nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2017‒02‒12
twenty papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Plague and long-term development: the lasting effects of the 1629-30 epidemic on the Italian cities By Guido Alfani; Marco Percoco
  2. Why did Argentina become a super-exporter of agricultural and food products during the Belle Époque (1880-1929)? By Vicente Pinilla; Agustina Rayes
  3. The Macrogenoeconomics of Comparative Development By Ashraf, Quamrul; Galor, Oded
  4. Human Lifetime Entropy in a Historical Perspective (1750-2014) By Patrick Meyer; Grégory Ponthière
  5. On the Origins and Consequences of Racism By Farfan-Vallespin, Antonio; Bonick, Matthew
  6. The baraccati of Rome: internal migration, housing, and poverty in fascist Italy (1924-1933) By Stefano Chianese
  8. The economics of health inequality in the English NHS – the long view By Miqdad Asaria
  9. The Euro and the Battle of Ideas By Brunnermeier, Markus; James, Harold; Landau, Jean-Pierre
  10. Between war and peace: The Ottoman economy and foreign exchange trading at the Istanbul bourse By Avni Önder Hanedar; Sercan Demiralay; Ismail Altay
  11. Aggregating the Fertility Transition: Intergenerational Dynamics in Quality and Quantity By Tom S. Vogl
  12. The Economics of Replication By Mueller-Langer, Frank; Fecher, Benedikt; Harhoff, Dietmar; Wagner, Gert G.
  13. Old and new formulations of the neoclassical theory of aggregate investment : a critical review By Daniele Girardi
  14. The political economy of exchange rate stability during the gold standard. The case of Spain, 1874-1914 By Nogues-Marco, Pilar; Martínez-Ruiz, Elena
  15. The Economic Consequences of Family Policies: Lessons from a Century of Legislation in High-Income Countries By Olivetti, Claudia; Petrongolo, Barbara
  16. Copyright Payments in Eighteenth-Century Britain, 1701–1800 By David Fielding; Shef Rogers
  17. Growth and Childbearing in the Short- and Long-Run By Shoumitro Chatterjee; Tom S. Vogl
  18. Family Economics Writ Large By Jeremy Greenwood; Nezih Guner; Guillaume Vandenbroucke
  19. The Rise of the Middle Class and Economic Growth in ASEAN By Markus Brueckner; Era Dabla-Norris; Mark Gradstein; Daniel Lederman
  20. On large-scale money finance in the presence of black markets: the case of the Japanese economy during and after World War II By SAITO, Makoto

  1. By: Guido Alfani (PAM, Università Bocconi (Italy) Dondena Centre and IGIER); Marco Percoco (PAM, Università Bocconi (Italy) Dondena Centre)
    Abstract: The paper aims to analyze the effects of plague on the long-term development of Italian cities, with particular attention to the 1629-30 epidemic. By using a new dataset on plague mortality rates in 49 cities covering the period 1575-1700 ca., an economic geography model verifying the existence of multiple equilibria is estimated. It is found that cities severely affected by the 1629-30 plague were permanently displaced to a lower growth path. It is also found that plague caused a long-lasting damage to the size of Italian urban populations and to urbanization rates. These findings support the hypothesis that seventeenth-century plagues played a fundamental role in triggering the process of relative decline of the Italian economies.
    Keywords: Plague, Italian cities, Urban development, Urban demography, Multiple equilibria, Early modern period, Mortality crises, Urbanization, Italy
    JEL: N30 N33 N93 D31
    Date: 2016–11
  2. By: Vicente Pinilla (Universidad de Zaragoza and IA2); Agustina Rayes (Universidad Nacional del Centro de la Provincia de Buenos Aires and CONACYT)
    Abstract: The objective of this paper is to explain, from a cliometric perspective, the determinants of the growth of Argentina’s exports between 1880 and 1929. To do this, we have constructed a gravity model with the principal products exported each year by Argentina to its most important trading partners. In this way, we believe that this study constitutes a relevant and original contribution to the analysis of economic growth from a historical perspective and specifically in explaining the factors determining the export success of the settler countries during the first wave of globalisation. Our results show that Argentina’s export-led growth must be explained from both the supply and demand sides. We also find that the reduction in transatlantic transport costs boosted exports.
