nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2017‒06‒11
thirty-two papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Between novelty and fashion.Risk management and the adoption of computers in retail banking. By Bernardo Batiz-Lazo
  2. Los orígenes del neoestructuralismo latinoamericano By Carlos Mallorquín Suzarte
  3. Is DLT the Cure for the Omni-Channel Blues? A Provocation By Bernardo Batiz-Lazo
  4. Secular stagnation and concentration of corporate power By Joan R. Rovira
  5. The impact of exposure to cash transfers on education and labor market outcomes By Paredes-Torres, Tatiana
  6. Economic Conditions at Birth and Cardiovascular Disease Risk in Adulthood: Evidence from New Cohorts By Alessie, Rob; Angelini, Viola; van den Berg, Gerard J.; Mierau, Jochen O.; Viluma, Laura
  7. Negative Shocks and Mass Persecutions: Evidence from the Black Death By Remi Jedwab; Mark Koyama; Noel Johnson
  8. Cross-Border Mergers and Acquisitions: Evidence from the Indochina Region By Ekkayokkaya, Manapol; Foojinphan, Pimnipa; Wolff, Christian C
  9. Socialism Revised By John E. Roemer
  10. War during Childhood: The Long Run Effects of Warfare on Health By Akbulut-Yuksel, Mevlude
  11. Democratisation and tax structure: Greece versus Europe from a historical perspective By Pantelis Kammas; Vassilis Sarantides
  12. Le climat de la Terre avant la révolution industrielle By André Fontana
  13. The Local Environment Shapes Refugee Integration: Evidence from Post-war Germany By Sebastian Till Braun; Nadja Dwenger
  14. The Debate about the Sources of Growth in East Asia after a Quarter of a Century: much ado about nothing By Felipe, Jesus; McCombie, John
  15. Navigating through torpedo attacks and enemy raiders: Merchant shipping and freight rates during World War I By Klovland, Jan Tore
  16. Skilling and Deskilling Technological Change in Classical Economic Theory and Its Empirical Evidence By Florian Brugger; Christian Gehrke
  17. The Role of Knowledge in the Evolution of the Religious Phenomenon By Lucian Ionel Mercea
  18. Learning to Participate in Politics: Evidence from Jewish Expulsions in Nazi Germany By Akbulut-Yuksel, Mevlude; Okoye, Dozie; Yuksel, Mutlu
  19. Portugal’s wine globalization waves, 1750-2015 By Pedro Lains
  20. The Future of Money: A Voyage Through Time and Space By Bernardo Batiz-Lazo; Leonidas Efthymiou
  21. "Intimate Knowledge of the Country": Factions and Struggles for Administrative Control in the Early Gold Coast Government, 1844-1854 By Asante, Kofi
  22. Selection on Ability and the Early Career Growth in the Gender Wage Gap By Fraga, Eduardo; Gonzaga, Gustavo; Soares, Rodrigo R.
  23. International Monetary Relations: Taking Finance Seriously By Maurice Obstfeld; Alan M. Taylor
  24. Blockchain and the Economics of Crypto-tokens and Initial Coin Offerings By John P. Conley
  25. World War II and the Industrialization of the American South By Taylor Jaworski
  26. Five Gems in the Torrent: Historical Portrayals of Chinese Women in Sound and Religion By Yuchi Che
  27. Upstart Industrialization and Exports, Japan 1880-1910 By Christopher M. Meissner; John P. Tang
  28. Some Remarks on the Causal Inference for Historical Persistence By KOGURE, Katsuo
  29. A tensão permanente entre expansão e crise do capitalismo: as revoluções tecnológicas e as bolhas financeiras By Rubem Polo Costa Mafra; Márcia Siqueira Rapini; Tulio Chiarini
  30. Advanced or postponed wage payments: Sraffa validates Marx By Marco Lonzi; Samuele Riccarelli; Ernesto Screpanti
  31. Veintitrés años, mil documentos:caracterización, visibilidad e impacto de los Borradores de Economía By Clorith Angélica Bahos-Olivera; Julián A. Parra-Polanía
  32. Are U.S. Companies Too Short-Term Oriented? Some Thoughts By Steven N. Kaplan

  1. By: Bernardo Batiz-Lazo (Bangor University)
    Abstract: This chapter explores developments in researching the adoption of applications of computer technology by retail deposit-accepting financial institutions. Contributions to date suggest an understanding of both technological and business decisions. This is a research agenda informed by developments both in the history of computing and in business and economic history because the analysis of computer applications in business should consider not only how decisions came about but also the expectations of decision makers and the context and stakeholders that helped to shape business decisions. This is a view which aligns with that of Wadhwani and Jones’ (2014) “constitutive historicism” or the investigation of how economic actors’ perceptions of their own places in historical time shape their strategies.
