nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2017‒06‒04
eighteen papers chosen by

  1. Historical Legacies and Gender Attitudes in the Middle East By Veronica Kostenko; Eduard Ponarin; Musa Shteiwi; Olga Strebkova
  2. Cellophane, the New Visuality, and the Creation of Self-Service Food Retailing By Ai Hisano
  3. Co-authorship in Economic History and Economics: Are We Any Different? By Andrew J. Seltzer; Daniel S. Hamermesh
  4. Finance and Growth: Household Savings, Public Investment, and Public Health in Late Nineteenth-Century New Jersey By Howard Bodenhorn
  5. An Early Experiment with "Permazero" By Quinn, Stephen F.; Roberds, William
  6. Villains or Heroes? Private Banks and Railroads after the Sherman Act By Cantillo, Miguel
  7. Retrospective Analysis of the Industrial Policy of the Russian Empire and the Soviet Union in the Context of the Development of Competition By Kurdin, Alexander A.
  8. Australian Squatters, Convicts, and Capitalists: Dividing Up a Fast-Growing Frontier Pie 1821-1871 By Laura Panza; Jeffrey G. Williamson
  9. Nation-Building, Nationalism and Wars By Alberto Alesina; Bryony Reich; Alessandro Riboni
  10. Ragnar Nurkse and the international financial architecture By Barry Eichergreen
  11. China's Lost Generation: Changes in Beliefs and their Intergenerational Transmission By Gerard Roland; David Y. Yang
  12. Mainstreams of Research on Institutional Change in the Multidimensional Viewpoint By Marek Piosik
  13. Inequality as Lack of Co-operation in Economic Thought By Monica Hernandez
  14. Teoria residual da política de dividendos: um experimento natural By Sanvicente, Antonio Zoratto
  15. The cultural context of contemporary understanding of socio-economic development By Michal Litwinski
  16. Evolución de la Normativa de Riesgo de Mercado de la Banca Chilena By José Miguel Matus
  17. Origins of Too-Big-to-Fail Policy By Prescott, Edward Simpson; Nurisso, George
  18. Upstart Industrialization and Exports, Japan 1880-1910 By Christopher M. Meissner; John P. Tang

  1. By: Veronica Kostenko (Laboratory for Comparative Social Research, Higher School of Economics, Russia); Eduard Ponarin; Musa Shteiwi; Olga Strebkova
    Abstract: This paper focuses on transformations of gender attitudes in a set of Arab societies covered by the Arab Barometer. We analyze age and cohort differences in thirteen countries using generalized additive modeling (GAM). We argue that stagnation or even retrogression of gender attitudes in some societies may be caused in part by an ideological shift of the 1970s–1980s, from largely secular and socialist-oriented national movements of the 1950s–1960s to the more conservative period often associated with the rise of political Islam. On the other hand, the youngest cohorts in those societies that have always promoted conservative gender attitudes are getting somewhat more liberal, although they remain slightly less gender egalitarian compared to other societies. We test our assumptions using the example of Yemen that was divided into two parts between 1967 and 1990: The South supported by the Soviet Union and the North influenced by Saudi Arabia and the Western bloc. We trace the support for gender egalitarianism across generations in the two parts of Yemen and show that the secular socialist ideology made a profound imprint on the attitudes of a whole generation and made those who were in their twenties back in the 1960s more egalitarian than the young people these days. The same is true for the other countries of the region that had some socialist experience.
    Date: 2017–05–25
  2. By: Ai Hisano (Harvard Business School, General Management Unit)
    Abstract: This working paper examines how innovations in transparent packaging, specifically cellophane, in the mid-twentieth century United States helped retailers to create full self-service merchandising systems, including selling perishable food. While self-service stores began appearing in the late 1910s, self-service was initially applied only to grocery and dry goods, such as canned foods and a box of breakfast cereals. It was not until after World War II that the majority of American grocers adopted self-service to meat and produce sections. Business historians have explored the development of this self-service merchandising from the perspectives of marketing strategies, store operations, and relationships between customers and store clerks. However, the significance of the development of cellophane as a new packaging material, and the role of packaging manufacturers in promoting self-service, has yet to be analyzed. This working paper fills this void by showing that the expansion of self-service operation and the increasing use of transparent packaging had a significant impact not only on how consumers purchased foods but also on how they understood food quality.
