nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2016‒03‒23
24 papers chosen by

  1. Spanish Agriculture in the Little Divergence By Alvarez-Nogal, Carlos; Escosura, Leandro Prados de la; Santiago-Caballero, Carlos
  2. A tale of two globalizations : gains for trade and openness 1800-2010 By Tena Junguito, Antonio; Federico, Giovanni
  3. The rich in historical perspective. Evidence for preindustrial Europe (ca. 1300-1800) By Guido Alfani
  4. America's First Great Moderation By Joseph Davis; Marc D. Weidenmier
  5. "The Influence of Ancestral Lifeways on Individual Economic Outcomes in Sub-Saharan Africa" By Stelios Michalopoulos; Louis Putterman; David Weil
  6. State Capacity and American Technology: Evidence from the 19th Century By Daron Acemoglu; Jacob Moscona; James A. Robinson
  7. Reproductive history and post-reproductive mortality: a sibling comparison analysis using Swedish register data By Kieron Barclay; Katherine Keenan; Emily Grundy; Martin Kolk; Mikko Myrskylä
  8. A Progress Report on Marxian Economic Theory: On the Controversies in Exploitation Theory since Okishio (1963) By Yoshihara, Naoki
  9. Immigration in American Economic History By Ran Abramitzky; Leah Platt Boustan
  10. Federal Reserve Board Statistical Releases: a Publications History By Seldin, Sian L.
  11. The New Classical Explanation of the Stagflation: A Psychological Way of Thinking By Aurélien Goutsmedt
  12. Colonization and Changing Social Structure: Kazakhstan 1896-1910 By Gani Aldashev; Catherine Guirkinger
  13. Distance and Time Effects in Swedish Commodity Prices, 1732-1914 By Mario J. Crucini; Gregor W. Smith
  14. How do regional labor markets adjust to immigration? A dynamic analysis for post-war Germany By Braun, Sebastian; Weber, Henning
  15. Money, Banking, and Monetary Policy from the Formation of the Federal Reserve until Today By Hetzel, Robert L.; Richardson, Gary
  16. Bankruptcy and Investment: Evidence from Changes in Marital Property Laws in the U.S. South, 1840-1850 By Peter Koudijs; Laura Salisbury
  17. Efficiency in Education. A Review of Literature and a Way Forward By Kristof de Witte; Laura López-Torres
  18. A Review of Some Postwar Economic Growth Theories and Empirics By Accolley, Delali
  19. Una stagnazione secolare? Italia, Giappone, Stati Uniti, 1950-2015 By Daniele, Vittorio
  20. Patents and Innovation in Economic History By Petra Moser
  21. Patent Citation Data in Social Science Research: Overview and Best Practices By Adam B. Jaffe; Gaétan de Rassenfosse
  22. The education revolution on horseback I : The relation between Napoleon Bonaparte and education system characteristics By Korthals R.A.
  23. Economic Backwardness and Catching Up: Brazilian Agriculture, 1964–2014 By Lee Alston; Bernardo Mueller
  24. Global Cycles: Capital Flows, Commodities, and Sovereign Defaults, 1815-2015 By Carmen M. Reinhart; Vincent Reinhart; Christoph Trebesch

  1. By: Alvarez-Nogal, Carlos (Universidad Carlos III); Escosura, Leandro Prados de la (Universidad Carlos III, CEPR, and CAGE); Santiago-Caballero, Carlos (Universidad Carlos III)
    Abstract: This paper explores the role of agriculture in Spain’s contribution to the little divergence in Europe. On the basis of tithes, long-run trends in agricultural output are drawn. After a long period of relative stability, output suffered a severe contraction during 1570-1620, followed by stagnation to 1650, and steady expansion thereafter. Output per head shifted from a relatively high to a low path that persisted until the nineteenth century. The decline in agricultural output per head and per worker from a relatively high level contributed to Spain falling behind and, hence, to the Little Divergence in Europe. Output per worker moved along labour force in agriculture over the long run, supporting the depiction of Spain as a frontier economy. Institutional factors, in a context of financial and monetary instability and war, along climatic anomalies, provide explanatory hypotheses that deserve further research.
