nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2015‒04‒25
thirty papers chosen by

  1. STATE AND RELIGION OVER TIME By Metin M. Cosgel; Thomas J. Miceli; Sadullah Yıldırım; Matthew Histen
  2. El comercio de cabotaje del vino de Jerez en el siglo XIX: un análisis cuantitativo By Luis Cárdenas del Rey; Andrea Carrera; Laura Vitriago Valdivielso
  3. he Scientific Study of Myth: Romantic Account of Symbolism and Mythology By Anastasia V. Shalaeva
  4. Functional Inequality in Latin America: News from the Twentieth Century By Pablo Astorga
  5. Sharing Mare Nostrum: An analysis of Mediterranean maritime history articles in English-language journals. By Ojala, Jari; Tenold, Stig
  6. The Cape of Perfect Storms: Colonial Africa’s first financial crash, 1788-1793 By Roy Havemann and Johan Fourie
  7. Enclosure Norwegian Style: the Withering Away of an Institution By Berge, Erling; Haugset, Anne Sigrid
  8. La regulación bancaria en el Uruguay durante la industrialización dirigida por el Estado: entre la seguridad del sistema y el control de la expansión monetaria, 1938-1965. By Gastón Díaz; Cecilia Moreira
  9. On the Rise of Bayesian Econometrics after Cowles Foundation Monographs 10, 14 By Nalan Basturk; Cem Cakmakli; S. Pinar Ceyhan; Herman K. van Dijk
  10. Art Collections and Taste in the Spanish Siglo de Oro By Federico Etro; Elena Stepanova
  11. Russian Hexameter in Contemporary Translations from Greek and Latin By Vladimir Fayer
  12. Infant Health and Longevity: Evidence from a Historical Trial in Sweden By Bhalotra, Sonia R.; Karlsson, Martin; Nilsson, Therese
  13. Forbidden Fruits: The Political Economy of Science, Religion, and Growth By Roland Bénabou; Davide Ticchi; Andrea Vindigni
  14. Digital Infrastructure and Physical Proximity By Emmanouil Tranos; Peter Nijkamp
  15. Agriculture, Transportation and the Timing of Urbanization: Global Analysis at the Grid Cell Level By Mesbah J. Motamed; Raymond J.G.M. Florax; William A. Masters
  16. Off the Waterfront: The Long-run Impact of Technological Change on Dock Workers By El-Sahli, Zouheir; Upward, Richard
  17. Bortkiewicz on Chain Indices and Irving Fisher's Reversal Tests, A Historical Note and a Disapproval of the Time Reversal Test By von der Lippe, Peter
  18. From real business cycle and new Keynesian to DSGE Macroeconomics: facts and models in the emergence of a consensus By Pedro Garcia Duarte
  19. Indices of House Prices and Rent Prices of Residential Property in London, 1895-1939 By Luke Samy
  20. The Great Divergence: A Network Approach By Ines Lindner; Holger Strulik
  21. The Impact of External Debt on Economic Growth:Empirical Evidence from Highly Indebted Poor Countries By Abu Siddique; E A Selvanathan; Saroja Selvanathan
  22. Historical aspects of global transformation of engineering thought in industry and agriculture in the context of changing the technological modes By Dudin, Mikhail; Ljasnikov, Nikolaj; Sekerin, Vladimir; Gorohova, Anna
  23. Bank Deregulation, Competition and Economic Growth: The US Free Banking Experience By Philipp Ager; Fabrizio Spargoli
  24. The Act of 1973 on Banque de France’s independence: the myth of the end of advances By BLANCHETON Bertrand
  25. Foundations and bioeconomic issues of sustainability: The contribution of Nicholas Georgescu-Roegen By FERRARI Sylvie
  26. AIG in Hindsight By Robert L. McDonald; Anna Paulson
  27. The return of black box economics - a critique of Keen on effective demand and changes in debt By Severin Reissl
  28. The Evolutionary Foundations of Economics By Jason Collins; Boris Baer; Ernst Juerg Weber
  29. A time to nourish? Evaluating the impact of innovative public procurement on technological generality through patent data By RAITERI Emilio
  30. Econometric Analysis of Financial Derivatives: An Overview By Chia-Lin Chang; Michael McAleer

  1. By: Metin M. Cosgel (University of Connecticut); Thomas J. Miceli (University of Connecticut); Sadullah Yıldırım (University of Connecticut); Matthew Histen (University of Connecticut)
    Abstract: State and religion, two of the oldest institutions known to mankind, have historically had a close relationship with each other, often joining forces to rule populations. Although the tendency towards secularization has hampered this relationship in recent centuries, the state-religion alliance remains strong in some societies. We use a political economy approach and a unique dataset to examine the relationship between state and religion since the year 1000. We constructed the data in two steps. We first gathered information on the political and religious characteristics of over five hundred polities observed throughout history. Then, using today’s nations as units of analysis, we tracked in 50-100 year intervals which polities have ruled in these lands since 1000. Combining the information from the two files, we built a cross-national panel dataset with three objectives. First, we examine the evolution of state religion over time and its variation across geographic regions and religious traditions. Second, we use regression analysis to examine the forces affecting the adoption of state religion during the period between 1000 and 2000. Finally, we narrow the focus to the continuing presence of official monopolies in the religion market and examine the historical roots of why state religions have survived in some societies while disappearing in others at the end of the twentieth century.