    Date: 2017–06
  2. By: Carlos Mallorquín Suzarte (Universidad Autónoma de Zacatecas)
    Abstract: La Región Centro de México se constituyó en el espacio demográfico y económico protagónicEste ensayo propone dar cuenta de la ambigüedad del concepto ´neostructuralismo´ cuando se le analiza a partir de la óptica de la obra de Osvaldo Sunkel; no obstante, ello no excluye una posible reconstrucción del término a partir de una reflexión en torno a sus autores “primigenios” y los respectivos vocabularios sobre el ´estructuralismo´. Sin embargo, el concepto ´neostructuralismo´ no armoniza necesariamente con la obra de Sunkel y, paradójicamente, tampoco con la obra de Raúl Prebisch antes del primer lustro de la década de 1970, sino hasta la publicación de la obra “Capitalismo perife´ rico, crisis y transformacio´ n”. Por lo tanto, la excursión conceptual que hacemos sobre el ´estructuralismo´ y el ´neostructuralismo´ da a entender que este último es fruto del progreso teórico dentro del pensamiento latinoamericano, bajo la singularidad con que Sunkel se integró al mismo.
    Keywords: Estructuralismo, neoestructuralismo, Latinoamérica
    JEL: B10 B31
    Date: 2017–06–01
  3. By: Bernardo Batiz-Lazo (Bangor University)
    Abstract: A current trend in both retailing and retail financial services aims to match customers to their purchases with the least amount of friction. For depositary institutions this entails enabling customers to deal with their financial affairs, including purchases, through whatever channel the customer chooses (branch, ATM, web, mobile, etc.). For merchants, it entails shipping and delivering the purchase when and how the customer chooses (in store, at a desired location, at a pick-up point, etc.), while settling outstanding financial claims with the different actors involved in the manufacturing, storage, shipping and distribution network. This essay briefly explores the potential use of distributed ledger technology (DLT) to deliver integrated omni-channel solutions
    Date: 2017–05
  4. By: Joan R. Rovira (Economic Studies Office, Barcelona Chamber of Commerce (ES))
    Abstract: We identify a set of key stylised facts characterising the evolution of the seven largest advanced economies from the 1960s to 2015 and develop a small one-sector model of growth and distribution broadly consistent with these facts. The model is used to explore the relationship between falling trend growth, the re-distribution of aggregate income towards profits and the concentration of corporate power and wealth. Theory is confronted with history to illustrate how changes in social structure can affect economic behaviour and performance. We argue that finance-led corporate restructuring, involving debt-financed corporate transactions, may have played a crucial role in shaping long-term patterns of growth and distribution.
    Keywords: Stagnation, Distribution, Growth, Financialisation, Heterodox Economics
    JEL: B22 E11 E12 E44 E65 G01 O11
    Date: 2017–05
  5. By: Paredes-Torres, Tatiana
    Abstract: This paper studies the short and long-term effects of exposure to Bono de Desarrollo Humano (BDH), the main unconditional cash transfer program in Ecuador, on young people’s education and labor market outcomes. Using individual administrative panel data and a regression discontinuity design, I estimate the short-term impact of BDH, as well as the differential impact of a long exposure (10 years) versus a short exposure to BDH (five years). In the short-run, treated children experienced gains in enrollment and schooling, but those gains dissipated after five more years of treatment. This explains why after ten years of exposure, treated children aged 18-21 were not more likely to finish high school when compared to similar children who were only treated during the first five years of the program. Regarding labor market outcomes, BDH had a negative but not statistically significant impact on the probability of working among the young children who were treated either during five or ten years and did not increase job opportunities among young adults.
