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on Business, Economic and Financial History |
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Issue of 2017‒04‒16
28 papers chosen by |
| By: | Ross, Cesar |
| Abstract: | This article analyzes the formalization of Chilean banking activity in the second half of the 19th century. It also considers the consequences of the legalization of banknote issuance as legal currency on the Chilean economy. The main hypothesis is that the formalization of banking activity had two main effects: on the one hand, it helped to develop the money market. On the other hand, it increased market concentration while there was no control of money issuing activity. This article is based on an archival research, contemporary magazines, newspapers and other secondary sources. |
| Keywords: | issuing banks, means of payment, bank notes, Chile |
| JEL: | E51 L53 N2 N86 |
| Date: | 2016–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78001&r=his |
| By: | Cohen, James |
| Abstract: | Cohen argues that the rise of neo-liberalism in the U.S. framed the failure of attempts to implement high speed rail in Florida between 1981 and 2011. In the 1980's rail promoters attempted, but were unable to apply neo-liberal precepts of financing new lines solely from sources of private capital, such as real estate development. Subsequently, financing plans based on both public and private funds were defeated by neo-liberal governors and their allies in Congress. As a result, the only new passenger line that appears likely to begin operations in Florida in the near future, is Florida East Coast Railway's Brightliner, which will operate at between 79 and 125 miles per hour, on existing freight rights of way between Miami and Orlando, with a possible future extension to Tampa. Cohen explains why this moderate speed line is likely to succeed, where prior attempts at high speed failed. |
| Keywords: | High speed rail; railways; political economy; capital finance; financial history; neo-liberalism; Florida |
| JEL: | N2 |
| Date: | 2016–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76765&r=his |
| By: | Andersson, David E. (Department of Business Studies, Uppsala University); Galaso, Pablo (Instituto de Economía, Universidad de la República); Saiz, Patricio (Departamento de Análisis Económico: Teoría Económica e Historia Económica. Universidad Autónoma de Madrid) |
| Abstract: | Sweden and Spain have developed very distinct systems of innovation over the long term. The former has a highly innovative economy while the latter drags serious problems in science and technology. However, during the first half of the nineteenth century both countries were latecomers to the industrial revolution in the European periphery with similar economic, technological, and institutional challenges ahead. In this paper, we hypothesize that one possible reason for this long-term divergence lies in the different collaboration patterns that emerge from interactions among innovative agents. To analyse such cooperation patterns we apply social network analysis methods and study co-patent networks in Sweden and Spain during the second industrial revolution (1878-1914). The results demonstrate that collaboration among innovators and openness to foreign influence was greater in Sweden than in Spain. This research opens new paths for further studies both on economic history and innovation networks dynamics. |
| Keywords: | collaboration, innovation networks, patents, social network analysis, Sweden, Spain, second industrial revolution |
| JEL: | N01 N73 O30 O33 Z13 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:uam:wpapeh:201702&r=his |
| By: | P. J. Lloyd (Department of Economics, University of Melbourne) |
| Abstract: | This paper reviews the history of tariffs imposed by the six Australian colonies during the 19th century. First, in each of the colonies, it identifies the starting points for the first tariffs, first preferences, and other features and the turning points in the levels of tariffs. It then constructs time series of the average tariff levels in the individual colonies and an average for All Six Colonies Combined. The conclusion notes general features of the pattern of tariffs and how the main features of colonial tariffs carried over to the Commonwealth Customs Tariff in the 20th century. |
| Keywords: | colonies, average tariff rates, tariff revenue, protection |
| JEL: | N1 F13 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:mlb:wpaper:2018&r=his |
| By: | Rubolino, Enrico; Waldenström, Daniel |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11935&r=his |
| By: | Metaxas, Theodore; Kechagia, Polyxeni |