    Date: 2017–05
  3. By: Andrew J. Seltzer; Daniel S. Hamermesh
    Abstract: Over the last six decades articles published in leading economic history journals have been less likely to be co-authored than articles published in leading general economics journals. However, in both economic history and general economics journals there have been strong, monotonic increases in the number of authors per article and the fraction of co-authored papers. Economics and economic history differ in the nature of collaboration, in that coauthorships in economic history are more likely to be formed of individuals of different seniority as compared to economics generally.
    Keywords: co-authorship, economic history and economics
    JEL: N01 B41
    Date: 2017–05
  4. By: Howard Bodenhorn
    Abstract: Saving is essential to the health of economies because it provides the wherewithal for investment. In the late nineteenth century, saving was also essential to the health of urban working-class households. This study brings together information from surveys of household spending and saving, reports of savings banks and insurance companies, water and sewer authorities, and health commissioners to illuminate the connections between household savings and health improvements. Contemporary financial institutions positively influenced economic growth by allocating capital to highly productive employments, including public infrastructure. Specifically, investments in waterworks contributed to the long-run decline in typhoid infection, which improved worker health and productivity.
    JEL: I15 N31
    Date: 2017–05
  5. By: Quinn, Stephen F. (Texas Christian University); Roberds, William (Federal Reserve Bank of Atlanta)
    Abstract: We investigate a monetary regime with persistent, near-zero policy interest rates ("permazero" in the terminology of Bullard 2015). This regime was implemented in 1683 by a prominent early central bank called the Bank of Amsterdam ("Bank"). The Bank fixed its policy rate at one-half percent and held it unchanged for more than a century. Maintaining the rate helped stabilize the value of Bank money. We employ archival data to reconstruct the Bank's activities during a portion of that interval (1736–91) for which data are most readily available. The data suggest that "permazero" worked well for long periods because the Bank counteracted market swings with quantitative operations. These same data show how fiscal exploitation denied the Bank sufficient resources to stabilize large shocks, with adverse results.
    Keywords: central banks; monetary policy; zero lower bound
    JEL: E58 E65 N13
    Date: 2017–05–01
  6. By: Cantillo, Miguel
    Abstract: Abstract This paper analyzes and measures the value that American private banks added as directors of non financial companies. Using data between 1874 and 1913, and an event study from 1906, I find that bank directors added about 20% of a firm's market capitalization. Collusive practices encouraged by private banks accounted for 65% of this value, and were the equivalent of creating a three player market among railroads. About 35% of the value added by banks came from better governance. I argue that although policymakers were partly right in sidelining private banks as activist investors, this helped entrench managers.
    Keywords: Antitrust; Collusion; Corporate Governance; Financial History
    JEL: G21 G24 G34 K21 L41 N21
    Date: 2016–11–30
  7. By: Kurdin, Alexander A. (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The paper assesses the industrial policy of the Russian Empire and the Soviet Union in the XVIII-XX centuries. in terms of their effects on competition. The pro-competitive and anti-competitive practices of industrial policy are identified by the economic and historical analysis, the reasons for the application of differenet types of measures and their impact are identified and assessed. The author shows that despite the long tradition of selective industrial policy, the pro-competitive instruments have also been an important element of the Russian government's policies in different historical periods and often led to relatively successful results.
    Date: 2017–02
  8. By: Laura Panza; Jeffrey G. Williamson
    Abstract: Compared with its nineteenth century competitors, Australian GDP per worker grew exceptionally fast, about twice that of the US and three times that of Britain. This paper asks whether the fast growth performance produced rising inequality. Using a novel data set we offer new evidence supporting unambiguously the view that, in sharp contrast with US, Australia underwent a revolutionary levelling in incomes between the 1820s and the 1870s. This assessment is based on our annual estimates of functional shares in the form of land rents, convict incomes, free unskilled incomes, free skill premiums, British imperial transfers and a capitalist residual.
    JEL: N17 N37 O47 O56
    Date: 2017–05
  9. By: Alberto Alesina; Bryony Reich; Alessandro Riboni
    Abstract: The increase in army size observed in early modern times changed the way states conducted wars. Starting in the late 18th century, states switched from mercenaries to a mass army by conscription. In order for the population to accept to fight and endure war, the government elites began to provide public goods, reduced rent extraction and adopted policies to homogenize the population with nation-building. This paper explores a variety of ways in which nation-building can be implemented and studies its effects as a function of technological innovation in warfare.
