nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2016‒12‒11
27 papers chosen by

  1. Purchasing Power Disparity before 1914 By Peter H. Lindert
  2. Relationship Lending and the Great Depression: Measurement and New Implications By Jon Cohen; Kinda Cheryl Hachem; Gary Richardson
  3. The demographic transition revisited: a cohort perspective By Tomas Frejka
  4. "High & Dry": The Liquidity and Credit of Colonial and Foreign Government Debt and the London Stock Exchange (1880-1910) By Chavaz, Matthieu; Flandreau, Marc
  5. Determinants of fertility in the long run By Jong-Wha Lee
  6. Rural Jobs and the CAP Lessons from a Historical Perspective: The Case of Aberdeenshire By Dalton, Graham E.
  7. Geographical Origins and Economic Consequences of Language Structures By Galor, Oded; Özak, Ömer; Sarid, Assaf
  8. A vision about the farming sector’s future: What is in there for farmers in the time of the second machine age? By Rizov, Marian
  9. The History of the Cross Section of Stock Returns By Juhani T. Linnainmaa; Michael R. Roberts
  10. The environmental Kuznets curve after 25 years By Stern, David I.
  11. Three Essays on the Theory of Money and Financial Institutions: Essay 1: A Nontechnical Overview By Martin Shubik
  12. Reavaliando a Vulnerabilidade Externa da Economia Brasileira By Fernando José da S. P. Ribeiro
  13. Economics of Civil Conflict: Evidence from the Punjab Insurgency By Singh, Prakarsh
  14. Neoclassical Economics as a Method of Scientific Research Program : A review of existing literature By Brahmachari, Deborshi
  15. Biased Technical Change and Economic Growth : The Case of Korea, 1970-2013 By Jeong, Sangjun
  16. Modelling Irish Rents: Recent Developments in Historical Context By Kennedy, Gerard; Sheenan, Lisa; Woods, Maria
  17. Joseph A. Schumpeter: Ein Pionier der Makrofinanz By Gerald Braunberger
  19. The Churches’ Bans on Consanguineous Marriages, Kin-networks and Democracy By Jonathan F. Schulz
  20. The Long-Run Effects of Childhood Insurance Coverage: Medicaid Implementation, Adult Health, and Labor Market Outcomes By Andrew Goodman-Bacon
  21. The Impact of the 1896 Factory and Shops Act on Victorian Labour Markets By Seltzer, Andrew; Borland, Jeff
  22. Energy, carbon, and economic growth: Brief literature review By Janda, Karel; Torkhani, Marouan
  23. Multiculturalism and Growth: Skill-Specific Evidence from the Post-World War II Period By Frédéric DOCQUIER; Riccardo TURATI; Jérome VALETTE; Chrysovalantis VASILAKIS
  24. How universities boost economic growth By Anna Valero; John Van Reenen
  25. Financial Crises Management By The IMF : Was External And Public Debt Sustainable ? By Ben Hassine, Hela
  26. The Rise of the Working Rich, Market Imperfections, and Income Inequality By Chhy, Niroth
  27. Drivers of Industrial and Non-Industrial Greenhouse Gas Emissions By Sanchez, Luis F.; Stern, David I.

  1. By: Peter H. Lindert
    Abstract: Economic historians’ Divergence debates since 2000 have asked a different question from that asked by Angus Maddison. The issue has become “when did countries’ contemporaneous purchasing powers diverge?”, not “when did countries’ productivity grow at different rates?” The two questions have different answers, especially before 1914. Using pre-1914 prices to compare real purchasing powers on six continents, this article sketches some historical geography of the departures from the conventional Maddison estimates. One underlying reason for the divergence between projections back from 1990 and direct price comparisons from long ago is that before the great 1870-1914 wave of trade globalization, consumer staples were not traded over great distances, and regions specialized in narrow luxury trade. Inter-continental price ratios for subsistence goods thus varied more widely than since 1914. The new measures open up a new economic history of international differences in purchasing power before 1914. Northwest Europe was further ahead of Asian countries than earlier measures have shown. The discrepancy stems from a Gerschenkron effect, magnified before 1914 by Engel effects as well as by Balassa-Samuelson. Yet Northwest Europe was behind America and Australia across the nineteenth century, consistent with the same accounting framework but not with Maddison’s estimates.
