nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2014‒11‒22
fourteen papers chosen by

  1. Re-Coinage in Medieval Sweden By Svensson, Roger
  2. Warfare at sea and profit: Corsairs, institutions and partnership companies By Economou, Emmanouel/Marios/Lazaros; Kyriazis, Nicholas; Metaxas, Theodore
  3. Schumpeter and the History of Economic Thought By Estrada, Fernando
  4. Water scarcity and agricultural growth in Spain: from curse to blessing? By Ignacio Cazcarro; Rosa Duarte; Miguel Martín-Retortillo; Vicente Pinilla; Ana Serrano
  5. Land-abundance, frontier expansion and the hypothesis of appropriability revisited from an historical perspective: settler economies during the First Globalization By Henry Willebald
  6. La transitoriedad histórica del capital: La tendencia descendente de la tasa de ganancia desde el siglo XIX By Maito, Esteban Ezequiel
  7. The Synthesis of Economic Law, Evolution, and History By Kakarot-Handtke, Egmont
  8. The Cult of statistical significance - A Review By Sripad Motiram
  9. The Federal Reserve in a Globalized World Economy By Taylor, John B.
  10. What Goes into a Medal: Women's Inclusion and Success at the Olympic Games By Marcus Noland; Kevin Stahler
  11. Patada a la escalera: La verdadera historia del libre comercio By Ha-Joon Chang
  12. The Piketty Curve and the Elasticity of Substitution By McCain, Roger
  13. Sobre las Curvas de Engel. Una Breve Revisión de su Evolución Histórica By Rodrigo García Arancibia
  14. Analyzing the Taylor Rule with Wavelet Lenses By Luís Aguiar-Conraria; Manuel M. F. Martins; Maria Joana Soares

  1. By: Svensson, Roger (Research Institute of Industrial Economics (IFN))
    Abstract: In medieval Europe, old coins were frequently declared invalid and exchanged for new ones at fixed rates and dates. Here, the question of whether and when such re-coinage was applied in medieval Sweden is analyzed against the historical record. A theory of how short-lived coinage systems work is applied to Swedish coinage. It is shown that Sweden adopted similar coin types as those minted in Continental Europe in the Middle Ages, and also adopted the corresponding continental coinage and monetary taxation policies linked to these coin types. Swedish experience is extraordinarily well in line with what one would expect from the theory of short-lived coins. Economic backwardness, limited monetization of society and separate currency areas facilitated re-coinage. Re-coinage with varying frequency was applied in 1180–1290 when only bracteates were minted. This is evidenced by many different coin types per reign, coin hoards which are dominated by a few types and dating of types to specific periods of the kings' reigns. However, monetization increased in the late 13th century, making re-coinage more difficult, and bracteates were replaced by long-lived two-faced coins in 1290. With an end to re-coinage, the Swedish kings then accelerated the debasement of the long-lived coins. The disappearing re-coinage fees were compensated for by debasing the silver content. Such debasements –interrupted by several coinage reforms – were applied until the beginning of the 16th century.
    Keywords: Re-coinage; Bracteates; Medieval Sweden; Coinage policies; Monetization; Debasements
    JEL: E31 E42 E52 N13
    Date: 2014–09–03
  2. By: Economou, Emmanouel/Marios/Lazaros; Kyriazis, Nicholas; Metaxas, Theodore
    Abstract: In the present paper we propose that in states with relatively weak central authorities, decision makers had to develop market oriented organisation solutions to successfully face a grave external threat, and these solutions proved to be efficient. Using an interdisciplinary approach that combines institutional theory, history and strategy, we analyse a case study, the use of corsairs (privateers) by England and the United Provinces (Dutch Republic) in the late 16th and early 17th centuries. We have found that the development of partnership companies went hand in hand for commercial and military purposes. English and Dutch privateers proved to be economically efficient and superior to the centrally planned war operations of the Spanish empire.
    Keywords: Institutions, partnership companies, corsairs, strategy, coordination and cooperation mechanisms, 16th-17th century England and United Provinces (Dutch Republic).
