nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2017‒03‒12
thirty papers chosen by

  1. Was Colonialism Fiscally Sustainable? An Empirical Examination of the Colonial Finances of Spanish America. By Javier L. Arnaut
  2. Historical Roots of Political Extremism: The Effects of Nazi Occupation of Italy By Fontana, Nicola; Nannicini, Tommaso; Tabellini, Guido
  3. Australian Exceptionalism? Inequality and Living Standards 1821-1871 By Laura Panza; Jeffrey G. Williamson
  4. Principles and Contributions of Total Quality Mangement (TQM) Gurus on Business Quality Improvement By Neyestani, Behnam
  5. Varieties of housing finance in historical perspective: The impact of mortgage finance systems on urban structures and homeownership By Blackwell, Timothy; Kohl, Sebastian
  6. Accounting for Wealth Inequality Dynamics: Methods, Estimates and Simulations for France (1800-2014) By Garbinti, Bertrand; Goupille-Lebret, Jonathan; Piketty, Thomas
  7. On the Measurement of Long-Run Income Inequality: Empirical Evidence from Norway, 1875-2013 By Aaberge, Rolf; Atkinson, Tony; Modalsli, Jorgen Heibo
  8. Technology-Skill Complementarity in Early Phases of Industrialization By Franck, Raphael; Galor, Oded
  9. Escaping the Holocaust: human and health capital of refugees to the US, 1940-42 By Blum, Matthias; Rei, Claudia
  10. The Municipal Treasury of Santa Cruz de Tenerife (1936-1958) By María Del Pino Ojeda Cabrera; Ruymán Hernández Pacheco
  11. The Macrogenoeconomics of Comparative Development By Ashraf, Quamrul; Galor, Oded
  12. "How Germany's Anti-Keynesianism Has Brought Europe to Its Knees" By Jorg Bibow
  13. When Britain turned inward: Protection and the shift towards Empire in interwar Britain By de Bromhead, Alan; Fernihough, Alan; Lampe, Markus; O'Rourke, Kevin Hjortshøj
  14. What do we know about the global financial safety net? Data, rationale and possible evolution By Scheubel, Beatrice; Herrala, Risto; Stracca, Livio
  15. Economic crises and the eligiblity for the lender of last resort: evidence from 19th century France By Bignon, Vincent; Jobst, Clemens
  16. The Fall of Capital Punishment and the Rise of Prisons: How Punishment Severity Affects Jury Verdicts By Bindler, Anna; Hjalmarsson, Randi
  17. “Water Law” as an Instrument of Russian Imperial Policy in the Central Asian Khanates By Roman Yu. Pochekaev
  18. “The Beauty that Kills Me”: the Death of Lyric Person and the Birth of the Poet in Joachim Du Bellay’S Book of Sonnets the Olive (1550) By Vladimir Avdonin
  19. On the Dispensability of New Transportation Technologies: Evidence from the Heterogeneous Impact of Railroads in Nigeria By Dozie Okoye; Roland Pongou; Tite Yokossi
  20. The Effect of Fertility on Mothers' Labor Supply over the Last Two Centuries By Aaronson, Daniel; Dehejia, Rajeev; Jordan, Andrew; Pop-Eleches, Cristian; Samii, Cyrus; Schulze, Karl
  21. The roles of nature and history in world development By Vernon Henderson; Tim Squires; Adam Storeygard; David Weil
  22. Social theory, economic geography, space and place: reflections on the work of Ray Hudson By Diane Perrons
  23. EU Membership or Thatcher's Structural Reforms: What Drove the Great British Reversal? By Campos, Nauro F; Coricelli, Fabrizio
  24. Capital after Capitalism The evolution of the concept of capital in the light of long-run sustainable reproduction of the species By Hanappi, Hardy
  25. Supply-Side Policies in the Depression: Evidence from France By Jérémie Cohen-Setton; Joshua K. Hausman; Johannes F. Wieland
  26. In brief... Is technology to blame for jobless recoveries? By Georg Graetz; Guy Michaels
  27. Financial Frictions and Employment during the Great Depression By Efraim Benmelech; Carola Frydman; Dimitris Papanikolaou
  28. Origins of happiness By Andrew Clark; Sarah Flèche; Richard Layard; Nattavudh Powdthavee; George Ward
  29. Bismarck in the bedroom? Pension reform and fertility: Evidence 1870-2010 By Jäger, Philipp
  30. Thomas Sargent face à Robert Lucas : une autre ambition pour la Nouvelle Economie Classique By Aurélien Goutsmedt

  1. By: Javier L. Arnaut (International Centre for Research and Analysis (ICRA), Warsaw, Poland)
    Abstract: This paper examines the long-run fiscal sustainability of the colonial finances of Spanish America. Using econometric tests of intertemporal stability and a macroeconomic budget constraint framework, the analysis revisits how the long-run fiscal dynamics of the colonial treasuries adjusted for inflation changed over time. Findings suggest that in spite of historical breakpoints associated to major financial difficulties during wartime, in general the treasuries achieved sustainable fiscal balances. However, there was a shifting pattern of fiscal sustainability between the treasuries across the colonial period.
