nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2015‒11‒07
23 papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. A closer look at the long-term patterns of regional income inequality in Spain: the poor stay poor (and stay together) By Daniel A. Tirado-Fabregat; Alfonso D’ez-Minguela; Julio Mart’nez-Galarraga
  2. (Mis)measuring Argentina’s Progress: Industrial Output, 1870s-1913 By Francis, Joseph A.
  3. Value, periphery and crisis: Argentina 1910-2011 By Maito, Esteban Ezequiel
  4. Pollution and Mortality in the 19th Century By W. Walker Hanlon
  5. The Pitfalls of External Dependence: Greece, 1829-2015 By Carmen M. Reinhart; Christoph Trebesch
  6. Economics and the Modern Economic Historian By Ran Abramitzky
  7. Piketty's Marx Or Das Capital For The Twenty First Centiury: All That Is Solid Melts Into Air? By Eren Ahmet
  8. Bubble Investing: Learning from History By William N. Goetzmann
  9. Pollution, Infectious Disease, and Mortality: Evidence from the 1918 Spanish Influenza Pandemic By Karen Clay; Joshua Lewis; Edson Severnini
  10. If You Do Not Change Your Behaviour : Managing Threats to State Security in Lithuania under Soviet Rule By Harrison, Mark
  11. The Mortality Consequences of Distinctively Black Names By Lisa Cook; Trevon Logan; John Parman
  12. Elites, Thickets and Institutions: French Resistance versus German Adaptation to Economic Change, 1945-2015. By Brigitte Granville; Jaume Martorell Cruz; Martha Prevezer
  13. Tertiary Education and Prosperity: Catholic Missionaries to Luminosity in India By Castelló-Climent, Amparo; Chaudhary, Latika; Mukhopadhyay, Abhiroop
  14. Economic Cycles in Ancient China By Yaguang Zhang; Guo Fan; John Whalley
  15. The Pioneers’ Arguments for Formulating Economic Problems Mathematically By Sandelin, Bo
  16. Lawson on Veblen on Social Ontology By Davis, John B.
  17. Capital, labour, democracy and the end of capitalism By Annamaria Artner
  18. How tight is the link between wages and productivity? : a survey of the literature By Van Biesebroeck, Johannes
  19. Long-term trends in income distribution a global perspective By Obst, Thomas
  20. Health Effects of Economic Crises By Christopher J. Ruhm
  21. The Economic Origins Of Neoliberism By İlkben Akansel
  22. At the origin of the notion of “creative goods” in economics: Scitovsky and Hawtrey By Antonio Bariletti; Eleonora Sanfilippo
  23. Measuring Changes in the Bilateral Technology Gaps between China, India and the U.S. 1979 - 2008 By Keting Shen; Jing Wang; John Whalley

  1. By: Daniel A. Tirado-Fabregat (Universitat de Valncia); Alfonso D’ez-Minguela (Universitat de Valncia); Julio Mart’nez-Galarraga (Universitat de Valncia)
    Abstract: This paper explores regional (NUTS3) income inequality in Spain, 1860-2010. Using a novel dataset spanning 150 years, we analyse the evolution of inequality in regional per-capita GDP. To do this, we follow the growth literature and use spatial exploratory tools. Our aim is to understand not only the long-term evolution as regards convergence or dispersion, but also aspects related to income distribution, i.e. modality, mobility and spatial clustering. We therefore use tolls such as kernel density estimates, boxplots, transition probability matrices, Shorrocks indices, KendallÕs !, MoranÕs I and LISA maps. The main finding is that there were two clearly distinguishable periods in the economic development process. First, there was an upswing in regional inequality accompanied by a certain mobility betwee 1860 and 1930. This was followed by a period of regional convergence lasting until the 1980Õs, in which mobility in income class or rank was rather low. As a result, spatial clustering became more significant and income distribution was transformed. Decreasing regional inequality was thus accompanied by a geographical concentration of the richest and poorest regions. While wealthy Spain was located in the north-east, poor Spain was in the south, particularly the south-west. Mobility has also been virtually non-existent in recent decades. All in all, the study shows the importance of history in the shaping of SpainÕs regional income distribution.