    JEL: N24 N4 N43 Z13
    Date: 2014–09–28
  3. By: Estrada, Fernando
    Abstract: Schumpeter's The History of Economic Analysis, is a tour de force of scholarship. The display of erudition is truly unbelievable. How may one man and then digested have acquired much knowledge? Not only does the History offer two thousand years of economics, from Aristotle to Paul Samuelson, But also, it expertly almost ranges over all the other social sciences, history and belles letters as well. For more that 1,100 pages on the prose flows in a way That one has come to expect from Schumpeter the fluent style, the vivid analogy, the striking metaphor, the arresting aside. Our goal is to present the main thoughts 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 and the Applied examples used by the author; (C) its methodological facing tremendous problems facing the economy with the other sciences.
    Keywords: Schumpeter, Economics History, Epistemology, Econometric, Industrial.
    JEL: B13 B15 B31 B41 O31
    Date: 2014
  4. By: Ignacio Cazcarro (Rensselaer Polytechnic Institute, School of Humanities and Social Sciences and BC3-Basque Centre for Climate Change, Bilbao, Spain); Rosa Duarte (Universidad de Zaragoza,Zaragoza,Spain); Miguel Martín-Retortillo (Universidad de Zaragoza,Zaragoza,Spain); Vicente Pinilla (Universidad de Zaragoza,Zaragoza,Spain); Ana Serrano (Universitat de Girona, Girona, Spain)
    Abstract: This working paper discusses how natural resource scarcity (aridity, in the case of Spanish agriculture) encouraged the process of frontier expansion defined by Barbier, meaning the exploitation of new, relatively abundant resources (water) for production purposes. Water for irrigated agriculture was obtained from both ground sources, identified as 'vertically downward' sources (i.e. wells, which were mainly funded by private initiative), and 'horizontally extensive' surface sources, such as dams and canals, primarily paid for by the public sector. Although the processes involved in obtaining water can be traced back over the centuries, it was really not until the 20thcentury when they became truly important. The growthof agricultural production was deeply influenced by this process. The main result is the mismatch between areas of high current agricultural productivity, and better initial endowment of natural resources.
    Keywords: Palabras clave: Natural resources and economic growth, Irrigated agriculture, Spanish economic history, Spanish agricultural history.
    JEL: N54 Q15 Q25
    Date: 2014–10
  5. By: Henry Willebald (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: Settler economies are characterized for the abundance of natural resources. However, natural capital is not homogeneous and it induces differences in terms of economic performance. I discuss the effect of agricultural natural resources on production and income distribution in the agriculture in the tradition of the curse (and blessing) of the natural resources hypothesis, from the mid-19th century to WWI. I consider the interaction between natural resources that a country posses, the type of land according to the agricultural aptitude and the quality of its institutions in terms of the concept of appropriability of a resource. I propose two approaches. One of them is based on the estimation of the statistical relationship between economic performance, natural resources and institutions. The other one is based on the historical description of the distribution of land rights in the River Plate and Australasia. In the first one, I reject the curse of the abundance of natural resources on the agricultural production but I do not reject it as regards income distribution. Nor technical neither institutional dimension of appropriability hypothesis work for agricultural production but both operate in terms of inequality; i.e. expanding the frontier by the best lands makes worse income distribution but the action of institutional quality on high land aptitude improve equality. The second approach proposes to give historical context to my analysis. I consider the institutional arrangements related to the land property, and they seemed suitable for obtaining high levels of income but inadequate to promote more egalitarian societies. Therefore, appropriability problems were more intense for Hispanic ex-colonies than for British ex-colonies which, in addition, enjoyed institutions more favourable for reducing inequality.
    Keywords: curse of the natural resources, appropriability hypothesis, settler economies, first globalization
    JEL: N50 O13 Q15
    Date: 2014–10
  6. By: Maito, Esteban Ezequiel
    Abstract: This paper presents estimates of the rate of profit on fourteen countries in the long run. The performance shows a clear downward trend, although there are periods of partial recovery in both core and peripheral countries. The behavior of the profit rate confirms the predictions made by Marx, about the historical trend of the mode of production. Finally, an estimate of the global rate of profit for the last six decades is done, also highlighting the particular role of China in systemic profitability.