| Abstract: | International capital flows have a significant social, political and financial impact on the trading countries. These flows are distributed among the geographical regions and as a result over the past decades underdeveloped, developing and transition economies made efforts and proceeded to reforms so as to absorb more foreign capital inflows. A determinant factor of foreign capital inflows is the host country’s political stability. We focus on external conflicts and terrorist attacks, taking into consideration the remarkable increase in total terrorist attacks in recent decades. In addition, we focus on a specific type of foreign capital flows and therefore we study the foreign direct investment (FDI) inflows. We perform a literature review on empirical studies that examined the interaction between FDI and terrorist attacks. The purpose of the essay is to investigate and discuss the correlation between FDI and terrorism in developing economies during the period 1970 – 2015 in the developing Asian countries. We aim at evaluating the impact of terrorism on the FDI inflows in the region. The contribution of the essay refers to the fact that it covers a larger period of time compared to past studies and that it includes both fatalities and injuries occurring from international terrorist attacks. We argue that terrorist attacks have a negative impact on FDI inflows in the region. |
| Keywords: | Foreign Direct Investment, Developing Countries, International Conflicts, Terrorism, Asia |
| JEL: | F21 F51 O53 R11 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78165&r=his |
| By: | Giampaolo Lecce; Laura Ogliari |
| Abstract: | The economic impact of exported institutions depends on the underlying cultural environment of the receiving country. We present evidence that cultural proximity between the exporting and the receiving country positively affects the adoption of new institutions and the resulting long-term economic outcomes. We obtain this result by combining new information on pre-Napoleonic kingdoms with county-level census data from nineteenthcentury Prussia. This environment allows us to exploit a quasi-natural experiment generated by radical Napoleonic institutional reforms and deeply rooted cultural heterogeneity across Prussian counties. We show that counties that are culturally more similar to France, in terms of either religious affiliation or historical exposure to French culture, display better long-term economic performance. We analyze a range of alternative explanations and suggest that our findings are most easily explained by cultural proximity facilitating the adoption of new institutions. Keywords: Institutions, Institutional Transplants, Culture, Economic Growth JEL classification: N13, N43, O47, Z10, Z12 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:598&r=his |
| By: | Keskinsoy, Bilal |
| Abstract: | This paper investigates international capital flows to developing countries for the period 1970-2006. The study focuses on the empirical puzzle that although one would expect international capital to flow to capital scarce countries where returns are higher, observation shows that capital flows to richer rather than to poorer countries (the Lucas paradox). To explore this, total capital is measured as the sum of foreign direct investment and portfolio equity flows. The paper addresses the argument, based on cross-section evidence (Alfaro et al., 2008, Rev. Econ. Stats), that including the quality of institutions accounts for the paradox (because richer countries have better institutions they attract more capital) and finds that this only holds if developed countries are included; within developing countries, institutions do not account for the paradox. Hence, for a consistent sample of 47 developing countries the positive wealth bias in international capital flows or the Lucas paradox is shown to be a persistent phenomenon in the long run. |
| Keywords: | Capital flows, Lucas paradox, Institutional quality, Economic growth, Cross-section OLS |
| JEL: | E02 F41 O16 |
| Date: | 2017–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78126&r=his |
| By: | Andrey Korotayev (National Research University Higher School of Economics); Leonid Grinin (National Research University Higher School of Economics); Leonid Issaev (National Research University Higher School of Economics); Alisa Shishkina (National Research University Higher School of Economics); Evgeny Ivanov (National Research University Higher School of Economics); Kira Meshcherina (National Research University Higher School of Economics) |
| Abstract: | The present working paper analyzes the world order in the past, present and future as well as the main factors, foundations and ideas underlying the maintaining and change of the international and global order. The first two sections investigate the evolution of the world order starting from the ancient times up to the late twentieth century. The third section analyzes the origin and decline of the world order based on the American hegemony. The authors reveal contradictions of the current unipolar world and explain in what way globalization has become more profitable for the developing countries but not for the developed ones. The paper also explains the strengthening belief that the US leading status will inevitably weaken. In this connection we discuss the alternatives