    JEL: I31 N0 N30
    Date: 2016–12
  2. By: Jon Cohen; Kinda Cheryl Hachem; Gary Richardson
    Abstract: The Great Depression remains ground zero for studying the non-monetary effects of financial crises. Despite the abundant scholarship on the period, lack of disaggregated data on lending activities has constrained our ability to measure the impact on the real economy of a collapse in long-term lending relationships. We propose here a novel way to extract cross-sectional differences in relationship lending from geographically aggregated financial statements. We find that the banking crises of the early 1930s, by destroying these relationships and the soft yet crucial information garnered from them, explain one-eighth of the economic contraction observed during the Depression. This effect comes specifically from small bank failures which alone explain one-third of the Depression. Large bank failures, on the other hand, were accompanied by a reallocation of deposits towards surviving relationship lenders, leading to economic gains which mitigated the overall negative impact of the banking crises. We show that ignoring cross-sectional differences in continuing relationships on the eve of the Great Depression understates by a factor of 2 the fall in economic activity directly attributable to the banking panics of the early 1930s. We also show that the rebuilding of lending relationships in the mold of those that existed in the 1920s was an important determinant of cross-sectional differences in economic performance during the 1937-38 recession.
    JEL: E44 G01 G21 L14 N22
    Date: 2016–12
  3. By: Tomas Frejka (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: The principal focus of this paper is to analyze the fertility transition of the 19 th to early 21 st centuries with cohort fertility measures, and a discussion of key societal conditions shaping the transition. This new approach and procedure reveals that there were four different fertility transition pathways. Arguably equally important is the finding that thus far the demographic transition has not resulted in an equilibrium of relatively stable low mortality and stable low fertility. Early in the 21 st century mortality is continuing to decline steadily, fertility is generally below replacement, and fertility trends are in a flux with a tendency towards further declines. The four types of fertility transition patterns were: a. The “Western” distinguished by major cohort total fertility rate (CTFR) fluctuations; b. The Central and East European characterized by a stable CTFR band around 2.0 births per woman in the 1920s to 1950s birth cohorts; c. The Southern European characterized by a relatively stable secular CTFR decline; d. The East and South-East Asian characterized by rapidly declining CTFRs starting as late as in the middle of the 20 th century. In all four fertility transition pathways almost all CTFRs were below replacement in the youngest cohorts born in the 1960s and early 1970s ending their childbearing early in the 21 st century. The higher CTFRs, mostly between 1.7 and 2.0 births per woman, were in the “Western” populations, the lowest of 1.2 to 1.6 in East and South-East Asia. The exploration of societal conditions shaping mortality and fertility trends confirm Notestein’s conclusions formulated 70 years ago (Notestein 1945 and 1953). This investigation has shown that it was a complex combination of “technological, social, economic, and political developments,” and also of cultural and ideational effects – revealed by subsequent research, especially of Coale (1973) as well as of Lesthaeghe and van de Kaa (1986) – which shape mortality and fertility trends. Furthermore, Notestein observed that it is “impossible to be precise about the various causal factors” generating mortality and fertility trends. Primary causal factors alternated between economic, social, political, policy and other factors. Keywords : Demographic transition – Pathways of the fertility transition – International comparative analysis – Cohort fertility – Causes of the demographic transition
    Keywords: cohort fertility, comparative analysis, demographic transition
    JEL: J1 Z0
    Date: 2016–11
  4. By: Chavaz, Matthieu; Flandreau, Marc
    Abstract: We gather a new database to conduct the first historically informed study of the importance of liquidity and credit for government bonds between 1880 and 1910. We argue that colonial and sovereign debt markets were segmented owing to differences in underlying information asymmetries. The result was heterogeneous pricing of colonial and sovereign debt, and different market microstructures and clienteles, themselves influenced by political, institutional and financial arrangements. We find that sovereign spreads mainly reflected credit risks, while colonial spreads mainly reflected liquidity risks. Liquidity premia were economically large and significant, contributing between 10% and 39% of colonial spreads. These findings help understanding why the seemingly dry subject of colonial illiquidity inspired passionate disputes and ground-breaking reforms of financial imperial institutions.
