nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2017‒04‒09
thirty-one papers chosen by

  1. 200 years diversifying the energy mix? Diversification paths of the energy baskets of European early comers vs. latecomers By Rubio-Varas, Mar; Muñoz-Delgado, Beatriz
  2. The Power of Big Data: Historical Time Series on German Education. By Claude Diebolt; Gabriele Franzmann; Ralph Hippe; Jürgen Sensch
  3. Market Efficiency and Price Stabilization Policy in Interwar Osaka-Dojima Rice Exchange By Mikio Ito; Kiyotaka Maeda; Akihiko Noda
  4. Quality and inequality: Taste, value, and power in the third wave coffee market By Fischer, Edward F.
  5. America's Central Bank: The History and Structure of the Federal Reserve : a speech at the West Virginia University College of Business and Economics Distinguished Speaker Series, Morgantown, West Virginia, March 28, 2017. By Powell, Jerome H.
  6. Routine and ageing? The Intergenerational Divide In The Deroutinisation Of Jobs In Europe By Piotr Lewandowski; Roma Keister; Wojciech Hardy; Szymon Gorka
  7. Why Wait? A Century of Education, Marriage Timing and Gender Roles By Jeanne Lafortune; Murat Iyigun
  8. The Causal Impact of Human Capital on R&D and Productivity: Evidence from the United States By Verónica Mies; Matías Tapia; Ignacio Loeser
  9. Le problème de la justification du concept de bien méritoire en perspective By Maxime Desmarais-Tremblay
  10. Promovendo a subericultura? A política florestal de Espanha e Portugal (1852-1914) By Carlos M. Faísca
  11. Black living standards in South Africa before democracy: New evidence from heights By Bokang Mpeta; Johan Fourie; Kris Inwood
  12. Series enlazadas de algunos agregados económicos regionales, 1955-2014. Parte I: Metodología, VAB, PIB y puestos de trabajo. RegData_55-14, Versión 5.0-parte I By Angel de la Fuente
  13. State History and Contemporary Conflict: Evidence from Sub-Saharan Africa By Emilio Depetris-Chauvin
  14. Trends and Gradients in Top Tax Elasticities: Cross-country Evidence, 1900–2014 By Rubolino, Enrico; Waldenström, Daniel
  15. Measuring Extractive Institutions: Colonial Trade and Price Gaps in French Africa By Federico Tadei
  16. One is not enough! An economic history perspective on world trade collapses and deglobalization By van Bergeijk, P.A.G.
  17. Bank Capital Redux: Solvency, Liquidity, and Crisis By Jorda, Oscar; Richter, Björn; Schularick, Moritz; Taylor, Alan M.
  18. Comment: Inferring Trade Costs from Trade Booms and Trade Busts By Guillaume Corlay; Stéphane Dupraz; Claire Labonne; Anne Muller; Céline Antonin; Guillaume Daudin
  19. Un constructeur automobile français des Trente Glorieuses et son écrivain-essayeur de frère : Jean et Pierre Daninos By Dominique Lejeune
  20. The impact of real oil revenues fluctuations on economic growth in Algeria: evidence from 1960-2015 data By LAOURARI, Imène; GASMI, Farid
  21. Imperialism, Islam, and the transformation of self : the pilgrimage of Nacir ed-Dine Dinet (1861-1929) By Watanabe, Shoko
  22. Insurance and Insurance Markets By Dionne, Georges; Harrington, Scott
  23. The Economics of German Unification after Twenty-Five Years: Lessons for Korea By Michael C. Burda; Mark Weder
  24. Inversión y capital: Chile, 1833-2010 By José Díaz; Gert Wagner
  25. From wood to coal: Directed technical change and the British Industrial Revolution By John C. V. Pezzey; David I. Stern; Yingying Lu
  26. History Regimes in High School World History Textbooks in Contemporary Japan By Odanaka Naoki
  27. Geographical Origins and Economic Consequences of Language Structures By Assaf Sarid; Oded Galor
  28. Effects of Consumption Taxes on Real Exchange Rates and Trade Balances By Caroline Freund; Joseph E. Gagnon
  29. Who is Lying on the Procrustean Bed?: Current Historians of the World, Denationalize Ourselves! By ODANAKA, Naoki
  30. Twin Peaks: Japan’s Economic Aid to India in the 1950s and 2010s By Jain, Purnendra
  31. The presidents of the Bank of Taiwan and their times : background, management and business development : 1899-1925 By Hisasue, Ryoichi