    Keywords: cash transfers, regression discontinuity, Ecuador, education, labor market outcomes, long-term effects, short-term effects, Bono de Desarrollo Humano, human capital, poverty, developing countries, regression discontinuity
    JEL: H23 I22 I24 I25 I28 I38 J24 O15
    Date: 2017–05
  6. By: Alessie, Rob (University of Groningen); Angelini, Viola (University of Groningen); van den Berg, Gerard J. (University of Bristol); Mierau, Jochen O. (University of Groningen); Viluma, Laura (University of Groningen)
    Abstract: Most of the literature that exploits business cycle variation at birth to study long-run effects of eco-nomic conditions on health later in life is based on pre-1940 birth cohorts. They were born in times where social safety nets were largely absent and they grew up in societies with relatively low female labor force participation. We complement the evidence from this literature by exploiting post-1950 regional business cycle variations in the Netherlands to study effects on cardiovascular disease (CVD) risk in adulthood, by gender. We operationalize CVD risk by constructing the Systematic COronary Risk Evaluation (SCORE) index from an extensive set of biomarkers. The data are from a large cohort study covering socio-economic, biological and health data from over 75k individuals aged between 18 and 63. We conclude that women born in adverse economic conditions experience higher CVD risk.
    Keywords: early-life conditions, developmental origins, recession, health, unemployment, long-run effects, biomarkers
    JEL: I10 I15 J11
    Date: 2017–05
  7. By: Remi Jedwab (George Washington University); Mark Koyama (George Mason University); Noel Johnson (George Mason University)
    Abstract: In this paper we study the Black Death persecutions (1347-1352) against Jews in order to shed light on the factors determining when a minority group will face persecution. We develop a theoretical framework which predicts that negative shocks increase the likelihood that minorities are scapegoated and persecuted. By contrast, as the shocks become more severe, persecution probability may actually decrease if there are eco- nomic complementarities between the majority and minority groups. We compile city- level data on Black Death mortality and Jewish persecution. At an aggregate level we find that scapegoating led to an increase in the baseline probability of a persecution. However, at the city-level, locations which experienced higher plague mortality rates were less likely to engage in persecutions. Furthermore, persecutions were more likely in cities with a history of antisemitism (consistent with scapegoating) and less likely in cities where Jews played an important economic role (consistent with inter-group complementarities).
    Keywords: Ethnic Conflict; Religious Conflict; Minorities; Persecutions; Massacres; Libels; Black Death; Jewish Economic History; Middle Ages; Epidemics; Cities; Trade
    JEL: J15 D74 Z12 N33 N43 O1 R1
  8. By: Ekkayokkaya, Manapol; Foojinphan, Pimnipa; Wolff, Christian C
    Abstract: We study cross-border mergers and acquisitions (M&As) in ten countries in the Indochina region during the period 1993-2015. Countries with a French colonial history showed markedly lower levels of cross-border M&As (value as well as volume) than other countries, whether previously colonized or not. This difference persists even after accounting for the known drivers of cross-border M&A activity, including legal origin, trade openness, and labor cost levels. Together, these findings suggest that the colonial past of a country plays an important role in cross-border M&A activity.
    Keywords: colonial history; Foreign direct investment; South-East Asia
    JEL: F54 G15 G34
    Date: 2017–06
  9. By: John E. Roemer (Dept. of Political Science & Cowles Foundation, Yale University)
    Abstract: Marxists have viewed the task of socialism as the elimination of exploitation, defined in the Marxian manner in terms the excess of labor expended over of labor commanded. I argue that the concept of Marxian exploitation commits both type-one (false positives) and type-two (false negatives) errors as a diagnosis of distributive injustice: it misses instances of distributive injustice because they do not involve exploitation, and it calls some economic relations characterized by exploitation unjust when they are not. The most important reformulators of Marx’s concept of socialism, which implicitly or explicitly attempt to correct the Marxian errors, are Oscar Lange, James Meade, John Rawls, Robert Nozick, Ronald Dworkin and G.A. Cohen. I trace this development, and argue for a re-definition of socialist principles based upon it.
