nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2016‒05‒08
34 papers chosen by

  1. Introduction: special section: “regime change in public finance: the case of interwar Japan” By Janet Hunter
  2. Historical Shocks and Persistence of Economic Activity: Evidence from a Unique Natural Experiment By Michael Fritsch; Alina Sorgner; Michael Wyrwich; Evguenii Zazdravnykh
  3. From Economic Controls to Export Expansion in Postwar Taiwan: 1946-1960 By Tsong-Min WU
  4. La flotación de 1957 y la estabilidad macroeconómica By Javier G. Gómez-Pineda
  5. The Hungarian Connection: the 1956 Hungarian Revolution and its Impact on Mao Zedong’s Domestic Policies in the late 1950s By David Tibor Teszar
  6. Clans, Guilds, and Markets: Apprenticeship Institutions and Growth By David de la Croix; Matthias Doepke; Joel Mokyr
  7. The Impact of the Civil War on Southern Wealth Holders By Brandon Dupont; Joshua Rosenbloom
  8. The consequences of sibling rivalry on survival and reproductive success across different ecological contexts: a comparison of the historical Krummhörn and Quebec populations By Jonathan F. Fox; Kai P. Willführ; Alain Gagnon; Lisa Dillon; Eckart Voland
  9. Financial supervision to fight fiscal dominance? The gold standard in Greece and South-East Europe between economic and political objectives and fiscal reality, 1841-1939 By Matthias Morys
  10. The Agricultural Origins of Time Preference By Galor, Oded; Özak, Ömer
  11. Shipping in dire straits: New evidence on trends and cycles in coal freights from Britain, 1919-1939. By Klovland, Jan Tore
  12. Canary in a Coal Mine: Infant Mortality, Property Values, and Tradeoffs Associated with Mid-20th Century Air Pollution By Karen Clay; Joshua Lewis; Edson Severnini
  13. Testing threshold cointegration in Wagner's Law: the role of military spending By Maddalena Cavicchioli; Barbara Pistoresi
  14. Usury laws and Private Credit in Lima, Peru. Evidence from notarized contracts By Luis Felipe Zegarra
  15. Why does paternal death accelerate the transition to first marriage in the C18-C19 Krummhörn population? By Eckart Voland; Kai P. Willführ
  16. Distance and Time Effects in Swedish Commodity Prices, 1732–1914 By Mario J. Crucini; Gregor W. Smith
  17. Series largas de algunos agregados demográficos regionales, 1950-2015. (RegDat-Dem versión 5.0) By Angel de la Fuente
  18. The construction of the network of public hospitals and outpatient clinics in Spain, 1880-1960. By Margarita Vilar-Rodríguez; Jerònia Pons-Pons
  19. Market Integration in the Prewar Japanese Rice Markets By Mikio Ito; Kiyotaka Maeda; Akihiko Noda
  20. How do regional labor markets adjust to immigration? A dynamic analysis for post-war Germany By Braun, Sebastian Till; Weber, Henning
  21. The Writers as Popularizers of the Knowledge About the Slavic Peoples. The Case of Multivolume “Picturesque Russia” in the Last Quarter Of the XIX Century By Leonid E. Gorizontov
  22. Fertility in Rostock in the 19th Century By Siegfried Gruber; Rembrandt D. Scholz
  23. Labor supply in the past, present, and future: a balanced-growth perspective By Boppart, Timo; Krusell, Per
  24. Financial Markets in the Face of the Apocalypse By Jedrzej Bialkowski; Ehud I. Ronn
  25. The role of financial elites in banking supervision in Japan from 1927 to 1998 By Hotori, Eiji
  26. Policy Regimes and the Shape of the Phillips Curve in Australia By Mallick, Debdulal
  27. SWOT Analysis: A Management Fashion Perspective By Dag Øivind Madsen
  28. Balanced budget rules and fiscal outcomes: Evidence from historical constitutions By Asatryan, Zareh; Castellon, Cesar; Stratmann, Thomas
  29. Aid and the symbiosis of global redistribution and development: Comparative historical lessons from two icons of development studies By Fischer, A.M.
