nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2015‒02‒22
thirty papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. History, Path Dependence and Development: Evidence from Colonial Railroads, Settlers and Cities in Kenya By Remi Jedwab; Edward Kerby; Alexander Moradi
  2. Baby-boom, baby-bust and the Great Depression By BELLOU, Andriana; CARDIA, Emanuela
  3. Transportation Technology and Economic Change: The Impact of Colonial Railroads on City Growth in Africa By Remi Jedwab; Alexander Moradi
  4. Post-Malthusian Dynamics in Pre-Industrial Scandinavia By Marc Klemp; Niels Framroze Møller
  5. Monks, Gents and Industrialists: The Long-Run Impact of the Dissolution of the English Monasteries By Vollmer, Sebastian; Heldring, Leander; Robinson, James A.
  6. The National Rise in Residential Segregation By Trevon Logan; John Parman
  7. Was the Classical Gold Standard Credible on the Periphery? Evidence from Currency Risk By Mitchener, Kris; Weidenmier, Marc
  8. Services, Comparative Advantage and Agglomeration of Economic Activity: A Ricardo-Marshall Model By Pflüger, Michael; Tabuchi, Takatoshi
  9. Economic Effects of the Abolition of Serfdom: Evidence from the Russian Empire By Markevich, Andrei; Zhuravskaya, Ekaterina
  10. La no reversión de la fortuna en el largo plazo: geografía y persistencia espacial de la prosperidad en Colombia, 1500- 2005 By Adolfo Meisel Roca
  11. By a Silken Thread : regional banking integration and pathways to financial development in Japan s Great Recession By Hoffmann, Mathias; Okubo, Toshihiro
  12. ‘To Have and Have Not’: Are Rich Litigious Plaintiffs Favored in Court? By B. Zorina Khan
  13. Historical mutilation: How misuse of 'public utility and 'natural monopoly' misdirects US telecommunications policy development By Cherry, Barbara A.
  14. 1807: Economic shocks, conflict and the slave trade By James Fenske; Namrata Kala
  15. Railroads and Growth in Prussia By Hornung, Erik
  16. Gary Becker: Model Economic Scientist By Heckman, James J.
  17. Ambiguity and the historical equity premium. By Fabrice Collard; Sujoy Mukerji; Kevin Sheppard; Jean-Marc Tallon
  18. Tendencias históricas y regionales de la adjudicación de baldíos en Colombia1 By Juanita Villaveces Niño; Fabio Sánchez
  19. The Literary Inquisition: The Persecution of Intellectuals and Human Capital Accumulation in China By Koyama, Mark; Xue, Melanie Meng
  20. “…then came Cisco, and the rest is history”: a ‘history friendly’ model of the Local Area Networking industry By R. Fontana; L. Zirulia
  21. Mapping Medieval and Modern chauvinism in England: By David Fielding
  22. Conceptualizing the formation and role of expectations before 1950: George Katona's thought. By Pierrick Dechaux
  23. Can Changes in the Cost of Cash Resolve the Corporate Cash Puzzle? By Martin Schmalz; Jean-François Kagy; Jose Azar
  24. If Hayek and Coase Were Environmentalists: Linking Economics and Ecology By Terry L. Anderson
  25. The long-run relationship between trade and population health: evidence from five decades By Herzer, Dierk
  26. The Roots of Islamist Armed Struggle, 1968-2007 By Krieger, Tim; Meierrieks, Daniel
  27. Reconciling Cournot and Bertrand Outcomes: A Review By Kirui, Benard Kipyegon
  28. Breve Histórico Das Mudanças Na Regulação do Trabalho no Brasil By André Gambier Campos
  29. The Income Distribution in the UK: A Picture of Advantage and Disadvantage By Jenkins, Stephen P.
  30. The Ejido System and Economic Growth of the Mexican States By Wallace, Frederick; Chapa Cantú, Joana

  1. By: Remi Jedwab; Edward Kerby; Alexander Moradi
    Abstract: Little is known about the extent and forces of urban path dependence in developing countries.  Railroad construction in colonial Kenya provides a natural experiment to study the emergence and persistence of this spatial equilibrium.  Using new data at a fine spatial level over one century shows that colonial railroads causally determined the location of European settlers, which in turn decided the location of the main cities of the country at independence.  Railroads declined and settlers left after independence, yet cities persisted.  Their early emergence served as a mechanism to coordinate investments in the post-independence period, yielding evidence for how path dependence influences development.