    Keywords: Exploitation, Socialist equality of opportunity, Market socialism
    JEL: P2
    Date: 2017–06
  10. By: Akbulut-Yuksel, Mevlude (Dalhousie University)
    Abstract: This paper estimates the causal long-term consequences of an exposure to war in utero and during childhood on the risk of obesity and the probability of having a chronic health condition in adulthood. Using the plausibly exogenous city-by-cohort variation in the intensity of WWII destruction as a unique quasi-experiment, I find that individuals who were exposed to WWII destruction during the prenatal and early postnatal periods have higher BMIs and are more likely to be obese as adults. I also find an elevated incidence of chronic health conditions such as stroke, hypertension, diabetes, and cardiovascular disorder in adulthood among these wartime children.
    Keywords: warfare, body size, health conditions, children
    JEL: I10 I12 J13
    Date: 2017–05
  11. By: Pantelis Kammas; Vassilis Sarantides
    Abstract: Building on a unique dataset that contains 13 different tax categories of the Greek state over the period 1833-1933, this paper studies the effect of democratisation on the size and the composition of tax revenues. Empirical analysis suggests that the radical reform that enfranchised all adult males in Greece in 1864 did not affect the level of taxation, but did exert a significant impact on its structure. Universal male suffrage was accompanied by an amazing reduction in rural taxes (e.g., taxes on land) and remarkable increases in indirect taxes – mostly in custom and excises duties. These findings clearly indicate that there were political economy motives behind this shift in the implemented fiscal policy. In particular, the Greek governments changed the structure of taxation in order to satisfy the large majority of the electorate, who were peasants and farmers, ensuring a minimum level of social cohesion. Using also a sample of 12 Western European countries over the same period, we show that the phase of economic development induced a differentiated effect of democratisation on the size and the structure of taxation.
    Keywords: democracy, tax structure, fiscal capacity
    Date: 2017–05
  12. By: André Fontana
    Abstract: La population du globe s’accroit lentement à travers les âges pour atteindre de l’ordre de 1 milliard d’habitants au milieu du XIXe siècle. L’historique des périodes glaciaires fait apparaître à l’évidence des fluctuations du climat totalement indépendantes des activités humaines. Une approche du bilan thermique de la planète fait apparaître les causes possibles de ces énormes perturbations.
    Keywords: historique des glaciations et des interglaciations; activité solaire; population du globe
    Date: 2016–07–10
  13. By: Sebastian Till Braun (University of St Andrews); Nadja Dwenger (University of Hohenheim)
    Abstract: This paper studies how the local environment in receiving counties affected the economic, social, and political integration of the eight million expellees who arrived in West Germany after World War II. We first document that integration outcomes differed dramatically across West German counties. We then show that more industrialized counties and counties with low expellee inflows were much more successful in integrating expellees than agrarian counties and counties with high inflows. Religious differences between native West Germans and expellees had no effect on labor market outcomes, but reduced inter-marriage rates and increased the local support for anti-expellee parties.
    Keywords: Expellees; Forced migration; Immigration; Integration; Post-War Germany
    JEL: J15 J61 N34 C36
    Date: 2017–05–30
  14. By: Felipe, Jesus (Asian Development Bank); McCombie, John (University of Cambridge)
    Abstract: This paper reviews what the profession has learned during the last 25 years about East Asia’s growth using growth accounting exercises and estimations of production functions. The publication of Alwyn Young’s (1992, 1994, 1995) and Jong-Il Kim and Lawrence Lau’s (1994) studies, and Paul Krugman’s (1994) popularization of the “zero total factor productivity growth” thesis, led to a very important debate within the profession. The paper demystifies this literature by pointing out a major methodological problem inherent in these approaches. This is that the variables used, namely, output, employment, the stock of capital, and the factor shares, are related definitionally through an accounting identity in value terms. As a consequence, results that are believed to reflect a true technological or production relationship are no more than the outcome of manipulating this identity. We show that total factor productivity calculated with value data is not a measure of productivity. We conclude that the debate about the sources of growth in East Asia was much ado about nothing.