    Keywords: Regional inequality, Spain, Regional growth, Economic history
    JEL: C21 O18 R0 N64 F14
    Date: 2015–10
  2. By: Francis, Joseph A.
    Abstract: Evidence of dramatic industrialisation has been used to support the optimistic, staple theory-inspired account of Argentina’s late nineteenth century, which is central to the dominant (neo)liberal narrative of the country’s history. This narrative is here challenged by a discussion of the available evidence of industrial output in Argentina from the 1870s to the eve of the First World War. Issue is taken, in particular, with Roberto Cortés Conde’s widely used industrial output index, which has suggested an 8-9 per cent annual industrial growth rate during this period. It is argued that he has overestimated the growth rate by relying upon dubious data taken from Argentina’s inland revenue service. Rather than reflecting increased production, the rapid growth of Cortés Conde’s index is actually due to increased taxation. Alternative indicators suggest a significantly lower annual growth rate of around 5 per cent, although even this should only be considered indicative, given the lack of data. This is illustrated by the case of textile production.
    Keywords: Argentina; nineteenth century; industrialisation; economic history.
    JEL: N01 N16 N66
    Date: 2015–10
  3. By: Maito, Esteban Ezequiel
    Abstract: In this paper we present a long-term study on the process of accumulation in Argentina over the past century. Explanations of the Argentine historical development are hegemonized by both the neoclassical, politically identified with the conservatives, and the Keynesian school, the latter related with Peronism and other particular ideologies. However, we will develop an alternative explanation deeply focused in Marxist political economy, empirical research and the country economic and political history over the past century. In the first section we will introduce some theoretical aspects aiming to a deeper acknowledge of some particularities in peripheral countries and their relation to Marxist political economy. In the second section, we establish a concrete analysis of the accumulation process in historical perspective. In the third section, we present the long run results of our estimates for Argentina in the period 1910-2011.
    Keywords: Argentina - Value - Accumulation - Rate of profit
    JEL: E22 E23 E32 N16 P16
    Date: 2015–08
  4. By: W. Walker Hanlon
    Abstract: Mortality was extremely high in the industrial cities of the 19th century, but little is known about the role played by pollution in generating this pattern, due largely to a lack of direct pollution measures. I overcome this problem by combining data on the local composition of industries in Britain with information on the intensity with which industries used polluting inputs. Using this new measure, I show that pollution had a strong impact on mortality as far back as the 1850s. Industrial pollution explains 30-40% of the relationship between mortality and population density in 1851-60, and nearly 60% of this relationship in 1900. Growing industrial coal use from 1851-1900 reduced life expectancy by at least 0.57 years. A back-of-the envelope estimate suggests that the value of this loss of life, expressed as a one-time cost, was equal to at least 0.33-1.00 of annual GDP in 1900. Overall, these results show that industrial pollution was a major cause of mortality in the 19th century, particularly in urban areas, and that industrial growth during this period came at a substantial cost to health.
    JEL: I10 N33 N53 Q53
    Date: 2015–10
  5. By: Carmen M. Reinhart; Christoph Trebesch
    Abstract: Two centuries of Greek debt crises highlight the pitfalls of relying on external financing. Since its independence in 1829, the Greek government has defaulted four times on its external creditors – with striking historical parallels. Each crisis is preceded by a period of heavy borrowing from foreign private creditors. As repayment difficulties arise, foreign governments step in, help to repay the private creditors, and demand budget cuts and adjustment programs as a condition for the official bailout loans. Political interference from abroad mounts and a prolonged episode of debt overhang and financial autarky follows. We conclude that these cycles of external debt and dependence are a perennial theme of Greek history, as well as in other countries that have been “addicted” to foreign savings.
    JEL: F3 G01 H6 N10 N13 N14
    Date: 2015–10
  6. By: Ran Abramitzky
    Abstract: I reflect on the role of modern economic history in economics. I document a substantial increase in the percentage of papers devoted to economic history in the top-5 economic journals over the last few decades. I discuss how the study of the past has contributed to economics by providing ground to test economic theory, improve economic policy, understand economic mechanisms, and answer big economic questions. Recent graduates in economic history appear to have roughly similar prospects to those of other economists in the economics job market. I speculate how the increase in availability of high quality micro level historical data, the decline in costs of digitizing data, and the use of computationally intensive methods to convert large-scale qualitative information into quantitative data might transform economic history in the future.