    Keywords: Tasa de ganancia - Capital - Karl Marx - Modo de producción capitalista - Centro/Periferia
    JEL: B14 E0 E22 F21 O5 P10 Y10
    Date: 2013–12
  7. By: Kakarot-Handtke, Egmont
    Abstract: It has long been criticized that history is almost entirely absent from orthodox economics. This deficiency is due to the fact that equilibrium and time make an odd couple. Because equilibrium is one of the crucial hard-core propositions of the research program it cannot be abandoned. This impedes the treatment of time in a methodologically acceptable manner. The orthodox approach is based on indefensible axioms which are in this paper replaced by objective structural axioms. This enables the synthesis of timeless economic laws, randomness, and goal-oriented human action, which are the essential elements of a formally consistent historical account.
    Keywords: new framework of concepts; structure-centric; axiom set; cumulative causation; First Economic Law; Period Core; propensity function
    JEL: B49 B59 E17
    Date: 2014–09–24
  8. By: Sripad Motiram (Indira Gandhi Institute of Development Research)
    Abstract: I present a review and extended discussion of The Cult of Statistical Significance: How the Standard Error Costs Us Jobs, Justice and Lives by Deirdre McCloskey and Stephen Ziliak, a work that raises important issues related to the practice of statistics and that has been widely commented upon. For this review, I draw upon several other works on statistics and my personal experiences as a teacher of undergraduate econometrics.
    Keywords: Significance, Standard Error, Application of Statistics, Methodology
    JEL: C1 C12
    Date: 2014–09
  9. By: Taylor, John B. (Stanford University)
    Abstract: This paper starts from the theoretical observation that simple rules-based monetary policy will result in good economic performance in a globalized world economy and the historical observation that this occurred during the Great Moderation period of the 1980s and 1990s. It tries to answer a question posed by Paul Volcker in 2014 about the global repercussions of monetary policies pursued by advanced economy central banks in recent years. I start by explaining the basic theoretical framework, its policy implications, and its historical relevance. I then review the empirical evidence on the size of the international spillovers caused by deviations from rules-based monetary policy, and explore the many ways in which these spillovers affect and interfere with policy decisions globally. Finally, I consider ways in which individual monetary authorities and the world monetary system as a whole could adhere better to rules-based policies in the future and whether this would be enough to achieve the goal of stability in the globalized world economy.
    JEL: E5 F4 F5
    Date: 2014–10–01
  10. By: Marcus Noland (Peterson Institute for International Economics); Kevin Stahler (Peterson Institute for International Economics)
    Abstract: This paper examines determinants of women's participation and performance in the Olympics. Female inclusion and success are not merely functions of size, wealth, and host advantage, but a more complex process involving the socioeconomic status of women and, more weakly, broad societal attitudes on gender issues. Female labor force participation and educational attainment in particular are tightly correlated with both participation and outcomes, even controlling for per capita income. Female educational attainment is strongly correlated with both the breadth of participation across sporting events and success in those events. Host countries and socialist states also are associated with unusually high levels of participation and medaling by female athletes. Medal performance is affected by large-scale boycotts. Opening competition to professionals may have leveled the playing field for poorer countries. But the historical record for women's medal achievement is utterly distorted by the doping program in the former East Germany, which specifically targeted women. At its peak in the 1970s and 1980s, the program was responsible for 17 percent of the medals awarded to women, equivalent to the medal hauls of the Soviet or American team in 1972, the last Olympics not marred by widespread abuse of performance-enhancing drugs.
    Keywords: women, gender, sports, Olympics
    JEL: J16 L83 F53 Z13
    Date: 2014–10
  11. By: Ha-Joon Chang
    Abstract: Resumen: Se describe la historia del libre comercio con una perspectiva alternativa a la predominante en el llamado consenso de Washington, según el cual lo mejor que pueden hacer los países para generar riqueza y puestos de trabajo es eliminar las barreras arancelarias y abrirse al mercado mundial. Los países que hoy se consideran desarrollados usaron en épocas pasadas el proteccionismo para defender su industria naciente y solo pasaron a predicar las virtudes del libre comercio cuando se hallaban ya en una situación en la que eran capaces de competir internacionalmente con otros países que habían avanzado antes en el desarrollo industrial. Tanto Gran Bretaña como EE. UU. Tuvieron practicaron el proteccionismo por largos periodos. Como dijo Friedrich List, una vez alcanzada la cima, es una argucia común dar una patada a la escalera por la que se ha subido, privando así a otros de la posibilidad de subir detrás.