    Keywords: British Empire; Colonial finance; credit risk; Government bonds; liquidity
    JEL: G12 N2 N23 N43
    Date: 2016–12
  5. By: Jong-Wha Lee
    Abstract: This study investigates the determinants of fertility in the long run, using a newly constructed panel data set consisting of fertility rates, measured as crude birth rates, infant mortality rates, per-capita income, and the educational attainment of men and women for 43 countries from 1890 to 2010 at five-year intervals. The regression results show the significant effects of per-capita income, infant mortality, educational attainment, and political development on fertility rates. A woman's educational attainment at the primary and secondary levels has a pronounced negative effect on fertility rates. On the contrary, an increase in a woman's tertiary educational attainment, with the level of a man's remaining constant, tends to raise fertility rates, indicating that highly educated women can have a better environment for childbearing and childrearing in a society with greater gender equality. The presented research thus identifies the important role of human capital accumulation, especially attained by women, in demographic transition through fertility decisions for over a century of human history.
    Keywords: Economic Development, Education, Female Education, Fertility, Gender Inequality
    JEL: J13
    Date: 2016–12
  6. By: Dalton, Graham E.
    Abstract: Aberdeenshire is a distinct peripheral part of Scotland. It is an important agricultural region with its own culture and export orientated farming systems. The arrival of the North Sea oil industry in the early 1970’s brought regional prosperity and high employment levels (until recently). Over the last 250 years switches in emphasis between state intervention and reliance on the markets have been important contributors to the contemporary agricultural situation. The CAP, over the same period of time as the oil industry, has influenced the number, roles and conditions of fewer agricultural workers in the county. This history attempts to set the research questions from this seminar into a more complete perspective.
    Keywords: historical perspective, structural perspective, production concentration, spare time farmers, Community/Rural/Urban Development, Labor and Human Capital, Political Economy, Production Economics, Public Economics,
    Date: 2016
  7. By: Galor, Oded (Brown University); Özak, Ömer (Southern Methodist University); Sarid, Assaf (University of Haifa)
    Abstract: This research explores the economic causes and consequences of language structures. It advances the hypothesis and establishes empirically that variations in pre-industrial geographical characteristics that were conducive to higher return to agricultural investment, larger gender gap in agricultural productivity, and more hierarchical society, are at the root of existing cross-language variations in the presence of the future tense, grammatical gender, and politeness distinctions. Moreover, the research suggests that while language structures have largely reflected the coding of past human experience and in particular the range of ancestral cultural traits in society, they independently affected human behavior and economic outcomes.
    Keywords: comparative development, cultural evolution, language structure, future tense, politeness distinctions, grammatical gender, human capital, education
    JEL: I25 J24 O1 O10 O11 O12 O40 O43 O44 Z10
    Date: 2016–11
  8. By: Rizov, Marian
    Abstract: Recent technological advances both on the farm and in the lab have made farming more independent form nature than ever before. Arguably, the new and accessible technologies are helping us to better understand and ‘manage’ nature and thus for first time in history farming is becoming as any other industry, susceptible to specialisation and economies of scale. This in turn, besides increased productivity, leads to fundamental organisational change away from family control towards corporate forms with associated implications for employment and rural livelihoods – new technology in farming replaces both ‘muscles and brains’.
    Keywords: Farming, technical change, industrial organization, Agribusiness, Agricultural and Food Policy, Industrial Organization, Labor and Human Capital, Production Economics, Research and Development/Tech Change/Emerging Technologies,
    Date: 2016–03–22
  9. By: Juhani T. Linnainmaa; Michael R. Roberts
    Abstract: Using data spanning the 20th century, we show that most accounting-based return anomalies are spurious. When examined out-of-sample by moving either backward or forward in time, anomalies' average returns decrease, and volatilities and correlations with other anomalies increase. The data-snooping problem is so severe that even the true asset pricing model is expected to be rejected when tested using in-sample data. Our results suggest that asset pricing models should be tested using out-of-sample data or, when not feasible, by whether a model is able to explain half of the in-sample alpha.
