nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2014‒12‒24
25 papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Chinese National Income, ca. 1661-1933 By Shi Zhihong; Xuyi; Ni Yuping; Bas van Leeuwen
  2. How the Danes Discovered Britain: The International Integration of the Danish Dairy Industry Before 1880 By Markus Lampe; Paul Sharp
  3. No Price Like Home: Global House Prices, 1870-2012 By Knoll, Katharina; Schularick, Moritz; Steger, Thomas
  4. A VAR Analysis of the Transportation Revolution in Europe By Felis-Rota, Marta
  5. “Phantom of the Opera” or “Sex and the City”? Historical Amenities as Sources of Exogenous Variation By Bauer, Thomas; Breidenbach, Philipp; Schmidt, Christoph M
  6. The Heavy Plough and the Agricultural Revolution in Medieval Europe By Thomas Barnebeck Andersen; Thomas Peter Sandholt Jensen; Christian Volmer Skovsgaard
  7. External Integration, Structural Transformation and Economic Development: Evidence from Argentina 1870-1914 By Fajgelbaum, Pablo; Redding, Stephen J.
  8. Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data By Saez, Emmanuel; Zucman, Gabriel
  9. continuity and change in workplaces of beyoglu in the period 1950-2011 By gülin giriþken
  10. Non-financial hurdles for human capital accumulation: Landownership in Korea under Japanese rule By Jun, Bogang; Kim, Tai-Yoo
  11. Accounting for Sustainable Development over the Long-Run:Lessons from Germany By Matthias Blum; Eoin McLaughlin; Nick Hanley
  12. The Emperor Has New Clothes: Empirical Tests of Mainstream Theories of Economic Growth By David Greasley; Nick Hanley; Eoin McLaughlin; Les Oxley
  13. Structural transformation in the 20th century: A new database on agricultural employment around the world By Asger Moll Wingender
  14. Determinants of success and failure in the internationalisation of the cork business: A tale of two Iberian family firms By João Lopes; Amélia Branco; Francisco Parejo; Jose Rangel
  15. How Fiscal Policy Affects the Price Level: Britain’s First Experience with Paper Money. By P.Antipa
  16. Capital Controls and Recovery from the Financial Crisis of the 1930s By Mitchener, Kris; Wandschneider, Kirsten
  17. Love in the time of the depression: The effect of economic conditions on marriage in the Great Depression By Matthew J. Hill
  18. The Great Depression, the New Deal, their Evaluation by Mainstream Economists and the Present Crisis of Europe By Stephan Schulmeister
  19. Mismeasuring Long Run Growth. The Bias from Spliced National Accounts By Leandro Prados de la Escosura
  20. Sailing away from Malthus: intercontinental trade and European economic growth, 1500-1800 By Nuno Palma
  21. Sir James Steuart on the origins of the exchange economy By José M. Menudo
  22. Easterlin revisted: Relative income and the baby boom By Matthew J. Hill
  23. Scoping paper on Kenyan manufacturing By Chege, Jacob; Ngui, Dianah; Kimuyu, Peter
  24. Growth, poverty and inequality in Rwanda: A broad perspective By Verpoorten, Marijke
  25. The Economics of Density: Evidence from the Berlin Wall By Ahlfeldt, Gabriel; Redding, Stephen J.; Sturm, Daniel M; Wolf, Nikolaus

  1. By: Shi Zhihong; Xuyi; Ni Yuping; Bas van Leeuwen
    Abstract: This paper pulls together many primary and secondary sources to arrive at consistent estimates of national income for china between the 17th and 20th centuries. We find, in line with much of the literature, that GDP per capita declined between the mid-17th and 19th centuries. This trend reversed during the 19th century, mainly due to a shift into services and, for the late 19th century onwards, also in industry. Since these sectors exhibited higher labour productivity, this fostered economic growth. This pattern of decreasing share of services and industry from the 17th century and increasing shares in the 19th century is common in many Asian countries except Japan. The reasons for this development, however, are unclear. The standard ultimate factors of growth such as institutions (low marriage age for women, exclusive society) and geography apply to almost all Asian countries. Hence, more research is necessary.