    Keywords: agriculture, tithes, early modern Spain, labour productivity, little divergence JEL Classification: N53, O13, Q10
    Date: 2016
  2. By: Tena Junguito, Antonio; Federico, Giovanni
    Abstract: This paper compares the wave of globalization before the outbreak of the Great Recession in 2007 with its alleged historical antecedent before the outbreak of World War One. We describe trends in trade and openness, estimate the gains from trade and investigate the proximate causes of the growth of openness. We argue that the conventional wisdom has to be revised. The first wave of globalization started around 1820 and culminated around 1870. In the next century, trade continued to grow, with the exception of the Great Depression, but openness and gains fluctuated widely. Growth resumed in the early 1970s. By 2007, the world was more open than a century earlier and its inhabitants gained from trade substantially more than their ancestors did. The current wave of globalization, in spite of some similarities with previous trends, has no historical antecedents.
    Keywords: 19th and 20th Century; Gains of trade; Openness; Globalization
    JEL: N10 F14
    Date: 2016–02–01
  3. By: Guido Alfani
    Abstract: This article provides an overview of long-term changes in the relative conditions of the rich in preindustrial Europe. It covers four pre-unification Italian states (Sabaudian State, Florentine State, Kingdom of Naples and Republic of Venice) as well as other areas of Europe (Low Countries, Catalonia) during the period 1300-1800. Three different kinds of indicators are measured systematically and combined in the analysis: headcount indexes, the share of the top rich, and richness indexes. Taken together, they suggest that overall, during the entirety of the early modern period the rich tended to become both more prevalent and more distanced from the other strata of society. The only period during which the opposite process took place was the late Middle Ages, following the Black Death epidemic of the mid-fourteenth century. In the period from ca. 1300 to 1800, the prevalence of the rich doubled. In the Sabaudian State, the Florentine State and the Kingdom of Naples, for which reconstructions of regional wealth distributions exist, in about the same period the share of the top 10% grew from 45-55% to 70-80% - reaching almost exactly the same level which has recently been suggested as the European average at 1810. Consequently, the time series presented here might be used to add about five centuries of wealth inequality trends to current debates on very long-term changes in the relative position of the rich. Keywords Economic inequality; wealth concentration; richness; top wealthy; middle ages; early modern period; Italy; Low Countries; Catalonia; Black Death; property structures JEL codes N300, N330, N930, D310
    Date: 2016
  4. By: Joseph Davis; Marc D. Weidenmier
    Abstract: We identify America’s First Great Moderation, a recession-free 16-year period from 1841 until 1856, that represents the longest economic expansion in U.S. history. Occurring in the wake of the debt-deleveraging cycle of the late 1830s, this “take-off” period’s high rates of economic growth and relatively-low volatility enabled the U.S. economy to escape downturns despite the absence of a central bank. Using new high frequency data on industrial production, we show that America’s First Great Moderation was primarily driven by a boom in transportation-goods investment, attributable to both the wider adoption of steam railroads and river boats and the high expected returns for massive wooden clipper ships following the discovery of gold in California. We do not find evidence that agriculture (i.e., cotton), domestic textile production, or British economic conditions played any significant role in this moderation. The First Great Moderation ended with a sharp decline in transportation investment and bank credit during the downturn of 1857-8 and the coming American Civil War. Our empirical analyses indicate that the low-volatility states derived for both annual industrial production and monthly stock prices during the First Great Moderation are similar to those estimated for the Second Great Moderation (1984-2007).