  30. National Borders and Urban Growth: Evidence from the Annexation of Alsace and Lorraine By Iakov T. Kuga
  31. Innovation and Access to Finance – A Review of the Literature By Michele Cincera; Anabela Marques Santos
  32. The Generation of Knowledge as an Emergent System Property: An Introduction. By Antonelli, Cristiano; David, Paul
  33. The German equity trading landscape By Gomber, Peter
  34. The Growth Effects of EU Membership for the UK: a Review of the Evidence By Crafts, Nicholas

  1. By: Janet Hunter
    JEL: E6
    Date: 2015
  2. By: Michael Fritsch; Alina Sorgner; Michael Wyrwich; Evguenii Zazdravnykh
    Abstract: This paper investigates the persistence of entrepreneurship in the region of Kaliningrad between 1925 and 2010. During this time period the area experienced a number of extremely disruptive shocks including; devastation caused by World War II, a nearly complete replacement of the native German population by Soviets, and 45 years under an antientrepreneurial socialist economic regime followed by a shock-type transition to a market economy. Nevertheless, we find a surprisingly high level of persistence of industry-specific self-employment rates in the districts of the Kaliningrad region. Our analysis suggests that persistence of entrepreneurship is higher in regions with a history of successful entrepreneurship. That is, in regions where a specific industry was particularly efficient and entrepreneurial activity was especially pronounced.
    Keywords: Entrepreneurship, regional culture, persistence
    JEL: L26 N94 P25 P5
    Date: 2016–04
  3. By: Tsong-Min WU
    Abstract: During 1955-2000, Taiwan's per capita gross domestic product (GDP) growth rate was the highest in the world. In the first half of the 20th century, the Japanese colonial government laid the basis for economic growth by establishing a modern economic institution in Taiwan. After taking over Taiwan in 1945, however, the Kuomintang (KMT) government adopted economic control policies which caused hyperinflation during 1946-1949. The control policies were continued after the KMT government retreated to Taiwan in late 1949. As a result, economic growth was stagnant. Fortunately, deregulations were initiated in the late 1950s, and Taiwan was able to rapidly expand its export sector. Using the textile industry as an important case, this paper analyzes what policy changes were critical in fostering the postwar export expansion and economic growth.
    Date: 2016–03
  4. By: Javier G. Gómez-Pineda (Banco de la República de Colombia)
    Abstract: La flotación del peso de 1957 fue la política que más contribuyó a la estabilidad externa dentro del primer programa de crédito contingente de Colombia con el FMI en 1957. En el artículo se especifica y estima un modelo de demanda para los componentes de la ecuación macroeconómica básica durante 1950-1965. En el modelo el control de importaciones se estima como una variable no observada. El modelo se utiliza para estudiar la evolución del balance comercial, la absorción y el producto por medio de ejercicios de descomposición de errores. Dentro de los resultados se encuentra que mientras que la apreciación de la tasa de cambio anterior a 1957 llevó al país a una crisis de pagos, la flotación de 1957 fue el elemento central del programa de estabilización con el FMI pues su efecto fue de lejos el más importante sobre la estabilidad externa dentro de la serie de políticas del programa de estabilización. El movimiento especulativo de capital y el crédito fueron los principales factores impulsores de la absorción, mientras que la flotación de la tasa de cambio tuvo un papel estabilizador sobre el ciclo económico. Los términos de intercambio no desempañaron un papel importante en la explicación del ciclo, a pesar de que comúnmente se les atribuye un papel importante. El control de importaciones ayudó estabilizar el balance comercial, pero una flotación de la tasa de cambio más prolongada habría logrado estabilizar el balance comercial sin racionamiento de las importaciones y sin moratoria de la deuda comercial.******The 1957 flotation of the peso was the policy that contributed most to external stability, among the policies in Colombia’s first stand-by agreement with the IMF. A model for the demand for each of the aggregates in the basic macroeconomic equation during 1950–1965 is specified and estimated. In the model, the imports control policy is estimated as an unobserved variable. The model is used to study the evolution of the trade balance, absorption and output in historical error decomposition exercises. Among the results we find that the appreciation of the exchange rate before 1957 led the country to a payments crisis, while the 1957 flotation was by far the more important policy among the policies in the stabilization program. Speculative capital movements and credit were the main propellers of absorption, while the flotation of the peso had a stabilizing effect on the economic cycle. The terms of trade did not have an important effect on the cycle, although the literature commonly attributes them a critical role. Import controls helped stabilize the trade balance, but a prolonged flotation of the peso would have helped stabilize the trade balance without import rationing or commercial debt arrears. Classification JEL:N1, N16, E12, E32, E58