    Keywords: Settler Economies, Economic History of Argentina, First Globalization, Trade Gravity Models, Latin America Economic History
    JEL: F14 N56 N76 Q17
    Date: 2017–01
  3. By: Ashraf, Quamrul (Williams College); Galor, Oded (Brown University)
    Abstract: The importance of evolutionary forces for comparative economic performance across societies has been the focus of a vibrant literature, highlighting the roles played by the Neolithic Revolution and the prehistoric "out of Africa" migration of anatomically modern humans in generating worldwide variations in the composition of human traits. This essay surveys this literature and examines the contribution of a recent hypothesis regarding the evolutionary origins of comparative economic development, set forth in Nicholas Wade's A Troublesome Inheritance: Genes, Race and Human History, to this important line of research.
    Keywords: comparative development, human evolution, natural selection, genes, race, the "out of Africa" hypothesis, genetic diversity
    JEL: O11 N10 N30 Z10
    Date: 2017–01
  4. By: Patrick Meyer (Lab-STICC_TB_CID_DECIDE - Lab-STICC - Laboratoire des sciences et techniques de l'information, de la communication et de la connaissance - ENIB - École Nationale d'Ingénieurs de Brest - UEB - Université européenne de Bretagne - Institut Mines-Télécom [Paris] - ENSTA Bretagne - IBNM - Institut Brestois du Numérique et des Mathématiques - Télécom Bretagne - UBS - Université de Bretagne Sud - UBO - Université de Bretagne Occidentale - CNRS - Centre National de la Recherche Scientifique, LUSSI - Département Logique des Usages, Sciences sociales et Sciences de l'Information - Télécom Bretagne - UEB - Université européenne de Bretagne - Institut Mines-Télécom [Paris]); Grégory Ponthière (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics)
    Abstract: Although it is widely acknowledged that life is risky, it is difficult to provide an intuitive indicator of the riskiness of life, whose metric would have a concrete counterpart for the layman. This paper uses the Shannon entropy index to the base 2 to quantify, in terms of bits (i.e. the amount of information revealed by tossing a fair coin), the risk relative to the age at death in 37 countries from the Human Mortality Database. We identify 5 major stylized facts: (1) over the last two centuries, (period) life entropy at birth exhibits an inverted U shape pattern with a maximum in the first half of the 20th century (at about 6 bits); (2) over the last 150 years, Western countries have converged in terms of (period) life entropy at birth towards levels of 5.6 bits for men and 5.5 bits for women; (3) curves of (period) life entropy at birth for men and women crossed during the 20th century; (4) the entropy age profi le shifted from a non-monotonic profi le (in the 18th and 19th centuries) to a strictly decreasing pro file (in the 20th and 21th centuries); (5) men exhibit a higher life entropy than women below ages 50-55, and a lower one after ages 50-55.
    Keywords: mortality risk,longevity,age at death,entropy,measurement
    Date: 2016–12
  5. By: Farfan-Vallespin, Antonio; Bonick, Matthew
    Abstract: We use a novel method to measure racism at both the individual and the country level. We show that our measure of racism has a strong negative and significant impact on economic development, quality of institutions and education. We then test different hypotheses concerning the origin of racism and its channels of impact in order to establish causality. We find that racism is not correlated with any possible measure of coexistence of different racial or ethnic groups, like ethno-linguistic fragmentation, share of migrants, or ethnically-motivated conflicts among others. Racism has a negative effect on social capital measured as generalized trust and voice and accountability. More importantly, we show that for former colonies, racism is strongly correlated with the presence of extractive institutions during the colonial time, even when we control for current institutions, current GDP per capita or current education. We argue that extractive colonial institutions not only had a negative impact on the political and economic institutions of the colonized countries, but also shaped the cultural values of the population. We claim that colonial powers instilled racism among the population of their colonies in order to weaken their ability for collective action, justify their own role as extractive elite in the eyes of the ruled and facilitate the internal cohesion of the elite. We also show that, at the individual level and using country fixed effects, racism is negatively correlated with those cultural values that one would expect if an extractive elite would be able to decide the cultural values of the society they control: lower trust, higher obedience, lower respect for others, lower feeling of control of one's live, lower preference for democracy, higher support for military intervention of the government, lower preference for political participation, lower valuation of civil rights, higher preference for state intervention in the economy, lower support for economic competition, and higher acceptance of dishonest behavior. We finally show that racism still has a significant impact on our outcome variables even when we control for these potential cultural correlates.