    Keywords: Fiscal sustainability, Colonialism, Cajas reales, Spanish America, Cointegration.
    JEL: C32 H61 E62 F54 N16 N26
    Date: 2017–03
  2. By: Fontana, Nicola (London School of Economics); Nannicini, Tommaso (Bocconi University); Tabellini, Guido (Bocconi University)
    Abstract: The Italian civil war and the Nazi occupation of Italy occurred at a critical juncture, just before the birth of a new democracy and when, for the first time in a generation, Italians were choosing political affiliations and forming political identities. In this paper we study how these traumatic events shaped the new political system. We exploit geographic heterogeneity in the intensity and duration of the civil war, and the persistence of the battlefront along the "Gothic line" cutting through Northern-Central Italy. We find that the Communist Party gained votes in the post-war elections where the Nazi occupation and the civil war lasted longer, mainly at the expense of the centrist and catholic parties. This effect persists until the early 1990s. Evidence also suggests that this is due to an effect on political attitudes. Thus, the foreign occupation and the civil war left a lasting legacy of political extremism and polarization on the newborn Italian democracy.
    Keywords: political extremism, path dependence, regression discontinuity design
    JEL: D72 C21
    Date: 2017–02
  3. By: Laura Panza; Jeffrey G. Williamson
    Abstract: Although the Australian historical literature covering the colonies’ first century from 1788 to 1871 is packed with assertions about Australian living standards and inequality exceptionalism, there has been very little evidence offered to confirm them. This paper establishes the Australian facts about living standards and inequality trends between the 1820s and the 1870s. We first explore the end-period benchmark, 1871, where previous literature has reported a big Australian income per capita and living standard lead. We ask whether 1871 is a poor choice for making these comparisons, and whether 1861 would be better. The US had just fought a Civil War, underwent a “lost growth decade” and southern destruction. In addition, both countries had to deal with a mineral rent bust. The revised calculation for 1861 reports a smaller Australian living standard lead, but a significant lead nonetheless. Next we ask whether Australia was born (relatively) rich or grew (relatively) rich by (relatively) fast growth. It was the latter, a conclusion reached in two ways. First, our new purchasing-power-parity estimates Australian town living standards below London and US cities in the 1830s. Second, when measured properly we report an exceptionally fast growth performance between 1821 and 1871. In addition, we ask whether convicts had similar living standards as free urban unskilled in the 1830s when convicts were still nearly half of the labor force. We follow this by documenting inequality trends between the 1820s and 1870s. Here we find exceptionalism since there is little evidence supporting rising income inequality prior to 1871.
    Keywords: Colonial Australia, living standards, inequality, growth, exceptionalism
    JEL: N17 N37 O47 O56
    Date: 2017–02
  4. By: Neyestani, Behnam
    Abstract: Over the past few decades, Total Quality Management (TQM) gurus have been developed certain theories in the area of business quality improvement, which caused a huge paradigm shift in improving the quality of products and services. The main aim of this paper was to discuss regarding the key roles of TQM gurus such as Deming, Crosby, Juran, Feigenbaum, Ishikawa, and others in improving business quality within different organizations in 20th Century. Thus, a systematic literature review was performed to specify the concept of TQM principles and philosophies from the aforementioned TQM gurus. However, the literature review was provided invaluable insight on the understanding of the main ideas and philosophies proposed by these TQM gurus.