    Keywords: GDP, agriculture, industry, services, growth, China, economic history
    Date: 2014–12
    URL: http://d.repec.org/n?u=RePEc:ucg:wpaper:0062&r=his
  2. By: Markus Lampe (Universidad Carlos III Madrid); Paul Sharp (University of Southern Denmark)
    Abstract: The success of Danish agricultural exports at the end of the nineteenth century is often attributed to the establishment of a direct trade with Britain. Previously, exports went mostly via Hamburg, but this changed with the loss of Schleswig and Holstein to Prussia in the war of 1864. After this, quantity and price data imply narrowing price gaps and thus imply gains for Danish producers. Why then did Denmark not discover the British market earlier? We show that butter markets in both countries were integrated in the eighteenth century, but through the Hamburg hub. We then demonstrate that there were sound economic reasons for this well into the nineteenth century. However, movements to establish a direct trade were afoot from the 1850s. Thus, although the war certainly gave an extra boost to the process, the shock from the loss of the Duchies was not necessary for the future Danish success.
    Keywords: Butter, dairies, Denmark, hubs, international trade, market integration
    JEL: F1 L1 N5 N7 Q1
    Date: 2014–10
    URL: http://d.repec.org/n?u=RePEc:hes:wpaper:0066&r=his
  3. By: Knoll, Katharina; Schularick, Moritz; Steger, Thomas
    Abstract: How have house prices evolved in the long-run? This paper presents annual house price indices for 14 advanced economies since 1870. Based on extensive data collection, we are able to show for the first time that house prices in most industrial economies stayed constant in real terms from the 19th to the mid-20th century, but rose sharply in recent decades. Land prices, not construction costs, hold the key to understanding the trajectory of house prices in the long-run. Residential land prices have surged in the second half of the 20th century, but did not increase meaningfully before. We argue that before World War II dramatic reductions in transport costs expanded the supply of land and suppressed land prices. Since the mid-20th century, comparably large land-augmenting reductions in transport costs no longer occurred. Increased regulations on land use further inhibited the utilization of additional land, while rising expenditure shares for housing services increased demand.
    Keywords: house prices; land prices; neoclassical theory; transportation costs
    JEL: N10 O10 R30 R40
    Date: 2014–09
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:10166&r=his
  4. By: Felis-Rota, Marta (Departamento de Análisis Económico: Teoría Económica e Historia Económica. Universidad Autónoma de Madrid)
    Abstract: During the second half of the 19th century transportation costs decreased sharply. Among the most notable technological advances that lead to the transportation revolution we find the arrival of the railways. This paper provides a quantitative analysis of the expansion of the railways at the time of the so-called First Globalization in European countries through a vector autoregressive analysis. Total mileage of the railways has been obtained through GIS software for every European country, via a long process of digitalization of historical atlases. Then the vector autoregressive analysis and the impulse-response functions show the interaction between railways and GDP. I find interactions going in both directions of the VAR, and that the persistence of the effects varies from country to country. Thanks to this method, we can compare differentiated patterns of development associated to idiosyncratic transportation revolutions in Europe.
    Keywords: VAR, railways, growth, comparative economic history
    JEL: C3 N13 R4
    Date: 2014–12
    URL: http://d.repec.org/n?u=RePEc:uam:wpapeh:201401&r=his
  5. By: Bauer, Thomas; Breidenbach, Philipp; Schmidt, Christoph M
    Abstract: Using the location of baroque opera houses as a natural experiment, Falck et al. (2011) claim to document a positive causal effect of the supply of cultural goods on today’s regional distribution of talents. This paper raises serious doubts on the validity of the identification strategy underlying these estimates, though. While we are able to replicate the original results, we proceed to show that the same empirical strategy also assigns positive causal effects to the location of historical brothels and breweries. These estimated effects are similar in size and significance to those of historical opera houses. We document that all these estimates reflect the importance of institutions for long-run economic growth, and that the effect of historical amenities on the contemporary local share of high skilled workers disappears upon controlling for regions’ historical importance.