  1. By: Rubio-Varas, Mar (Departamento de Economía. Universidad Pública de Navarra); Muñoz-Delgado, Beatriz (Departamento de Análisis Económico: Teoría Económica e Historia Económica. Universidad Autónoma de Madrid)
    Abstract: The changes in the composition of the energy basket in the long run lead to energy transitions. Primary energy substitution models allow addressing these phenomena. However, the diversification paths of the energy mix of different countries in a long term compared perspective have not been studied yet. This paper proposes an indicator, based on the Herfindahl-Hirschman Index, the Energy Mix Concentration Index (EMCI), to quantify the degree of diversification of the primary energy basket of eight European countries over the last two centuries. The results reveal that early comers, which are large energy consumers, required a huge concentration of their energy basket in the 19th century; however, the observed countries had converged to similar levels of diversification of their energy mixes from the second half of the 20th century, and more crucially after the oil crises. For some countries, today’s degree of diversification is the largest in their energy histories, but it is not the case for all of them. Our results suggest that small energy consuming countries would be able to achieve higher diversification, and therefore to do a faster transition to a low carbon economy, than large energy consumers.
    Keywords: energy mix, energy transitions, energy baskets, energy diversification, energy concentration index, Europe.
    JEL: C43 N50 N70 O13 O33 Q40
    Date: 2017–02
  2. By: Claude Diebolt; Gabriele Franzmann; Ralph Hippe; Jürgen Sensch
    Abstract: Numerous primary investigators collected and processed long termed time series on German educational statistics in the context of their studies. As a result there are a multitude of quantitative empirical studies. On the one hand there is the project group on German Educational Statistics. Its projects were targeted at describing and analysing the long-term structural changes of the German educational system on a broad empirical and statistical basis. On the other hand there are comprehensive data compilations of individual research projects, focusing on a wide variety of special educational research topics. The online database ‘histat’ provides central digital access to these datasets on German educational history. Currently, it offers more than 120,000 long-term time series on the German educational system for a period of 200 years. The striking size of the database shows its key importance for researchers in the field of education. Thus, this paper aims to provide useful insights into the background of the database, the special characteristics of the data compilations and their analytical potential. Additionally, examples are given of how the data have already been used by researchers.
    Keywords: Big Data, Cliometrics, Demography, Education, Germany.
    JEL: C81 C82 C83 I2 J11 N33 N34
    Date: 2017
  3. By: Mikio Ito; Kiyotaka Maeda; Akihiko Noda
    Abstract: We investigate how and to what extent the Japanese government intervened in the rice futures exchange in Osaka during the interwar period, from the late 1910s to 1939, using a time-varying AR model. We found the two facts by featuring the time-varying nature of the market efficiency. First, the intervention with discretionary power disrupted the rice market and reduced market efficiency in the exchange under the Rice Law in 1921 than the following second case. Second, the market remained efficient while traders pondered seasonally patterned interventions of the government based on the law established in 1933. When the government obtained the discretionary power to operate the policy regarding commodity market, the market efficiency often reduced. Conversely, even if the government implemented a large intervention, the market efficiency improved when the government's discretionary power was controlled by the law.