    Keywords: accounting identity; dual TFP; East Asia; growth accounting; primal TFP; technical progress
    JEL: O10 O47 O53
    Date: 2017–05–18
  15. By: Klovland, Jan Tore (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: During World War I ocean freight rates rose to extraordinary levels. Using a new monthly dataset it is shown that freight rates can be well explained by economic activity, commodity prices, war risk and world tonnage in the period 1912 to 1916. In the first two years of the war part of the British merchant fleet was directly controlled by the Government but neutral shipping was basically free to operate as normal. In this period neutral shipping accounted for about one third of British imports. In the final two years of the war a much stricter regime of freight control was introduced that resulted in the withdrawal of a large proportion of neutral shipowners from British and Allied trade. Together with the mounting losses of tonnage due to the German submarine campaign this created an acute shortage of carrying capacity and reduced imports. It is argued that the policy of freight control may have rested on a misconception of the role of freight rates as a source of the high wartime in ation.
    Keywords: Freight; rates
    JEL: E31 N14 N74
    Date: 2017–05–25
  16. By: Florian Brugger (Department of Sociology, University of Graz); Christian Gehrke (Department of Economics, University of Graz)
    Abstract: The paper provides a summary account of the views of the classical political economists on the effects of technical change on the demand for labour, and in particular for skilled versus unskilled labour. The views of the classical economic theorists, from Smith to Ricardo, Babbage, Ure and Marx, are then contrasted with the historical record of the bias of technical change with regard to de-qualifying and skill-enhancing tendencies in the 18th and 19th century that emerges from studies of economic historians. The paper shows that some of the classical economists made a serious effort to account for heterogeneous labour in a changing technical environment. While Smith and Marx envisaged the de-qualification of the workforce as the main characteristic of technological development and as a purposely intended consequence of the introduction of new technologies, other authors like Babbage also took into account capital - skilled labour complementarities and skill-enhancing effects of technological change. While for Smith the deskilling bias is a by-product of progress, Marx and Ure regarded directed technological change as a bourgeois weapon in the class struggle for the reduction of the bargaining power of the proletariat. Economic historians found strong confirmation for Marx’s hypotheses that technical change was used as a weapon against the proletariat. But most empirical studies found no evidence for a deskilling tendency of industrialization as a whole. According to those studies industrialization was accompanied by a polarization of labour. On the one hand, industrialization deskilled part of the labour force and on the other hand it sharply raised the demand for highly skilled workers.
    Date: 2017–05–31
  17. By: Lucian Ionel Mercea (PhD candidate at the West University of Timisoara)
    Abstract: In the development of the religious phenomenon, knowledge bears an essential role. The present study analyses the factors that have contributed to the emergence and the spreading of NeoProtestant denominations (Baptist, Adventists, Brethren and Pentecostals) within the borders of Romania in the second half of the 19th and the beginning of the 20th century. Four different perspectives are presented: the orthodox, communist, neo Protestant and sociological points of view. With this paper we will observe the way knowledge played an important role in the appearance and development of neo‚ÄíProtestant confessions in Romania. That mainstream churches in Romanian (Orthodox, Catholic), preoccupied more with the ritualistic aspects of their liturgical services, did not fulfill the needs of believers in search for a deeper spiritual experience. For this to occur, believers belonging to these ecclesiastical traditions have turned towards what has been labeled neo Protestantism in Romania.