    Keywords: historical amenities; human capital; regional competitiveness
    JEL: H42 J24 R11
    Date: 2014–08
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:10098&r=his
  6. By: Thomas Barnebeck Andersen (University of Southern Denmark); Thomas Peter Sandholt Jensen (University of Southern Denmark); Christian Volmer Skovsgaard (University of Southern Denmark)
    Abstract: This research tests the long-standing hypothesis put forth by Lynn White, Jr. (1962) that the adoption of the heavy plough in Northern Europe was an important cause of economic development. White argued that it was impossible to take proper advantage of the fertile clay soils of Northern Europe prior to the invention and widespread adoption of the heavy plough. We implement the test in a difference-in-difference set-up by exploiting regional variation in the presence of fertile clay soils. Using a high quality dataset for Denmark, we find that historical counties with relatively more fertile clay soil experienced higher urbanization after the heavy plough had its breakthrough, which was around AD 1000. We obtain a similar result, when we extend the test to European regions
    Keywords: Heavy plough, medieval technology, agricultural productivity
    JEL: J1 N1 N93 O1 O33
    Date: 2014–12
    URL: http://d.repec.org/n?u=RePEc:hes:wpaper:0070&r=his
  7. By: Fajgelbaum, Pablo; Redding, Stephen J.
    Abstract: This paper uses the natural experiment of Argentina's integration into world markets in the late-nineteenth century to provide evidence on the role of internal geography in shaping the effects of external integration. We develop a quantitative model of the distribution of economic activity across regions and sectors. The model predicts a spatial Balassa-Samuelson effect, in which locations with better access to world markets have higher population densities, higher shares of employment in the non-traded sector, higher relative prices of non-traded goods, and higher land prices relative to wages. We use the model and data on population density and sectoral employment shares to recover sufficient statistics that isolate the economic mechanisms through which external and internal integration affect economic development. Our analysis highlights the role of complementary investments in internal infrastructure and technology adoption in mediating the economy's response to external integration.
    Keywords: economic development; external integration; structural transformation
    JEL: F11 F14 O13 O14
    Date: 2014–06
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:10026&r=his
  8. By: Saez, Emmanuel; Zucman, Gabriel
    Abstract: This paper combines income tax returns with Flow of Funds data to estimate the distribution of household wealth in the United States since 1913. We estimate wealth by capitalizing the incomes reported by individual taxpayers, accounting for assets that do not generate taxable income. We successfully test our capitalization method in three micro datasets where we can observe both income and wealth: the Survey of Consumer Finance, linked estate and income tax returns, and foundations' tax records. Wealth concentration has followed a U-shaped evolution over the last 100 years: It was high in the beginning of the twentieth century, fell from 1929 to 1978, and has continuously increased since then. The rise of wealth inequality is almost entirely due to the rise of the top 0.1% wealth share, from 7% in 1979 to 22% in 2012---a level almost as high as in 1929. The bottom 90% wealth share first increased up to the mid-1980s and then steadily declined. The increase in wealth concentration is due to the surge of top incomes combined with an increase in saving rate inequality. Top wealth-holders are younger today than in the 1960s and earn a higher fraction of total labor income in the economy. We explain how our findings can be reconciled with Survey of Consumer Finances and estate tax data.