    Keywords: state, religion, legitimacy, political economy
    JEL: H10 P5 N4 Z12
    Date: 2015–04
  2. By: Luis Cárdenas del Rey; Andrea Carrera; Laura Vitriago Valdivielso
    Abstract: In this paper, we tackle the most relevant aspects of the evolution in the market for sherry wine by studying the coastal trade in the region of Cadiz during the period 1857-1900. We develop a database using the information contained in the Estadísticas Generales del Comercio de Cabotaje en España (General Statistics of Coastal Trade in Spain) over the second half of the nineteenth century. We use these data to divide the period into different phases, in order to study the major historical features of the domestic market of sherry. Then we formulate a series of hypotheses to be tested empirically. In particular, we investigate the causal links between the dynamics of coastal trade and exports, as well as major historical events such as the outbreak of phylloxera or the global crisis of the late twentieth century. We find empirical evidence to support our hypotheses by estimating econometric time-series models.
    Keywords: Jerez wine, coastal trade, economic history, XIX century, business cycle, time-series models
    JEL: C22 E32 N53 N73
    Date: 2015–04
  3. By: Anastasia V. Shalaeva (National Research University Higher School of Economics)
    Abstract: The present study seeks to investigate the arrangement of the science of mythology at the turn of the 19th century, and an understanding of the scientific work, which enabled to consider mythology a discipline. The research in a case of interpretation of the notions of myth and symbol explores prerequisites and framework for the study. The findings of the research illustrate the role of the disciplinary argument and publishing strategies in the debates surrounding mythology’s conceptual bases. The research demonstrates that at the turn of the 19th century mythology was established both as a subject of research and as a discipline in its own right on the crossroads of disciplinary arguments, knowledge differentiation and knowledge distribution strategies
    Keywords: mythology as a discipline, symbolism, Romanticism, Georg Friedrich Creuzer, Enlightenment, history of humanities
    JEL: Z
    Date: 2015
  4. By: Pablo Astorga
    Abstract: This paper presents a new consistent yearly series of gross income (between-group) inequality Ginis for four occupational categories in Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela over the period 1900-2011 using a newly assembled wage dataset.  The approach used differentiates labour by skill level and allows for changing allocation of the labour force over time.  Profits and rents are calculated as a residual.  Our regional Gini shows a changing secular process with a reclined "S" shape with an inflection point around 1940 and a peak in the 1990s.  There are mixed country trends in the early and middle decades, but in most cases inequality was on the rise in the 1960s.  There was also a tendency for narrowing wage inequality in the middle decades of the last century - at the time of the Great Levelling in the developed economies - but whose impact was more than off-set by a rising share of the top group.  Inequality in the 20th century is a story of increased polarisation - particularly post 1970 - amid significant social mobility.
    Keywords: economic history, economic development, income inequality, Latin America
    JEL: N36 O15 O54
    Date: 2015–04–16
  5. By: Ojala, Jari (University of Jyväskylä); Tenold, Stig (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: This discussion paper is a follow-up to a previous bibliometric analysis of articles published in The International Journal of Maritime History and maritime-themed articles published in other economic and business history journals over the last 25 years. The paper looks more closely at articles dealing with the Mediterranean and articles written by scholars from the Mediterranean countries. The article is structured around five propositions about current trends in Mediterranean maritime history publishing in English-language journals.