    Keywords: Contributions, Quality Management, TQM Gurus, Total Quality Management (TQM), and Principles.
    JEL: B2 B3 B31 F1 M11 M2 O1
    Date: 2017–02–01
  5. By: Blackwell, Timothy; Kohl, Sebastian
    Abstract: In this paper, we argue that the complexion of housing finance systems in OECD countries, both now and historically, has a significant bearing on a number of core housing-related indicators, including housing form, tenure composition, and urban development. Existing literature in the fields of housing studies and comparative political economy, however, has often neglected the historical dynamics of housing finance, while contemporaneously, financial historians have focused almost exclusively on company and not mortgage finance. We identify four different "ideal types" of housing finance systems that developed in mature capitalist economies when organized housing finance institutions began to emerge throughout the long nineteenth century: informal person-to-person lending and state lending as solutions outside specialized banking circuits, and deposit-based and bond-based institutions as banking solutions. We adapt Alexander Gerschenkron's theory of economic backwardness in order to explain the temporal-spatial emergence of these distinct types. We draw a path-dependent conclusion, noting that the more countries developed bond-based mortgage banks in the nineteenth century, the more they tended towards multi-story building structure, low homeownership rates and lower securitization levels in the twentieth century. A collection of unique historical city and country data supports these findings.
    Keywords: housing finance,homeownership,building form,urbanization,Gerschenkron,path dependence,financial history,mortgage banks,building societies,buildings and loans,Hausfinanz,Wohneigentum,Bauform,Urbanisierung,Gerschenkron,Pfadabhängigkeit,Finanzgeschichte,Hypothekenbanken,Bausparkassen
    Date: 2017
  6. By: Garbinti, Bertrand; Goupille-Lebret, Jonathan; Piketty, Thomas
    Abstract: This paper combines different sources and methods (income tax data, inheritance registers, national accounts, wealth surveys) in order to deliver consistent, unified wealth distribution series by percentiles for France over the 1800-2014 period, with detailed breakdowns by age, gender, income and assets over the 1970-2014 sub-period. We find a large decline of the top 10% wealth share from the 1910s to the 1980s (from 80-90% of total wealth during the 19th century up until World War 1, down to 50-60% in the 1980s), mostly to the benefit of the middle 40% of the distribution (the bottom 50% wealth share is always less than 10%). Since the 1980s-90s, we observe a moderate rise of wealth concentration, with large fluctuations due to asset price movements. In effect, rising inequality in saving rates and rates of return pushes toward rising wealth concentration, in spite of the contradictory effect of housing prices. We develop a simple simulation model highlighting how the combination of unequal saving rates, rates of return and labor earnings leads to large multiplicative effects and high steady-state wealth concentration. Small changes in the key parameters appear to matter a lot for long-run inequality. We discuss the conditions under which rising concentration is likely to continue in the coming decades.
    Keywords: saving rate; steady-state; Wealth Inequality
    JEL: D31 E21 N34
    Date: 2017–02
  7. By: Aaberge, Rolf (Statistics Norway); Atkinson, Tony (Nuffield College, Oxford); Modalsli, Jorgen Heibo (Statistics Norway)
    Abstract: In seeking to understand inequality today, a great deal can be learned from history. However, there are few countries for which the long-run development of income inequality has been charted. Many countries have records of incomes, taxes and social support. This paper presents a new methodology constructing income inequality indices from such data. The methodology is applied to Norway, for which rich historical data sources exist. Taking careful account of the definition of income and population and the availability of micro data starting in 1967, an upper and lower bound for the pre-tax income Gini coefficient is produced.
    Keywords: income, inequality, distribution, Norway, long-run changes
    JEL: D31 D63 N33 N34
    Date: 2017–02
  8. By: Franck, Raphael; Galor, Oded
    Abstract: The research explores the effect of industrialization on human capital formation. Exploiting exogenous regional variations in the adoption of steam engines across France, the study establishes that, in contrast to conventional wisdom that views early industrialization as a predominantly deskilling process, the industrial revolution was conducive for human capital formation, generating wide-ranging gains in literacy rates and educational attainment.