    Keywords: Path Dependence, Urbanisation, Transportation, Colonialism
    JEL: R11 R12 R40 O18 N97
    Date: 2014–01–12
    URL: http://d.repec.org/n?u=RePEc:oxf:wpaper:wps/2014-04&r=his
  2. By: BELLOU, Andriana; CARDIA, Emanuela
    Abstract: The baby-boom and subsequent baby-bust have shaped much of the history of the second half of the 20th century; yet it is still largely unclear what caused them. This paper presents a new unified explanation of the fertility Boom-Bust that links the latter to the Great Depression and the subsequent economic recovery. We show that the 1929 Crash attracted young married women 20 to 34 years old in 1930 (whom we name D-cohort) in the labor market possibly via an added worker effect. Using several years of Census micro data, we further document that the same cohort kept entering into the market in the 1940s and 1950s as economic conditions improved, decreasing wages and reducing work incentives for younger women. Its retirement in the late 1950s and in the 1960s instead freed positions and created employment opportunities. Finally, we show that the entry of the D-cohort is associated with increased births in the 1950s, while its retirement turned the fertility Boom into a Bust in the 1960s. The work behavior of this cohort explains a large share of the changes in both yearly births and completed fertility of all cohorts involved.
    Keywords: Baby boom; baby bust; Great Depression; added worker effect; retirement, fertility
    Date: 2015
    URL: http://d.repec.org/n?u=RePEc:mtl:montde:2015-02&r=his
  3. By: Remi Jedwab; Alexander Moradi
    Abstract: What is the impact of modern transportation technology on long-run economic change in poor countries with high trade costs?  Rail construction in colonial Sub-Saharan Africa provides a natural experiment: 90% of African rail-road lines were built before independence, in a context where headloading was the dominant transportation technology.  Using new data on railroads and cities over one century within one country, Ghana, and Africa as a whole, we find large permanent effects of transportation technology on economic development.  First, colonial railroads had strong effects on commercial agriculture and urban growth before independence. We exploit various identification strategies to ensure these effects are causal.  Second, using the fact that African railroads fell largely out of use post-independence, due to mismanagement and lack of maintenance, we show that colonial railroads had a persistent impact on cities.  While colonial sunk investments (e.g. schools, hospitals and roads) partly contributed to urban path dependence, evidence suggests that railroad cities persisted because their early emergence served as a mechanism to coordinate contemporary investments for each subsequent period.  Railroad cities are also wealthier than non-railroad cities of similar sizes today.  This suggests a world where shocks to economic geography can trigger an equilibrium in which cities will emerge to facilitate the accumulation of factors, and thus have long-term effects on economic growth.
    Keywords: Transportation Technology, Development, Path Dependence, growth
    JEL: R4 R1 O1 O3 N97
    Date: 2013–11–18
    URL: http://d.repec.org/n?u=RePEc:oxf:wpaper:wps/201-17&r=his
  4. By: Marc Klemp (Department of Economics, University of Copenhagen); Niels Framroze Møller (Department of Economics, University of Copenhagen)
    Abstract: Theories of economic growth hypothesize that the transition from pre-industrial stagnation to sustained growth is associated with a post-Malthusian phase in which technological progress raises income and spurs population growth while offsetting diminishing returns to labor. Evidence suggests that England was characterized by post-Malthusian dynamics preceding the Industrial Revolution. However, given England's special position as the forerunner of the Industrial Revolution, it is unclear if a transitory post-Malthusian period is a general phenomenon. Using data from Denmark, Norway and Sweden, this research provides evidence for the existence of a post-Malthusian phase in the transition from stagnation to growth in Scandinavia.