    Keywords: Maritime history;
    JEL: N01 N70 N73 N74
    Date: 2015–04–06
  6. By: Roy Havemann and Johan Fourie
    Abstract: This paper investigates the causes and consequences of colonial Africa’s first financial crash, which happened in South Africa’s Dutch Cape Colony. The 1788–1793 crisis followed a common sequence of events: trade and fiscal deficits were monetized by printing money, credit extension accelerated, the exchange rate fell sharply and inflation spiked. The domestic conditions were compounded by a deterioration of international conditions and political uncertainty. The final straw was the collapse of the Cape’s own Lehman Brothers – an unregulated merchant house, run by a prominent Cape family, which had been indiscriminately issuing the equivalent of promissory notes. The policy response during the crisis included fiscal austerity, an attempted reorganization of domestic financial intermediation and continued monetary easing, which depreciated the exchange rate and triggered inflation. A new domestic bank was created. Yet the Cape economy would not recover quickly; the effects of the Cape’s first financial crash would be felt deep into the nineteenth century.
    Keywords: financial crisis, Eighteenth century, institutions, banking, Africa
    JEL: N27 N17 N20
    Date: 2015
  7. By: Berge, Erling (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Haugset, Anne Sigrid (Trøndelag R&D Institute,)
    Abstract: More than 200 years after the King sold one of the “King’s commons” of Follafoss (located in the current Verran municipality) to urban timber merchants, local people in some ways still behave as if the area is a kind of commons. The paper will outline the history of the transformation of the area from an 18th century King’s commons to a 21th century battleground for ideas about ancient access and use rights of community members facing rights of a commercial forest owner and the local consequences of national legislation. The right of common to fish and to hunt small game without dog in Follafoss private commons was confirmed in a judgement of the Supreme Court in 1937 and in legislation on hunting in 1899 and 1951. In the Government’s proposal for new legislation on fishing in 1964 the right to fish was removed. And in 1981 the right to hunt was removed without saying a word about it, and it was never commented on in parliament during the legislative process. To explain what we observe it is suggested that a new layer of legislation on commons from 1857 and 1863 created a structural amnesia about private commons making it easy to remove them from legislation without anyone noticing.
    Keywords: King’s commons; private forest; rights of common; customary rights; national legislation; loss of customary rights
    JEL: P48 Q15 Z13
    Date: 2015–04–17
  8. By: Gastón Díaz (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Cecilia Moreira (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: This paper analyses banking regulation in Uruguay during the period of state-led industrialization. We aim to fill a hole in the national economic historiography, which has paid scant attention to this topic, and to advance in consonance with recent developments in the Latin American historiography. The major legislative actions taken in regard to the private banking sector are identified, the motives for these actions are examined and their impact on private banking activity is evaluated. The research activities consisted primarily of reviewing the National Register of Laws and Decrees, the recorded sessions of both houses of Congress and the specialized national economic journals of the period, as well as of the construction of a database of banking activity during the period. Four major regulatory moments are discussed: in 1938 the first general banking law of the 20th century looked to strengthen the safety and soundness of the banking system; during the 1940s minimum reserve ratios were adjusted as a means of restricting monetary expansion; in the 1950s the rediscount mechanism was liberalized in order to control monetary policy and, to a much lesser extent, credit policy; finally, as a response to Uruguay’s first major banking crisis of the 20th century, a new banking law was passed that looked to increase the safety and soundness of the system, implement greater control over bank assets and apply measures for directing credit towards strategic activities. In general, banking regulation appears to have focused on safety and soundness, and rather than aiming to direct financial resources towards productive activities, it tended to respond to monetary problems, such as inflation or scarcity of credit. At the same time, even though credit selectivity was an explicit goal of policy makers starting in the late-1940s, it was overshadowed by other problems of greater importance, the very problems that contributed to the collapse of the development model pursued during these decades.
    Keywords: banking, regulation, monetary and credit policy, industrialization, Uruguay
    JEL: G21 G28 N16 N26 N46
    Date: 2015–04
  9. By: Nalan Basturk (Erasmus University Rotterdam); Cem Cakmakli (Koc University, Turkey); S. Pinar Ceyhan (Erasmus University Rotterdam); Herman K. van Dijk (Erasmus University Rotterdam, the Netherlands)
    Abstract: This paper starts with a brief description of the introduction of the likelihood approach in econometrics as presented in Cowles Foundation Monographs 10 and 14. A sketch is given of the criticisms on this approach mainly from the first group of Bayesian econometricians. Publication and citation patterns of Bayesian econometric papers are analyzed in ten major econometric journals from the late 1970s until the first few months of 2014. Results indicate a cluster of journals with theoretical and applied papers, mainly consisting of <I>Journal of Econometrics</I>, <I>Journal of Business and Economic Statistics</I> and <I>Journal of Applied Econometrics</I> which contains the large majority of high quality Bayesian econometric papers. A second cluster of theoretical journals, mainly consisting of <I>Econometrica</I> and <I>Review of Economic Studies</I> contains few Bayesian econometric papers. The scientific impact, however, of these few papers on Bayesian econometric research is substantial. Special issues from the journals <I>Econometric Reviews</I>, <I>Journal of Econometrics</I> and <I>Econometric Theory</I> received wide attention. <I>Marketing Science</I> shows an ever increasing number of Bayesian papers since the middle nineties. The <I>International Economic Review</I> and the <I>Review of Economics and Statistics</I> show a moderate time varying increase. An upward movement in publication patterns in most journals occurs in the early 1990s due to the effect of the 'Computational Revolution'. … More abstract in the paper.