    JEL: G11 G12 G14
    Date: 2016–12
  10. By: Stern, David I.
    Abstract: The environmental Kuznets curve (EKC) has been the dominant approach among economists to modeling aggregate pollution emissions and ambient pollution concentrations over the last quarter century. Despite this, the EKC was criticized almost from the start and decomposition approaches have been more popular in other disciplines working on global climate change. More recently, convergence approaches to modeling emissions have become popular. This paper reviews the history of the EKC and alternative approaches. Applying an approach that synthesizes the EKC and convergence approaches, I show that convergence is important for explaining both pollution emissions and concentrations. On the other hand, while economic growth has had a monotonic positive effect on carbon and sulfur emissions, the EKC holds for concentrations of particulates. Negative time effects are important for sulfur emissions. The EKC seems to be most useful for modeling the ambient concentrations of pollutants it was originally applied to.
    Keywords: Air pollution, economic growth, environmental Kuznets curve, convergence, climate change, Environmental Economics and Policy, Q53, Q56,
    Date: 2015–12
  11. By: Martin Shubik (Cowles Foundation, Yale University)
    Abstract: This is a nontechnical retrospective paper on a game theoretic approach to the theory of money and financial institutions. The stress is on process models and the reconciliation of general equilibrium with Keynes and Schumpeter’s approaches to non-equilibrium dynamics.
    Keywords: Bankruptcy, Innovation, Growth, Competition, Price-formation
    JEL: C7 E12
    Date: 2016–11
  12. By: Fernando José da S. P. Ribeiro
    Abstract: O objetivo deste trabalho é rediscutir a questão da vulnerabilidade externa da economia brasileira à luz da teoria, das novas condições da economia mundial e das transformações ocorridas na economia brasileira neste século, seja no período de crescimento acelerado (até 2010), seja na fase de desaceleração e crise que o seguiu. A partir de uma digressão sobre o comportamento histórico do saldo em transações correntes e de uma breve revisão da literatura teórica e empírica sobre o tema, o trabalho faz uma avaliação do grau de vulnerabilidade externa do país, por meio de um conjunto de variáveis usualmente utilizadas na literatura como indicadores de vulnerabilidade externa. Ressaltam-se duas conclusões principais. A primeira é de que o país se encontra, hoje, em uma situação razoavelmente confortável com relação à vulnerabilidade externa, especialmente em virtude da acumulação de um grande volume de reservas internacionais e de um perfil mais favorável do financiamento externo. Isso tornou-o menos vulnerável a crises cambiais ou a problemas de financiamento externo no curto prazo. A segunda conclusão é de que não houve avanços no sentido de superar problemas estruturais, de forma a mitigar a vulnerabilidade externa de maneira mais perene. Ou seja, ter condições de controlar os ciclos de expansão e retração do saldo em transações correntes, tornando sua trajetória mais equilibrada e compatível com a sustentação de uma taxa de crescimento razoável do produto interno bruto (PIB) no longo prazo. This paper aims to reapproach the external vulnerability of the brazilian economy, based on the the theory and considering the new conditions of the world economy and the transformations that carachterized the Brazilian economy in this century, in the period or rapid growth (until 2010) as well as in the period of deceleration and crisis that followed. Departing from a digression about the historical behavior of the current account balance and from a brief revision of the theoretical and empirical literature concerning the theme, the paper evaluates de degree of external vulnerability of the country through the analisys of a group of variables usually referred in the literature as external vulnerability Two main conclusions are highlighted. First, the country faces, today, a reasonably comfortable situation in terms of external vulnerability, especially due to the accumulation of a huge volume of international reserves and to a more favorable profile of the external financing flows. This made the country less vulnerable to currency crises or to short term problems of external financing. The second conclusion is that there were no advances in overcoming the structural problems with the aim of mitigating the external vulnerability in a more perennial manner, which would mean developing conditions to control the cycles of expansion and contraction of the current account balance, providing a more balanced trajectory and one that were compatible with a reasonable and sustained rate of economic growth in the long term.