    Keywords: Acuerdo de crédito contingente, Programa de estabilización, Ajuste de la balanza de pagos, Enfoque absorción ******Stand-by agreement; Stabilization program; Balance of payments adjustment; Absorption approach
    Date: 2016–04
  5. By: David Tibor Teszar
    Abstract: Despite being a highly relevant event in the history of the Cold War, the 1956 Hungarian revolution remains underanalyzed from the perspective of the People’s Republic of China. The domestic policy changes in the PRC that were influenced by the Hungarian uprising are equally undertreated in scholarly literature. For these reasons this paper examines the PRC’s changing perception of the nature of the 1956 Hungarian revolution and answers the question whether the Chinese leadership influenced Nikita Khrushchev and the Kremlin elite in favour of an armed intervention in Budapest. The second half of the article assesses the impact of the Hungarian crisis on Mao’s domestic policies in the late 1950s, particularly to the Hundred Flowers campaign and the AntiRightist campaign.
    Keywords: 1956 Hungarian Revolution; Cold War; Hungarian History; Mao Zedong; China; Soviet Union.
    JEL: Y8
    Date: 2015–10
  6. By: David de la Croix (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Matthias Doepke (Department of Economics, Northwestern University); Joel Mokyr (Department of Economics, Northwestern University)
    Abstract: In the centuries leading up to the Industrial Revolution, Western Europe gradually pulled ahead of other world regions in terms of technological creativity, population growth, and income per capita. We argue that superior institutions for the creation and dissemination of productive knowledge help explain the European advantage. We build a model of technological progress in a pre-industrial economy that emphasizes the person-to-person transmission of tacit knowledge. The young learn as apprentices from the old. Institutions such as the family, the clan, the guild, and the market organize who learns from whom. We argue that medieval European institutions such as guilds, and specific features such as journeymanship, can explain the rise of Europe relative to regions that relied on the transmission of knowledge within extended families or clans.
    Date: 2016–03–24
  7. By: Brandon Dupont; Joshua Rosenbloom
    Abstract: The U.S. Civil War and emancipation wiped out a substantial fraction of southern wealth. The prevailing view of most economic historians, however, is that the southern planter elite was able to retain its relative status despite these shocks. Previous studies have been hampered, however, by limits on the ability to link individuals between census years, and have been forced to focus on persistence within one or a few counties. Recent advances in electronic access to the Federal Census manuscripts now make it possible to link individuals without these constraints. We exploit the ability to search the full manuscript census to construct a sample that links top wealth holders in 1870 to their 1860 census records. Although there was an entrenched southern planter elite that retained their economic status, we find evidence that the turmoil of 1860s opened greater opportunities for mobility in the South than was the case in the North, resulting in much greater turnover among wealthy southerners than among comparably wealthy northerners.
    JEL: N11 N31 N91
    Date: 2016–04
  8. By: Jonathan F. Fox (Max Planck Institute for Demographic Research, Rostock, Germany); Kai P. Willführ (Max Planck Institute for Demographic Research, Rostock, Germany); Alain Gagnon (Max Planck Institute for Demographic Research, Rostock, Germany); Lisa Dillon; Eckart Voland
    Abstract: This article investigates the relationship between large families and the probability of offspring survival, marriage, and fertility across the historical populations of the Quebec (1670-1799) and Krummhörn regions (1720-1874). Both populations exist in agriculturally based economies, but differ in important ways. The Krummhörn population faced a fixed supply of land, which was concentrated amongst a small number of farmers. Most individuals were landless agricultural workers who formed a relatively competitive labor supply for the large farmers. In contrast, individuals in Quebec had access to a large supply of land, but with far fewer available agricultural workers, had to rely on their family to develop and farm that land. Results indicate that more siblings of the same gender were generally associated with increases in mortality during infancy and childhood, later ages of first marriage, and fewer numbers of children ever born. For mortality and age at first marriage, the effects of sibling formation appear strongest in the Krummhörn region. This indicates that although sibship effects appear in both ecological contexts, that the context of the region mattered in determining their magnitude.