    Keywords: History, Bayesian Econometrics
    JEL: C01
    Date: 2014–07–08
  10. By: Federico Etro; Elena Stepanova
    Abstract: We analyze art pricing in a unique dataset on Madrid inventories between 1600 and 1750. Hedonic regressions reveal a number of interesting facts about the taste of Baroque Spanish collectors and the imports of foreign paintings. The hedonic price index shows an impressive increase in the price of paintings (relative to the cost of living) during the XVII century, in line with the Lopez hypothesis for which investment in art increases in wealthy societies without new productive investment opportunities. We examine price differentials between domestic and imported paintings: at the beginning of the century local works were priced substantially below imported paintings, but the price gap is gradually reduced during the century, with an increasing contribution of the younger painters. This is in line with a Schumpeterian hypothesis for which increasing demand induced increasing domestic quality, as priced by the market, and created the conditions for what is known as the Siglo de Oro of Spanish art.
    Keywords: Hedonic price index, Lopez hypothesis, Schumpeterian hypothesis
    Date: 2015–04–20
  11. By: Vladimir Fayer (National Research University Higher School of Economics)
    Abstract: The article deals with Russian translations of ancient epic texts that were made in the last few decades. The type of accentual verse that is frequently (but not universally) considered equirhythmic to Greek and Latin hexameter is called Russian hexameter. The first part of the article gives a brief outline of the metrical history of this verse. The second part classifies the trends in contemporary hexametric translations based on the statistics of dactylization. Some experimental forms of Russian hexameter, which have recently been the point of debate, are discussed in the final part of the present work.
    Keywords: metrics, hexameter, Russian literature, translation studies
    JEL: Z
    Date: 2015
  12. By: Bhalotra, Sonia R. (University of Essex); Karlsson, Martin (University of Duisburg-Essen); Nilsson, Therese (Lund University)
    Abstract: This paper investigates the potential of an infant intervention to improve life expectancy, contributing to emerging interest in the early life origins of chronic disease. We analyse a pioneering program trialled in Sweden in the 1930s, which provided information, support and monitoring of infant care. Using birth certificate data from parish records matched to death registers, we estimate that the average duration of program exposure in infancy led to a 1.54% point decline in the risk of infant death (23% of baseline risk) and a 2.37% decline in the risk of dying by age 75 (6.5% of baseline risk).
    Keywords: infant health, life expectancy, early life interventions, program evaluation
    JEL: I15 I18 H41
    Date: 2015–04
  13. By: Roland Bénabou; Davide Ticchi; Andrea Vindigni
    Abstract: We analyze the joint dynamics of religious beliefs, scientific progress and coalitional politics along both religious and economic lines. History offers many examples of the recurring tensions between science and organized religion, but as part of the paper's motivating evidence we also uncover a new fact: in both international and cross-state U.S. data, there is a significant and robust negative relationship between religiosity and patents per capita. The political-economy model we develop has three main features: (i) the recurrent arrival of scientific discoveries that generate productivity gains but sometimes erode religious beliefs; (ii) a government, endogenously in power, that can allow such innovations to spread or instead censor them; (iii) a religious organization or sector that may invest in adapting the doctrine to new knowledge. Three long-term outcomes emerge. First, a "Secularization" or "Western-European" regime with declining religiosity, unimpeded science, a passive Church and high levels of taxes and transfers. Second, a "Theocratic" regime with knowledge stagnation, extreme religiosity with no modernization effort, and high public spending on religious public goods. In-between is a third, "American" regime that generally (not always) combines scientific progress and stable religiosity within a range where religious institutions engage in doctrinal adaptation. It features low overall taxes, together with fiscal advantages or societal laws benefiting religious citizens. Rising income inequality can, however, lead some of the rich to form a successful Religious-Right alliance with the religious poor and start blocking belief-eroding discoveries and ideas.