    Date: 2016–11
  13. By: Singh, Prakarsh (Amherst College)
    Abstract: The Punjab Insurgency in India (1978-1993) took the lives of over 20,000 people. Yet, there has been little research on the economic causes and consequences of the conflict in Punjab, which has been classified as a civil war and also an insurgency. In this article, I delve into some of the reasons for why Punjab suffered such a prolonged and bloody insurgency. Finally, I consider the macro and microeconomic effects of the conflict in Punjab that affected every walk of life and perhaps continue to do so today.
    Keywords: Punjab, conflict, civil war, insurgency, India
    JEL: D74
    Date: 2016–11
  14. By: Brahmachari, Deborshi
    Abstract: This paper aims at a commentary on the Neoclassical Economics as a Method of Scientific Research Program which argues that many theories in Neo-Classical Economics when tested using Lakatos’ Methodology of Scientific Research Program, were not categorised as 'progressive research program'. This finds that some endogenous growth theories have now been tested by few researcher as progressive in terms of Lakatos’ Scientific Research Program.
    Keywords: Scientific Research Program, Neo-Classical Economics, evolution of theory, Research Methodology, Research methods.
    JEL: B41
    Date: 2016–01
  15. By: Jeong, Sangjun
    Abstract: This paper explores the pattern of technical change in the Korean economy from 1970 to 2013 and investigates its determinants. We use the Classical growth-distribution schedule to show that the labor-saving and capital-using pattern has predominated. For the rationale behind this Marx-biased technical change (“MBTC”), we focus on the relationship between technical change and real wage growth via the evolution of labor and capital productivity, and verify the historical direction of technical change against the rise and fall of the working class. Furthermore, we find that the deviation during the post-crisis period from the long-run trend of MBTC is not attributable to the vitality of new technological innovations, but rather the reflection of class dynamics over extracting productivity under weaker capital deepening. The results suggest that the recent deterioration of labor share and labor unions in Korea is closely associated with low incentive for technological progress, which contributes to prolonged stagnation.
    Keywords: growth-distribution schedule, Marx-biased technical change, labor productivity, capital productivity
    JEL: B51 N15 O33
    Date: 2016–11
  16. By: Kennedy, Gerard (Central Bank of Ireland); Sheenan, Lisa (Central Bank of Ireland); Woods, Maria (Central Bank of Ireland)
    Abstract: In recent years Ireland experienced strong growth in residential rents. To characterise current conditions in this market, this Letter investigates the dynamic behaviour of real Irish rents by applying two models to data from the 1980s/1990s. First, employing a univariate non-linear approach, average quarterly growth rates are benchmarked relative to historical trends. The results show that national rents move between high-growth and low-growth periods from the 1990s. From 2013 to 2016Q1, Irish rents are found to be in a high-growth regime. This Letter also models national real rents using quarterly data from 1985Q1 to 2016Q1. Employment and housing stock per capita are found to influence long-run rents over the sample. From end-2013, rents are found to be higher that would be expected by these long-run relationships.
    Date: 2016–11
  17. By: Gerald Braunberger (Frankfurter Allgemeine Zeitung)
    Abstract: Since the outbreak of the Great Financial Crisis in 2007, „Macrofinance“ has evolved as an exciting field for economists. The idea of marrying macroeconomics and financial economics has a long tradition, however, which should not remain buried in almost forgotten books. A couple of seemingly new ideas can be traced back to the work of the eminent economist Joseph A. Schumpeter. His dynamic model of the business cycle is built upon a close interaction between entrepreneurs and banks. Fire-sales of assets, liquidity spirals and feedback loops can turn a mild recession into a devastating depression. Schumpeter’s analysis of the role of monetary policy bears a striking resemblance to contemporary discussions.