    Keywords: Canada, Germany, child mortality, historical demography, reproduction, siblings
    JEL: J1 Z0
    Date: 2016–01
  9. By: Matthias Morys
    Abstract: We add a historical and regional dimension to the debate on the Greek debt crisis. Analysing Greece, Romania, Serbia/Yugoslavia and Bulgaria from political independence to WW II, we find surprising parallels to the present: repeated cycles of entry to and exit from monetary unions, government debt build-up and default, and financial supervision by West European countries. Gold standard membership was more short-lived than in any other part of Europe due to fiscal dominance. Granger causality tests and money growth accounting show that the prevailing pattern of fiscal dominance was only broken under international financial control, when strict conditionality scaled back the treasury’s influence; only then were central banks able to conduct a rule-bound monetary policy and stabilize their exchange-rates. The long-run record of Greece suggests that the perennial economic and political objective of monetary union membership can only be achieved if both monetary and fiscal policy is effectively delegated abroad.
    Keywords: fiscal dominance, gold standard, financial supervision, South-East Europe
    JEL: N13 N14 N23 N24 E63 F34
    Date: 2016–04
  10. By: Galor, Oded; Özak, Ömer
    Abstract: This research explores the origins of the distribution of time preference across regions. It advances the hypothesis, and establishes empirically that geographical variations in the natural return to agricultural investment have had a persistent effect on the distribution of time preference across societies. In particular, exploiting a natural experiment associated with the expansion of suitable crops for cultivation in the course of the Columbian Exchange, the research establishes that pre-industrial agro-climatic characteristics that were conducive to higher return to agricultural investment, triggered selection and learning processes that had a persistent positive effect on the prevalence of long-term orientation in the contemporary era.
    Keywords: Time preference, Delayed Gratification, Economic Growth, Culture, Agriculture, Economic Development, Evolution, Comparative Development, Human Capital, Education, Smoking
    JEL: D14 D9 E2 I12 I25 J24 J26 O1 O3 O4 Z1
    Date: 2016–04–12
  11. By: Klovland, Jan Tore (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: New monthly freight rate indices for 13 coal trade routes from Britain 1919-1939 are presented. The new indices form the basis of a review of the interwar freight markets and their relationship to the timing and severity of general business cycles. New time series of laid-up tonnage provide the background for this discussion. The Great Depression starting in the autumn of 1929 created a shipping cycle of unusual length and severity. Real freight rate indices used as a cross-check on productivity gains in shipping raise some doubt on previous estimates of productivity growth in British shipping in the interwar years.
    Keywords: Freight markets; business cycles.
    JEL: D24 N14 N74
    Date: 2016–03–30
  12. By: Karen Clay; Joshua Lewis; Edson Severnini
    Abstract: Pollution is a common byproduct of economic activity. Although policymakers should account for both the benefits and the negative externalities of polluting activities, it is difficult to identify those who are harmed and those who benefit from them. To overcome this challenge, our paper uses a novel dataset on the mid-20th century expansion of the U.S. power grid to study the costs and the benefits of coal-fired electricity generation. The empirical analysis exploits the timing of coal-fired power plant openings and annual variation in plant-level coal consumption from 1938 to 1962, when emissions were virtually unregulated. Pollution from the burning of coal for electricity generation is shown to have quantitatively important and nonlinear effects on county-level infant mortality rates. By 1962, it was responsible for 3,500 infant deaths per year, over one death per thousand live births. These effects are even larger at lower levels of coal consumption. We also find evidence of clear tradeoffs associated with coal-fired electricity generation. For counties with low access to electricity in the baseline, increases in local power plant coal consumption reduced infant mortality and increased housing values and rental prices. For counties with near universal access to electricity in the baseline, increases in coal consumption by power plants led to higher infant mortality rates, and lower housing values and rental prices. These results highlight the importance of considering both the costs and benefits of polluting activities, and suggest that demand for policy intervention may emerge only when the negative externalities are significantly larger than the perceived benefits.