    JEL: B0 N0
    Date: 2015–10
  7. By: Eren Ahmet (Artvin Coruh University, Department of Economics)
    Abstract: Piketty almost with a provocative title refers to Marx's "Capital". "Capital in the twenty-first century” is a book of Piketty, working by a group of researchers based on historical and comparative data. The book tries to reveal the tendencies and the movements of the capitalist system covering more than twenty countries and datas of 300 years. The reason for the much discussion of the book, and the importance attached are the references to Marx himself and the “Capital”. In this study relatedness between Piketty's "Capital in the twenty-first century" and Marx's "Capital" will be questioned. This relatedness will be evaluated depending on three basis. The first of these, is the personalities of the authors and their historical background, secondly; the methods and the tools that they use in their work, and finally; the work will be taken regarding the content and results.
    Keywords: na
    Date: 2015
  8. By: William N. Goetzmann
    Abstract: History is important to the study of financial bubbles precisely because they are extremely rare events, but history can be misleading. The rarity of bubbles in the historical record makes the sample size for inference small. Restricting attention to crashes that followed a large increase in market level makes negative historical outcomes salient. In this paper I examine the frequency of large, sudden increases in market value in a broad panel data of world equity markets extending from the beginning of the 20th century. I find the probability of a crash conditional on a boom is only slightly higher than the unconditional probability. The chances that a market gave back it gains following a doubling in value are about 10%. In simple terms, bubbles are booms that went bad. Not all booms are bad.
    JEL: G01 G14 N2
    Date: 2015–10
  9. By: Karen Clay; Joshua Lewis; Edson Severnini
    Abstract: This paper uses the 1918 influenza pandemic as a natural experiment to examine whether air pollution affects susceptibility to infectious disease. The empirical analysis combines the sharp timing of the pandemic with large cross-city differences in baseline pollution measures based on coal-fired electricity generating capacity for a sample 183 American cities. The findings suggest that air pollution exacerbated the impact of the pandemic. Proximity to World War I military bases and baseline city health conditions also contributed to pandemic severity. The effects of air pollution are quantitatively important. Had coal-fired capacity in above-median cities been reduced to the median level, 3,400-5,860 pandemic- related infant deaths and 15,575-23,686 pandemic-related all-age deaths would have been averted. These results highlight the complementarity between air pollution and infectious disease on health, and suggest that there may be large co-benefits associated with pollution abatement policies.
    JEL: I15 I18 N32 N52 Q40 Q53
    Date: 2015–10
  10. By: Harrison, Mark (Centre on Competitive Advantage in the Global Economy, University ofWarwick, Centre for Russian, European, and Eurasian Studies, University of Birmingham, Hoover Institution onWar, Revolution, and Peace, Stanford University)
    Abstract: In Soviet Lithuania (and elsewhere) from the 1950s to the 1980s, the KGB applied a form of "zero-tolerance" policing, or profilaktika, to incipient threats to state security. Petty deviation from socio-political norms was regarded as a person's first step towards more serious state crimes, and as a bad example for others. As long as petty violators could be classed as confused or misled rather than motivated by anti-Soviet conviction, their mistakes would be corrected by a KGB warning or "preventive discussion." Successful prevention avoided the costly removal of the subject from society. This represented a complete contrast to the Stalin years, when prevention relied largely on eliminating the subject from society. Preventive discussions were widely practised in many different circumstances. KGB internal evaluations concluded that these discussions were extremely effective in preventing further violations. This was the front line of the Soviet police state; it was perhaps the largest programme for personally targeted behaviour modification anywhere in the world at that time outside the education sector. It was also a front line of the Cold War because the foreign adversary was seen as the most important source of misleading or confusing influence. My work in progress aims to understand the origins and operation of profilaktika, including how and to whom it was applied, how it worked on the individual subject, and its wider influence on the Soviet Union’s social and political order.