    JEL: B10 B13 B20 B22 E30 E44
    Date: 2016–12
  18. By: Bleemer, Zachary
    Keywords: Education
    Date: 2016–12–01
  19. By: Jonathan F. Schulz (Yale University, Human Cooperation Laboratory (HCL) and Social Cognitive Development Lab (SCDL), and University of Nottingham, School of Economics.)
    Abstract: This paper highlights the role of kin-networks for the functioning of modern societies: countries with strong extended families as characterized by a high level of cousin marriages exhibit a weak rule of law and are more likely autocratic. To assess causality, I exploit a quasi-natural experiment. In the early medieval ages the Church started to prohibit kin-marriages. Using the variation in the duration and extent of the Eastern and Western Churches’ bans on consanguineous marriages as instrumental variables, reveals highly significant point estimates of the percentage of cousin marriage on an index of democracy. An additional novel instrument, cousin-terms, strengthens this point: the estimates are very similar and do not rest on the European experience alone. Exploiting within country variation of cousin marriages in Italy, as well as within variation of a ‘societal marriage pressure’ indicator for a larger set of countries support these results. These findings point to a causal effect of marriage patterns on the proper functioning of formal institutions and democracy. The study further suggests that the Churches’ marriage rules - by destroying extended kin-groups - led Europe on its special path of institutional and democratic development.
    Keywords: Democracy, Family, Kin-groups, Church, Cousin-Marriage, Consanguinity.
    Date: 2016
  20. By: Andrew Goodman-Bacon
    Abstract: This paper exploits the original introduction of Medicaid (1966-1970) and the federal mandate that states cover all cash welfare recipients to estimate the effect of childhood Medicaid eligibility on adult health, labor supply, program participation, and income. Cohorts born closer to Medicaid implementation and in states with higher pre-existing welfare-based eligibility accumulated more Medicaid eligibility in childhood but did not differ on a range of other health, socioeconomic, and policy characteristics. Early childhood Medicaid eligibility reduces mortality and disability and, for whites, increases extensive margin labor supply, and reduces receipt of disability transfer programs and public health insurance up to 50 years later. Total income does not change because earnings replace disability benefits. The government earns a discounted annual return of between 2 and 7 percent on the original cost of childhood coverage for these cohorts, most of which comes from lower cash transfer payments.
    JEL: I13 J10 N32
    Date: 2016–12
  21. By: Seltzer, Andrew (Royal Holloway, University of London); Borland, Jeff (University of Melbourne)
    Abstract: This paper examines the effects of the Victorian Factory and Shops Act, the first minimum wage law in Australia. The Act differed from modern minimum wage laws in that it established Special Boards, which set trade-specific minimum wage schedules. We use trade-level data on average wages, employment, and other outcomes to examine the effects of changes in minimum wages. Although the minimum wages were binding, we find that the effects on employment and other outcomes were modest. We speculate that this was partly because the Special Boards, which were comprised mostly of employers and union officials, followed labour market conditions when setting wages for their trades.
    Keywords: minimum wages, Australia, Factory and Shops Act
    JEL: J38 N37
    Date: 2016–11
  22. By: Janda, Karel; Torkhani, Marouan
    Abstract: This paper serves as a brief introduction to the complex relationship between energy consumption and economic growth and between energy consumption and greenhouse emissions. We provide a critical overview of recent literature dealing with energy, carbon emissions and economic growth. We focus mainly on econometric literature examining causal effects between energy consumption and economic growth and on literature adding carbon emissions into the investigation of this topic.