    Keywords: Economic Growth; Human Capital; Industrialization; Steam Engine.; Technology-Skill Complementarity
    JEL: N33 N34 O14 O33
    Date: 2017–02
  9. By: Blum, Matthias; Rei, Claudia
    Abstract: The large-scale persecution of Jews during World War II generated massive refugee movements. Using data from 20,441 predominantly Jewish passengers from 19 countries traveling from Lisbon to New York between 1940 and 1942, we analyze the last wave of refugees escaping the Holocaust and verify the validity of height as a proxy for human and health capital. We further show this episode of European migration displays wellknown features of migrant self-selection: early migrants were taller than late migrants; a large migrant stock reduces migrant selectivity; and economic barriers to migration apply. Our Öndings show that Europe experienced substantial losses in human and health capital while the US beneÖtted from the immigration of European refugees.
    JEL: N34 F22 J24
    Date: 2016
  10. By: María Del Pino Ojeda Cabrera (Universidad de la Laguna, Spain); Ruymán Hernández Pacheco (Universidad de la Laguna, Spain)
    Abstract: The Canary Islands were not outside to the deep and prolonged crisis of autarchy, and the departure of thousands of islanders across the Atlantic was perhaps the most visible sign. To the difficult circumstances of the Civil War and Second World War, was added an autocratic policy that in the case of the island's economy had its own aspect, because it cut the link that had been essential piece in its historical becoming, its free access to the international market. In addition, the vulnerability of the islands to the outside pressure, its possible occupation by Allied forces and the demand of commodities (food, energy), determined that during much of the period the economy was ruled by the military authority, based in Santa Cruz de Tenerife, ancient capital in times of the single province (until 1927). This paper studies the treasury of this city with the purpose of pondering the meaning of this process
    Keywords: Dictatorship of Franco, municipality, municipal treasury, Santa Cruz de Tenerife.
    JEL: D60 N00 N34 N94
    Date: 2017–03
  11. By: Ashraf, Quamrul; Galor, Oded
    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; genes; genetic diversity; human evolution; natural selection; race; the “out of Africa†hypothesis
    JEL: N10 N30 O11 Z10
    Date: 2017–02
  12. By: Jorg Bibow
    Abstract: This paper investigates the (lack of any lasting) impact of John Maynard Keynes's General Theory on economic policymaking in Germany. The analysis highlights the interplay between economic history and the history of ideas in shaping policymaking in postwar (West) Germany. The paper argues that Germany learned the wrong lessons from its own history and misread the true sources of its postwar success. Monetary mythology and the Bundesbank, with its distinctive anti-inflationary bias, feature prominently in this collective odyssey. The analysis shows that the crisis of the euro today is largely the consequence of Germany's peculiar anti-Keynesianism.
    Keywords: John Maynard Keynes; Mercantilism; Economic and Monetary Union; Euro Crisis
    JEL: B31 E30 E58 E65 N14
    Date: 2017–03
  13. By: de Bromhead, Alan; Fernihough, Alan; Lampe, Markus; O'Rourke, Kevin Hjortshøj
    Abstract: International trade became much less multilateral during the 1930s. Previous studies, looking at aggregate trade flows, have argued that discriminatory trade policies had comparatively little to do with this. Using highly disaggregated information on the UK's imports and trade policies, we find that policy can explain the majority of Britain's shift towards Imperial imports in the 1930s. Trade policy mattered, a lot.
    Keywords: interwar period; trade policy
    JEL: F13 F14 N74
    Date: 2017–02
  14. By: Scheubel, Beatrice; Herrala, Risto; Stracca, Livio
    Abstract: We critically review the theoretical basis for the provision of global financial safety nets (GFSN) and provide a comprehensive database covering four types (foreign exchange reserves, IMF financing, central bank swap lines, and Regional Financing Arrangements) for over 150 countries in the sample 1970-2015. We also show some key stylised facts associated with the provision of financing associated with GFSN and compare macroeconomic outcomes around sudden stop episodes depending on how much GFSN were available for countries, and used. We conclude with some speculations on the possible evolution of the GFSN.