of the American strategy and the possibility of the renaissance of the American leadership. The last section presents a factor analysis which allows stating that the world is shifting toward a new balance of power and is likely to become the world without a leader. The new world order will consist of a number of large blocks, coalitions and countries acting within a framework of rules and mutual responsibility. However, the transition to a new world order will take certain time (about two decades). This period, which we denote as the epoch of new coalitions, will involve a reconfiguration of the World-System and bring an increasing turbulence and conflict intensity. There are grounds to conclude that in 2011–2012 the World-System experienced to some extent a phase transition to a qualitatively new state of global protest activity. This phase transition is shown to bear some resemblance to the one which the World-System experienced in the early 1960s. The first (after 1919) phase transition of this sort occurred in the early 1960s and was related to the growth of global informational connectivity after the World War II, as well as the improvement of the means of protest self-organization due to the spread of television, portable radio receivers, portable electric loud-speakers and other technologies of the Fourth Kondratieff Cycle. The phase transition of the early 2010s was prepared by a new wave of growth of global informational connectivity, as well as the improvement of the means of protest self-organization due to the spread of various technologies of the Fifth Kondratieff cycle (the Internet, satellite television, Twitter and other social networks, mobile telephony etc.). Similarly to what was observed during the Fourth Kondratieff Wave, during the Fifth Cycle while the spread of these technologies was going on for many years before 2011, their internal colossal potential for generating and spreading protest activity was realized in one leap, as a phase transition. |
| Keywords: | World-System, CNTS, anti-governmental demonstrations, phase transition, change of international powers balance, turbulence, Kondratieff cycles; hype-cycles; Internet; Arab Spring; sociopolitical destabilization; protests activity. |
| JEL: | Z |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:29/ir/2017&r=his |
| By: | Thilo Albers (Department of Economic History, London School of Economics and Political Science. Macrohistory Lab, University of Bonn) |
| Abstract: | The devaluations of the 1930s facilitated a faster recovery from the Great Depression in the countries depreciating, but their unilateral manner provoked retaliatory commercial policies abroad. This paper explores the importance of the retaliatory motive in French trade policy during the 1930s and its effects on trade. Relying on a novel dataset of bilateral tariff rates and a difference in differences approach, the quantification of the protectionist response suggests that retaliation was an important motive behind increasing tariffs. The resulting beggar-my-neighbour penalty reduced trade to a similar degree that modern regional trade agreements foster trade. Furthermore, the analysis of contemporary newspapers reveals that the devaluations of the early 1930s triggered a lasting Anglo-French trade conflict marked by tit-for-tat protectionist policies. Overall, the quantitative and qualitative results indicate that the unilateral currency depreciations came at a high price in political and economic terms. |
| Keywords: | Currency Manipulation, Great Depression, Tariff Retaliation, Beggar-my-neighbour Policies |
| JEL: | N44 N74 F13 F15 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:hes:wpaper:0110&r=his |
| By: | Hoechle, Daniel; Karthaus, Larissa; Schmid, Markus |
| Abstract: | The literature on IPO long-term performance generally focuses on three- to five-year post-issue time horizons. Research published in the 2000s shows that the apparent underperformance of IPOs docu-mented in the 1990s disappears when the different risk exposures between IPO and mature firms are accounted for by using a Carhart (1997) factor model. In this paper, we show that a sample of 7,487 U.S. IPOs between 1975 and 2014 continues to significantly underperform mature firms in terms of Carhart-alphas over two years, with underperformance peaking one year after going public. We apply a regression-based portfolio sorts approach (RPS), which allows to decompose the Carhart-alpha into firm-specific characteristics, to explain one-year IPO underperformance using a multitude of market and firm characteristics in a statistically robust setting. In fact, our RPS-model that augments the Carhart factors by a set of firm characteristics related to investments, internationality, liquidity, and leverage can explain IPO underperformance. We find similar results when using the Fama-French three-factor model or an augmented version of the Carhart model. We challenge our RPS-model by applying it to the most severely underperforming sub-samples in terms of firm size, time period, venture capital involvement, and IPO underpricing, and find it to explain IPO underperformance across all sub-samples. |