    Keywords: knowledge, neoProtestant, Baptist, Adventists, Brethren, Pentecostals, orthodox
    Date: 2016
  18. By: Akbulut-Yuksel, Mevlude (Dalhousie University); Okoye, Dozie (Dalhousie University); Yuksel, Mutlu (Dalhousie University)
    Abstract: This paper provides causal evidence on the importance of socioeconomic circumstances, socialization, and childhood events, in the formation of adult political behaviour and attitudes, using region-by-cohort variation in exposure to the Jewish expulsions in Nazi Germany as a quasi-experiment. We find that the expulsion of Jewish professionals had long-lasting detrimental effects on the political attitudes and beliefs of Germans who were at impressionable years during the Nazi Regime. We further demonstrate that these adverse effects on political behaviour and attitudes may be explained by the social changes brought about by the expulsions, which led to relatively lower adult socioeconomic status and civic skills for individuals in their impressionable ages during the expulsions. These results are robust to several alternative specifications, composition bias induced by differential migration and mortality rates across regions and cohorts, and also regional differences in economic performance, wartime destruction, urbanization, and party support, during the Nazi Regime.
    Keywords: political behaviour, impressionable years, Jewish expulsions, socioeconomic status
    JEL: D72 D74 O12 P16 N40
    Date: 2017–05
  19. By: Pedro Lains (Institute of Social Sciences, University of Lisbon)
    Abstract: From 1750 to 2015 we may detect three waves of globalization of wines produced in Portugal, namely, port wine exports for the British market in the 18th century, common wines exports to France in the second half of the 19th century, and finally the growth of exports to European markets from the last decade of the 20th century up to the present times. This chapter explores the fundamentals of such waves looking at trends in output, productivity, domestic and foreign consumption, commercial agreements and economic policies. The first two waves came to halt as conditions in the foreign markets changed, because they did not have a solid domestic base of production and commercialization. The chapter argues that the third wave is of a different kind as it developed from a more solid domestic base of the wine sector that had developed for decades based on domestic consumption. Thus we may conclude that wine globalization is also about changing domestic economic conditions. The process was however long and painful, as the sector had a very irregular performance throughout the 20th century which is however related to the overall backwardness of the Portuguese economy in the European context.
    Keywords: Portugal, Agriculture, Wine, Globalization, Domestic markets, Competitiveness
    JEL: N53 N54 O13 Q11 Q17
    Date: 2017–05
  20. By: Bernardo Batiz-Lazo (Bangor University); Leonidas Efthymiou (UNICAF - Intercollege Larnaca)
    Abstract: In this paper we look backwards and sideways to ascertain elements that are likely to determine the future of cash as well as cashless payment systems. Our analysis begins in medieval Europe while examining how legal tender and fiat money was imposed on people during the primitive accumulation era (Marx, [1887] 2015). Primitive accumulation marks the transition to a market economy. Paper money played a central role in the transformation of socio-economic relations as part of the imposition of wage labour upon self-producing, self-sufficient and self-provisioning populations. But primitive accumulation has been conceived as more than just a period of transition that led to the development of capitalistic socio-economic relations, to encompass a set of forces that permanently reproduce accumulation and capital’s existence (Bonefeld, 2001; Dalla Costa & Dalla Costa, 1995; De Angelis, 2001; Perelman, 2001). Following this broader conception of primitive accumulation, we trace practices in Fordism and post-Fordism to explain how the emergence of a cashless/checkless economy results not only technological change and a drive for cost efficiency within financial institutions, but also results from economic restructuring, labour de-skilling and general changes in the social and cultural landscape. We content that market forces as well as government policy have contributed to the diffusion and adoption of cashless means of payment, within an intensifying automation and mobilisation of daily life where digital money is likely to outpace cash. Furthermore, the transparency (or lack of) with which these decisions have taken place, indicates the extent to which the government and business elites value the right to information and freedom of choice. The move to a cashless/checkless economy thus epitomises how money is also subject to the freedom versus security debate that is fast becoming one of the quintessential quandaries of the 21st century.