    JEL: P16
    Date: 2017–05
  10. By: Barry Eichergreen
    Abstract: World-renowned economist, Professor of Economics at the University of California, and the author of several books on international economy and the monetary system, Barry Eichen­green, gave the 2017 Ragnar Nurkse memorial lecture entitled Ragnar Nurkse and the International Financial Architecture. The lecture was held at Eesti Pank on January 12th 2017. In his lecture, Professor Eichengreen gave an overview of Ragnar Nurkse’s book International Currency Experience: Lessons of the Inter-War Period that was published in 1944 and discussed whether the conclusions of the book still hold true today. The 2017 Ragnar Nurkse memorial lecture was held in honour of the 110th birth anniversary of the Estonian economist who achieved global recognition in the 1940s and 1950s. His research on monetary policy issues, international trade, international policy coordination, and development economics has provided valuable information, lessons, and guidelines. Eesti Pank started the regular lecture series dedicated to Ragnar Nurkse in 2007
    Date: 2017–05–25
  11. By: Gerard Roland; David Y. Yang
    Abstract: Beliefs about whether effort pays off govern some of the most fundamental choices individuals make. This paper uses China’s Cultural Revolution to understand how these beliefs can be affected, how they impact behavior, and how they are transmitted across generations. During the Cultural Revolution, China’s college admission system based on entrance exams was suspended for a decade until 1976, effectively depriving an entire generation of young people of the opportunity to access higher education (the “lost generation”). Using data from a nationally representative survey, we compare cohorts who graduated from high school just before and after the college entrance exam was resumed. We find that members of the “lost generation” who missed out on college because they were born just a year or two too early believe that effort pays off to a much lesser degree, even 40 years into their adulthood. However, they invested more in their children’s education, and transmitted less of their changed beliefs to the next generation, suggesting attempts to safeguard their children from sharing their misfortunes.
    JEL: I23 O53 P26 P48 Z1
    Date: 2017–05
  12. By: Marek Piosik (Poznan University of Economics and Business, Poland)
    Abstract: The role of institutions in the social and economic development is widely recognized in recent literature on economics of institutions. Economic history provides many examples of bad and good institutional structures, environments, and ways of organizing the social life and relationships between individuals, which is the main reason for institutions to arise. Simultaneously diversity of institutional solutions can be perceived as cultural wealth from which societies can choose in order to find proper instruments to solve various problems in different situations. The present paper is an attempt to review main areas of research into institutional changes and synthesize them into mainstreams, which are also described in the multi-faceted viewpoint to prove the complexity and broad scope that need to be tackled by institutional economists to investigate institutional changes. The article analyses literature on institutional change and several dozen dimensions of the research areas that have a significant impact on the discussion on the mechanisms and environments of evolution of institutions. The review of the mainstreams is divided into five identified basic groups. In the last section the multidimensional perspective of the research area of institutional changes is proposed as it helps to grasp many aspects that play the fundamental role in understanding the process of institutional change, which is an indispensable step towards a development of the general theory of institutional change.
    Keywords: institutions; institutional change; theory of institutional change; evolution of the institution
    JEL: B52 D02 O17 O43
    Date: 2017–05
  13. By: Monica Hernandez (Department of Economics, New School for Social Research)
    Abstract: This study is about the notion of co-operation by economic thinkers of the 19th century in the United Kingdom. It presents a comparison and contrast of their ideas as well as an analysis of the relationship between co-operation and economic and social inequality. Two approaches of such relationship are identified. First, an economic-centered view, found in Charles Babbage and William Stanley Jevons, where the benefits of co-operation are linked to profit sharing, the increase of productivity and the expansion of the economic system. Second, Robert Owen’s and John Stuart Mill’s ideas on co-operation, even though with different implications, are mainly socially-oriented. Here, it is possible to see a broader social concern that led them to suggest reforms that could have implications in terms of social (e.g., education and gender), and not only economic inequality. Marx’s analysis of co-operation does not belong to any of these approaches. In his view, under capitalism, the effect of some forms of co-operation may generate or reinforce inequality.
    Keywords: Co-operation, inequality, Robert Owen, Charles Babbage, William Stanley Jevons, John Stuart Mill, Karl Marx, profit sharing, co-operatives, associations
    JEL: B1 B19 B3 B30 D6 D63 J5 J50 J51 J52 J53 J54
    Date: 2017–05
  14. By: Sanvicente, Antonio Zoratto
    Abstract: Em 15 de dezembro de 1976, nova lei das sociedades por ações (S.As.) introduziu, entre outras inovações, a exigência de distribuição mínima obrigatória de resultados anuais ('dividendo mínimo obrigatório'). O presente trabalho considera, como referência conceitual, a chamada teoria residual da política de dividendos, segundo a qual os dividendos são determinados pelo que sobraria após a otimização de decisões tanto de investimento quanto de financiamento. Com o dividendo mínimo obrigatório, introduziu-se uma restrição a esse comportamento por parte das empresas. É testada a hipótese de que a restrição afetou o nível de investimento das empresas, o que é parcialmente confirmado por um termo de interação com o de pagamento de dividendos. É usado um enfoque de 'diferenças em diferenças', com dados contábeis de 233 companhias abertas no período de 1973 a 1980.