    JEL: E02 H11 H41 N0 O3 O43 P16 Z1 Z12
    Date: 2015–04
  14. By: Emmanouil Tranos (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam)
    Abstract: Some 2000 years ago, the average annual distance a person would normally travel, was approximately 500 km. The action radius of most people remained rather stable, but it rose gradually after the industrial revolution to some 1820 km (by car, bus, railway or aircraft) in the year 1960. Then, a period of rapid increase started, with almost 4390 km per year in 1990. Clearly, air transport, but also technological advances and changing lifestyles formed the background of this megatrend. Accessibility and proximity have become keywords in understanding the geographical pattern of the ‘homo mobilis’. The question is if and how this pattern of physical movement will be affected by the digital revolution.
    Keywords: Digital infrastructure, proximity
    JEL: O1 L63
    Date: 2013–10–18
  15. By: Mesbah J. Motamed (United States Department of Agriculture, United States); Raymond J.G.M. Florax (Purdue University, United States; and VU University Amsterdam, the Netherlands); William A. Masters (Tufts University, United States)
    Abstract: This paper addresses the timing of a location's historical transition from rural to urban activity. We test whether urbanization occurs sooner in places with higher agricultural potential and comparatively lower transport costs, using worldwide data that divide the earth's surface at half-degree intervals into 62,290 cells. From an independent estimate of each cell's rural and urban population history over the last 2,000 years, we identify the date at which each cell achieves various thresholds of urbanization. Controlling for unobserved heterogeneity across countries through fixed effects and using a variety of spatial econometric techniques, we find a robust association between earlier urbanization and agro-climatic suitability for cultivation, having seasonal frosts, better access to the ocean or navigable rivers, and lower elevation. These geographic correlations become smaller in magnitude as urbanization proceeds, and there is some variance in effect sizes across continents. Aggregating cells into countries, we show that an earlier urbanization date is associated with higher per capita income today. "Agriculture, Transportation and the Timing of Urbanization: Global Analysis at the Grid Cell Level" has been published in the "Journal of Economic Growth" (DOI 10.1007/s10887-014-9104-x).
    Keywords: Economic growth, economic geography, urbanization, agriculture, transportation
    JEL: C21 N50 O11 O18 R1
    Date: 2014–01–02
  16. By: El-Sahli, Zouheir (Department of Economics, Lund University); Upward, Richard (University of Nottingham)
    Abstract: We investigate how individual workers and local labour markets adjust over a long time period to a discrete and plausibly exogenous technological shock, namely the introduction of containerisation in the UK port industry. This technology, which was introduced rapidly between the mid-1960s and the late-1970s, had dramatic consequences for specific occupations within the port industry. Using longitudinal micro-census data we follow dock-workers over a 40 year period and examine the long-run consequences of containerisation for patterns of employment, migration and mortality. The results show that the job guarantees protected dock-workers’ employment until their removal in 1989. A matched comparison of workers in com- parable unskilled occupations reveals that, even after job guarantees were removed, dock-workers did not fare worse than the comparison group in terms of their labour market outcomes. Our results suggest that job guarantees may significantly reduce the cost to workers of sudden technological change, albeit at a significant cost to the industry.
    Keywords: containerisation; labour markets; England and Wales; dock workers; technological change.
    JEL: J51 J64 J65 O33
    Date: 2015–04–14
  17. By: von der Lippe, Peter
    Abstract: Ladislaus von Bortkiewicz has criticized chain indices and Irving Fisher's time and factor reversal tests. However, his arguments (published in German articles) though well ahead of his time and still relevant today are widely fallen in oblivion. He was not the only German statistician who criticized Fisher' approach but the first who extensively and successfully used mathematics to substantiate it and to derive a formula for the "chain drift". We present his ideas together with some own arguments against the time reversal test. To study Bortkiewicz's and other criticisms of Fisher's reversal tests and chain indices remains worthwhile, because reference to the time reversal test is still unshakably popular today and it only recently became mandatory to compile chain indices in official statistics.
    Keywords: Index Numbers, Time Reversal Test, Factor Reversal Test, Fisheer's ideal index, chain indices, transititvity
    JEL: C43 C82 E01 E31
    Date: 2015–04–22
  18. By: Pedro Garcia Duarte
    Abstract: Macroeconomists have emphasized the force of facts in forging a consensus understanding of business cycle fluctuations. According to this view, rival economists could no longer hold disparate views on the topic because “facts have a way of not going away” (Blanchard 2009). But how can macroeconomists observe the workings of an economy? Essentially through building and manipulating models. Thus the construction of macroeconomic facts –or “stylized facts”–, empirical regularities that come to be widely accepted, opens up technical spaces where macroeconomists negotiated their theoretical commitments and eventually allowed a consensus to emerge. I argue that this is an important element in the history of the DSGE macroeconomics.