    JEL: E01 E32 N1 N11
    Date: 2016–01
  5. By: Stelios Michalopoulos; Louis Putterman; David Weil
    Abstract: We explore the role of an individual's historical lienage in determining economic status, holding constant his or her current location. This is complementary to the more common approachto studying how history shapes economic outcomes across locations. Motivated by a large literature in social sciences stressing the beneficial influence of agricultural transition on contemporary economic perfromance at the level of countries, we examine the relative status of descendants of agriculturalists vs. pastoralists. We match individual-level survey data with information on the historical lifeways of ancestors, focusing in Africa, where the transition away from such modes of production began only recently. Within enumeration areas and occupational groups, we find that individuals from ethnicities that derived a larger share of subsistence from agriculture in the pre-colonial era are today more educated and wealthy. A tentative exploration of channels suggests that differences in attitudes and beliefs as well as differential treatment by others, including less political power, may contribute to these divergent outcomes.
    Date: 2016
  6. By: Daron Acemoglu; Jacob Moscona; James A. Robinson
    Abstract: Robert Gordon's The Rise and Fall of American Economic Growth provides a compelling interpretation of how technical change and innovation has radically changed the living standards of the citizens of the US in the past 150 years. Lying behind these changes are the institutions which have allowed the country to harness its human potential. In this paper we conduct an empirical investigation of the impact of one key set of institutions, the capacity of the US state as proxied by the presence of post offices in a county, on innovation. We show that between 1804 and 1899, the time when the US became the world technological leader, there is a strong association between the presence and number of post offices in a county and patenting activity, and it appears that it is the opening of postal offices that leads to surges in patenting activity, not the other way around. Our evidence suggests that part of the yet untold story of US technological exceptionalism is the way in which the US created an immensely capable and effective state.
    JEL: D70 N11 N41 O3
    Date: 2016–01
  7. By: Kieron Barclay; Katherine Keenan; Emily Grundy; Martin Kolk; Mikko Myrskylä
    Abstract: A growing body of evidence suggests that reproductive history influences post-reproductive mortality. A potential explanation for this association is confounding by socioeconomic status in the family of origin, as socioeconomic status is related to both fertility behaviours and to long-term health. We examine the relationship between age at first birth, completed parity, and post-reproductive mortality and address the potential confounding role of family of origin. We use Swedish population register data for men and women born 1932-1960, and examine both all-cause and cause-specific mortality. The contributions of our study are the use of a sibling comparison design that minimizes residual confounding from shared family background characteristics and assessment of cause-specific mortality that can shed light on the mechanisms linking reproductive history to mortality. Our results were entirely consistent with previous research on this topic, with teenage first time parents having higher mortality, and the relationship between parity and mortality following a U-shaped pattern where childless men and women and those with five or more children had the highest mortality. These results indicate that selection into specific fertility behaviours based upon socioeconomic status and experiences within the family of origin does not explain the relationship between reproductive history and post-reproductive mortality. Additional analyses where we adjust for other lifecourse factors such as educational attainment, attained socioeconomic status, and post-reproductive marital history do not change the results. Our results add an important new level of robustness to the findings on reproductive history and mortality by showing that the association is robust to confounding by factors shared by siblings. However it is still uncertain whether reproductive history causally influences health, or whether other confounding factors such as childhood health or risk-taking propensity could explain the association.
    Keywords: Age at first birth; parity; reproductive history; mortality; sibling fixed effects; Sweden
    JEL: C1
    Date: 2016
  8. By: Yoshihara, Naoki
    Abstract: This report explores the development of exploitation theory in mathematical Marxian economics by reviewing the main controversies surrounding the proper definition of exploitation since the contribution of Okishio (1963). The report first examines the debates on the Fundamental Marxian Theorem and Class-Exploitation Correspondence Principle, developed mainly in the 1970s and 1980s, followed by the property relation theory of exploitation by Roemer (1982). Then, the more recent exploitation theory proposed by Vrousalis (2013) and Wright (2000) is introduced. Finally, the report introduces and comments on recent axiomatic studies of exploitation by focusing on the work of Veneziani and Yoshihara (2015).
    Keywords: Proper Definitions of UE Exploitation, Property Relations Definition of Exploitation, Profit-Exploitation Correspondence Principle
    JEL: D63 D51
    Date: 2016–02
  9. By: Ran Abramitzky; Leah Platt Boustan
    Abstract: The United States has long been perceived as a land of opportunity for immigrants. Yet, both in the past and today, US natives have expressed concern that immigrants fail to integrate into US society and lower wages for existing workers. This paper reviews the literatures on historical and contemporary migrant flows, yielding new insights on migrant selection, assimilation of immigrants into US economy and society, and the effect of immigration on the labor market.