    Keywords: Keywords: coercion; communism; deviance; nudge; security; social norms; surveillance; Soviet Union; zero-tolerance JEL Codes: N44 ; P37
    Date: 2015
  11. By: Lisa Cook; Trevon Logan; John Parman
    Abstract: Race-specific given names have been linked to a range of negative outcomes in contemporary studies, but little is known about their long term consequences. Building on recent research which documents the existence of a national naming pattern for African American males in the late nineteenth and early twentieth centuries (Cook, Logan and Parman 2014), we analyze long-term consequences of distinctively racialized names. Using over three million death certificates from Alabama, Illinois, Missouri and North Carolina from 1802 to 1970, we find a robust within-race mortality difference for African American men who had distinctively black names. Having an African American name added more than one year of life relative to other African American males. The result is robust to controlling for the age pattern of mortality over time and environmental factors which could drive the mortality relationship. The result is not consistently present for infant and child mortality, however. As much as 10% of the historical between-race mortality gap would have been closed if every black man were given a black name. Suggestive evidence implies that cultural factors not captured by socioeconomic or human capital measures may be related to the mortality differential.
    JEL: I1 J15 N31 N32
    Date: 2015–10
  12. By: Brigitte Granville; Jaume Martorell Cruz; Martha Prevezer
    Abstract: This paper explores a nexus that runs from the construction of an elite thicket in France through a shared mental model or doxa to a centralized activist state that modernized the French economy during the trentes glorieuses but since the mid-1990s has led to behavioural stasis, dependency on state solutions and institutional deterioration.
    Keywords: Culture, Economic History, Institutions, Industrial Relations, Elites, Varieties of Capitalism, Mental Models.
    JEL: N24 N40 N44 O38 Z10
    Date: 2015–10
  13. By: Castelló-Climent, Amparo (Universidad de Valencia); Chaudhary, Latika (Naval Postgraduate School); Mukhopadhyay, Abhiroop (Indian Statistical Institute)
    Abstract: This paper estimates the causal impact of tertiary education on luminosity across Indian districts. We address the potential endogeneity of tertiary education using the location of Catholic missionaries in 1911 as an instrument for current tertiary education. We find Catholic missionaries have a large and positive impact on tertiary education. Catholics were not at the forefront of tertiary education in colonial India, but they established many high quality colleges following Indian independence. Controlling for a rich set of geographical and historical characteristics, we find a positive causal effect of tertiary education on development, as measured by light density at night. The findings are robust to different measures of development, and are not driven by alternative channels through which missionaries could impact current income.
    Keywords: human capital, Catholic missionaries, subregional analysis
    JEL: I25 N35 O15
    Date: 2015–10
  14. By: Yaguang Zhang; Guo Fan; John Whalley
    Abstract: We discuss business cycles in ancient China. Data on Ancient China business cycles are sparse and incomplete and so our discussion is qualitative rather than quantitative. Essentially, ancient debates focused on two types of cycles: long run political or dynastic cycles of many decades, and short run nature induced cycles. Discussion of the latter show strong parallels to Jevons’ conception of sun spot cycles. The former has no clear contemporary analogue, were often deep in impact and of long duration. The discussion of both focused on agricultural economies. Ancient discussion on intervention focused on counter cyclical measures, including stockpiling, and predated Keynes and the discussion in the 1930s by centuries. Also, a strongly held belief emerged that cycles create their own cycles to follow, and that cycles are part of the inevitable economic order, a view consistent with Mitchell’s view of the business cycle in the 1940s. Current debates on how best to respond to the ongoing global financial crisis draw in part on historical precedents, but these are largely limited to the last 150 years for OECD countries and with major focus on the 1990’s. Here we also probe material on Ancient China to see what is relevant.