    Date: 2017–04
  4. By: Fischer, Edward F.
    Abstract: Based on a case study of the burgeoning high-end ("Third Wave") coffee market in the United States, this discussion paper examines value creation and capital accumulation in an age of neoliberal globalization. Drawing on sociological and economic theories of value, as well as perspectives on world systems and late capitalist accumulation, this paper proposes a framework in which the importance Marx ascribed to control over the material means of production has become eclipsed by control over the means of symbolic production in extracting surplus value through global trade. It shows how roasters, baristas, and marketers have created a new lexicon of quality for coffee, one tied to narratives of provenance and exclusivity that creates much of the value added in the coffee trade. This disadvantages smallholding coffee farmers who are heavily invested in land and the material means of production but lack the social and cultural capital to benefit from the surplus value created through symbolic production. It also perpetuates classic dependency patterns of global capital accumulation.
    Keywords: coffee,Guatemala,values,inequality,means of production,Kaffee,Guatemala,Werte,Ungleicheit,Produktionsmittel
    Date: 2017
  5. By: Powell, Jerome H. (Board of Governors of the Federal Reserve System (U.S.))
    Date: 2017–03–29
  6. By: Piotr Lewandowski; Roma Keister; Wojciech Hardy; Szymon Gorka
    Abstract: This paper analyses the age dimension of changes in the task composition of jobs in 12 European countries between 1998 and 2014. We use the approach proposed by Autor et al. (2003) and Acemoglu & Autor (2011), and combine O*NET occupation content data with EU-LFS individual data to construct five task content measures: non-routine cognitive analytical, non-routine cognitive interpersonal, routine cognitive, routine manual, and non-routine manual physical. We find that the shift away from routine work and toward non-routine work occurred much faster among workers born between 1970 and 1989 than among workers born between 1950 and 1969. We find that in the majority of countries, the ageing of the workforce occurred more quickly in occupations that were initially more routine-intensive, as the share of young workers in these occupations was declining. We estimate logit models that show that individuals in these occupations were increasingly likely to be unemployed, especially if they were between the ages of 15 and 34.
    Keywords: task content of jobs, routinisation, ageing, occupational change, O*NET
    JEL: J21 J23 J24
    Date: 2017–03
  7. By: Jeanne Lafortune; Murat Iyigun
    Abstract: We document that, over the 20th century, age at first marriage followed a U-shaped pattern, while the gender education gap tracked an inverted-U path in the United States. To explain this, we propose a multi-period frictionless matching model where educational and marriage decisions are endogenous. Two key assumptions are made: marriage requires a fixed cost and married couples cannot study simultaneously. This simple model can replicate the aforementioned stylized facts and is consistent with our empirical result that exogenous delays in marriage age caused by minimum age laws decreased the educational difference within a couple while increasing their educational attainment.
    JEL: J12 J11 N32
    Date: 2016
  8. By: Verónica Mies; Matías Tapia; Ignacio Loeser
    Abstract: This paper contributes to the empirical literature on the impact of human capital on technology adoption and the production structure of the economy by using census micro data aggregated at the state level data for US cohorts born between 1915 and 1939. We test the impact of secondary and tertiary schooling in the US at the state-cohort level on R&D and TFP growth across industries in 1970. While we follow the literature in using the variation in the timing of compulsory schooling laws across states to instrument secondary schooling, we propose a novel instrument for tertiary enrollment. In particular, we exploit, as in Acemoglu, Autor and Lyle (2004), the differences across states and cohorts in World War II mobilization rates. While Acemoglu, Autor, and Lyle (2004) used this variation as an exogenous shift in female labor supply, we exploit the fact that WWII veterans were benefited by the GI Bill Act (1944), which granted them free college education once they were discharged from service. This provides a clean source of variation in the costs of attending college, which allows us to exploit differences in college enrollment across states and cohorts. Our results suggest that, consistent with the initial discussion, different types of human capital are associated to different effects on the productive structure of the economy. Two-stage least squared regressions find no effect of the share of population with secondary schooling over outcomes such as R&D per worker or TFP growth. On the other hand, the share of population with tertiary education has a significant effect on both R&D per worker or TFP growth. In particular, a 1% increase in the share of workers with tertiary education increases R&D per worker by 1.8 percentage points, and annual TFP growth by 1% for 17 years. Creation-Date: 2015