    Keywords: Demography, Post-Malthusian Dynamics, Malthus, Pre-Industrial Scandinavia, Demographic Transition, Economic Growth, Unified Growth Theory, Malthusian Stagnation, Co-integration, Time Series Analysis
    JEL: C32 N3 O1
    Date: 2015–01–23
    URL: http://d.repec.org/n?u=RePEc:kud:kuiedp:1503&r=his
  5. By: Vollmer, Sebastian; Heldring, Leander; Robinson, James A.
    Abstract: In this paper we undertake an investigation of the long-run economic impact of the dissolution of the English monasteries by Henry VIII in the 1530s. This event is plausibly linked to the rise of the gentry , the commercialization of agriculture and political and economic change in early modern England potentially facilitating its precocious industrialization. To measure the dissolution we digitized the Valor Ecclesiasticus, the census Henry commissioned of monastic incomes in 1534 and use monastic income at the parish level from the Valor as a measure of the local impact of the dissolution. We show that parishes which the dissolution impacted more were more likely to have a textile mill in 1838, tended to have more mills and greater mill employment. We also show that they tended to have a lower proportion of their labor force in agriculture in 1831 and a higher proportion in retail trade. In addition we demonstrate that parishes where the dissolution had a greater impact had more gentry in 1700, were more likely to have land enclosed by parliament and had more innovative agriculture as measured by patents. We show these results are robust to controlling for many other potential determinants of the location and extent of industry and for a variety of strategies for accounting for unobservables. The results are consistent with Tawney s famous thesis of the rise of the gentry but extend it by making the link between social change and the industrial revolution.
    JEL: N43 N63 N93
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc14:100275&r=his
  6. By: Trevon Logan; John Parman
    Abstract: This paper introduces a new measure of residential segregation based on individual-level data. We exploit complete census manuscript files to derive a measure of segregation based upon the racial similarity of next-door neighbors. Our measure allows us to analyze segregation consistently and comprehensively for all areas in the United States and allows for a richer view of the variation in segregation across time and space. We show that the fineness of our measure reveals aspects of racial sorting that cannot be captured by traditional segregation indices. Our measure can distinguish between the effects of increasing racial homogeneity of a location and the tendency to segregate within a location given a particular racial composition. Analysis of neighbor-based segregation over time establishes several new facts about segregation. First, segregation doubled nationally from 1880 to 1940. Second, contrary to previous estimates, we find that urban areas in the South were the most segregated in the country and remained so over time. Third, the dramatic increase in segregation in the twentieth century was not driven by urbanization, black migratory patterns, or white flight to suburban areas, but rather resulted from a national increase in racial sorting at the household level. The likelihood that an African American household had a non-African American neighbor declined by more than 15 percentage points (more than a 25% decrease) through the mid-twentieth century. In all areas of the United States -- North and South, urban and rural -- racial segregation increased dramatically.
    JEL: J1 N3 N9 N91 N92
    Date: 2015–02
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:20934&r=his
  7. By: Mitchener, Kris; Weidenmier, Marc
    Abstract: We use a standard metric from international finance, the currency risk premium, to assess the credibility of fixed exchange rates during the classical gold standard era. Theory suggests that a completely credible and permanent commitment to join the gold standard would have zero currency risk or no expectation of devaluation. We find that, even five years after a typical emerging-market country joined the gold standard, the currency risk premium averaged at least 220 basis points. Fixed- effects, panel-regression estimates that control for a variety of borrower-specific factors also show large and positive currency risk premia. In contrast to core gold standard countries, such as France and Germany, the persistence of large premia, long after gold standard adoption, suggest that financial markets did not view the pegs in emerging markets as credible and expected devaluation.