    JEL: I18 N22 Q52 Q53
    Date: 2016–04
  13. By: Maddalena Cavicchioli; Barbara Pistoresi
    Abstract: This paper uses historical data since mid-19th century to test the validity of Wagner's Law for the Italian economy. Unlike the previous studies, we accommodate possible nonlinear asymmetric effects of total gov- erment spending and GDP toward their long-run equilibrium. Our results show the presence of a threshold cointegrating relationship between the two variables with significantly different error correction adjustments in normal and extreme regimes. Particularly, we find the validity of Wagner's Law from 1862 to 2009, only when we take into account strong nonlinear responses of government spending during the WWI and WWII period. Robustness checks clearly recognize nonlinear behaviour of government expenditure driven by military spending.
    Keywords: Time series; Nonlinearity; Threshold Cointegration; Threshold Vector Error Correction; Public spending; Economic growth; Wagner's Law.
    JEL: C01 C34 H1 H5
    Date: 2016–02
  14. By: Luis Felipe Zegarra (CENTRUM Católica Graduate Business School)
    Abstract: This article analyzes the effects of usury laws in the credit market of Lima in 1825-49. By relying on a sample of more than 1,100 notarized records, the article shows that the repeal of colonial anti-usury laws in early 1833 led to the increase in interest rates and to a greater access to credit. Furthermore, lenders made loans with greater maturities after the repeal of usury laws.
    Keywords: Mortgage credit, usury laws, interest rates, access to credit, Latin America
    JEL: N2 N26 N46 K1
    Date: 2016–03
  15. By: Eckart Voland; Kai P. Willführ (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: In the population of the Krummhörn (Ostfriesland, Germany) in the 18th and 19th centuries, paternal death led to an accelerated marriage of his children on average. Three evolutionary explanations are offered for this “paternal absence” effect in the literature, namely (i) the assumption of an adaptive “psychosocial acceleration” of the children with pre-pubertal experience of uncertainty within the framework of evolutionary life history theory, (ii) an adaptive adjustment of life and reproduction decisions within the theoretical framework of behavioral ecology as a reaction to the personal cost-benefit balances changed by the father’s death, and (iii) in view of the genetic parent-offspring conflict, an increase in the reproductive autonomy of offspring after the loss of the dominant father figure. Our models, which are based on the analyses of the vital-statistics data derived primarily from church registers and compiled into a family reconstitution study, attribute the greatest explanatory power to the behavioral ecology approach (ii) for the circumstances in the Krummhörn.
    Keywords: Germany, family reconstitution, historical demography
    JEL: J1 Z0
    Date: 2015–10
  16. By: Mario J. Crucini; Gregor W. Smith
    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.
    JEL: E37 F61 N70
    Date: 2016–04
  17. By: Angel de la Fuente
    Abstract: En el presente trabajo se recopilan, extienden o construyen series regionales y nacionales de movimientos naturales de población, población de derecho, saldos migratorios netos y estructura por edades de la población para el período 1950-2015. También se construye una nueva serie de población residente corregida por migraciones no declaradas que intenta aproximar la población que realmente reside de forma habitual en cada territorio.
    Date: 2016–04
  18. By: Margarita Vilar-Rodríguez (Universidad de A Coruña, Spain); Jerònia Pons-Pons (Universidad de Sevilla, Spain)
    Abstract: This paper aims to analyze the historical construction of the network of health infrastructures in Spain from very different areas both public and private. The first part provides a first statistical progress of the major infrastructure before approving the compulsory insurance. The second part of the paper analyzes the implementation of compulsory insurance in a context where the state lacked a basic network of public health infrastructure. Within this context, concerts with the private sector were essential. Later, the Plan Nacional de Instalaciones Sanitarias was approved. It was an ambitious and expensive project launched in a country with serious economic problems. From here, several questions arise: How did the dictatorship manage to fund and build the plan?; What role did private health infrastructure play after the approval of this plan?; Did this plan achieve convergence between Spain and Europe in provision of health infrastructure? The paper ends with some conclusions and a future research agenda.