    JEL: J14 O12 L26 M53
  9. By: Maxime Desmarais-Tremblay (Centre Walras-Pareto - Université de Lausanne, LSE (CPNSS) - London School of Economics, Centre for Philosophy of Natural and Social Science (CPNSS) - LSE - London School of Economics and Political Science, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Le concept de bien méritoire (merit good) a été inventé par Richard A. Musgrave dans le cadre de sa Theory of Public Finance publiée en 1959. Le but de cet article est de situer le débat sur la justification du concept de bien méritoire dans une perspective historique. Les différentes prises de position reflètent et participent à l’évolution de l’économie du bien-être des années 1950 à aujourd’hui. Dans la première section, je reconstruis le contexte de la théorisation des dépenses publiques en économie en identifiant plus spécifiquement l’apport de Musgrave. Dans les deux sections suivantes, je montre que l’on peut distinguer deux grandes familles dans le corpus sur la justification du concept de biens méritoires. Dans la deuxième section, je montre comment certains auteurs justifient les biens méritoires en adaptant légèrement les hypothèses de l’économie du bien-être. Dans la troisième section, je discute les usages du concept qui remettent en question la dominance des préférences individuelles dans l’évaluation du bien-être, notamment en admettant des responsabilités de l’État socialement irréductibles aux demandes individuelles.
    Keywords: biens méritoires, besoins méritoires, biens sous tutelle, biens collectifs, Richard A. Musgrave
    Date: 2016
  10. By: Carlos M. Faísca
    Abstract: Portugal currently leads worldwide all the facets of the cork business, from the forest market, through manufacturing and the trade of cork products. This scenario is enhanced with the fact that in Portugal the cork oak trees have the best conditions for their development. However, up to 1930s, this role was played by other countries, especially by Spain, and is important to understand the factors that contributed to this situation. Recent historiography has highlighted the public policies pursued by Portugal during the Estado Novo, in comparison with those followed by the Franco regime, as one of the main reasons for the rise of the portuguese cork sector, which includes forestry policy. Therefore, it’s important to carry out a similar exercise for the chronology in question, thus the aim of this work is to analyze, in a comparative perspective, the nineteenth-century forest and cereal policies of Portugal and Spain, in the latter case due to the implications that cereal protectionism had towards the cork oak forests. Legislative sources, technical reports and official agricultural statistics were used, and it was concluded that there was no clear advantage derived from any agroforestry public policy by the spanish cork industry compared to the portuguese one. In the matter of fact, as we will demonstrate, both States procedured with great similarity.
    Keywords: Iberian Peninsula, forestry policy, cereal policy, cork production, cork industry
    JEL: Q23 Q18 N50 N53
    Date: 2017–03
  11. By: Bokang Mpeta; Johan Fourie; Kris Inwood
    Abstract: Very little income or wage data was systematically recorded on the living standards of South Africa’s black majority during much of the twentieth century. Between 1911 and 1996, for example, only fragmentary evidence of black living standards remain in mining reports and manufacturing censuses, often at a too generalised level or of too short time-span to render any meaningful unbiased, long-run interpretations of living standards. This paper uses three new datasets to document, for the first time, the stature of black South Africans over the course of the twentieth century. The data allow us to disaggregate by ethnicity within the black population group, revealing levels of inequality within race group that has been neglected in the literature.
    Keywords: apartheid, living standards, South Africa, heights, anthropometric, twentieth century
    Date: 2017–02
  12. By: Angel de la Fuente
    Abstract: En este trabajo se construyen series “homogéneas” anuales de VAB y PIB a precios corrientes y constantes y de puestos de trabajo para las regiones españolas durante el periodo 1955-2014. Estas series se obtienen enlazando la Contabilidad Regional del INE con las series elaboradas por Julio Alcalde y colaboradores para la Fundación BBVA. El “punto de corte” en el que se abandona esta última fuente en favor de la anterior como referencia para la construcción de la serie larga enlazada se determina utilizando un procedimiento que permite estimar cuál de las dos series disponibles generará un estimador con menor error cuadrático medio cuando se utiliza como variable dependiente en una regresión sobre una variable independiente arbitraria. La discrepancia entre ambas series que aflora en el momento del enlace se reparte entre los niveles iniciales y las tasas de crecimiento de la serie más antigua utilizando, en la medida de lo posible, estimaciones externas del valor de las variables de interés a comienzos del período muestral.