    Keywords: currency risk; fixed exchange rates; gold standard; sovereign borrowing
    JEL: F22 F33 F36 F41 N10 N20
    Date: 2015–02
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:10388&r=his
  8. By: Pflüger, Michael; Tabuchi, Takatoshi
    Abstract: The last century has witnessed dramatic changes in the world economy. The service (tertiary) sector, which at the beginning of the 20th century was of little importance relative to agriculture and manufacturing, has become the dominant sector today, accounting for 80% and more of value added in advanced countries and around 70% and of employment. Innovations in transport technologies and in information and communications technologies have radically reduced the costs of trading goods and have also made an increasing share of services tradeable. We propose a tractable micro-founded Ricardo-Marshall model to study the implications of the rise of the service sector and its interaction with international trade and factor mobility for the location of economic activity. Our model highlights a tension between nontradeable producer services which exert an agglomerative force and trade costs and comparative advantage in final goods and services which act as dispersion forces.
    JEL: F10 R12 R13
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc14:100323&r=his
  9. By: Markevich, Andrei; Zhuravskaya, Ekaterina
    Abstract: We document a very large increase in agricultural productivity, peasants’ living standards, and industrial development in the 19th century Imperial Russia as a result of the abolition of serfdom. We construct a novel province-level panel dataset of development outcomes and conduct a difference-in-differences analysis relying on cross-sectional variation in the shares of serfs and over-time variation in emancipation controlling for region-specific trends. We disentangle the effects of the emancipation and the subsequent land reform and show that land reform contributed negatively to agricultural productivity in contrast to a large positive effect of the emancipation. The evidence is consistent with the increase in the power of the peasant commune as the channel of the negative effect of the land reform. The different organizational forms of serfdom were associated with different levels of nutrition of serfs and productivity. The emancipation of serfs from estates where serfs were obliged to work on the landlord’s farm (corvee, barshchina) caused an increase in height of their children by 1.6 centimeters. Estates where serfs were required to make in kind payment to the landlord (quitrent, obrok) were equally productive, but, in contrast, their emancipation did not lead to rise in their height. Commitment to an implicit longer-term contract on the amount of serf obligations to landlords, practiced in some estates, made serfdom more productive.
    Keywords: development; forced labor; Russian empire; serfdom
    JEL: N33 N35 O1
    Date: 2015–02
    URL: http://d.repec.org/n?u=RePEc:cpr:ceprdp:10398&r=his
  10. By: Adolfo Meisel Roca
    Abstract: En este artículo se examina la tesis de la reversión de la fortuna propuesta por Acemoglu, Johnson y Robinson (2002) de acuerdo con la experiencia colombiana durante los últimos 500 años. Utilizando un total de 14 censos nacionales de población y el registro de los indígenas encomendados que había en 1559, se encuentra que la densidad demográfica de las regiones de Colombia ha mostrado una gran persistencia en el transcurso del tiempo. Por lo tanto, la evidencia indica que los lugares que fueron prósperos en torno al año 1500 siguen siéndolo hoy en día y viceversa. Estos resultados indican que las influencias a largo plazo de la geografía sobre las disparidades económicas regionales al interior de un país no son despreciables.** ABSTRACT: This paper examines the non-reversal of fortune thesis proposed by Acemoglu, Johnson, and Robinson (2002) in the light of the Colombian experience over the last 500 years. Using a total of 14 national population censuses and the record of tributary Indians in 1559, it is found that the population density of Colombian regions presented a high degree of persistence through time. Thus, the evidence indicates that those places that were prosperous circa 1500 remain so today, and vice versa. These results indicate that the long run influences of geography on regional economic disparities within a country are not negligible.
    Keywords: Historia Económica Comparativa, Economía demográfica, Latinoamérica
    JEL: N16 J10 N36
    Date: 2014–10–15
    URL: http://d.repec.org/n?u=RePEc:col:000101:012505&r=his
  11. By: Hoffmann, Mathias; Okubo, Toshihiro
    Abstract: Regional differences in banking integration determined how Japan s Great Recession after 1990 spread across the country. We explain these differences with the emergence of silk reeling as the main export industry after Japan s opening to trade in the 19th century. The silk-exporting prefectures developed a system of export finance centered on local, cooperative banks that preserved their dominant local position long after the decline of the silk industry. Our findings suggest that different pathways to financial development can lead to long-term differences in de facto financial integration, even if there are no formal barriers to capital mobility between regions.