    JEL: J61 N11 N12
    Date: 2016–01
  10. By: Seldin, Sian L. (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: The Board of Governors of the Federal Reserve System has published extensive statistical information on the U.S. economy and banking industry since 1914. This information has been published in various formats, usually referred to as "statistical releases." Titles and release numbers of the publications have changed frequently. Federal Reserve Board Statistical Releases: a Publications History describes these changes; it is a convenient tool that lightens the burden of tracing the titles and release numbers by providing history in a single location.
    Keywords: Data collection and estimation; Economic history; Federal Reserve Board and Federal Reserve System
    Date: 2016–03–04
  11. By: Aurélien Goutsmedt (Centre d'Economie de la Sorbonne)
    Abstract: The stagflation phenomenon is regarded as one of the cause of the Keynesian paradigm breakdown in the 1970s. The New Classical school took advantage of this breakdown. However, its discourse on the stagflation was not so clear and remained in a implicit shape. The paper aim at rebuilding the New Classical tale of the stagflation that stroke the United-States economy in the 1970s. We show that psychological ideas (expectations, beliefs, credibility) lay in the heart of the explanation. In the same time, oil shocks were left in the background. Besides, the New Classical school put much more emphasis on the inflation issue and experienced some difficulties to deal with the increase in unemployment
    Keywords: History of macroeconomics; Macroeconomics; New Classical School; Stagflation
    JEL: B22 E32 E52 N12
    Date: 2016–02
  12. By: Gani Aldashev; Catherine Guirkinger
    Abstract: This paper investigates how, under increasing land pressure during Russian settlement in Kazakh steppes in the late-XIXth century, family-based institutions and social structure of Kazakhs evolved to adapt to new economic conditions. Using a rich dataset constructed from Russian colonial expedition materials, we find that during the transition from nomadic pastoralism to a semi-sedentary pastoralist-agriculture system, the size of Kazakh extended families increased, those of communes and clans decreased, and that Kazakhs identified stronger with lower levels of genealogical clan system. Within families, property rights on land became more individualized, households became less likely to pool labor to farm, and wage labor contracts in agriculture became common. We discuss theoretical explanations for the observed patterns.
    Date: 2016–03
  13. By: Mario J. Crucini (Vanderbilt University); Gregor W. Smith (Queen's University)
    Abstract: We study the role of distance and time in statistically explaining price dispersion across 32 Swedish towns for 19 commodities from 1732 to 1914. The resulting large number of relative prices (502,689) allows precise estimation of distance and time effects, and their interaction. We find an effect of distance that declines significantly over time, beginning in the 18th century, well before the arrival of canals, the telegraph, or the railway.
    Keywords: distance effect, law of one price
    JEL: N70
    Date: 2016–03
  14. By: Braun, Sebastian; Weber, Henning
    Abstract: We draw on two decades of historical data to analyze how regional labor markets in West Germany adjusted to one of the largest forced population movements in history, the mass inflow of eight million German expellees after World War II. The expellee inflow was distributed very asymmetrically across two West German regions. A dynamic two-region search and matching model of unemployment, which is exposed to the asymmetric expellee inflow, closely fits historical data on the regional unemployment differential and the regional migration rate. Both variables increase dramatically after the inflow and decline only gradually over the next decade. We show that despite the large and long-lasting dynamics following the expellee inflow, native workers experience only a modest loss in expected discounted lifetime labor income of 1.38%. Per-period losses in native labor income, however, are up to four times as large. The magnitude of income losses also depends on the initial location and labor market status of native workers. In counterfactual analyses, we furthermore show that economic policy interventions that affect the nature of the immigration inflow can effectively reduce native income losses and dampen adjustment dynamics in regional labor markets. One such intervention is to distribute the inflow more evenly over time. Smaller immigration inflows, similar in magnitude to the refugee inflow that Germany is experiencing today, also reduce native income losses markedly but decrease the duration of labor market adjustment only modestly.