| Keywords: | IPO Underperformance, Long-Term Performance Evaluation, Time Horizon, Firm Characteristics |
| JEL: | G14 G24 G32 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:usg:sfwpfi:2017:06&r=his |
| By: | Siedschlag, Iulia; Lawless, Martina; Di Ubaldo, Mattia |
| Abstract: | This paper reviews the international evidence on measuring investment in knowledge-based capital (KBC) and its impact on productivity. On this evidence basis, it provides a conceptual framework to analyse Ireland’s performance in this area on macroeconomic, industry and firm levels. The evidence reviewed in this paper indicates that investment in KBC is sizeable and has increased over time in many advanced economies, including Ireland. At the country, sectoral and firm level, the contribution of investment in KBC to productivity growth over and above other factors including investment in tangible capital is documented as important. This paper also reviews and discusses economic framework policies which could incentivise further investment in knowledge-based capital in Ireland. |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp557&r=his |
| By: | Joshua C. Hall (West Virginia University, Department of Economics) |
| Abstract: | In this essay, I highlight some of the contributions of Deirdre McCloskey to the practice of economics as a teacher and scholar. I highlight her influence on my teaching and scholarship in the areas of economic education and economic freedom. |
| Keywords: | rhetoric, economic freedom, storytelling |
| JEL: | A00 A11 A23 B31 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:17-09&r=his |
| By: | Paul, Saumik; Fukao, Kyoji |
| Abstract: | Japan’s regional convergence of productivity levels throughout the 20th century can be best described as a cumulative process of “catching up, forging ahead, and falling behind”. Using a novel dataset spanning 135 years (1874 – 2008), this study finds support for a crucial role played by structural transformation in convergence. The pace of productivity catch-up and convergence accelerated in the mid-1950s with the help of structural transformation, particularly in the period from 1955–1965. Structural transformation explains, on average, about 30% of the aggregate productivity growth, and its effect intensified in prefectures with faster movements of labor across sectors and larger sectoral productivity gaps. However, since the early 1970s, its contribution to the convergence was frequently offset by within-sector productivity growth, in turn thwarting the pace of convergence. These counter-balancing effects contributed to the diverse pathways of productivity catch-up at the prefecture level. |
| Keywords: | Economic Growth and Aggregate Productivity, Japan |
| JEL: | O40 O10 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2016-12&r=his |
| By: | Fernholz, Ricardo; Mitchener, Kris James; Weidenmier, Marc |
| Abstract: | We use the demise of silver-based standards in the 19th century to explore price dynamics when a commodity-based money ceases to function as a global unit of account. We develop a general equilibrium model of the global economy with gold and silver money. Calibration of the model shows that silver ceased functioning as a global price anchor in the mid-1890s - the price of silver is positively correlated with agricultural commodities through the mid-1890s, but not thereafter. In contrast to Fisher (1911) and Friedman (1990), both of whom predict greater price stability under bimetallism, our model suggests that a global bimetallic system in which the gold price of silver fluctuates has higher price volatility than a global monometallic system. We confirm this result using agricultural commodity price data for 1870-1913. |
| Keywords: | bimetallism; classical gold standard; fixed exchange rates; silver; unit of account |
| JEL: | E42 F33 N10 N20 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11952&r=his |
| By: | Grégoire Croidieu (GEM - Grenoble Ecole de Management - Grenoble École de Management (GEM)); Charles-Clemens Rüling (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc, GEM - Grenoble Ecole de Management - Grenoble École de Management (GEM)); Amélie Boutinot (ISG - International Business School [Paris], MC - Management et Comportement - Grenoble École de Management (GEM)) |
| Abstract: | The present paper examines how a new, creative genre emerges out of a commodity-based industry. Building on the genre-emergence literature, the paper analyzes the Australian wine industry since the 1950s. Based on content analysis of a wide variety of sources, the study identifies four mechanisms that account for creative-genre emergence: shifting and layering of metrics, analogies with established creative industries and practices, resonance with society-level logics, and personification. The results contribute to the genre-emergence and creative-industries literatures. |