    Keywords: Health Insurance, Health Infrastructures, Hospitals, Spain, XIXth-XXth centuries
    JEL: I18 I38
    Date: 2016–04
  19. By: Mikio Ito; Kiyotaka Maeda; Akihiko Noda
    Abstract: This paper examines the integration process of the Japanese major rice markets (Tokyo and Osaka) from 1881 to 1932. Using a non-Bayesian time-varying vector error correction (VEC) model, we argued that the process strongly depended on the government's policy on the network system of telegram and telephone; rice traders with an intention in using the modern communication tools were usually affected by the changes of the policy. We find that (i) the Japanese rice markets had been integrated in the 1910s; (ii) the increasing use of telegraphs had accelerated the rice market integration since the Meiji period in Japan; (iii) the local phone, which reduced the urban users' time for sending and receiving telegrams, promoted the market integration.
    Date: 2016–04
  20. By: Braun, Sebastian Till; 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
  21. By: Leonid E. Gorizontov (National Research University Higher School of Economics)
    Abstract: The multi-volume edition “Picturesque Russia. Our Fatherland in its spatial, historic, ethnographic, economic and everyday life sense” (1879–1901, in 12 volumes and 19 books) contains a lot of data about the Slavic peoples – Russians, Ukrainians, Belorussians and Poles. Most of the essays on different regions were prepared by the men of letters often simultaneously known as novelists, journalists, literary critics, historians and ethnographers. The study analyses their choice by the publishers, literary reputations in the mid-1880s, national and political affiliations. A special attention is paid to the holders of various ethnic and regional identities among the authors, as well as to some specific roots and consequences of the unique large-scale project under review.
    Keywords: “Picturesque Russia”, writers, novelists, journalists, literary scholars, historians, literary reputations, late Russian Empire, regions, Russians, Ukrainians, Belorussians, Poles, Slavic studies
    JEL: Z
    Date: 2016
  22. By: Siegfried Gruber (Max Planck Institute for Demographic Research, Rostock, Germany); Rembrandt D. Scholz (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: -
    Keywords: Germany, fertility
    JEL: J1 Z0
    Date: 2016–01
  23. By: Boppart, Timo; Krusell, Per
    Abstract: What explains how hard people work? Going back in time, a main fact to address is the steady reduction in hours worked. The long-run data, for the U.S. as well as for other countries, show a striking pattern whereby hours worked fall steadily by a little below a half of a percent per year, accumulating to about a halving of labor supply over 150 years. In this paper, we argue that a stable utility function defined over consumption and leisure can account for this fact, jointly with the movements in the other macroeconomic aggregates, thus allowing us to view falling hours as part of a macroeconomy displaying balanced growth. The key feature of the utility function is an income effect (of higher wages) that slightly outweighs the substitution effect on hours. We also show that our proposed preference class is the only one consistent with the stated facts. The class can be viewed as an enlargement of the well-known "balanced-growth preferences" that dominate the macroeconomic literature and that demand constant (as opposed to falling) hours in the long run. The postwar U.S. experience, over which hours have shown no net decrease and which is the main argument for the use of "balanced-growth preferences", is thus a striking exception more than a representative feature of modern economies.
    Keywords: balanced growth; hours worked; Kaldor facts; Labor Supply; preferences
    JEL: E21 J22 O11 O40
    Date: 2016–04
  24. By: Jedrzej Bialkowski (University of Canterbury); Ehud I. Ronn
    Abstract: This paper brings together two strands of the literature: Quantifying the impact of apocalyptic risk on capital markets, and the correct computation of the equity risk premium. For the former, we use events in four countries during the Second World War to discern markets' incorporation of information regarding the probability of an Armageddon for each country. We argue that past computations of the equity risk premium did not properly account for the financial implications of political collapse on property/civil/human rights. Accordingly, we show that past calculations overstated the equity risk premium. We provide an estimate of the equity risk premium that is corrected for lack of basic rights, demonstrating the important changes in this estimate over time.