    Date: 2017–04
  13. By: Emilio Depetris-Chauvin
    Abstract: I examine empirically the role of historical political centralization on the likelihood of contemporary civil conflict in Sub-Saharan Africa. I combine a wide variety of historical sources to construct an original measure of long-run exposure to statehood at the sub-national level. I then exploit variation in this new measure along with geo-referenced conflict data to document a robust negative relationship between long-run exposure to statehood and contemporary conflict. From a variety of identification strategies, I provide evidence suggesting that the relationship is causal. I argue that regions with long histories of statehood are better equipped with mechanisms to establish and preserve order. I provide two pieces of evidence consistent with this hypothesis. First, regions with relatively long historical exposure to statehood are less prone to experience conflict when hit by a negative economic shock. Second, exploiting contemporary individual-level survey data, I show that within-country long historical statehood experience is linked to people’s positive attitudes toward state institutions and traditional leaders.
    JEL: D74 N47 O10 O17 Z10
    Date: 2016
  14. By: Rubolino, Enrico (Uppsala University); Waldenström, Daniel (Research Institute of Industrial Economics (IFN))
    Abstract: We compile data spanning the period 1900–2014 and up to 30 countries to study long-run patterns in the tax elasticity of top incomes. Our results show that top tax elasticities vary tremendously over time; they were medium-to-low before 1950, virtually zero during the postwar era up to 1980 and have thereafter increased to unprecedented levels. We document a strong income gradient in tax response within the top, underlining the importance to study even small top groups separately. Several mechanisms are investigated. Tax-driven income shifting between wage and capital income is important in the very top. Wars, financial crises, and country-specific effects and trends have bearing on top elasticities whereas standard macroeconomic factors and indicators of “real responses” do not.
    Keywords: Economic history; Income inequality; Taxation
    JEL: D31 H21 H24 H26 N40
    Date: 2017–03–27
  15. By: Federico Tadei (Department of Economic History, Universitat de Barcelona.)
    Abstract: A common explanation for current African underdevelopment is the extractive character of institutions established during the colonial period. Yet, since colonial extraction is hard to quantify, the magnitude of this phenomenon is still unclear. In this paper, I address this gap in the literature by focusing on monopsonistic colonial trade in French Africa. By using new archival data on export prices, I provide yearly-estimates of colonial extraction via trade, measured as the gap between actual prices that the colonial trading companies paid to African agricultural producers and prices that should have been paid in a counter-factual competitive market (i.e. world prices minus trade costs). The results show that African prices were about half than what they would have been in competitive markets. This suggests that colonial trade dynamics was characterized by a considerable amount of extraction.
    Keywords: Africa, Development, Extractive Institutions, Colonization, Trade, Price Gaps
    JEL: N17 O43
    Date: 2017–03
  16. By: van Bergeijk, P.A.G.
    Abstract: This paper provides a comparative economic history perspective on two significant periods of deglobalization: the Great Depression in the 1930s and the period following the Financial Crisis of 2008/9. The paper discusses differences and similarities and provides empirical results regarding the correlates of deglobalization, including the political system (institutions), level of development (GDP per capita) and the share of manufacturing.