    JEL: N1 N15
    Date: 2015–10
  15. By: Sandelin, Bo (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: The nineteenth century pioneers in formulating economic problems mathematically often felt that they needed to explain their reasons for using mathematics. We will look at the arguments of Cournot, Thünen, Gossen, Jevons, Walras, Edgeworth, Marshall, Fisher, Wicksell, and Pareto. Three main arguments can be found: First, mathematics provides greater clarity of presentation, secondly, economics is fundamentally similar to the mathematical natural sciences, especially physics, and third, mathematics can help economists themselves to control the reasoning in their analysis.<p>
    Keywords: History of economic thought; economic methodology; mathematics; marginalism
    JEL: B41 C00
    Date: 2015–10
  16. By: Davis, John B. (Department of Economics Marquette University)
    Abstract: This paper discusses Lawson’s use of Veblen’s concept of ‘neoclassical economics’ and argument that the category of neoclassical economics should be jettisoned on the grounds that it obfuscates effective critique of mainstream economics. The paper links Lawson’s critique of closed systems and Veblen’s cumulative causation view by offering a reflexivity, feedback loop formulation of the latter aimed at overcoming the pre-Socratic dichotomy between Heraclitian and Parmenidean ontological thinking. The paper then reviews what this implies for three key social ontology doctrines: social reality as processual and highly transient; emergence and the appearance of novelty; the internal relatedness of social reality. Final remarks address the use of the ‘neoclassical economics’ concept.
    Keywords: neoclassical economics, Veblen, Lawson, closed systems, cumulative causation, reflexivity
    JEL: B13 B41 B52
    Date: 2015–08
  17. By: Annamaria Artner (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: Since 1989, due to historical developments and the works of theorists such as Francis Fukuyama, authoritative sources have claimed that the combination of a “free market economy” and “liberal democracy built on equal rights” results in the most developed form of human society. Taking into consideration that development is driven by contradictions, the above premise is true if it is accepted that no contradictions exist within or between a free market economy and liberal democracy. If, however, such contradictions do exist, the potential development of human society cannot be said to ultimately conclude with capitalism. Therefore, democratic capitalism may be the most developed and final form of capitalism, but not that of human society in general. This essay aims to clarify the meanings of free market and democracy, and their relationship. Based on the general and specific definitions of democracy, it distinguishes between the concepts of de jure and de facto equality, and analyses the impact of the most important working mechanism of a market economy – competition – on manifold inequalities. It discusses the real inequalities manifested in income and the ownership of the means of production, and also the inequalities within capital, and between capital and wage labour. By reflecting upon these inequalities, the study looks at how free market forces work towards the erosion of democracy and constrain the practical utilization of democratic institutions.
    Keywords: wage labour, inequality, democracy, market economy, return on capital, competitiveness
    JEL: E22 E24 F01 F50 F52
    Date: 2015–10
  18. By: Van Biesebroeck, Johannes
    Abstract: This working paper provides a review of the links between wages and productivity, based mainly on the mainstream economic literature (and hence best complemented with other more “heterodox” literature).
    Keywords: wages, labour productivity, measurement, salaire, productivité du travail, mesure, salario, productividad del trabajo, medición
    Date: 2014
  19. By: Obst, Thomas
    Abstract: Provides a comprehensive overview of the development in income distribution and outlines its major long-term trends of 23 countries worldwide. These countries are clustered in four groups covering the core advanced, the Nordic, the emerging, and the least developed economies of the world. Applies different measures to analyse income distribution in three dimensions: national income, functional income distribution, and personal income distribution, ranging between 1960 and 2012.
    Keywords: income distribution, wage differential, economic disparity, national income, household income, low income, trend, developed countries, developing countries, répartition du revenu, disparité des salaires, disparité économique, revenu national, revenu des ménages, faible revenu, tendance, pays développés, pays en développement, distribución del ingreso, diferencia del salario, desigualdad económica, ingreso nacional, ingreso de los hogares, bajos ingresos, tendencia, países desarrollados, países en desarrollo
    Date: 2014
  20. By: Christopher J. Ruhm
    Abstract: This analysis summarizes prior research and uses national, state and county level data from the United States from 1976-2013 to examine whether the mortality effects of economic crises differ in kind from those of the more typical fluctuations. The tentative conclusion is that economic crises affect mortality rates (and presumably other measures of health) in the same way as less severe downturns: namely, they lead to improvements in physical health. The effects of severe national recessions in the United States, appear to have a beneficial effect on mortality that is roughly twice as strong as that predicted due to the elevated unemployment rates alone while the higher predicted rate of suicides during typical periods of economic weakness is approximately offset during severe recessions. No consistent pattern is obtained for more localized economic crises occurring at the state level – some estimates suggest larger protective mortality effects while others indicate offsetting deleterious consequences.