    Keywords: household wealth; income tax; wealth inequality; wealth-holders
    JEL: H2 N32
    Date: 2014–10
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:10227&r=his
  9. By: gülin giriþken
    Abstract: 20th century witnessed Istanbul's unexpected and tumultuous economic, politic, social and spatial transformation. In the first quarter of the 20th century, Istanbul lost half of its population and went through a stagnated duration; however the city regained its importance and former population at the end of 1950's. The city's macroform and transportation infrastructure that could have easily handled the needs of the city at the beginning of the 20th century. However migration accalerated by industrilization began with 1950's and increased need for more transport infrastructure in the urban area and other cities. Due to these rooted changes, the city's macroform turned inside out in terms of spatial context. During this tumultuous and multi-layered transformation period, Istanbul's central business district was restructured and Istanbul pursued being the centre of commerce and economy in the country. In the last decade of the 20th century, with the influential effect of producer services, this transformation and change was reflected to the sectoral and spatial environment. 1950 and following years are the times of radical transformation of the economic, social and cultural structure for Istanbul. The structure and function, cultural and ethnic diversity, the appearance and silhouette the city had sustained for thousands of years has started to change first gradually in the 1950s, then dramatically in the 1970s and finally 1990s and 2000s Istanbul has become an unorganized, unplanned giant metropolis. In this framework, Istanbul's fastest transforming district, Beyoglu underwent through some big changes in economic, cultural and daily-life aspects. In this context, Beyoglu district which is a perfect example to observe the transformations that Turkish city went through between the years 1950 and 2010 and the influence of producer services during this transformation period. This research is aimed at analyzing the workplace geography of Beyoglu district in the period 1950-2011. Research focusing on; - recognition of sectoral assemblages that produces and reproduces economic and spatial change and transformation; - discovering the economic and spatial differentiation and segmentation which characterized by spatial shifts in years; - characterizing and monitoring the economic and spatial transformation processes by using policies, actions, and tools. The research analyzes the economic landscape of Beyoglu in the 20th century period with adopting a relational perspective. The research looks in detail to the characteristics and activity assemblages of economic structure of Beyoglu, spatial formations of change and transformation, and the effect of these all economic processes to the formation of the district and the city.
    Keywords: central business district; economic geography; urban change and transformation; Z13 Economic Sociology Economic Anthropology Social and Economic Stratification
    Date: 2014–11
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa14p1452&r=his
  10. By: Jun, Bogang; Kim, Tai-Yoo
    Abstract: This paper suggests that inequality in landownership is a non-financial hurdle for human capital accumulation. It is the first to present evidence that inequality in landownership had an adverse effect on the level of public education in the Korean colonial period. Using a fixed effects model, the present research exploits variations in inequality in land concentration across regions in Korea and accounts for the unobserved heterogeneity across these regions. The analysis establishes a highly significant adverse effect of land inequality on education in the Korean colonial period.
    Keywords: Land inequality,Education,Development,Korean economic history
    JEL: I25 N35 Q15
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:zbw:fziddp:932014&r=his
  11. By: Matthias Blum (Queen's University Management School); Eoin McLaughlin (School of Geography and Sustainable Development, University of St. Andrews); Nick Hanley (School of Geography and Sustainable Development, University of St. Andrews)
    Abstract: For many years, the World Bank has reported estimates of the degree of sustainability of the world’s economies using a measure of adjusted net savings. We construct long-run sustainability indicators for Germany over the period 1850-2000 to test the relationship between these net savings-based indicators and a number of measures of well-being over the long-run. These are the present value of future changes in consumption and changes in average height and infant mortality rates. We find that German sustainability indicators are positive for the most part, although they are negative during and after the two World Wars and also the Great Depression. However, we do not observe similar trends in the path of future consumption. Overall, we find that Genuine Savings is positively related to the present value of changes in future consumption, with some evidence of a cointegrating relationship when the measure of changes in assets is made more comprehensive. Our main contribution is to demonstrate the importance of broader measures of capital, including measures of technological progress; and the limits of conventional measures of investment to understand why future German consumption did not collapse.
    Keywords: Sustainability, economic development, Genuine Savings, Adjusted Net Savings, investment, consumption, well-being, economic history.
    JEL: E01 E21 N10 O11 Q01
    Date: 2014–11
    URL: http://d.repec.org/n?u=RePEc:sss:wpaper:2014-10&r=his
  12. By: David Greasley (School of History, Classics and Archaeology, University of Edinburgh); Nick Hanley (School of Geography and Sustainable Development, University of St. Andrews); Eoin McLaughlin (School of Geography and Sustainable Development, University of St. Andrews); Les Oxley (Department of Economics, University of Waikato)
    Abstract: Modern macroeconomic theory utilises optimal control techniques to model the maximisation of individual well-being using a lifetime utility function. Agents face choices over current and future consumption (with resultant implied savings decisions) seeking to maximise the present value of current plus future well-being. However, such inter-temporal welfare- maximising assumptions remain empirically untested. In the work presented here we test whether welfare was in (historical) fact maximised in the US between 1870 -2000 and find empirical support for the optimising basis of growth theory, but only once a comprehensive view of what constitutes a country’s wealth or capital is taken into account.