    JEL: O10 P48 N00
    Date: 2016
  6. By: Stefano Chianese (University of Rome Tor Vergata)
    Abstract: Newly discovered archival material is used to document the standard of living of slum dwellers in fascist Rome. As part of the regime's effort to suppress growing shanty towns in the capital, the Governorate of Rome conducted a census in 1933, gathering information on the identity and living conditions of their inhabitants, the "baraccati". The paper analyzes the mostly migrant families of the shanty towns, identifying their social and demographic characteristics.
    Keywords: Housing,internal migration,poverty,slum dwellers,fascism
    JEL: N01 R23
    Date: 2017–02–03
  7. By: Antonio Di Majo; Elina De Simone
    Abstract: Abstract. This paper looks at the role of tax decentralization in the Italian history of Public Finance from the beginning of the Italian Unification to the years before the set-up of Regional governments. The role of the benefit principles in the local tax assignments is discussed. The analysis also includes some updated data on local public expenditures and taxes from 1861 to 1970
    Keywords: Local taxes, Fiscal decentralization, Italy, XIX-XX centuries
    JEL: N93 N94 H70
    Date: 2017–02
  8. By: Miqdad Asaria (Centre for Health Economics, University of York, York, UK.)
    Abstract: In this paper, I briefly outline some of the key milestones of health inequality policy in England. I describe how socioeconomic inequalities in health, government policy towards it, and the academic literature about it, have evolved over time and in relation to each other. Whilst this historical review is far from comprehensive, its aim is to provide sufficient context within which to interpret current NHS health inequality policy from the perspective of an economist.
  9. By: Brunnermeier, Markus; James, Harold; Landau, Jean-Pierre
    Abstract: Book description: Why is Europe’s great monetary endeavor, the Euro, in trouble? A string of economic difficulties in Greece, Ireland, Spain, Italy, and other Eurozone nations has left observers wondering whether the currency union can survive. In this book, Markus Brunnermeier, Harold James, and Jean-Pierre Landau argue that the core problem with the Euro lies in the philosophical differences between the founding countries of the Eurozone, particularly Germany and France. But the authors also show how these seemingly incompatible differences can be reconciled to ensure Europe’s survival. As the authors demonstrate, Germany, a federal state with strong regional governments, saw the Maastricht Treaty, the framework for the Euro, as a set of rules. France, on the other hand, with a more centralized system of government, saw the framework as flexible, to be overseen by governments. The authors discuss how the troubles faced by the Euro have led its member states to focus on national, as opposed to collective, responses, a reaction explained by the resurgence of the battle of economic ideas: rules vs. discretion, liability vs. solidarity, solvency vs. liquidity, austerity vs. stimulus. Weaving together economic analysis and historical reflection, The Euro and the Battle of Ideas provides a forensic investigation and a roadmap for Europe’s future.
    JEL: B26 E58 N14
    Date: 2016
  10. By: Avni Önder Hanedar (Sakarya University, Faculty of Political Sciences, Sakarya-Turkey and Dokuz Eylül University, Faculty of Business, Izmir-Turkey; Yeditepe University, Faculty of Economics and Administrative Sciences, Istanbul-Turkey); Sercan Demiralay (Istanbul Gelisim University, Faculty of Economics, Business Administration and Social Sciences, Istanbul-Turkey); Ismail Altay (Recep Tayyip Erdogan University, Faculty of Economics and Administrative Sciences, Rize-Turkey)
    Abstract: Between 1914 and 1918, the Ottoman Empire was involved in the First World War, which caused economic disruptions, huge budget deficits, surmounted inflation rates and excessive devaluation of Lira, the Ottoman currency. Based on the value of Lira against the currencies of three selected countries that were not in the war, we focus on the effects of news about the war on the foreign exchange rates at the Istanbul bourse from 1918 to 1919. Our results signify some dates, which match the official announcements of the war events and/or the official treaties.