    JEL: F34 F33 G01
    Date: 2016
  15. By: Bignon, Vincent; Jobst, Clemens
    Abstract: This paper shows that a central bank can more efficiently mitigate economic crises when it broadens eligibility for its discount facility to any safe asset or solvent agent. We use difference-in-differences panel regressions and emulate crises by studying how defaults of banks and non-agricultural firms were affected by the arrival of an agricultural disease. We exploit the specificities of the implementation of the discount window to deal with the endogeneity of the access to the central bank to the arrival of the crisis and local default rates. We find that broad eligibility reduced significantly the increase in the default rate when the shock hit the local economy. A counterfactual exercise shows that defaults would have been 10% to 15% higher if the central bank would have implemented the strictest eligibility rule. This effect is identified independently of changes in policy interest rates and the fiscal deficit. JEL Classification: E44, E51, G28, E58, N14, N54
    Keywords: Bagehot rule, Bank of France, collateral, default, discount window
    Date: 2017–02
  16. By: Bindler, Anna; Hjalmarsson, Randi
    Abstract: This paper studies the effect of punishment severity on jury decision-making using a large archival data set from the Old Bailey Criminal Court in London from 1715 to 1900. We take advantage of two natural experiments in English history, which result in sharp decreases in punishment severity: the offense specific abolition of capital punishment in the 1800s and the temporary and unexpected halt of penal transportation during the American Revolution. Using a difference-in-differences design to study the former and a pre-post design to study the latter, we find that decreasing expected punishment (especially via the end of the death penalty), had a large, significant and permanent impact on jury behavior, generally leading to the jury being "harsher". Moreover, we find that the size of the effect differs with defendants' gender and criminal history. These results raise concerns about the impartiality of juries as well as the implicit assumption often made when designing and evaluating criminal justice policies today - that the chance of conviction is independent of the harshness of the penalty.
    Keywords: conviction; crime; death penalty; English history; expected punishment; jury; punishment severity; verdict
    JEL: H00 K14 K40 N00 N43 N93
    Date: 2017–03
  17. By: Roman Yu. Pochekaev (National Research University Higher School of Economics)
    Abstract: Water has always been an important resource for Central Asian states and peoples. Different rulers at different times used water, and access to it, as an instrument of political and even military influence. When the Russian Empire expanded into Central Asia, seizing substantial parts of three central Asian khanates (Bukhara, Khiva and Khoqand) and established its own protectorate over these states, its also found that water was one of the most effective means to control the rulers and peoples of Central Asia. The use of water and irrigation policy as an instrument of rule was effectively used by the Russian Empire in its relations with the Central Asian khanates and this has already been the subject of investigation. This paper analyses the legal regulation of water use and the irrigation policy of the Russian Empire in Turkestan in order to influence the Bukharan Emirate and the Khivan Khanate during the epoch of the Russian protectorate (1870s–1910s). The paper demonstrates how the internal “water law” was a starting point in Russian policy towards Bukhara and Khiva, and shows that each subsequent stage was closely connected to the evolution of the “water law” in the Russian Turkestan. The sources are official documents (including legal acts) of the Russian Empire, correspondence of Russian and Central Asian statesmen, memoirs of contemporaries and the notes of Russian visitors to khanates (diplomats, engineers, etc.) who participated in the realization of Russian water policy in Bukhara and Khiva and could estimate its effectiveness
    Keywords: Russian Empire, Central Asia, water use, water law, Emirate of Bukhara, Khanate of Khiva, modernization, protectorates.