    Keywords: inter-temporal utility maximisation;modern growth theory; US; comprehensive wealth
    JEL: E21 E22 C61
    Date: 2014–08
    URL: http://d.repec.org/n?u=RePEc:sss:wpaper:2014-01&r=his
  13. By: Asger Moll Wingender (Department of Economics, Copenhagen University)
    Abstract: Many empirical questions about economic growth and development are left open due to the lack of long time series of reliable GDP estimates. The share of the labor force employed in agriculture can fill this gap. Agricultural employment shares are highly correlated with GDP per capita, less prone to measurement errors, and data are available for longer periods than existing GDP estimates. This paper describes a new database on agricultural employment covering 169 countries for the period 1900-2010. Some of the many potential uses of the data are discussed.
    Keywords: Economic growth, structural transformation, agricultural employment
    JEL: O1 O4
    Date: 2014–12–01
    URL: http://d.repec.org/n?u=RePEc:kud:kuiedp:1428&r=his
  14. By: João Lopes; Amélia Branco; Francisco Parejo; Jose Rangel
    Abstract: The trajectories of internationalisation followed by family firms can be viewed from several theoretical approaches ? phases of the internationalisation process; international entrepreneurship, sociological perspective, family business theory. An historical perspective of the internationalised family firms, allowing the integration of these several approaches, is useful to a deep understanding of the internationalisation process of different sectors and countries. The main purpose of this paper is to identify the facilitating and the restricting factors during the internationalisation path of family firms, considering their competitive advantages, the ownership structure and management attitudes, innovation and intangible assets and other relevant factors, internal and/or external to the firm. It makes a long run analysis (more than one century) of two companies acting in the cork business in Spain and Portugal: Mundet and Amorim&Irmãos. One of these companies - Mundet ? has been closed in the 1980s and the other - Amorim&Irmãos ? became, and is by now, the leading company in the cork worldwide business. The careful comparison of these two stories, one of failure and the other of success, allows an accurate identification of the determinants of a successful internationalisation. In fact, it is useful for understanding several characteristics of both firms, some similar and other different, allowing the test of several hypothesis in the context of the theoretical approach to the internationalisation of family firms. First of all, both are family firms operating in the same business and since their origin orientated to foreign markets. Second, their story went along much of the twentieth century and so both faced similar national and international constraints but in the end both became leading firms in the cork business, although in different time periods. Third, their location choices were different and, although in both cases benefiting from agglomeration forces in certain phases of the business, they were also important determinants of the opposite destinies of these two emblematic Iberian cork family firms.
    JEL: F23 L73 N60 O14 R12
    Date: 2014–11
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa14p638&r=his
  15. By: P.Antipa
    Abstract: Between 1797 and 1821, Britain suspended the gold standard in order to finance the Napoleonic Wars. This measure was accompanied by large scale debt accumulation and inflation: After Napoleon’s final defeat at Waterloo in 1815, the debt to GDP ratio had climbed to 226%; the price level exceeded its 1797 level by 22.3%. Under these circumstances and given that institutional settings allowed excluding the possibility of strategic default, I will show that expectations of how debt would be stabilized in the future shaped the observed evolution of the price level. Thus, my contribution establishes the importance of fiscal determinants of the price level.
    Keywords: Debt monetization, sovereign debt, inflation, structural breaks.
    JEL: N13 N23 N43 C22
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:bfr:banfra:525&r=his
  16. By: Mitchener, Kris; Wandschneider, Kirsten
    Abstract: We examine the first widespread use of capital controls in response to a global or regional financial crisis. In particular, we analyze whether capital controls mitigated capital flight in the 1930s and assess their causal effects on macroeconomic recovery from the Great Depression. We find evidence that they stemmed gold outflows in the year following their imposition; however, time-shifted, difference-in-differences (DD) estimates of industrial production, prices, and exports suggest that exchange controls did not accelerate macroeconomic recovery relative to countries that went off gold and floated. Countries imposing capital controls also appear to perform similar to the gold bloc countries once the latter group of countries finally abandoned gold. Time series analysis suggests that countries imposing capital controls refrained from fully utilizing their newly acquired monetary policy autonomy.