| Keywords: | genre emergence,boundary formation,creative industries,production-of-culture perspective,Australian wine |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hal:gemptp:halshs-01498722&r=his |
| By: | Jules Hugot and Camilo Umaña-Dajud; Camilo Umaña-Dajud |
| Abstract: | Current estimates offer a puzzling picture of the magnitude and historical evolution of the distance elasticity of trade. We take advantage of historical episodes that changed bilateral distance to estimate the distance elasticity in the time dimension and characterize its evolution over time. The openings of the Suez and Panama Canals – as well as the closure of the Suez Canal from 1967 to 1975 – allow us to control for unobserved time-invariant country pair characteristics in a gravity setting. Our estimates show that the impact of distance on trade remains particularly low, even if it has increased during the last half century. These results reconcile the distance elasticity of trade with its two components: the elasticity of trade to trade costs and the elasticity of trade costs to distance. In a second stage, we use these estimates to quantify the trade and welfare effects associated with the openings of the Suez and Panama Canals. We also perform the counterfactual exercise of closing the Panama Canal in 2012 to evaluate its current welfare effect. |
| Keywords: | Distance Elasticity, Trade Costs, Gravity, Suez Canal, Panama Canal |
| JEL: | F14 F15 N70 I |
| Date: | 2017–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:col:000416:015510&r=his |
| By: | Alberto Baffigi (Banca d'Italia); Luigi Cannari (Banca d'Italia); Giovanni D’Alessio (Banca d'Italia) |
| Abstract: | The paper describes the evolution of the Survey of Household Income and Wealth from the early sixties until today. It shows how the innovations that have taken place over time have improved the quality of the data collected and expanded the possibilities for analysis. The work also examines in detail how the survey data compare to those drawn from other sources (national accounts, tax data, censuses, other sample surveys and so on), summarizing the main results of several works on this subject. The conclusion recalls the survey’s main developments, which highlight the need to pursue greater integration with other surveys at international level, sample and administrative sources in Italy and aggregate statistics. |
| Keywords: | household income and wealth distribution, sample surveys, microdata |
| JEL: | C81 C83 D31 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_368_16&r=his |
| By: | Murat Iyigun (University of Colorado); Jared Rubin (Chapman University) |
| Abstract: | Why do some societies fail to adopt more e¢ cient institutions in response to changing economic conditions? And why do such conditions sometimes generate ideological backlashes and at other times lead to transformative sociopolitical movements? We propose an explanation that highlights the interplayó or lack thereofó between new technologies, ideologies, and institutions. When new technologies emerge, uncertainty results from a lack of understanding how the technology will Öt with prevailing ideologies and institutions. This uncertainty discourages investment in institutions and the cultural capital necessary to take advantage of new technologies. Accordingly, increased uncertainty during times of rapid technological change may generate an ideological backlash that puts a higher premium on traditional values. We apply the theory to numerous historical episodes, including Ottoman reform initiatives, the Japanese Tokugawa reforms and Meiji Restoration, and the Tongzhi Restoration in Qing China. |
| Keywords: | Ideology, Institutions, Conservatism, Beliefs, Institutional Change, Technological Change, Uncertainty |
| JEL: | D02 N40 N70 O33 O38 O43 Z10 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:17-06&r=his |
| By: | Malte Krüger |
| Abstract: | The period from the 1950s to the late 1970s saw an almost uniform decline of cash-to-GDP ratios in industrial countries. A closer look at the German payment system suggests that the factor causing such a change has been the shift towards cashless wage payments. In this period, in Germany, the branch network of the banks expanded significantly and at the end of the period almost all economically active persons had a current account. This change was triggered by rising wages and incomes. Rising wages increased the burden of weekly wage payments in cash, and rising incomes made the average earner more interesting for banks. Moreover, regulation and de-regulation, triggering both, price and non-price competition, may also have played a role. Technological change has not been an independent driver. The introduction of cashless wage payments has not only affected the payment behavior but also the savings behaviour of households. These changes were evolutionary rather than revolutionary, however. So, even though the cash-to-GDP ratio declined in this period, absolute amounts of real cash per capita were still rising. |