    Date: 2017
  18. By: Vladimir Avdonin (National Research University Higher School of Economics)
    Abstract: The study analyzes Sonnets 63, 65 and 69 as the key texts of the enlarged version of Joachim Du Bellay’s The Olive. In the sequence of sonnets, some loci communes of “love poems” (Amours) such as innamoramento or description of the lady’s beauty form a kind of a “new beginning”. The paper shows how Du Bellay gradually implants the Neoplatonic and religious motifs that link the middle of his new book to its beginning and its end. Another intertextual link, which is explored, is reference to Petrarch’s Canzoniere in the sonnets 63 and 69. If Petrarch’s lyric person regrets his errors leaving him to guiltiness, Du Bellay’s lyric person sees his defeat as Amor’s providence, and the defeat suddenly changes in discovery of heavenly beauty. The study demonstrates that Du Bellay addresses the ideas of Neoplatonism in order to induct and strengthen the vertical opposition of the world of earth (closely linked to suffering) and the world of heaven. Meanwhile, the poet differs from the strict followers of Neoplatonism, insisting that not the lady but Amor is the real converging point between the two worlds
    Keywords: sonnet, lyric narrative, composition of a book of poetry, Neoplatonism, Joachim Du Bellay
    JEL: Z
    Date: 2017
  19. By: Dozie Okoye (Department of Economics, Dalhousie University, Halifax, NS); Roland Pongou (Department of Economics, University of Ottawa, Ottawa, ON); Tite Yokossi (Department of Economics, MIT, Cambridge, MA)
    Abstract: Exploring heterogeneity in the impact of a technology is a first step towards understanding conditions under which this technology is conducive to economic development. This article shows that colonial railroads in Nigeria have large long-lasting impacts on individual and local development in the North, but virtually no impact in the South neither in the short run nor in the long run. This heterogeneous impact of the railway can be accounted for by the distance to ports of export. We highlight the fact that the railway had no impact in areas that had access to ports of export, thanks to their proximity to the coast and to their use of waterways, and that those areas barely adopted the railway as it did not reduce their shipping costs. Our analyses rule out the possibility that the heterogeneous impacts are driven by cohort effects, presence of major roads, early cities, or missionary activity, or by crude oil production.
    Keywords: Impact Heterogeneity, Colonial Investments, Railway, Africa, Long-run Effects, Development, Nigeria
    JEL: O15 O18 N30 N37
    Date: 2017
  20. By: Aaronson, Daniel (Federal Reserve Bank of Chicago); Dehejia, Rajeev (New York University); Jordan, Andrew (University of Chicago); Pop-Eleches, Cristian (Columbia University); Samii, Cyrus (New York University); Schulze, Karl (Federal Reserve Bank of Chicago)
    Abstract: This paper documents the evolving impact of childbearing on the work activity of mothers between 1787 and 2014. It is based on a compiled data set of 429 censuses and surveys, representing 101 countries and 46.9 million mothers, using the International and U.S. IPUMS, the North Atlantic Population Project, and the Demographic and Health Surveys. Using twin births (Rosenzweig and Wolpin 1980) and same gendered children (Angrist and Evans 1998) as instrumental variables, we show three main findings: (1) the effect of fertility on labor supply is small and often indistinguishable from zero at low levels of income and large and negative at higher levels of income; (2) these effects are remarkably consistent both across time looking at the historical time series of currently developed countries and at a contemporary cross section of developing countries; and (3) the results are robust to other instrument variation, different demographic and educational groups, rescaling to account for changes in the base level of labor force participation, and a variety of specification and data decisions. We show that the negative gradient in female labor supply is consistent with a standard labor-leisure model augmented to include a taste for children. In particular, our results appear to be driven by a declining substitution effect to increasing wages that arises from changes in the sectoral and occupational structure of female jobs into formal non-agricultural wage employment as countries develop.
    Keywords: labor supply, fertilty, mothers
    JEL: F63 F66 J00 J13 N00
    Date: 2017–02
  21. By: Vernon Henderson; Tim Squires; Adam Storeygard; David Weil
    Abstract: Vernon Henderson and colleagues explore fundamental determinants of the location of economic activity.
    Keywords: agriculture, physical geography, development
    JEL: O13 O18 R12
    Date: 2017–03
  22. By: Diane Perrons
    Abstract: Economic geography, at its best, deploys economic and social theory to make sense of the economic, political and social transformation of regions and their impact on people’s lives and opportunities. Nowhere is this approach more evident than in the work of Ray Hudson, who has consistently focused on analysing the processes of combined and uneven development to explain the broad changes in the capitalist economy together with middle-level theories to account for the complexity of regional development in practice. In so doing he has created a powerful Geographical Political Economy that provides a deep understanding of the last four decades of economic restructuring and industrial transformation of the North-East Region of England and its impact on the lives of people living there. This article reflects on this aspect of Ray Hudson’s work in the context of his broader contributions to the academy.