    Keywords: capital controls; financial crises; Great Depression; interwar gold standard
    JEL: E44 E61 F32 F33 F41 G15 N1 N2
    Date: 2014–06
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:10019&r=his
  17. By: Matthew J. Hill
    Abstract: I examine the impact of the Great Depression on marriage outcomes and find that marriage rates and local economic conditions are positively correlated. Specifically, poor labor market opportunities for men negatively impact marriage. Conversely, there is some evidence that poor female labor markets actually increase marriage in the period. While the Great Depression did lower marriage rates, the effect was not long-lasting: marriages were delayed, not denied. The primary long-run effect of the downturn on marriage was stability: marriages formed in tough economic times were more likely to survive compared to matches made in more prosperous time periods.
    Date: 2014–09
    URL: http://d.repec.org/n?u=RePEc:upf:upfgen:1454&r=his
  18. By: Stephan Schulmeister (WIFO)
    Abstract: Roosevelt's New Deal stays in sharp contrast to the course followed by European policy since 2009. At first, Roosevelt focussed on fighting the generally pessimistic mood of the public, on strictly regulating the financial sector and on setting up investment and employment programmes. After that, structural reforms were carried out in order to strengthen confidence and social coherence. The most important measures were the introduction of unemployment insurance and of a public pension scheme as well as regulations to ensure "fair" labour conditions. The New Deal policy was successful: GDP expanded in the USA between 1933 and 1937 by 43 percent, mainly due to a boom in investments (+140 percent). By fighting the social-psychological depression and "speculation with other people's money", Roosevelt anticipated those two main messages of Keynes' "General Theory" (1936) which were later forgotten: first, the importance of the "state of confidence" and, second, the necessity to radically restrict financial speculation. The most influential thesis of Friedman – Schwartz (1963) according to which the Great Depression was primarily caused by a too restrictive monetary policy, i.e., by the state, turns out to be more based on ideology than on empirical facts. This holds even more true for the thesis of Cole – Ohanian (1999) and of Prescott (1999) according to which the depression was prolongued by New Deal policies. At present, a re-orientation of economic policy in Europe along Roosevelt's guidelines and, hence, a "New Deal for Europe" might help to lead the economy out of the persistent crisis.
    Keywords: Makroökonomische Politik, Depressionen, New Deal
    Date: 2014–11–17
    URL: http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2014:i:483&r=his
  19. By: Leandro Prados de la Escosura (Universidad Carlos III and CEPR)
    Abstract: Comparisons of economic performance over space and time largely depend on how statistical evidence from national accounts and historical estimates are spliced. To allow for changes in relative prices, GDP benchmark years in national accounts are periodically replaced with new and more recent ones. Thus, a homogeneous long-run GDP series requires linking different temporal segments of national accounts. The choice of the splicing procedure may result in substantial differences in GDP levels and growth, particularly as an economy undergoes deep structural transformation. An inadequate splicing may result in a serious bias in the measurement of GDP levels and growth rates. Alternative splicing solutions are discussed in this paper for the particular case of Spain, a fast growing country in the second half of the twentieth century. It is concluded that the usual linking procedure, retropolation, has serious flows as it tends to bias GDP levels upwards and, consequently, to underestimate growth rates, especially for developing countries experiencing structural change. An alternative interpolation procedure is proposed.