    Keywords: DSGE models; history of macroeconomics; new Keynesian macroeconomics; real business cycles
    JEL: B22 B23 E32
    Date: 2015–04–17
  19. By: Luke Samy
    Abstract: Data from two different primary sources were used to construct indices of house prices (HPI) and rents (RRPI) of residential property located in London and the Home Counties between 1895 and 1939.  The indices were derived using the hedonics method of price index measurement, which extracts the variation in prices due to differences in the quality of dwellings that form the sample across different time periods.  Both nominal and real HPIs and RRPIs are reported in the paper, as well as simple summary statistics on the levels of house prices and rental values, years purchase and returns on housing for a selected number of boroughs in London over time.
    Keywords: housing, rents, inflation, building societies
    Date: 2015–04–14
  20. By: Ines Lindner (VU University Amsterdam, the Netherlands); Holger Strulik (Georg-August-Universität Göttingen, Germany)
    Abstract: We present a multi-country theory of economic growth in which countries are connected by a network of mutual knowledge exchange. Growth is generated through human capital accumulation and knowledge externalities. The available knowledge in any country depends on its connections to the rest of the world and on the human capital of the countries it is exchanging knowledge with. We show how the diffusion of knowledge through the world explains the evolution of global income inequality. It generates a "Great Divergence", that is increasing world inequality after the take-off of the forerunners of the industrial revolution, followed by a "Great Convergence", that is decreasing world inequality after the take-off of the latecomers of the industrial revolution. Knowledge diffusion through a Small World network produces an extraordinary diversity of individual growth e xperiences of initially identical countries including differentiated take-offs to growth as well as overtaking and falling behind in the course of world development.
    Keywords: networks, knowledge diffusion, economic growth, world income distribution
    JEL: O10 O40 D62 D85 F41
    Date: 2014–03–10
  21. By: Abu Siddique (Business School, University of Western Australia); E A Selvanathan (Griffith Business School, Griffith University); Saroja Selvanathan (Griffith Business School, Griffith University)
    Abstract: During the 1970s and 1980s, the external debt levels of poor countries rose to a level constituting a ‘debt crisis.’ The main source of the supply of external debt was the surplus revenue generated by the OPEC through significant increases in the price of oil during the 1970s. Unfortunately, many of the countries failed to use the external debt wisely and prudently. When the revenue from oil sales started to decline due to low oil prices during the 1980s, heavily indebted countries experienced difficulty servicing the debt. This paper analyses the extent to which the external debt burden impacts on a country’s gross domestic product (GDP) using data from HIPC over the period 1970-2007. The findings of empirical analysis suggest that, in the short-run as well as in the long-run, a reduction in debt stock would have significantly increased the growth performance of the indebted nations.
    Date: 2015
  22. By: Dudin, Mikhail (Russian Presidential Academy of National Economy and Public Administration (RANEPA), Russian Academy of Entrepreneurship); Ljasnikov, Nikolaj (Russian Presidential Academy of National Economy and Public Administration (RANEPA), Russian Academy of Entrepreneurship); Sekerin, Vladimir (Moscow state university of mechanical engineering); Gorohova, Anna (Moscow state university of mechanical engineering)
    Abstract: Problem statement: to investigate changes of public and economic space inextricably connected with transformation of engineering thought which is the basis of the scientific and technological progress both in industry and agriculture. It is necessary to note that development of engineering thought in the agricultural sector involves not only creation of new machinery and equipment designed for processing and development of rural areas. First of all, it involves biotechnologies and gene technologies allowing to bring crop raising and livestock farming to a new evolutionary level. Development of engineering thought and its quality transformation determine both the rate of changes in society and economics and sequence of changes in the technological modes. The approach of this article involves investigation of historical aspects indicating the interrelation between engineering thought evolution and change in technological modes. Results: the technological mode characterizes the specific character of the stage of the scientific and technological progress as well as provides the general idea of the technical level of development of the industrial, agricultural and service and trade sectors of economic sectors. It is commonly known that the technological mode has been dominating in economics for the period from 40 to 60 years, at that, the faster the innovations are implemented (primary those of the technological nature) the higher the rate of the scientific and technological progress is and the higher the quality of social and economic changes is. Conclusion / recommendations: materials contained in the article have allowed to prove once again the fact that change in technological modes and change in scientific and technological progress are of common nature, at that, the key factor of development of social and economic relations is considered by the authors as quintessence of the engineering thought implemented in innovations. This presentation is a continuum of sustainable development of global social and economic relations.