    Keywords: The Istanbul bourse, foreign exchange trading, the First World War, the armistices, economic recovery
    JEL: G1 N25 N45
    Date: 2017–02
  11. By: Tom S. Vogl (Princeton University, BREAD, and NBER)
    Abstract: Fertility change is distinct from other forms of social and economic change because it directly alters the size and composition of the next generation. This paper studies how changes in population composition over the fertility transition feed back into the evolution of average fertility across generations. Theory predicts that changes in the relationship between human capital and fertility first weaken and then strengthen fertility similarities between mothers and daughters, a process that first promotes and then restricts aggregate fertility decline. Consistent with these predictions, microdata from 40 developing countries over the second half of the 20th century show that intergenerational fertility associations strengthen late in the fertility transition, due to the alignment of the education-fertility relationship across generations. As fertility approaches the replacement level, the strengthening of these associations reweights the population to raise aggregate fertility rates, pushing back against aggregate fertility decline.
    JEL: J13
    Date: 2017–01
  12. By: Mueller-Langer, Frank; Fecher, Benedikt; Harhoff, Dietmar; Wagner, Gert G.
    Abstract: Replication studies are considered a hallmark of good scientific practice. Yet they are treated among researchers as an ideal to be professed but not practiced. To provide incentives and favorable boundary conditions for replication practice, the main stakeholders need to be aware of what drives replication. Here we investigate how often replication studies are published in empirical economics and what types of journal articles are replicated. We find that from 1974 to 2014 less than 0.1% of publications in the top-50 economics journals were replications. We do not find empirical support that mandatory data disclosure policies or the availability of data or code have a significant effect on the incidence of replication. The mere provision of data repositories may be ineffective, unless accompanied by appropriate incentives. However, we find that higher-impact articles and articles by authors from leading institutions are more likely to be subject of published replication studies whereas the replication probability is lower for articles published in higher-ranked journals.
    Keywords: Replication; economics of science; science policy; economic methodology
    JEL: A1 B4 C12 C13
    Date: 2017–01–30
  13. By: Daniele Girardi (Department of Economics, University of Massachusetts, Amherst)
    Abstract: This paper surveys the neoclassical theory of aggregate investment and its criticisms. We distinguish four main formulations of this theory: the traditional Wicksellian investment function; the Fisherian array-of-opportunities approach (as Witte Jr. called it); the Jorgensonian model; the now prevailing adjustment-costs models. With respect to other papers criticizing the neoclassical theory of investment, we do not appeal to market imperfections. We instead argue that all four formulations present serious theoretical difficulties, even conceding free competition.
    Keywords: investment, neoclassical theory, Wicksell, Jorgenson, Fisher, adjustment-costs
    JEL: B22 E22 B13
    Date: 2017
  14. By: Nogues-Marco, Pilar; Martínez-Ruiz, Elena
    Abstract: This article contributes to the literature on the commitment to gold during the classical period of the gold standard. We use the case of Spain to analyse how national institutional design determined adherence to gold in peripheral countries, and argue that institutional design was the result of negotiation between the government and the central bank. We construct indicators of the relative bargaining power of the two actors to assess their respective influence in determining adherence to gold. Our results show that a powerful government facilitated adherence to the gold standard, but an independent central bank hindered it, especially if confronted by an unstable political authority. Central banks were private institutions whose objective was profit maximization, not monetary stability. Strongly independent private central banks operating in politically very weak countries avoided the responsibility of defending the national currency, even in a stable macroeconomic situation. In peripheral countries, therefore, adherence (or not) to gold was determined by the institutional design in which the monetary system operated.
    Keywords: Gold Standard, Political Economy, Central Bank Independence, Institutional Design, Monetary Stability, Spain
    JEL: E02 E42 E58 F33 N13
    Date: 2017
  15. By: Olivetti, Claudia (Boston College); Petrongolo, Barbara (Queen Mary, University of London)
    Abstract: We draw lessons from existing work and our own analysis on the effects of parental leave and other interventions aimed at aiding families. The outcomes of interest are female employment, gender gaps in earnings and fertility. We begin with a discussion of the historical introduction of family policies ever since the end of the nineteenth century and then turn to the details regarding family policies currently in effect across high-income nations. We sketch a framework concerning the effects of family policy to motivate our country- and micro-level evidence on the impact of family policies on gender outcomes. Most estimates of the impact of parental leave entitlement on female labor market outcomes range from negligible to weakly positive. The verdict is far more positive for the beneficial impact of spending on early education and childcare.