    Keywords: deglobalization, world trade collapse, economic history, value chains, politics and trade, 1930s, world trade slowdown
    Date: 2017–03–28
  17. By: Jorda, Oscar (Federal Reserve Bank of San Francisco); Richter, Björn (University of Bonn); Schularick, Moritz (University of Bonn); Taylor, Alan M. (University of California, Davis)
    Abstract: Higher capital ratios are unlikely to prevent a financial crisis. This is empirically true both for the entire history of advanced economies between 1870 and 2013 and for the post-WW2 period, and holds both within and between countries. We reach this startling conclusion using newly collected data on the liability side of banks’ balance sheets in 17 countries. A solvency indicator, the capital ratio has no value as a crisis predictor; but we find that liquidity indicators such as the loan-to-deposit ratio and the share of non-deposit funding do signal financial fragility, although they add little predictive power relative to that of credit growth on the asset side of the balance sheet. However, higher capital buffers have social benefits in terms of macro-stability: recoveries from financial crisis recessions are much quicker with higher bank capital.
    JEL: E44 G01 G21 N20
    Date: 2017–03–28
  18. By: Guillaume Corlay (ENSAE - Ecole Nationale de la Statistique et de l'Analyse Economique - Ecole Nationale de la Statistique et de l'Analyse Economique); Stéphane Dupraz (Department of Economics Columbia University - Columbia University [New York]); Claire Labonne (ENSAE - Ecole Nationale de la Statistique et de l'Analyse Economique - Ecole Nationale de la Statistique et de l'Analyse Economique); Anne Muller (ENSAE - Ecole Nationale de la Statistique et de l'Analyse Economique - Ecole Nationale de la Statistique et de l'Analyse Economique); Céline Antonin (OFCE - OFCE - Sciences Po); Guillaume Daudin (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine)
    Abstract: Jacks et al. (2011) offer an alternative to price gaps to quantify trade costs. Implementing a method which consists in deducing international trade costs from trade flows, they argue that the reduction in trade costs was the main driving force of trade growth during the first globalization (1870-1913), whereas economic expansion was the main driving force during the second globalization (1950-2000). We argue that this important result is driven by the use of an ad hoc aggregation method. What Jacks et al. (2011) capture is the difference in the relative starting trade of dyads experiencing faster trade growth in the first and second globalization. More generally, we cast doubts on the possibility to reach conclusions of such nature with a method that infers trade costs from trade flows, and then uses these costs to explain trade flows. We argue that it can only rephrase the information already contained in openness ratios.
    Keywords: Trade costs,globalization,gravity model,aggregation,structure effect
    Date: 2017–02–23
  19. By: Dominique Lejeune (Lycée Louis Le Grand - C.P.G.E.)
    Abstract: Jean (Clément) Daninos est le constructeur des automobiles de prestige Facel, société fondée en 1939, qui fabriqua également les carrosseries de voitures prestigieuses, comme la Ford Comète (1951-1954). La première Facel Vega dessinée par Jean Daninos sortit en 1954, équipée d’un moteur Chrysler.
    Keywords: Histoire sociale,Automobile,Entreprises
    Date: 2017–02–14
  20. By: LAOURARI, Imène; GASMI, Farid
    Abstract: This paper investigates the impact of real oil revenues fluctuations on economic growth in Algeria using data from 1960 to 2015. To shed some new light on this question, we use a measure of real oil revenues recently developed by Gasmi and Laourari (2015) that is endogenous to Algeria’s international trade structure. We apply the Johansen multivariate cointegration approach to analyze the short-run and the long-run dynamic relationship between real oil revenues and economic growth proxied by two variables, namely, real GDP and industrial sector growth. The cointegration analysis suggests that a long-run relationship exists between real oil revenues, real GDP, and industrial growth in Algeria. The impulse response function and the variance decomposition analysis suggest that the impact of unexpected shifts in real oil revenues on the country's economic and industrial growth is negative.
    Keywords: Algeria, Real oil revenues fluctuations, Economic growth, Industrial sector, Time series.
    JEL: C32 O13 O14 Q32
    Date: 2016–10–10
  21. By: Watanabe, Shoko
    Abstract: Orientalist travel writing has often been understood as a literate form of imperial domination in which Western travelers reproduced a stereotyping narrative of non-Westerners to reinforce the dichotomist worldview between Westerners and non-Westerners. To reconsider this view, this paper discusses the Muslim pilgrimage account written by converted French orientalist painter, Nacir ed-Dine, born Étienne Dinet (1861–1929). This paper argues that Dinet saw that the difference which separates Europeans and Muslims was surmountable. This worldview allowed Dinet to have hope for self-transformation, which would ultimately blur the cultural borders between the dominators and the dominated as defined in the colonial context.