    Keywords: engineering thought, engineering activity, scientific and technological progress, technological mode, economic cycles, socio-economic development
    Date: 2014
  23. By: Philipp Ager (University of Southern Denmark, Odense); Fabrizio Spargoli (Rotterdam School of Management, Erasmus University Rotterdam, Rotterdam, The Netherlands)
    Abstract: We exploit the introduction of free banking laws in US states during the 1837-1863 period to examine the impact of removing barriers to bank entry on bank competition and economic growth. As governments were not concerned about systemic stability in this period, we are able to isolate the effects of bank competition from those of state implicit guarantees. We find that the introduction of free banking laws stimulated the creation of new banks and led to more bank failures. Our empirical evidence indicates that states adopting free banking laws experienced an increase in output per capita compared to the states that retained state bank chartering policies. We argue that the fiercer bank competition following the introduction of free banking laws might have spurred economic growth by (1) increasing the money stock and the availability of credit; (2) leading to efficiency gains in the banking market. Our findings suggest that the more frequent bank failures occurring in a competitive banking market do not harm long-run economic growth in a system without public safety nets.
    Keywords: Bank Deregulation, Bank Competition, Economic Growth, Financial Development, Dynamic Efficiency, Free Banking
    JEL: G18 G21 G28 N21
    Date: 2013–12–20
  24. By: BLANCHETON Bertrand
    Abstract: A stubborn myth presents this Act as a conspiracy, allegedly giving the Banque de France solid independence and stymieing any subsequent allegiance to the Government. The State would have been forced to turn to the markets for financing, leading to an increase in the public debt. For the far left, the nationalist right-wing and also for M. Rocard or J Attali, this Act would mark a break in the financial relations between the bank and the government, blocking the possibility to mint money in order to finance public spending and obtain the Bank’s cooperation at zero cost. In reality, article 19 of the Act upholds the possibility for the Government to obtain advances and loans… The Act of 1973 very clearly protects the possibility for the Government to obtain finance from the Banque de France – even at no cost – and keeps it under strict guardianship
    Keywords: Banque de France, public debt, central bank independence.
    JEL: G20 N10 N20 N40
    Date: 2015
  25. By: FERRARI Sylvie
    Abstract: The aim of this paper is to discuss some major issues of Georgescu-Roegen’s work for Economic science with a special emphasis on the connection between the economic process and the entropy law. The flow-found approach is discussed and some possible implementations are proposed to measure the sustainability of the economic process.
    Keywords: Foundations and bioeconomic issues of sustainability: The contribution of Nicholas Georgescu-Roegen
    JEL: B31 B41 Q57
    Date: 2015
  26. By: Robert L. McDonald; Anna Paulson
    Abstract: The near-failure on September 16, 2008, of American International Group (AIG) was an iconic moment in the financial crisis. Two large bets on real estate made with funding that was vulnerable to bank-run like behavior on the part of funders pushed AIG to the brink of bankruptcy. AIG used securities lending to transform insurance company assets into residential mortgage-backed securities and collateralized debt obligations, ultimately losing at least $21 billion and threatening the solvency of the life insurance companies. AIG also sold insurance on multi-sector collateralized debt obligations, backed by real estate assets, ultimately losing more than $30 billion. These activities were apparently motivated by a belief that AIG’s real estate bets would not suffer defaults and were “money-good.” We find that these securities have in fact suffered write-downs and that the stark “money-good” claim can be rejected. Ultimately, both liquidity and solvency were issues for AIG.
    JEL: E00 G01 G18 G2
    Date: 2015–04
  27. By: Severin Reissl
    Abstract: In a paper for the Review of Keynesian Economics, Steve Keen recently provided a restatement of his claim that "effective demand equals income plus the change in debt". The aim of the present article is to provide a detailed critique of Keen's argument using an analytical framework pioneered by Wolfgang Stützel which has recently been developed further.Using this framework, it is shown that there is no strictly necessary relationship whatsoever between effective demand and changes in the level of gross debt. Keen's proposed relation is shown not to hold under all circumstances, and it is demonstrated that where it does hold this is due to variations in the `velocity of debt'-variable he introduces. This variable, however, lacks theoretical underpinning. The article also comments on Keen's proposal that trade in financial assets should be included in effective demand, arguing that this undermines the concept of effective demand itself. It is also shown that many weaknesses in Keen's argument stem from a lack of terminological clarity which originates in his interpretation of the works of Hyman Minsky.