    JEL: F15 F30 G01
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc14:100309&r=his
  12. By: B. Zorina Khan
    Abstract: A long-standing debate centers on the role of the “Haves” and the “Have Nots” in litigation. It is often suggested that wealthier plaintiffs are more likely to be repeat players, who tend to prevail in disputes before the courts. Do wealthy repeat players indeed capture courts and succeed in shaping legal rules regardless of the intent of policy makers? This paper employs a unique historical data set that allows a direct test of these hypotheses, including information on the wealth of participants in civil district courts, their occupations, and the total number of lawsuits filed by each litigant over a long period. The results show that repeat players indeed tended to be wealthier, in occupations that likely benefited from creating a reputation for uncooperative litigation strategies. However, outcomes in court were independent of wealth, and related more to the type of case. Far from being under the sway of the “Haves,” early courts functioned as an effective enforcement mechanism for extensive markets in debt, that likely promoted economic growth during this period.
    JEL: K10 K41 N11 O43
    Date: 2015–02
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:20945&r=his
  13. By: Cherry, Barbara A.
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:zbw:itsb14:106881&r=his
  14. By: James Fenske; Namrata Kala
    Abstract: Suppression of the slave trade after 1807 increased the incidence of conflict between Africans.  We use geo-coded data on African conflicts to uncover a discontiuous increase in conflict after 1807 in areas affected by the slave trade.  In West Africa, the slave trade declined.  This empowered interests that rivaled existing authorities, and political leaders resorted to violence in order to maintain their influence.  In West-Central and South-East Africa, slave exports increased after 1807 and were produced through violence.  We validate our explanation using Southwestern Nigeria and Eastern South Africa as examples.
    Date: 2014–01–10
    URL: http://d.repec.org/n?u=RePEc:oxf:wpaper:wps/2014-02&r=his
  15. By: Hornung, Erik
    Abstract: We study the effect of railroad access on urban population growth. Using GIS techniques, we match triennial population data for roughly 1,000 cities in nineteenth-century Prussia to georeferenced maps of the German railroad network. We find positive short- and long-term effects of having a station on urban growth for different periods during 1840--1871. Causal effects of (potentially endogenous) railroad access on city growth are identified using propensity score matching, instrumental variables, and fixed-effects estimation techniques. Our instrument identifies exogenous variation in railroad access by constructing straight-line corridors between nodes. Counterfactual models using pre-railroad growth yield no evidence to support the hypothesis that railroads appeared as a consequence of a previous growth spurt.
    JEL: O18 O33 N73
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc14:100589&r=his
  16. By: Heckman, James J. (University of Chicago)
    Abstract: This paper presents Gary Becker's approach to conducting creative, empirically fruitful economic research. It describes the traits and methodology that made him such a productive and influential scholar.
    Keywords: empirical economics, human capital, discrimination
    JEL: B31 D13 J13 J24
    Date: 2015–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8827&r=his
  17. By: Fabrice Collard (Department of Economics - University of Bern); Sujoy Mukerji (Department of Economics and University College - University of Oxford); Kevin Sheppard (Department of Economics and Oxford-Man Institute of Quantitative Finance - University of Oxford); Jean-Marc Tallon (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: This paper assesses the quantitative impact of ambiguity on the historically observed financial asset returns and prices. The single agent, in a dynamic exchange economy, treats the conditional uncertainty about the consumption and dividends next period as ambiguous. We calibrate the agent's ambiguity aversion to match only the first moment of the risk-free rate in data and condition the uncertainty each period on the actual, observed history of (U.S.) macroeconomic growth outcomes. Ambiguity aversion accentuates the conditional uncertainty endogenously in a dynamic way, depending on the history; e.g., it increases during recessions. We show the model implied time series of asser returns match observed return dynamics of first and second conditional moments, very substantially. In particular, we find the time-series properties of our model generated equity premium, which may be regarded as an index measure of revealed uncertainty, relates very closely to those of the macroeconomic uncertainty index recently developed in Jurado, Ludvigson, and Ng (2013).