    Keywords: Libre comercio, Consenso de Washington, desarrollo industrial, proteccionismo
    JEL: F13 F15 D20
    Date: 2013–06–27
  12. By: McCain, Roger (School of Economics Drexel University)
    Abstract: Thomas Piketty’s (2014) recent book has been the occasion of a good deal of discussion, much of it centered around his references to the elasticity of substitution between labor and capital. He presents evidence that suggests that capital’s share rises as the capital-labor ratio rises. In a very simple growth model, this would mean that the elasticity of substitution between capital and labor is greater than one. However, many economists probably concur with a criticism by Lawrence Summers: (2014) “I know of no study suggesting that … the elasticity of substitution is less than one, and I know of quite a few suggesting the contrary.” A number of such studies are reviewed in Leon-Ledesma et. al (2010, see esp. Table 1, p. 1335) and most do indeed estimate elasticities of substitution less than one; however, they also assume that technical progress is either Hicks-Neutral or factor-augmenting and, if factor-augmenting, that the rates of factor augmentation are exogenously given1. Piketty does not split definitional hairs, referring sometimes to capital claims and sometimes to the imputed competitive income of the capital input. As Summers notes, he abstracts from depreciation and, barring a few mostly negative comments, does not treat technical progress nor human capital as important determinants of the income shares. Thus, clearly, the studies referenced by Leon-Ledesma et. al do not apply to Piketty’s argument. On the other hand, there is some room for conjecture as to how Piketty’s thinking might be represented in mathematical economic models of economic growth. This paper will briefly sketch a model influenced by Stokey (1991), Romer (1986), and Duffy et al (2004). in which trends like those reported by Piketty can arise depending on the differences between the elasticities of substitution among physical capital, human-technological capital, and raw labor. For this model, “capital” will be understood in a strictly neoclassical way, as an index of an aggregate of heterogeneous durable produced means of production, treated “as if” a divisible and homogenous input. The paper will then reconsider the relation of Piketty’s writing to a model of this kind.
    Keywords: Piketty Curve; Elasticity of Substitution
    JEL: D24
    Date: 2014–08–21
  13. By: Rodrigo García Arancibia
    Abstract: Resumen: En este ensayo se presentan algunas reflexiones sobre los cambios conceptuales y metodológicos a lo largo del pensamiento económico en los estudios referentes a curvas de Engel (CE).Comenzando por el ‘inductivismo’ bajo un espíritu no paramétrico del trabajo original de Ernst Engel (1895), hasta la posterior inclusión dentro de la teoría del consumidor del programa de investigación neoclásico o mainstream, y la problemática subsiguiente de la búsqueda de una especificación consistente, en términos de la adecuación con la teoría y del ajuste econométrico.Se sostiene que la incorporación de especificaciones no paramétricas va en línea con una mayor flexibilidad postulada para la relación de Engel siguiendo su contribución original. Sin embargo,la forma en que generalmente es planteada sigue persiguiendo su adecuación con algunos o todos los requerimientos para su consistencia en el marco de la teoría del consumidor.
    Keywords: Ernst Engel; Gasto de Hogares; Especificación Econométrica y No Paramétrico.
    JEL: B16 B23 D12
    Date: 2013–06–27
  14. By: Luís Aguiar-Conraria (NIPE and Department of Economics, University of Minho); Manuel M. F. Martins (cef.up and Faculty of Economics, University of Porto); Maria Joana Soares (NIPE and Department of Mathematics and Applications, University of Minho)
    Abstract: This paper analyses the Taylor Rule in the U.S. 1960-2014 with new lenses: continuous time partial wavelets tools. These allow us to assess the co-movement between the policy interest rate and the macroeconomic variables in the Rule, inflation and the output gap, both jointly and independently, for each frequency and at each moment of time. Our results uncover some new stylized facts about U.S. monetary policy and add new insights to the record of U.S. monetary history since the early 1960s. Among other findings, we conclude that monetary policy has been forward-looking and aimed at stabilizing inflation throughout the whole sample, although with varying effectiveness both across time and frequencies. Monetary policy has lagged the output gap across most of the sample, but in recent times became more reactive. Volcker’s disinflation, and the conquest of credibility in 1979-1986, were achieved with no extra costs in terms of output.
    Keywords: Monetary Policy, Taylor Rule, Continuous Wavelet Transform, Partial Wavelet Coherency, Partial Phase-difference
    JEL: C49 E43 E52
    Date: 2014–10

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