    Keywords: Economic geography; space; place; social theory
    JEL: N0
    Date: 2017–01–23
  23. By: Campos, Nauro F; Coricelli, Fabrizio
    Abstract: This paper presents a dissonant view on post-war British economic performance. A defining feature is the decline of the UK relative to the six founding members of the European Union after 1945. However, this relative decline stopped. The conventional view is that a turning point occurs in the mid-1980s when Mrs Thatcher implements far-reaching structural reforms. This paper asks whether econometric evidence supports this conventional view and finds it does not. We then examine an alternative hypothesis: this turning point occurs around 1970 when the UK joined the European Community. We find strong econometric support for this view. The intuition we offer is that EU membership signalled the prominence of business groups that chose to compete at the high-tech end of the common European market against those business groups that preferred comparative advantage driven Commonwealth markets (mostly former colonies). Those pro-Europe business groups later become the constituency that provides support for Mrs Thatcher's reforms. Without this vital support, we argue, Mrs Thatcher's structural reforms would not have been nearly as effective, if proposed and implemented at all.
    Keywords: European integration; UK relative economic performance
    JEL: N14 O47
    Date: 2017–02
  24. By: Hanappi, Hardy
    Abstract: The capitalist mode of production has fulfilled a most astonishing ‘historical mission’ for the human species. It enabled an explosion of labor productivity gains and the discovery of new utility dimensions. But this progress came at the price of accompanying explosion of contradictions, of unequal benefits and burdens across global and local classes of humans. This paper sets out to explore what will happen if capitalism is finally ending, if its mission collapses. To do so a workable definition of the essence of capitalism is needed, I propose this to be the ‘capitalist algorithm’ – for a detailed treatment see [Hanappi, 2013]. The most interesting question then concerns the social mechanisms that might overcome – revolutionize – what currently dominates the behavior of large production conglomerates as well as their military arms on a global level. Following the tradition of Hegel and Marx it can be assumed that a large part of the capitalist algorithm simply will have to vanish. But as history shows there also always is a remainder of a mode of production that in an inverted form (Hegel: negation, German Marxism: ‘Umstülpung’) becomes part of the next progressive mode of production. To identify what ‘Capital after Capitalism’ could be, what has to be abolished and what might survive in which form – remember the double meaning of Hegel’s concept ‘Aufhebung’ – is a central prerequisite for a proper understanding of the coming revolution of the current mode of production. Since each step on the ladder of global social evolution is also a step in social human consciousness, this step in understanding implies a direct impact in guiding the actions to accomplish this turnover.
    Keywords: Capitalism, Utopia, Political Economy, Mode of Production
    JEL: B00 B59 N10 P16
    Date: 2016–11–28
  25. By: Jérémie Cohen-Setton (Peterson Institute for International Economics); Joshua K. Hausman (University of Michigan); Johannes F. Wieland (University of California, San Diego)
    Abstract: The effects of supply-side policies in depressed economies are controversial. This Working Paper sheds light on this debate using evidence from France in the 1930s. In 1936, France departed from the gold standard and implemented mandatory wage increases and hours restrictions. Deflation ended but output stagnated. The authors present time-series and cross-sectional evidence that these supply-side policies, in particular the 40-hour law, contributed to French stagflation. These results are inconsistent both with the standard one-sector new Keynesian model and with a medium-scale, multi-sector model calibrated to match the authors’ cross-sectional estimates. They conclude that the new Keynesian model is a poor guide to the effects of supply-side shocks in depressed economies.
    Keywords: Depression, stagflation
    JEL: E32 E31 E65 N14
    Date: 2017–03
  26. By: Georg Graetz; Guy Michaels
    Abstract: Since the early 1990s, the United States has been plagued by weak employment growth when emerging from recessions - so-called 'jobless recoveries'. Georg Graetz and Guy Michaels look at multiple recoveries elsewhere in the world over a 40-year period to see if the same applies - and whether modern technology is responsible.
    Keywords: job polarization, jobless recoveries, routine-biased technological change, robots
    JEL: E32 J23 O33
    Date: 2017–03
  27. By: Efraim Benmelech; Carola Frydman; Dimitris Papanikolaou
    Abstract: We provide new evidence that a disruption in credit supply played a quantitatively significant role in the unprecedented contraction of employment during the Great Depression. To analyze the role of financing frictions in firms' employment decisions, we use a novel, hand-collected dataset of large industrial firms. Our identification strategy exploits preexisting variation in the need to raise external funds at a time when public bond markets essentially froze. Local bank failures inhibited firms' ability to substitute public debt for private debt, which exacerbated financial constraints. We estimate a large and negative causal effect of financing frictions on firm employment. Interpreting the estimated elasticities through the lens of a simple structural model, we find that the lack of access to credit may have accounted for 10% to 33% of the aggregate decline in employment of large firms between 1928 and 1933.