| Keywords: | retail payments, demand for cash, innovation |
| JEL: | E41 G29 L89 O33 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:rmn:wpaper:201609&r=his |
| By: | Peter Lloyd (University of Melbourne); Cassey Lee (ISEAS – Yusof Ishak Institute, Singapore) |
| Abstract: | This paper reviews the recent (post-2000) literature which assesses the importance of institutions as a factor determining cross-country differences in growth rates or in the contemporary level of “prosperity”. It first sketches how institutional economics has evolved. It then examines critically the methods of analysis employed in the recent literature. The paper finds that this literature has made a major contribution to the analysis of the causes of economic growth but the relative importance of institutions as a determinant of long-run growth and prosperity is still a wide open question. |
| Keywords: | institutions, policies, long-run performance, instruments |
| JEL: | O43 B52 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:mlb:wpaper:2019&r=his |
| By: | Pascal Langenbach (Max Planck Institute for Research on Collective Goods); Franziska Tausch (Max Planck Institute for Research on Collective Goods) |
| Abstract: | We experimentally investigate whether the procedural history of a sanctioning institution affects cooperation in a social dilemma. Subjects inherit the institutional setting from a previous generation of subjects who either decided on the implementation of the institution democratically by majority vote or were exogenously assigned a setting. In order to isolate the impact of the voting procedure, no information about the cooperation history is provided. In line with existing empirical evidence, we observe that in the starting generation cooperation is higher (lower) with a democratically chosen (rejected) institution, as compared to the corresponding, randomly imposed setting. In the second generation, the procedural history only partly affects cooperation. While there is no positive democracy effect when the institution is implemented, the vote-based rejection of the institution negatively affects cooperation in the second generation. The effect size is similar to that in the first generation. |
| Keywords: | Endogeneity, Voting, Institutions, Social dilemma, Public good, Inherited rules |
| JEL: | C92 D02 D71 D72 H41 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2017_01&r=his |
| By: | Frédéric Docquier (IRES - Institut de recherche économique et sociale - Université catholique de Louvain); Riccardo Turati (IRES - Institut de recherche économique et sociale - Université catholique de Louvain); Jérome Valette (CERDI - Centre d'études et de recherches sur le developpement international - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Chrysovalantis Vasilakis (IRES - Institut de recherche économique et sociale - Université catholique de Louvain) |
| Abstract: | This paper empirically revisits the impact of multiculturalism (as proxied by indices of birthplace diversity and polarization among immigrants, or by epidemiological terms) on the macroeconomic performance of US states over the 1960-2010 period. We test for skill-specific effects of multiculturalism, controlling for standard growth regressors and a variety of fixed effects, and accounting for the age of entry and legal status of immigrants. To identify causation, we compare various instrumentation strategies used in the existing literature. We provide converging and robust evidence of a positive and significant effect of diversity among college-educated immigrants on GDP per capita. Overall, a 10% increase in high-skilled diversity raises GDP per capita by 6.2%. On the contrary, diversity among less educated immigrants has insignificant effects. Also, we find no evidence of a quadratic effect or a contamination by economic conditions in poor countries. |
| Keywords: | Growth.,Immigration,Culture,Birthplace diversity |
| Date: | 2017–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01425462&r=his |
| By: | Jordà, Òscar; Richter, Björn; Schularick, Moritz; Taylor, Alan M. |
| 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. |
| Keywords: | bank liabilities; capital ratio; crisis prediction; Financial crises; local projections |
| JEL: | E44 G01 G21 N20 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11934&r=his |
| By: | Ruben Durante; Paolo Pinotti; Andrea Tesei |
| Abstract: | We study the political impact of entertainment television in Italy exploiting the staggered introduction of Berlusconi's commercial TV network, Mediaset, in the early 1980s. We find that individuals with early access to Mediaset all-entertainment content were more likely to vote for Berlusconi's party in 1994, when he first ran for office. The effect persists for five elections and is driven by heavy TV viewers, namely the very young and the elders. Regarding possible mechanisms, we find that individuals exposed to entertainment TV as children were less cognitively sophisticated and civic-minded as adults, and ultimately more vulnerable to Berlusconi's populist rhetoric. |