    Keywords: Ambiguity Aversion, Asset pricing, Equity premium puzzle, uncertainty shocks, time-varying uncertainty.
    JEL: G12 E21 D81 C63
    Date: 2011–05
    URL: http://d.repec.org/n?u=RePEc:mse:cesdoc:11032rr&r=his
  18. By: Juanita Villaveces Niño; Fabio Sánchez
    Abstract: Abstract This paper analyses land reform policy in Colombia since the early twentieth century to 2012, characterized by allocation of public land to peasants. We seek to show the magnitude and importance of this constant public policy and shows its dynamic at national and regional level, in order to contribute to the vast literature on land reform in Colombia that it although analyzes the tensions of this policy, it does not have disaggregated data from the period we describe here.
    Keywords: reforma agraria, baldíos, Colombia
    Date: 2015–02–11
    URL: http://d.repec.org/n?u=RePEc:col:000092:012538&r=his
  19. By: Koyama, Mark; Xue, Melanie Meng
    Abstract: Imperial China used an empire-wide system of examinations to select civil servants. Using a semiparametric matching-based difference-in-differences estimator, we show that the persecution of scholar-officials led to a decline in the number of examinees at the provincial and prefectural level. To explore the long-run impact of literary inquisitions we employ a model to show that persecutions could reduce the provision of basic education and have a lasting effect on human capital accumulation. Using the 1982 census we find that literary inquisitions reduced literacy by between 2.25 and 4 percentage points at a prefectural level in the early 20th century. This corresponds to a 69% increase in the probability of an individual being illiterate. Prefectures affected by the literary inquisition had a higher proportion of workers in agriculture until the 1990s.
    Keywords: China, Human Capital, Institutions, Persecutions, Persistence
    JEL: N0 N45 O1 O15
    Date: 2015–02–11
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:62103&r=his
  20. By: R. Fontana; L. Zirulia
    Abstract: We study the role that switching costs, compatibility, and mergers and acquisitions, play in influencing the evolution of a multi-market industry. By looking at the case of the Local Area Networking industry, we propose a ‘history friendly model’ to replicate its evolution during the 1990s. Our model explains how a firm can start from a dominant position in one of the existing markets and exploit switching costs and compatibility to enter a new market when it opens. Mergers and acquisitions also play an important role as the new market is pioneered by a new start-up, which is soon acquired by the dominant incumbent. As a result of the acquisition, the acquiring firm becomes leader also in the new market.
    JEL: O30 L10 L63
    Date: 2015–02
    URL: http://d.repec.org/n?u=RePEc:bol:bodewp:wp993&r=his
  21. By: David Fielding (Department of Economics, University of Otago, New Zealand)
    Abstract: There is evidence for the long-run persistence of geographical variation in tolerance towards other ethnicities. However, existing studies of tolerance use data from countries with long-standing patterns of ethnic diversity, so it is unclear whether the inter-generational transmission is in attitudes towards specific ethnic groups or in an underlying cultural trait of which such attitudes are just one expression. This paper presents evidence for the latter, identifying geographical variation in the intensity of anti-immigrant sentiment in England that has persisted over eight centuries, spans the arrival and departure of different immigrant groups, and is correlated with authoritarianism.