    JEL: E24 E5 G01 G21 G31 J6 N42
    Date: 2017–03
  28. By: Andrew Clark; Sarah Flèche; Richard Layard; Nattavudh Powdthavee; George Ward
    Abstract: Understanding the key determinants of people's life satisfaction makes it possible to suggest policies for how best to reduce misery and promote wellbeing. A forthcoming book by Richard Layard and colleagues discusses evidence on the origins of happiness in survey data from Australia, Germany, the UK and the United States.
    Keywords: happiness, wellbeing, government, mental health
    Date: 2017–03
  29. By: Jäger, Philipp
    Abstract: Rising public pension generosity has frequently been cited as one reason for the (persistently) declining fertility rates in many advanced economies. Despite the theoretical appeal, empirical evidence on the pension-fertility nexus is limited. To fill this gap, I study country-level fertility trends before and after 23 pension reforms using a long-run panel dataset starting in 1870. In addition to the raw fertility rate (birth per women aged 15-49), I examine the residuals of a fertility regression, which capture variations in the fertility rate that cannot be explained by alternative theories of the historical fertility decline. Contrasting pre- and post-reform trends of the raw fertility rate as well as the fertility regression residual across countries, I do not find robust evidence that pension reforms, on average, affect fertility in the way most theoretical models predict. On the individual country level, however, some reforms are indeed associated with a significant structural break in fertility trends that is in line with the old-age security hypothesis. Varying social ties might provide an explanation for the different country-specific fertility reactions to pension reforms. @Großzügige öffentliche Rentenversicherungssysteme werden häufig für rückläufige Fertilitätsraten verantwortlich gemacht, da sie möglicherweise Kinder als eine Form der Altersabsicherung verdrängen. Trotz der Plausibilität und der Relevanz dieses Arguments, existiert kaum empirische Forschung zum Thema. Um diese Lücke zu füllen, untersuche ich wie sich die Fertilitätsrate vor- und nach einer Reihe von Rentenreformen, angefangen bei der Einführung der öffentlichen Rentenversicherung im 19. Jahrhundert, entwickelt hat. Im Durchschnitt über alle Länder hinweg finde ich keine Evidenz dafür, dass die Einführung oder Erweiterung der öffentlichen Rentenversicherungssysteme die Fertilitätsrate nachhaltig reduziert hat. Die länderspezifischen Ergebnisse sind allerdings sehr heterogen. In einigen Ländern scheint die Einführung der Rentenversicherung sogar mit einer Steigerung der Fertilität einhergegangen zu sein (z.B. in Italien), während in anderen Ländern das Gegenteil zu beobachten ist (z.B. in Frankreich). Kulturelle Unterschiede in Bezug auf die Eltern-Kind-Bindung bilden einen möglichen Erklärungsansatz für die Heterogenität der Ergebnisse.
    Keywords: Old-age security,fertility,pension reform
    JEL: H55 J13
    Date: 2017
  30. By: Aurélien Goutsmedt (Centre d'Economie de la Sorbonne)
    Abstract: The article shows that Sargent's view of macroeconomics is in contrast with Lucas' one. According to the latter, assumptions in a model are un-realist, the model do not aim at representing reality. It is rather a simulation tool to enable the evaluation of different economic policies. The Lucasian ideal reflects a belief in a macroeconomist who is an engineer in charge of the production of a “software for economic policies” used by governmental authorities. And he is the one who handles the software to help policy choices on a scientific basis. Concerning Sargent, he believed that in order to replace the Keynesian paradigm, New Classical Economics had to be able to succeed in the same tasks. And one of these tasks was to advise political power by bringing some telescope to read current economic phenomenon and some intuitive ideas to debate on economic policy. Sargent sought to implement what he called the Rational Expectations Theory to some concrete cases (Poincaré Stabilization, German Hyperinflation, Thatcher and Reagan policies) to show the relevance of such a framework to think about current economic issues
    Keywords: History of Macroeconomics; Macroeconomics; New Classical School; Stagflation
    JEL: B22 E52 N12
    Date: 2017–02

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