello, analizaremos la evolución del sector en Argentina desde la década del treinta y realizaremos algunas comparaciones con Estados Unidos. El objetivo es discutir qué condiciones debe tener el sector industrial para poder efectivamente conducir el proceso de desarrollo nacional y por ende, discutir la coyuntura argentina actual.
    Keywords: Industria; Argentina; Productividad; Salario real; Comparación internacional.
    JEL: J24 L25 L60 O57
    Date: 2013–12–16
  15. By: Mauricio Reina; Felipe Castro
    Abstract: El documento se divide en cuatro secciones adicionales a esta introducción. En una primera sección se propone una mirada detallada a la evolución de la economía desde sus principales indicadores macroeconómicos y de productividad. El objetivo es comparar el desempeño económico del país a nivel mundial y regional, y evaluar los logros y los fracasos en perspectiva. La segunda sección realiza una recopilación por cuatrienios de las iniciativas que promovieron la competitividad o productividad desde diferentes estamentos gubernamentales. Estas incluyen políticas industriales y/o comerciales e iniciativas de ciencia e investigación. La tercera sección presenta un recuento del papel que ha jugado la empresa privada alrededor de los principales hitos de la competitividad nacional incluyendo su participación y percepción de los principales programas y políticas colectivas o particulares. Asimismo, esta sección se complementa con las conclusiones sobre los principales problemas y factores de éxito asociados a la experiencia exportadora fruto de una serie de entrevistas y encuestas realizadas por Fedesarrollo en el transcurso del proyecto. El cuarto y último aparte del documento se centra en la identificación de los elementos que hicieron algunos programas y políticas casos de éxito en los últimos 20 años, los cuales se comentan en las recomendaciones del estudio.
    Keywords: Competitividad, Productividad, Desarrollo Productivo, Política industrial, Política económica, Economía colombiana, Economía internacional
    JEL: E63 D24 O47 E65
    Date: 2013–12–19
  16. By: Adnen Ben Nasr (Laboratoire BESTMOD, ISG de Tunis, Universite de Tunis, Tunisia.); Rangan Gupta (Department of Economics, University of Pretoria, South Africa.); Joao Ricardo Sato (Center of Mathematics, Computation and Cognition, Universidade Federal do ABC,Brazil.)
    Abstract: There exists a huge international literature on the, so-called, Environmental Kuznets Curve (EKC) hypothesis, which in turn, postulates an inverted u-shaped relationship between environmental pollutants and output. The empirical literature on EKC has mainly used test for cointegration, based on polynomial relationships between pollution and income. Motivated by the fact that, measured in per capita CO2 equivalent emissions, South Africa is the world’s most carbon-intensive non-oil-producing developing country, this paper aims to test the validity of the EKC for South Africa. For this purpose, we use a century of data (1911-2010), to capture the process of development better compared to short sample-based research; and the concept of co-summability, which is designed to analyze non-linear long-run relations among persistent processes. Our results, however, provide no support of the EKC for South Africa, implying that to reduce emissions without sacrificing growth, policies should be aimed at promoting energy efficiency.
    Keywords: Environmental Kuznets Curve, CO2 emissions; Output; Co-summability; South Africa
    JEL: C01 C22 Q53
    Date: 2014–11
  17. By: José A. Tapia Granados
    Abstract: Resumen Se comenta la visión del comercio y de la economía mundial de dos autores representativos de corrientes significativas del pensamiento económico actual, Ha-Joon Chang y Michael Spence, y se presenta un bosquejo de una visión alternativa. En la visión poskeynesiana de Chang, la política comercial de cada país ha de subordinarse a sus intereses nacionales. Michael Spence presenta una visión más conforme con la ortodoxia predominante, afirmando del consenso de Washington que se trata de orientaciones con gran apoyo en la experiencia de desarrollo y en el análisis económico, que han resultado sin embargo controvertidas y disputadas como consecuencia de la forma en que fueron interpretadas e implementadas. Frente a las perspectivas de Chang y de Spence se propone una visión que ve el proteccionismo o el libre comercio como políticas para defender intereses que no son los de la población general asalariada, a menudo sometida al desempleo o a la necesidad de emigrar en busca de trabajo.
    Keywords: Economía mundial, desarrollo, industria, proteccionismo, economía postkeynesiana, global economy, development.
    JEL: F13 F15 D20
    Date: 2013–06–27
  18. By: Jake Zhao
    Abstract: Why do U.S. firms hold much more cash now than they did 30 years ago? Prior empirical studies have discovered a statistically significant positive relationship between firm cash holdings and cash flow volatility. Such findings, however, are subject to endogeneity problems. In this paper, I construct a structural model of firm dynamics where cash provides a buffer against cash-flow shortfalls in the presence of costly external finance. My model finds that 63% of the increase in corporate cash holdings can be accounted for by the increase in cash flow volatility. The increase in cash flow volatility observed in the data arises from a decrease in the correlation between revenue and operating expenses. The model has a corresponding correlation parameter between the shocks on revenue and operating expenses and only this parameter is changed in the primary experiment. The decomposition of revenue and operating expenses is important and I show that other ways of modeling the cash flow volatility increase are both counterfactual and dampening. A regression using the model data then generates a coefficient on cash flow volatility similar to what was found in previous studies which suggests that the regression underestimates the true impact of volatility. Finally, I investigate the response of cash holdings to policy changes and the consequences of cash restrictions on firm value.
    JEL: G3
    Date: 2014–09

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