    Keywords: growth measurement, splicing GDP, historical national accounts, Spain
    JEL: C82 E01 N13 O47
    Date: 2014–08
    URL: http://d.repec.org/n?u=RePEc:hes:wpaper:0060&r=his
  20. By: Nuno Palma
    Abstract: What was the contribution of intercontinental trade to the development of the European early modern economies? Previous attempts to answer this question have focused on static measures of the weight of trade in the aggregate economy at a given point in time, or on the comparison of the income of specific imperial nations just before and after the loss of their overseas empire. These static accounting approaches are inappropriate if dynamic and spillover effects are at work, as seems likely. In this paper I use a panel dataset of ten countries in a dynamic model which allows for spillover effects, multiple channels of causality, persistence and country-specific fixed effects. Using this dynamic model, simulations suggest that in the counterfactual absence of intercontinental trade, rates of early modern economic growth and urbanization would have been moderately to substantially lower. For the four main long-distance traders, by 1800 the real wage was, depending on the country, 6.1 to 22.7% higher, and urbanization was 4.0 to 11.7 percentage points higher, than they would have otherwise been. For some countries, the effect was quite pronounced: in the Netherlands between 1600 and 1750, for instance, intercontinental trade was responsible for most of the observed increase in real wages and for a large share of the observed increase in urbanization. At the same time, countries which did not engage in long-distance trade would have had real wage increases in the order of 5.4 to 17.8% and urbanization increases of 2.2 to 3.2 percentage points, should they have done so at the same level as the four main traders. Intercontinental trade appears to have played an important role for all nations which engaged in it, with the exception of France. These conclusions stand in contrast with the earlier literature which uses a partial equilibrium and static accounting approach.
    Keywords: early modern economic growth; economics of empires
    JEL: O52
    Date: 2014–09
    URL: http://d.repec.org/n?u=RePEc:ehl:wpaper:60453&r=his
  21. By: José M. Menudo (Department of Economics, Universidad Pablo de Olavide)
    Abstract: This paper examines James Steuart’s explanation of the emergence of the exchange economy. An initial hypothesis holds the decisive influence of a plan designed and implemented by merchants. Our proposal evokes the importance, acknowledged by Steuart, of the construction of institutions, involving designs aimed at achieving self-interest purposes. It is argued that “commercial” subordination explains how individuals become dependent on a new institutional organisation. Finally, we conclude that Political Œconomy is a science of the artificial that seeks to understand the functioning of non-natural mechanisms and to create instruments that the statesman adapts to the needs and of objectives individuals..
    Keywords: James Steuart, development, institutions, subordination, economic system.
    JEL: J31 J24 J41
    Date: 2014–09
    URL: http://d.repec.org/n?u=RePEc:pab:wpaper:14.08&r=his
  22. By: Matthew J. Hill
    Abstract: This paper reexamines the first viable and a still leading explanation for mid-twentieth century baby booms: Richard Easterlin's relative income hypothesis. He suggested that when incomes are higher than material aspirations (formed in childhood), birth rates would rise. This paper uses microeconomic data to formulate a measure of an individual's relative income. The use of microeconomic data allows the researcher to control for both state fixed effects and cohort fixed effects, both have been absent in previous examinations of Easterlin's hypothesis. The results of the empirical analysis are consistent with Easterlin's assertion that relative income influenced fertility decisions, although the effect operates only through childhood income. When the estimated effects are contextualized, they explain 12 percent of the U.S. baby boom.
    Date: 2014–09
    URL: http://d.repec.org/n?u=RePEc:upf:upfgen:1453&r=his
  23. By: Chege, Jacob; Ngui, Dianah; Kimuyu, Peter
    Abstract: Three major policy regimes, namely import substitution, market liberalization and export promotion have greatly influenced Kenyan industrialization since independence in 1963. Overall, import substitution strategy was successful in establishing some prima
    Keywords: industrial policy, productivity, reforms, structure of industry
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2014-136&r=his
  24. By: Verpoorten, Marijke
    Abstract: This study focuses on growth, poverty and inequality in Rwanda. We take a broad perspective, in two respects. First, we consider a long time period so as to compare the current situation with the pre-war situation, allowing us to assess whether the recent
    Keywords: Rwanda, poverty, inequality, mobility, happiness
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:unu:wpaper:wp2014-138&r=his
  25. By: Ahlfeldt, Gabriel; Redding, Stephen J.; Sturm, Daniel M; Wolf, Nikolaus
    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.
    Keywords: agglomeration; cities; commuting; density; gravity
    JEL: N34 O18 R12
    Date: 2014–08
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:10097&r=his

This nep-his issue is ©2014 by Bernardo Bátiz-Lazo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.