    Keywords: Effective Demand, endogenous money, debt
    JEL: E12 E20 E44 E51
    Date: 2015
  28. By: Jason Collins (Business School, University of Western Australia); Boris Baer (Centre for Integrative Bee Research (CIBER) ARC CoE in Plant Energy Biology, University of Western Australia); Ernst Juerg Weber (Business School, University of Western Australia)
    Abstract: As human traits and preferences were shaped by natural selection, there is substantial potential for the use of evolutionary biology in economic analysis. In this paper, we review the extent to which evolutionary theory has been incorporated into economic research. We examine work in four areas: the evolution of preferences, the molecular genetic basis of economic traits, the interaction of evolutionary and economic dynamics, and the genetic foundations of economic development. These fields comprise a thriving body of research, but have significant scope of further investigation. In particular, the growing accessibility of low cost molecular data will create more opportunities for research on the relationship between molecular genetic information and economic traits.
    Date: 2015
  29. By: RAITERI Emilio
    Abstract: Innovative public procurement has been increasingly considered as a form of public support to innovative activities from both scholars and policy makers. Economic historians suggested an even more fundamental role for procurement in setting the pace of technological change, reporting how defense-related procurement had a major impact for the emergence of many general purpose technologies (GPT) developed in the United States in the 20th century. Conceiving the arrival of a GPT as a process unfolding in time, the paper surmises that procurement might represent one of the most important element in creating the right soil to \"cultivate\" a technology that has the potential to reach high levels of pervasiveness. To test this hypothesis I make use of patent data and patent citations. Citations allow to identify the connection between innovations related to public procurement and their technological antecedents and to measure the generality of the patents. Grounding on these two considerations, I hypothesize that receiving a citation from a patent related to public procurement raises the generality level of the cited patent. I design a quasi-experiment in which I compare the change in the generality level over time, between a group of treated and a group of control patents. A patent is assigned to the treatment group if it receives a citation from a patent related to public procurement. Results suggest a positive and significant impact of innovative public procurement upon the generality of a patent. Public demand seems to have crucial importance in increasing the pervasiveness of a technology, calling for Schumpeterian demand policies.
    Keywords: Economics of Innovation, General Purpose Technologies, Public Procurement, Patent Data, Technology Policy
    JEL: O30 H57 O33 O38 C21
    Date: 2015
  30. By: Chia-Lin Chang (National Chung Hsing University, Taiwan); Michael McAleer (National Tsing Hua University, Taiwan, Erasmus University Rotterdam, the Netherlands, Complutense University of Madrid, Spain)
    Abstract: One of the fastest growing areas in empirical finance, and also one of the least rigorously analyzed, especially from a financial econometrics perspective, is the econometric analysis of financial derivatives, which are typically complicated and difficult to analyze. The purpose of this special issue of the journal on “Econometric Analysis of Financial Derivatives” is to highlight several areas of research by leading academics in which novel econometric, financial econometric, mathematical finance and empirical finance methods have contributed significantly to the econometric analysis of financial derivatives, including market-based estimation of stochastic volatility models, the fine structure of equity-index option dynamics, leverage and feedback effects in multifactor Wishart stochastic volatility for option pricing, option pricing with non-Gaussian scaling and infinite-state switching volatility, stock return and cash flow predictability: the role of volatility risk, the long and the short of the risk-return trade-off, What’s beneath the surface? option pricing with multifrequency latent states, bootstrap score tests for fractional integration in heteroskedastic ARFIMA models, with an application to price dynamics in commodity spot and futures markets, a stochastic dominance approach to financial risk management strategies, empirical evidence on the importance of aggregation, asymmetry, and jumps for volatility prediction, non-linear dynamic model of the variance risk premium, pricing with finite dimensional dependence, quanto option pricing in the presence of fat tails and asymmetric dependence, smile from the past: a general option pricing framework with multiple volatility and leverage components, COMFORT: A common market factor non-Gaussian returns model, divided governments and futures prices, and model-based pricing for financial derivatives.
    Keywords: Stochastic volatility, switching volatility, volatility risk, option pricing dynamics, futures prices, fractional integration, stochastic dominance, variance risk premium, fat tails, leverage and asymmetry, divided governments
    JEL: C58 G23 G32
    Date: 2014–12–16

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. 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.