    Keywords: Colonialism, Islam, Book of travels, Orientalism, French Colonialism, Travel Account, Muslim Pilgrimage
    Date: 2017–03
  22. By: Dionne, Georges (HEC Montreal, Canada Research Chair in Risk Management); Harrington, Scott (University of Pennsylvania)
    Abstract: Kenneth Arrow and Karl Borch published several important articles in the early 1960s that can be viewed as the beginning of modern economic analysis of insurance activity. This chapter reviews the main theoretical and empirical contributions in insurance economics since that time. The review begins with the role of utility, risk, and risk aversion in the insurance literature and then summarizes work on the demand for insurance, insurance and resource allocation, moral hazard, and adverse selection. It then turns to financial pricing models of insurance and to analyses of price volatility and underwriting cycles; insurance price regulation; insurance company capital adequacy and capital regulation; the development of insurance securitization and insurance-linked securities; and the efficiency, distribution, organizational form, and governance of insurance organizations.
    Keywords: Insurance; insurance market; risk sharing; moral hazard; adverse selection; demand for insurance; financial pricing of insurance; price volatility; insurance regulation; capital regulation; securitization; insurance-linked security; organization form; governance of insurance firms.
    JEL: D80 D81 D82 G22 G30
    Date: 2017–03–30
  23. By: Michael C. Burda (Humboldt-Universität zu Berlin, CEPR and IZA); Mark Weder (School of Economics, University of Adelaide)
    Abstract: This paper reviews the performance of the East German economy in the turbulent quarter-century following reunification and draws some conclusions for the reunification of North and South Korea. In this period, the gap in output per capita between East and West Germany declined at a speed not far from empirical estimates of the neoclassical growth model, yet systematic total factor productivity differentials persist despite identical institutional frameworks and significant investment in the eastern regions. At the same time, regional disparities in income, well-being, and health are little different from those found within West Germany, and net migration has ceased. On this human metric, German unification has been an unqualified success. For Korea, an effort of this dimension will be costly. A back-of-the-envelope calculation suggests that Korean unification will cost roughly twice as much as its German counterpart.
    Keywords: East Germany, convergence, total factor productivity, Korean unification.
    JEL: P2 O11 E02
    Date: 2017–04
  24. By: José Díaz; Gert Wagner
    Abstract: This paper reports sources and methods utilized when estimating Chilean gross investment and net capital stock of fixed assets between 1833 and 2010.Two types of assets are identified: (i)machinery and equipment and (ii)construction (total). The main source for machinery investments is imports and a price for such goods based on Chilean import structure and export data of providing countries. In the case of construction, we rely on public expenditure on infrastructure and indirect measures for private activity. From 1940 onwards all data is obtained from national accounts. Capital is generated applying the perpetual inventory method. Main findings are: (i)Chile starts from a quite low capital output ratio around 1830, (ii)in the second half of the 19th Century, and specially due to the expansion of construction, the economy reaches capital output ratios comparable with other countries, (iii)the relative importance of machinery and equipment in total investment starts at practically zero increasing along the 170 years, (iv)capital per laborer expands systematically but slowly.
    JEL: E22 N16 O16
    Date: 2016
  25. By: John C. V. Pezzey; David I. Stern; Yingying Lu
    Abstract: We build a directed technical change model of the British Industrial Revolution where one intermediate goods sector uses a fixed renewable energy ("wood") quantity, and another uses coal at a fixed price. With a high enough elasticity of substitution between the two goods in producing final output, an industrial revolution, where over time the coal-using sector grows relative to the wood-using sector and its growth accelerates, is not inevitable. However, greater initial scarcity of wood and/or higher population growth puts the economy on a path to an industrial revolution. The converse slows industrialization, or even prevents it forever.