    Keywords: Economic growth, energy consumption, oil consumption, natural gas consumption, renewable energies, biomass
    JEL: O40 Q28 Q42
    Date: 2016–12–05
  23. By: Frédéric DOCQUIER; Riccardo TURATI; Jérome VALETTE; Chrysovalantis VASILAKIS
    Abstract: This paper empirically revisits the impact of multiculturalism (as proxied by indices of birthplace diversity and polarization among immigrants, or by epidemiological terms) on the macroeconomic performance of US states over the 1960-2010 period. We test for skill-specific effects of multiculturalism, controlling for standard growth regressors and a variety of fixed effects, and accounting for the age of entry and legal status of immigrants. To identify causation, we compare various instrumentation strategies used in the existing literature. We provide converging and robust evidence of a positive and significant effect of diversity among college-educated immigrants on GDP per capita. Overall, a 10% increase in high-skilled diversity raises GDP per capita by 6.2%. On the contrary, diversity among less educated immigrants has insignificant effects. Also, we find no evidence of a quadratic effect or a contamination by economic conditions in poor countries.
    Keywords: Birthplace diversity, Growth.
    JEL: J61 F22
    Date: 2016–12
  24. By: Anna Valero; John Van Reenen
    Abstract: The expansion of higher education has helped to fuel economic growth around the world, according to research by Anna Valero and John Van Reenen. Analysing data on 15,000 universities in 78 countries for the period since 1950, they find that there is a strong positive impact of university expansion on regional economic growth. Doubling the number of universities in a region raises future GDP per capita by 4%. Focusing on the immediate challenges for the UK, they note that the benefits of university expansion far outweigh the costs, but Brexit poses significant risks. Until now, UK universities have thrived in a climate of openness to international students, academics and collaboration.
    Keywords: universities, growth, human capital, innovation
    JEL: I23 I25 J24 O10 O31
    Date: 2016–12
  25. By: Ben Hassine, Hela
    Abstract: The main contribution of this paper is to analyze whether the absence of restructuring programs during some financial crisis episodes was justified. In other words, was the countries' debt sustainable, allowing an intervention through only an IMF bailout ? Using a non- parametric methodology (Classification And Regression Tree or CART), the fiscal and the external solvency of countries facing financial troubles since the 80’s was assessed. It is found that, in some crisis episodes, like the one faced by Argentina in 1995, Brazil in 1999 and Turkey in 2001, a debt restructuring plan was necessary while the countries clearly exhibited solvency problems. This can explain the inefficiency of the IMF intervention during some crises.
    Keywords: Financial crises, sustainability assessment, IMF, Debt
    JEL: F32 F34 F35 G01
    Date: 2015
  26. By: Chhy, Niroth
    Abstract: This paper attempts to explain the recent substantial increase in income inequality, which is largely due to the explosion of the very top labor incomes (i.e., the rise of the working rich), in the rich countries especially the United States. This paper points to technological progress and (less importantly to) capital accumulation as the main cause of the (universal) increase in income inequality starting from the late 1970s; also, this paper points to the differences in the nature of demand as the main cause of the large cross-country differences. This paper will build a simple general equilibrium model to formalize this idea and to provide some new insights into the analysis of income inequality.
    Keywords: Income inequality, trickle-down, entrepreneurs, supermanagers
    JEL: D31 D63
    Date: 2016–12–02
  27. By: Sanchez, Luis F.; Stern, David I.
    Abstract: There has been extensive analysis of the drivers of carbon dioxide emissions from fossil fuel combustion and cement production, which constituted only 55% of global greenhouse gas (GHG) emissions in 1970 and 65% in 2010. But there has been much less analysis of the drivers of greenhouse gases in general and especially of emissions of greenhouse gases from agriculture, forestry, and other land uses, which we call non-industrial emissions in this paper, that constituted 24% of total emissions in 2010. We statistically analyse the relationship between both industrial and non-industrial greenhouse gas emissions and economic growth and other potential drivers for 129 countries over the period from 1971 to 2010. Our analysis combines the three main approaches in the literature to investigating the evolution of emissions and income. We find that economic growth is a driver of both industrial and non-industrial emissions, though growth has twice the effect on industrial emissions. Both sources of emissions decline over time though this effect is larger for non-industrial emissions. There is also convergence in emissions intensity for both types of emissions but given these other effects there is no evidence for an environmental Kuznets curve.
    Keywords: Greenhouse gas emissions, economic growth, decoupling, pollution, environmental Kuznets curve, convergence, Environmental Economics and Policy, Q54, Q56,
    Date: 2015–03

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