    Keywords: Immigration,labor market adjustments,dynamic search and matching model of unemployment,asymmetric labor supply shock,post-war Germany
    JEL: J61 F22
    Date: 2016
  15. By: Hetzel, Robert L. (Federal Reserve Bank of Richmond); Richardson, Gary (Federal Reserve Bank of Richmond)
    Abstract: The United States Congress created the Federal Reserve System in 1913. The System consists of the Federal Reserve Board in Washington, D.C.; 12 Federal Reserve Banks; and thousands of member commercial banks. This entry describes the evolution of the System and of monetary policy from its foundation through 2013.
    Date: 2016–01–15
  16. By: Peter Koudijs; Laura Salisbury
    Abstract: We study the impact of the introduction of a form of bankruptcy protection on household investment in the U.S. South in the 1840s, which predated modern bankruptcy laws. During this period, certain southern states passed laws that protected married women's property from seizure in the case of insolvency, amending the common law default which vested a wife's property in her husband and thus allowed it to be seized for the repayment of his debts. Importantly, these laws only applied to newlyweds. We compare couples married after the passage of a law with couples from the same state who married before the passage of a law. Since states passed laws at different points in time, we can exploit variation in protection conditional on state and year of marriage. We find that the effect on household investment was heterogeneous: if most household wealth came from the husband (wife), the law led to an increase (decrease) in investment. This is consistent with a simple model where downside protection leads to both an increase in the demand for credit and a reduction in supply. Demand effects will only dominate if a modest fraction of total wealth is protected.
    JEL: G33 K11 K35 N21 N31
    Date: 2016–02
  17. By: Kristof de Witte (Katholieke Universiteit Leuven (Belgium)); Laura López-Torres (Business Department, Universitat Autònoma de Barcelona)
    Abstract: This paper provides an extensive and comprehensive overview of the literature on efficiency in education. It summarizes the earlier applied inputs, outputs and contextual variables, as well as the used data sources of papers in the field of efficiency in education. Moreover, it reviews the papers on education that applied methodologies as Data Envelopment Analysis, Malmquist index, Bootstrapping, robust frontiers, metafrontier, or Stochastic Frontier Analysis. Based on the insights of the literature review, a second part of the paper provides some ways forward. It attempts to establish a link between the parametric ‘economics of education’ literature and the (semiparametric) ‘efficiency in education literature’. We point to the similarities between matching and conditional efficiency; difference-in-differences and metafrontiers; and quantile regressions and partial frontiers. The paper concludes with some operative directions for prospective researchers in the field.
    Keywords: Efficiency; Education; Review; Education Economics; Operational Research
    JEL: I21 I20 D61
    Date: 2015–06
  18. By: Accolley, Delali
    Abstract: The evolution of growth theories from the 1956 seminal work of Solow and Swan to Aghion and Howitt’s 1992 Schumpeterian model is traced herein. How growth empirics helped improve some existing theories is also presented. As a matter of fact, the empirical evidence that countries were not converging as the Solow-Swan model predicted led to the development of endogenous growth theories pioneered by Romer (1986) and Lucas (1988). Thereafter, semi-endogenous growth models originated from the observation that growth rate across countries was not proportional to the size of skilled labor as endogenous growth theories predicted. I also present my own empirical assessment of some predictions from growth theories and find supporting evidence of (1) convergence of GDP across Canada and the countries of the West African Economic and Monetary Union and (2) a positive relationship between output and the accumulation of knowledge through R&D across Canada. I also find, in Canada, the evidence of a positive relationship between economic growth and skilled labor, as some model predicted.