    Keywords: British Industrial Revolution, directed technical change, renewable energy, coal, two-sector model, substitutability, population growth
    JEL: N13 N73 O33 O41 Q43
    Date: 2017–03
  26. By: Odanaka Naoki
    Date: 2016–05
  27. By: Assaf Sarid (Department of Economics, University of Haifa); Oded Galor (Department of Economics, Brown University)
    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 returns to agricultural investment, gender gaps in agricultural productivity, and the emergence of hierarchical societies, are at the root of existing cross-language variations in the structure of the future tense and the presence of grammatical gender and politeness distinctions. Moreover, the research suggests that while language structures have largely re ected past human experience and ancestral cultural traits, they have independently a ected human behavior and economic outcomes.
    Keywords: Comparative Development, Cultural Evolution, Language Structure, Future Tense, Po- liteness Distinctions, Grammatical Gender, Human Capital, Education
    JEL: D01 D03 J16 Z10 Z13
  28. By: Caroline Freund (Peterson Institute for International Economics); Joseph E. Gagnon (Peterson Institute for International Economics)
    Abstract: This paper examines the effects of border-adjusted consumption taxes (mainly value added taxes or VATs) in a sample of 34 advanced economies from 1970 through 2015. We find that the real exchange rate tends to rise by the full amount of any consumption tax increase, with little effect on the current account balance and modest offsetting effects on the trade and income balances. Case studies suggest that adjustment comes initially through prices. We note that the border-adjusted cash flow tax of the House Republicans differs in important ways from consumption taxes used in our study, which raises the possibility of a slower adjustment process with temporarily larger trade effects.
    Keywords: VAT, border tax adjustment, exchange rate adjustment, current account adjustment
    JEL: F31 F32 H20
    Date: 2017–04
  29. By: ODANAKA, Naoki
    Date: 2016–03
  30. By: Jain, Purnendra
    Abstract: This paper concerns the significance of Official Development Assistance (ODA) in Japan’s relationship with India. It explores how and why peaks in Japan’s ODA to India parallel the two highpoints in the overall bilateral relationship ? the early post-war period (roughly to the early1960s), and the present (from the mid-2000s). It argues that whatever other purposes Japan’s ODA may serve domestically and internationally through supporting economic development, in the program with India ODA has politico-strategic utility in signaling not just to India, but also to the rest of Asia and beyond, Japan’s interest in strengthening this bilateral relationship to gain leverage in Asia. Early in the post-war period, collaboration with India was seen to provide an entry point for the development of primarily commercial relations with Southeast Asia and other Asian nations while lingering concerns about Japan’s wartime incursions supported resistance to other approaches. Currently, while positioned as Japan’s special strategic and global partner, and enjoying an ever more powerful economy, India helps open the way for Japan to extend strategic leverage within Asia and beyond. This is significant for Japan at a time when regional transformation, especially through China’s rise, is becoming instrumental in reshaping the regional and global balance of power, causing Japan great strategic and economic concerns along the way.
    Keywords: Japan,India,foreign aid,Japan?India relations,ODA,strategic ties,financial assistance
    Date: 2017–02
  31. By: Hisasue, Ryoichi
    Abstract: This paper is the brief history of the Bank of Taiwan (BOT, å °æ¹¾éŠ€è¡Œ) from 1899 to 1925, especially focusing on the first to the fourth presidents who represent the era of the rise and fall of the BOT. The BOT was established by the Japanese government in 1899 as colonial development bank in Taiwan, however they changed the business model to that of an international bank covering mainland China and Southeast Asia in 1910s. This rapid expansionism failed in the early 1920s and the BOT temporarily closed its doors in 1927. The question is how and when these problems occurred and spread in the organization as a result of mismanagement. Through the analysis of their achievements and personal background along with corporate performance and macro history, we are better able to understand the rise and fall of the BOT.
    Keywords: Banks, Economic history, Imperialism, Taiwan, Bank of Taiwan, Southward movement, Financial history
    JEL: N25 N45 N85 N95
    Date: 2017–03

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