    Keywords: Rare (“black swan") events; Equity premium; International political crises; property, civil, and human rights; World War II
    JEL: G12 G15
    Date: 2016–04–25
  25. By: Hotori, Eiji
    Abstract: Following the collapse of the bubble economy in Japan, banking supervisors and bank examiners were severely criticized by the media as human capital had long been viewed the key element of Japanese banking supervision. The purpose of this paper is to analyze the bank supervisors´ career paths over the long term, including "amakudari" appointments from among the Directors of the Financial Inspection Department of the Ministry of Finance, and the Director-Generals of the Bank Examination Department of the Bank of Japan. The paper analyzes the performance of several regional banks that accepted the appointment of an ex-Director or an ex-Director-General as their president in order to examine whether such an amakudari relationship worsened such banks´ management. The majority of ex-Directors and ex-Director-Generals entered a regional bank or a regional bank II, many of which were already experiencing problems. Regarding the regional banks, lower growth rates of loans were observed in all cases, and lower loan/deposit ratios or higher capital/asset ratios were observed in most. These findings suggest that the link between the amakudari relationship and the bubble economy in the late 1980s was not as straightforwardly negative as is generally considered.
    Keywords: financial history,human capital,regional bank
    JEL: N25 N35 N45
    Date: 2016
  26. By: Mallick, Debdulal
    Abstract: We document an evolving pattern in the slope of the Phillips curve in Australia at different frequencies under different monetary policy regimes and labor market regulations. Our estimation strategy relies on the frequency domain estimation but is also complemented by the time domain estimation. We document an upward sloping medium-run Phillips curve in the pre-1977 period, a downward sloping long-run Phillips curve from 1977 to 1993, and a flattened Phillips curve from 1993 onwards. Inflation lagged unemployment during the first period but led during the second period. The Phillips curve at business-cycle frequencies is downward sloping in all periods. We explain our results in terms of the monetary targeting in 1976 and the inflation targeting in 1993 by the RBA, respectively, and important changes in labor relations from the mid-1980s to the mid-1990s. The flattened Phillips curve is also observed in several industrialized countries since their adoption of inflation targeting.
    Keywords: Phillips curve, Long-run, Business-cycle, Frequency, Spectral method
    JEL: C49 E24 E31 E32
    Date: 2016
  27. By: Dag Øivind Madsen (Buskerud and Vestfold University College)
    Abstract: SWOT analysis has over a period spanning several decades enjoyed considerable popularity in the business community. In this paper management fashion theory is used as a theoretical lens to understand the history and evolution of SWOT as a management idea. The analysis shows that SWOT's evolution pattern diverges in several respects from that of other comparable management ideas. The findings from the analysis have several implications for research on SWOT and, more generally, management ideas and fashions.
    Keywords: management idea,SWOT analysis,management fashion,strategy tool
    Date: 2016–03
  28. By: Asatryan, Zareh; Castellon, Cesar; Stratmann, Thomas
    Abstract: This paper studies the long-run fiscal consequences of balanced budget rules (BBR) that are enshrined in a country's constitution. Using historical data dating back to the 19th century and applying a difference-in-difference approach we find that the introduction of a constitutional-BBR reduces government debt-to-GDP and expenditure-to-GDP ratios, on average, by around 11 and 3 percentage points, respectively. We do not find evidence that BBRs affect tax revenues. Our analysis indicates that such rules reduce the probability of experiencing a debt crisis and that the effective enforcement of BBRs can be conditional on the quality of democratic institutions. In addition, we implement an instrumental variable approach by instrumenting the probability of having budget rules on de jure constraints on changing the constitution. This and other tests suggest that the relations we find are largely causal going from BBRs to fiscal outcomes.
    Keywords: economic effects of constitutions,fiscal rules,historical public finances,sovereign debt crises