    Date: 2017–03–07
  15. By: Michal Litwinski (Poznan University of Economics and Business; Niepodleglosci 10, 61-875 Poznan)
    Abstract: Research background: The way of understanding of development concept in economics has been changing since the beginning of the discipline: from economic growth, through economic development to socio-economic development. The author of the paper believes that identification of features of cultural context that shape understanding of this phenomenon will allow to understand appropriately contemporary definitions of this process. Purpose of the article: The purpose of the paper is to reconstruct features of socio-cultural context in which it has changed the way of understanding of development concept in economics. The specific objectives are as follows: identification of period in which it was recognised that development is something more than economic growth, identification of reasons and circumstances of evolution of development definition: from economic growth to socio-economic development. Methodology/methods: A basis for conclusions formulation will be a research of literature (mostly publications in English). Analysis will have interdisciplinary character as it relates sociological and economic dimensions of analysis of development. Findings & Value added: Division of economic development and economic growth took place in 1960s. Change of understanding of development concept was caused by the following factors: (1) influence of new sociological and philosophical ideas, (2) historical events, (3) growing meaning of formalism and scientism in economic considerations, (4) international cooperation for development.
    Keywords: socio-economic development; economic growth; social development; cultural context
    JEL: O10 O40 B10
    Date: 2017–05
  16. By: José Miguel Matus
    Abstract: This paper describes the main changes in regulation and the measurement of market risks of the banking industry. In that sense, this article focuses its analysis in the 1979-2015 period, especially the main recommendations of the Basel Committee on Banking Supervision (BCBS) and the challenges facing the banks in terms of existing gaps between the current regulation and the standards suggested by the BCBS.
    Date: 2017–02
  17. By: Prescott, Edward Simpson (Federal Reserve Bank of Cleveland); Nurisso, George (Federal Reserve Bank of Cleveland)
    Abstract: This paper traces the origin of the too-big-to-fail problem in banking to the bailout of the $1.2 billion Bank of the Commonwealth in 1972. It describes this bailout and those of subsequent banks through that of Continental Illinois in 1984. Motivations behind the bailouts are described with a particular emphasis on those provided by Irvine Sprague in his book Bailout. During this period, market concentration due to interstate banking restrictions is a factor in most of the bailouts, and systemic risk concerns were raised to justify the bailouts of surprisingly small banks. Sprague’s descriptions are also used to describe the trade offs and the time-consistency problem faced by bank regulators. Finally, most of the bailouts in this period relied on the Federal Deposit Insurance Corporation’s use of the Essentiality Doctrine. A discussion of this doctrine is provided and used to illustrate how legal constraints on regulators may become less constraining over time.
    Keywords: Too big to fail; deposit insurance; banking; time consistency; TBTF;
    JEL: G21 G28 N22
    Date: 2017–05–24
  18. By: Christopher M. Meissner; John P. Tang
    Abstract: Japanese exports between 1880 and 1910 increased massively in volume, changed composition, and shifted away from leading industrialized countries toward poorer Asian neighbors. The product mix also varied with the level of development of the destination, with new products and specializations more likely to ship to less developed regional economies. Using a new disaggregated data set of the bilateral-product level exports for the universe of Japanese trade partners, we find that changes in various extensive margins (new markets, new goods) account for over 30 percent of export growth over this period. Determinants of initial entry include trade costs and market size. Products started in a small number of markets and accumulated additional destinations building on earlier successes. Subsequent entry was also influenced by product-level characteristics interacting with destination-specific characteristics. We confirm that export growth for “new” products was stronger in LDCs than in advanced economies, but the latter still claimed a larger share of overall trade growth. There is little evidence that Japan exported low quality manufactured goods to new, low-income destinations. Instead, reductions in trade costs helped Japan augment market share. Exit is relatively rare but appears to be determined by market-specific demand-side effects and product-specific factors.
    Keywords: market entry, extensive margin, intensive margin, first wave of globalization, export diversification
    Date: 2017–05

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