| Keywords: | entertainment TV, voting, cognitive abilities, civic engagement |
| JEL: | L82 D72 Z13 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1475&r=his |
| By: | Gasmi, Farid; Laourari, Imène |
| Abstract: | Algeria is strongly dependent on oil exports revenues to fuel its economy and following the 1986 oil counter-shock this country has experienced a persistent decline of its manufacturing sector. Although it has benefited from high oil prices over the last decades and implemented a myriad of economic reforms, Algeria has failed to develop its manufacturing sector and diversify its economy. One of the main mechanisms through which fluctuations in oil prices can constitute an impediment to the development of the manufacturing sector, and hence to long-term growth, in an economy that heavily relies on a natural resource exports is referred to in the literature as the Dutch disease. This paper aims to test whether or not Algeria’s economy has suffered from the main symptoms of this syndrome by analyzing data covering more than half-a-century. More specifically, we use annual data from 1960 to 2016 and investigate two important implications of this phenomenon that occur following an oil boom, namely, the spending effect and the resource movement effect. We perform some simple tests of these signs of the Dutch disease using a set of regressions while controlling for some other factors that could have led to similar economic symptoms. The results do not allow us to unambiguously claim that the Algerian economy has suffered from the Dutch disease over the period under study. |
| Keywords: | Algeria, Oil revenues, Manufacturing sector, Dutch disease, Real exchange rate, Economic growth, Time series. |
| JEL: | C32 O13 O14 O55 Q32 Q43 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:31559&r=his |
| By: | Michael C. Burda; Mark Weder |
| 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 neoclas- sical growth model, yet systematic total factor productivity di¤eren- tials persist despite identical institutional frameworks and significant investment in the eastern regions. At the same time, regional dispar- ities in income, well-being, and health are little di¤erent 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 e¤ort 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 productiv- ity, Korean unification |
| JEL: | P2 O11 E02 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2017-009&r=his |
| By: | Jung-In Yeon; Andreas Pyka; Tai-Yoo Kim |
| Abstract: | In this paper, we examine the experiences of Korean economy to verify the theoretical knowledge of economic development and structural change. To demonstrate the generalized hypotheses in structural changes, input-output tables of Korea, from 1960 to 2010, are analyzed. Our interest in taking a time series form of Input-output tables originates from the following two questions. Firstly, we inquire whether the change of Korean industrial structure has been followed a certain pattern of structural shift as well as increasing variety. Secondly, if so, it is questioned how the meso-level conditions for the economic development could be explained out of such a pattern. To complete the set of answers, we start from adopting a model of the economic development by the creation of new sectors, TEVECON model, as our theoretical framework. Using this growth model, it is preliminarily experimented how the structural change could impact on the economic development, and then, we figured out how the empirical analysis of Korean economy verifies and more deepens our understandings of the structural change and development. Therefore, this paper contributes to empirically identify the theoretical knowledge of economic development by the emerging of key sectors as well as the creation of new sectors. To complete the set of answers, we start from choosing the model of the economic development by the creation of new sectors, TEVECON, as our theoretical framework. Using this simulation model, it is preliminarily experimented how the different scenarios upon meso-level conditions could impact on the economic development. In the other hand, as analyzing the classification of industries over time and each set of sectoral outcomes and demand-induced outputs, we figured out how the empirical analysis of Korean economy supported and more deepened theoretical understandings of structural change and development. Accordingly, the presented empirical results provide a starting point to expand the model, TEVECON, into a history-friendly model, bridging the gap between the artificial world of formal theories and the real world of historical experiences. In this regard, this paper is the first to identify and enhance empirically the theoretical model of economic development by the creation of new sectors. |
| Keywords: | South Korea, Growth, Sectoral issues |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9411&r=his |