    Keywords: Minorities, Immigration, Anti-Semitism, Prejudice
    Date: 2014–10
    URL: http://d.repec.org/n?u=RePEc:otg:wpaper:1409&r=his
  22. By: Pierrick Dechaux (Centre d'Economie de la Sorbonne)
    Abstract: This article analyzes Katona's theory of expectations and compares it to that of Keynes and Hicks. It discusses the implicit and explicit debates on the introduction of psychology in economic theory. The aim of this paper is twofold: define Katona's thought and examine the impact of this work on the debate on expectations in macroeconomics. This paper shows that Katona is the only author, to our knowledge, who develops both an empirical and theoretical research program on expectations that borrows from the epistemology of Keynes. While rediscovering Katona's work, this paper contributes to highlight the forgotten methodology that initiated the construction of confidence (or sentiment) indexes. It also discusses the implicit and explicit debates on the introduction of psychology in economic theory.
    Keywords: George Katona, Keynes, Hicks, Psychology, Expectations theories, Expectations measures, Macroeconomics.
    JEL: B22 D84
    Date: 2014–05
    URL: http://d.repec.org/n?u=RePEc:mse:cesdoc:15010&r=his
  23. By: Martin Schmalz (University of Michigan); Jean-François Kagy (Cornerstone Research); Jose Azar (Charles River Associates)
    Abstract: To answer this question, we first create a measure of the opportunity costs of holding liquid assets as the wedge between the cost of capital and the return of firms’ cash portfolio. Exploiting both cross-sectional and time-series variation of opportunity costs, we estimate a negative effect of opportunity costs on the cash-to-assets ratio of U.S. nonfinancial Compustat firms. We then use the estimate to predict changes in aggregate cash holdings for 1945-2013 and find that they closely match actual changes in cash holdings over that period. Differences in opportunity costs also explain cross-country differences and within-country time variation of cash-to-assets ratios of firms in the five largest European economies and Japan. The increased sample length for the U.S. results and the international results make clear that current U.S. cash holdings are not abnormal, neither in a historical nor in an international comparison.
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:red:sed014:1027&r=his
  24. By: Terry L. Anderson (Hoover Institution)
    Abstract: This essay argues that the focus of ecology and economics on equilibria and externalities misses the dynamic connection between humans and nature and that there is a better alternative for linking ecology with economics, one that builds on the teachings of Nobel laureates Friedrich Hayek and Ronald Coase.
    Date: 2015–02
    URL: http://d.repec.org/n?u=RePEc:hoo:wpaper:15102&r=his
  25. By: Herzer, Dierk
    Abstract: In recent years, the increase in international trade has sparked a debate about the impact of international trade on population health. To date, however, there has been very little econometric research on the relationship between these two variables. This paper examines the long-run relationship between trade openness and population health for a sample of 74 countries over five decades, from 1960 to 2010. Using panel time-series techniques, it is shown that international trade in general has a robust positive long-run effect on health, as measured by life expectancy and infant mortality. This effect tends to be greater in countries with lower development levels, higher taxes on income, profits, and capital gains, and less restrictive business and labor market regulations. The results also show that long-run causality runs in both directions, suggesting that increased trade is both a consequence and a cause of increased life expectancy.
    JEL: O11 F40 I12
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc14:100441&r=his
  26. By: Krieger, Tim; Meierrieks, Daniel
    Abstract: This contribution studies the influence of poor politico-economic factors, unfavorable demographic conditions, state failure, modernization, secularization, globalization and the perceived dependency of the Islamic world from the West on the onset of armed Islamist activity for 155 countries between 1968 and 2007. Its empirical findings show that the onset of militant Islamism is robustly associated with the discrimination of Islamic minorities, state weakness, the presence of large (secular and possibly predatory) governments, military dependence from the U.S., external cultural influences and the availability of a large pool of potential recruits (as indicated by a large, Muslim population). Poor economic conditions, modernization and authoritarianism share no association with the onset of Islamist militancy. The latter findings imply that democratic reforms and economic development while often advocated countering Islamist violence appear to be rather ineffective tools of conflict prevention.