    Keywords: parental leave, childcare, family policies, gender gaps
    JEL: J13 J16 J18
    Date: 2017–01
  16. By: David Fielding (Department of Economics, University of Otago, New Zealand); Shef Rogers (Department of English and Linguistics, University of Otago, New Zealand)
    Abstract: Although there have been extensive critical studies of the laws and conceptual understandings of early modern copyright in the past few decades, less attention has been devoted to the authorial payments that followed from those developments. Studies of individual authors or genres have collected details of payments to authors, but no comparative study of the values of those payments exists. This essay assesses 439 examples of copyright payments about which we know enough to match the payment to a particular edition of a book so that we can ascertain the book’s physical format and construction and thus estimate a publisher’s expenses relative to the price paid for the copy. We offer some comparative context for this Data within the larger body of publications across the century, in order to Gauge the degree to which these results are representative.
    Date: 2015–06
  17. By: Shoumitro Chatterjee (Princeton University); Tom S. Vogl (Princeton University)
    Abstract: Despite being key to theories of economic growth and the demographic transition, evidence on how fertility responds to aggregate income change is mixed. We analyze economic growth and fertility change in the developing world over six decades, using data on 2.3 million women from 255 surveys in 81 countries. We find that fertility responds differently to fluctuations and long-run growth, and the nature of these responses varies over the life cycle. Fertility is procyclical, falling during recessions, but also declines and delays with long-run growth. Lifetime fertility is affected by fluctuations near the end of the reproductive period but not those at prime reproductive age. Our results are consistent with models linking demography, human capital, and long-run growth, extended to include a life cycle with liquidity constraints.
    JEL: J13 O40
    Date: 2016–12
  18. By: Jeremy Greenwood; Nezih Guner; Guillaume Vandenbroucke
    Abstract: Powerful currents have reshaped the structure of families over the last century. There has been (i) a dramatic drop in fertility and greater parental investment in children; (ii) a rise in married female labor-force participation; (iii) a significant decline in marriage and a rise in divorce; (iv) a higher degree of positive assortative mating; (v) more children living with a single mother; (vi) shifts in social norms governing premarital sex and married women's roles in the workplace. Macroeconomic models explaining these aggregate trends are surveyed. The relentless flow of technological progress and its role in shaping family life are stressed.
    JEL: D58 E1 E13 J1 J12 J13 J2 J22 N30 O11 O15 O3
    Date: 2017–01
  19. By: Markus Brueckner; Era Dabla-Norris; Mark Gradstein; Daniel Lederman
    Abstract: We present estimates of the relationship between the share of income accruing to the middle class and GDP per capita of ASEAN economies. The increase in GDP per capita that ASEAN economies experienced during 1970-2010 significantly contributed to a higher share of income accruing to the middle class in these countries. The impact of a rise of the middle class on economic growth depends on ASEAN countries' initial level of GDP per capita. In the majority of ASEAN countries, a rise of the middle class that is unrelated to GDP per capita growth would have had a significant negative effect on economic growth based on values of these countries' GDP per capita in 1970. In contrast, for recent values of GDP per capita a rise of the middle class would positively contribute to GDP per capita growth. We show that human capital accumulation is an important channel through which a rise of the middle class affects economic growth.
    Keywords: Income Inequality, Economic Growth, ASEAN
    JEL: O1
    Date: 2017–01
  20. By: SAITO, Makoto
    Abstract: This paper explores the alternative role of large-scale money finance as a fiscal instrument for financing indirectly from black markets when an economy is heavily controlled. It demonstrates that (1) in the Japanese national accounts, aggregate expenditure exceeded aggregate income by income leakages to black markets under the strict price control of the wartime and postwar years 1937-1949, and (2) in order to cover a financial shortage resulting from such income leakages, private agents bartered directly with illegal dealers, but the government let the Bank of Japan (BoJ) underwrite public bonds instead of dealing directly with formal/poor agents or illegitimate/rich agents. The BoJ notes issued to the government were eventually held as a means to conceal income by illegal dealers. Some policy implications for currency reforms are also explored with consideration for the fact that the emergence of black markets necessitated the BoJ's direct underwriting.
    Keywords: money finance, wartime finance, price controls, black markets, national accounts, statistical discrepancies
    Date: 2017–01

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