    Keywords: Economic Growth, endogenous growth, exogenous growth, growth empirics
    JEL: N1 O4 O47
    Date: 2015–11–09
  19. By: Daniele, Vittorio
    Abstract: This paper discusses the hypothesis of secular stagnation. Firstly, the debate on stagnation, from Alvin Hansen (1938) to Marxists and more recent interpretations is illustrated. Then, the demographic and macroeconomic trends of Italy, Japan and the United States are examined in relationship with the secular stagnation hypothesis.
    Keywords: Stagnazione secolare; disuguaglianze; crescita economica; Italia; invecchiamento popolazione
    JEL: B10 B22 B24 B5 E22 O11
    Date: 2015–11–10
  20. By: Petra Moser
    Abstract: A strong tradition in economic history, which primarily relies on qualitative evidence and statistical correlations, has emphasized the importance of patents as a primary driver of innovation. Recent improvements in empirical methodology – through the creation of new data sets and advances in identification – have produced research that challenges this traditional view. The findings of this literature provide a more nuanced view of the effects of intellectual property, and suggest that when patent rights have been too broad or strong, they have actually discouraged innovation. This paper summarizes the major results from this research and presents open questions.
    JEL: K0 K21 L51 N0 O30 O31 O34
    Date: 2016–02
  21. By: Adam B. Jaffe; Gaétan de Rassenfosse
    Abstract: The last two decades have witnessed a dramatic increase in the use of patent citation data in social science research. Facilitated by digitization of the patent data and increasing computing power, a community of practice has grown up that has developed methods for using these data to: measure attributes of innovations such as impact and originality; to trace flows of knowledge across individuals, institutions and regions; and to map innovation networks. The objective of this paper is threefold. First, it takes stock of these main uses. Second, it discusses four pitfalls associated with patent citation data, related to office, time and technology, examiner, and strategic effects. Third, it highlights gaps in our understanding and offers directions for future research.
    JEL: O31 O32 O34
    Date: 2016–01
  22. By: Korthals R.A. (GSBE)
    Abstract: Much research has been done into the emergence of mass education systems, primarily by studying the social origin of the education system, the introduction of compulsory schooling laws, or the expansion of enrolment rates. However, little is known about the origin of the characteristics of these newly formed systems. Ramirez and Boli 1987 argue that the threat for war with and invasion by the French around the 1800s induced European countries to introduce mass public education systems. This paper empirically establishes whether political pressure from Napoleon is related to the levels of differentiation and standardization of European education systems. I find that the political pressure from France is related to differentiation, but less to standardization of the content of instruction, and not at all to the existence of central exam and administrative standardization.
    Date: 2016
  23. By: Lee Alston; Bernardo Mueller
    Abstract: Alexander Gerschenkron understood the development of backward countries as a contextual process that varied from country to country depending on which perquisites were present or absent. In the past twenty years, Brazilian agriculture evolved from “backward” to an agricultural powerhouse. Its production and total factor productivity more than doubled. Brazil is in the worlds’ top five producers of coffee, soybeans, oranges, beef and corn. Yet, some segments of agriculture lag far behind. We draw on the insights of Gerschenkron and Albert Hirschman, inter alia to conceptualize the development process. As an illustrative aid we apply fitness landscapes to the process of development. Fitness landscapes are good representations of a contextual view of development. We portray the process as an evolutionary search for good designs across a large, uncertain and not pre-statable set of possibilities. In such circumstances a controlled strategy of following predetermined stages is not effective. Rather we need an approach relying on creativity and imagination to find solutions to specific problems faced by each country.
    JEL: N56 Q15
    Date: 2016–02
  24. By: Carmen M. Reinhart; Vincent Reinhart; Christoph Trebesch
    Abstract: Capital flow and commodity cycles have long been connected with economic crises. Sparse historical data, however, has made it difficult to connect their timing. We date turning points in global capital flows and commodity prices across two centuries and provide estimates from alternative data sources. We then document a strong overlap between the ebb and flow of financial capital, the commodity price super-cycle, and sovereign defaults since 1815. The results have implications for today, as many emerging markets are facing a double bust in capital inflows and commodity prices, making them vulnerable to crises.
    JEL: E30 E44 F44 G01 N10 N20
    Date: 2016–02

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