    JEL: E32 I1 I12 I18 J68
    Date: 2015–10
  21. By: İlkben Akansel (Artvin Coruh University, Department of Economics)
    Abstract: Neoliberalism is a notion which cannot be described definitively. Nevertheless, it is a notion affecting economics system in terms of its components. Taking effects since 1970, premises justifying freedom and social efficiency can only be provided by private ownership and free market; therefore, it opposes state intervention. Broadly, arguments of neoliberalism differentiate from liberal arguments, which justify classical liberalism based upon individual and firm, whereas its failure in practice causes many critical arguments. The basis of these failures is upon debating implementations of economics system that is carried on the core of neoliberalism. Neoliberalism can basically be divided into three eras: Chicago School in 1970’s opposing Keynesian economics, end of 1980’s Washington Consensus and since mid-1990’s the era of re-discussing the regulatory role of state. This study aims to examine these three economics era which are the basis of neoliberalism. Examining the features applied for each three political economics, the failure points of neoliberal discourse can be visualized. Consequently, analysis of the economics origin of neoliberal discourse will enlighten the resolution of recent economic crisis.
    Keywords: neoliberalism, Chicago School, Keynesian Economics, Washington Consensus, free market, state regulator
    JEL: P1
    Date: 2015
  22. By: Antonio Bariletti (University of Cassino and Lazio Meridionale); Eleonora Sanfilippo (University of Cassino and Lazio Meridionale)
    Abstract: The notion of “creativity” has assumed a growing importance in the recent economic literature on happiness, motivations and life-satisfaction. Starting from the seminal contribution of Scitovsky, the effects of “creative goods” and “creative activities” on consumers’ well-being, in connection with cultural, sociological, psychological and educational aspects, have been analyzed. An increasing interest in these concepts has also been shown recently by policy-makers and international institutions (see, e.g., the UNCTAD Reports on Creative Economy, 2010, 2013), in particular in relation to economic growth. On the other hand, a clear and rigorous analytical definition of this category of goods and activities and deep investigation of its peculiarity in comparison with other types of products and activities, broadly defined as comfort or defensive ones, is still lacking in the economic literature. This is why, despite its wide use in economics, the nature of the distinction still remains somehow vague and not univocal. The aim of this paper is to provide a contribution to help clarify this distinction by reconstructing its meaning and scope in the works of Scitovsky (1976, 1992) and Hawtrey (1925) – the first economists who have tried to provide an analytical content to the notion of creative goods and activities in their theoretical frameworks.
    JEL: B31 B41 D01 D11
    Date: 2015–10
  23. By: Keting Shen; Jing Wang; John Whalley
    Abstract: Popular literature suggests a rapid narrowing of the technology gap between China and the U.S. based on large percentage increases in Chinese patent applications, and equally large increases in college registrants and completed PhDs (especially in sciences) in China in recent years. Little literature attempts to measure the technology gap directly using estimates of country aggregate technologies. This gap is usually thought to be smaller than differences in GDP per capita since the later reflect both differing factor endowments and technology parameters. This paper assesses changes in China’s technology gaps both with the U.S. and India between 1979 and 2008, comparing the technology level of these economies using a CES production framework in which the technology gap is reflected in the change of technology parameters. Our measure is related to but differs from the Malmquist index. We determine the parameter values for country technology by using calibration procedures. Our calculations suggest that the technology gap between China and the U.S. is significantly larger than that between India and the U.S. for the period before 2008. The pairwise gaps between the U.S. and China, and the U.S. and India remain large while narrowing at a slower rate than GDP per worker. Although China has a higher growth rate of total factor productivity than India over the period, the bilateral technology gap between China and India is still in India’s favor. India had higher income per worker than China in the 1970’s, and China’s much more rapid physical and human capital accumulation has allowed China to move ahead, but a bilateral technology gap remains.
    JEL: O41 O47 O57 P5
    Date: 2015–10

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