    JEL: H50 H60 K10 N40
    Date: 2016
  29. By: Fischer, A.M.
    Abstract: This study examines the question of aid effectiveness through a comparative historical analysis of the external financing constraints of two icons of development studies: South Korea and Brazil. The selection of these contrasting cases is based on a method of difference, designed to examine the predicaments of two countries attempting similar developmentalist strategies of sustained industrial policy through successive stages of industrialization, but with differences in amounts of aid supporting such strategies. This approach differs from the standard approach in the literature of examining economic performance among aid recipient countries and it is adopted as a means to highlight the challenges that some of the most successful and advanced late industrialisers of the post-war era have faced in the absence of aid. The comparison draws on an analytical framework that locates aid effectiveness in the interaction of both aid absorption (via current accounts deficits) and development strategy (via industrial policy), the latter based on the premise that unconstrained strategies of post-war late industrialisation have exhibited inherent structural tendencies to generate merchandise trade deficits. The interaction establishes an important, yet mostly overlooked, symbiosis between global redistribution and development. This symbiosis is then demonstrated by the historical analysis of the external accounts of the two cases, which constitutes the original empirical contribution of the article given that inductive historical analysis of actual interactions between aid flows (or lack thereof) and external accounts has been essentially absent in the aid literature. Similarly, the literatures on industrial policy and developmental states tend to exhibit a domestic productionist bias that has also shunned serious analyses of the role of aid in supporting successful late industrialisation experiences. Accordingly, the case of South Korea clearly illustrates the crucial role that aid played in buttressing rapid late industrialisation against structural external constraints and financial vulnerabilities. The contrasting case of Brazil clearly demonstrates the constraints faced by late industrialising countries in the absence of generous supplies of aid and/or stable, secure and affordable finance. The conclusion reflects on some of the wider implications of these insights and also offers some comparative reflections on China as an alternative model for dealing with similar constraints.
    Keywords: Aid (official development assistance), redistribution, political economy of development, industrialization and industrial policy, international finance and development finance, balance of payments, structuralist macroeconomics, South Korea
    Date: 2016–04–19
  30. By: Iakov T. Kuga (National Research University Higher School of Economics)
    Abstract: According to the Treaty of Frankfurt (1871) France lost Alsace and Lorraine. In the paper I estimate how the new border affected a growth of nearby towns. Applying difference-in-differences methodology to census data for 1831-1911, I obtain paradoxical result. The new border boosted the growth of nearby towns. Extra urban growth in a 70 km border region reached 4.23 per cent p.a. in 1872-6, and was smaller, but still significantly positive, later. Point estimate of the total border effect in 1872-1911 is 134 per cent. This effect survives in more homogeneous subsamples and is robust to a number of specification changes. Both immigration of Alsatians, garrison growth and fort construction have sizable and significant positive effect on urban growth; however, the border effect remains significantly positive after accounting for these factors
    Keywords: market potential, population, France, Alsace, Lorraine, difference-in-differences.
    JEL: F15 N93
    Date: 2016
  31. By: Michele Cincera; Anabela Marques Santos
    JEL: O31 O38 O52
    Date: 2015
  32. By: Antonelli, Cristiano; David, Paul (University of Turin)
    Date: 2015–10
  33. By: Gomber, Peter
    Abstract: This paper describes cash equity markets in Germany and their evolution against the background of technological and regulatory transformation. The development of these secondary markets in the largest economy in Europe is first briefly outlined from a historical perspective. This serves as the basis for the description of the most important trading system for German equities, the Xetra trading system of Deutsche Börse AG. Then, the most important regulatory change for European and German equity markets in the last ten years is illustrated: the introduction of the Markets in Financial Instruments Directive (MiFID) in 2007. Its implications on equity trading in Germany are analyzed against the background of the current status of competition in Europe. Recent developments in European equity markets like the emergence of dark pools and algorithmic / high frequency trading are portrayed, before an outlook on new regulations (MiFID II, MiFIR) that will likely come into force in early 2018 will close the paper.
    Keywords: MiFID II,MiFIR,equity trading,electronic trading,cash equity markets
    Date: 2016
  34. By: Crafts, Nicholas (University of Warwick)
    Abstract: This paper reviews the literature on the implications of EU membership for the UK. It concludes that membership has raised UK income levels appreciably and by much more than 1970s’ proponents of EU entry predicted. These positive effects stem from the EU’s success in increasing trade and the impact of stronger competition on UK productivity. The economic benefits of EU membership for the UK have far exceeded the costs of budgetary transfers and regulation. Brexit is risky and its impact would depend heavily on the terms negotiated and the use made of the policy space that it freed up.
    Keywords: Brexit; competition; income levels; SingleMarket; trade costs. JEL Classification: F15; N14; N74.
    Date: 2016

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.