    JEL: D74 H56 N40
    Date: 2014
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc14:100579&r=his
  27. By: Kirui, Benard Kipyegon
    Abstract: This paper reconciles the Cournot and Bertrand Models of oligopolistic competition, highlighting its weaknesses and giving an opinion thereafter. The pertinent question in this paper is why Cournot (1838) ignored the price and Bertrand (1883) ignored the quantity? From the review, the main conclusion of this paper is that oligopoly competition is guided in the long run by production capacity competition, as advocated by Cournot, equilibrated through price competition in the short run, as advocated by Bertrand.
    Keywords: Cournot Competition,Bertrand Competition,Oligopoly,equilibrium
    JEL: D43 L13
    Date: 2013–04
    URL: http://d.repec.org/n?u=RePEc:zbw:esprep:97305&r=his
  28. By: André Gambier Campos
    Abstract: O fenômeno da desigualdade é próprio das relações que vertebram a sociedade de classes e a economia capitalista. Trabalhadores e empresários, sujeitos dessas relações,encontram-se em uma posição de desigualdade que deriva do seguinte fato: por um lado, empresários são sujeitos coletivos, pois suas decisões influenciam a sociedade como um conjunto. Por outro, trabalhadores são sujeitos individuais, com todas as fragilidades e dificuldades inerentes a essa condição, pois suas opções não conseguem afetar quase nada além de sua própria comunidade. Ainda que não seja possível imaginar a superação dessa desigualdade, é possível pensar em sua mitigação, por meio de uma regulação pública do trabalho. Instituidora de direitos e deveres, balizadores das relações entre trabalhadores e empresários no mercado laboral, tal regulação procura atenuar a desigualdade estrutural verificada entre ambos os sujeitos. Este Texto para discussão procura recuperar os traços básicos da evolução da regulação pública do trabalho no Brasil, no largo espectro histórico que vai dos anos 1930 aos 2000. The phenomenon of inequality is typical of relations that structure class society and capitalism. Workers and entrepreneurs, subjects of those relations, are in a position of inequality, which derives from the following facts: on the one hand, entrepreneurs are collective subjects, because their decisions affect society as a whole. Furthermore,workers are individual subjects, with all the weaknesses and difficulties of this condition, because their choices don’t affect almost anything beyond their own community.Although it is not possible to overcome this inequality, it is possible to think about its mitigation, through public regulation of labor relations. Founder of rights and duties in the labor market, such regulation seeks to mitigate the structural inequality observed between both subjects. This discussion paper seeks to recover the basic features of the evolution of labor regulation in Brazil, in the broad historical spectrum ranging from the 1930s to 2000s.
    Date: 2015–01
    URL: http://d.repec.org/n?u=RePEc:ipe:ipetds:2024&r=his
  29. By: Jenkins, Stephen P. (London School of Economics)
    Abstract: This chapter describes the UK income distribution and how it has evolved over the last 50 years. It also includes some comparisons with the income distributions of other rich countries. Multiple perspectives on the distribution are provided: there is evidence about real income levels and inequality, and the prevalence of affluence and of poverty.
    Keywords: inequality, poverty, affluence, income distribution, United Kingdom
    JEL: D31 I32
    Date: 2015–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8835&r=his
  30. By: Wallace, Frederick; Chapa Cantú, Joana
    Abstract: Building on previous work by Chiquiar (2005) we study the impact of the ejido communal property system on economic growth in the Mexican states. The average growth rate of state per capita GDP is negatively related to the share of state land in the communal ejido system during some of the sub-periods examined. The negative relation suggests that the misallocation of resources related to the limited property rights of ejidatarios has been a binding constraint on the growth of the Mexican states at times during the 1970-2012 period. We also examine the conditional convergence or divergence of the Mexican states for 2003-2012 and 2005-2012 and find that definite conclusions cannot be drawn. Whether state GDP per capita converged or diverged depends on whether the estimations start with 2003 or 2005 and, interestingly, on the specific ejido variable included in the model.
    Keywords: Economic growth, Mexican states, ejido system, property rights
    JEL: O4 O43 O47 O5 O54
    Date: 2015–01–31
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:62261&r=his

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