    Date: 2016–11
  21. By: Asante, Kofi
    Abstract: This paper examines conflicts between factions in the early British colonial administration in the Gold Coast. The reversion of administration control from the company of merchants to the Colonial Office generated hostility within the administration. Mercantile resentment stemmed from a perception that metropolitan control was likely to undermine the results of their labours and jeopardise their commercial interests. These circumstances provided a fertile breeding ground for the pattern of conflicts that embroiled officials of the colonial administration from 1844. However, when allowed the opportunity to influence administrative policy, merchants adopted cordial relations with the new officials and readily offered their cooperation. This study suggests that we cannot assume that colonial administrations functioned as coherent units. Another implication is that uncritically accepting the ‘coloniser’ and ‘colonised’ dichotomy obscures many important differences within each category and blinds us to the important social and political implications of these internal divisions.
    Date: 2017
  22. By: Fraga, Eduardo (Yale University); Gonzaga, Gustavo (Pontifical Catholic University of Rio de Janeiro (PUC-Rio)); Soares, Rodrigo R. (Columbia University)
    Abstract: This paper analyzes the effect of selection on ability on the evolution of the gender wage gap during the first years of professional life. We use longitudinal data with 16 years of the early career history of formal sector workers in Brazil. The panel allows us to build a measure of unobserved ability that we use to analyze the dynamics of labor market selection across genders as individuals age. We focus on the cohort born in 1974, for which we have a close to complete history of formal labor market participa-tion. For this cohort, the average ability of formally employed men improved in relation to that of women during the first years of professional life. The selection of men and women into the labor mar-ket was similar at age 21, but by age 31 high‐ability men (one standard deviation above the mean) had a probability of employment 1.6 percentage point higher than their high‐ability female counter-parts. This contributed to the increase in the conditional gender wage gap observed in the early career, as the ability distribution of employed women deteriorated in relation to that of employed men. Our estimates suggest that, for the 1974 cohort, this mechanism explains 32% of the cumulative growth in the conditional gender wage gap between ages 21 and 36.
    Keywords: gender wage gap, selection, ability, lifecycle
    JEL: J16 J21 J31 J71
    Date: 2017–05
  23. By: Maurice Obstfeld; Alan M. Taylor
    Abstract: In our book, Global Capital Markets: Integration, Crisis, and Growth, we traced out the evolution of the international monetary system using the framework of the “international monetary trilemma”: countries can enjoy at most two from the set {exchange-rate stability, open capital markets, and domestic monetary autonomy}. The events of the past decade or more highlight the further complications for this framework posed by financial stability issues. Here we update and qualify our prior analysis, drawing on recent experience and research. Under the classical gold standard, scant attention was paid to macro management, either to stabilize output and employment or to ensure financial stability. The interwar years highlighted the changing demands for modern central bank interventions in the economy. Financial instability, followed by WWII, left a world with sharply constricted financial markets and little private cross-border capital mobility. Due to this historical accident, the Bretton Woods system agreed in 1944 focused not at all on financial stability, and focused on issues like adjustment, exchange rate misalignment, and international liquidity (defined in terms of official, not private, capital-account transactions). Post 1970s floating rates permitted, but did not require, liberalization of the capital account. But the political equilibrium had shifted in favor of financial interests, signaled by the push toward European integration and the later reform process in emerging markets starting in the 1990s. This development, however, opened the door once again to domestic financial crises and their international transmission. Countries now become more susceptible to a new species of “capital account crises,” fueled by bank and bond lending, and its sudden withdrawal. These developments, in fact, made evident a different, “financial trilemma”: countries can pick at most two from {financial stability, open capital markets, and autonomy over domestic financial policy}. We distill the main lessons as to the interactions between the monetary and financial trilemmas, and policies that could best address the resulting weaknesses.
    JEL: B1 E44 E50 E60 F30 F40 F62 F65 G01 N10 N20
    Date: 2017–05
  24. By: John P. Conley (Vanderbilt University)
    Abstract: Blockchain startups have embraced initial coin offerings (ICOs) as a vehicle to raise early capital. The crypto-tokens offered in these sales are intended to fill a widely varied set of roles on different platforms. Some tokens are similar to currencies, others are more like securities, and others have properties that are entirely new. Each company's technological vision calls for a token with unique properties and uses. The main point of this paper is that designing a successful token must take into account certain aspects of monetary theory, financial economics, and game theory. Failing to do so can put an otherwise excellent project at risk. We also explore what economics tells us about how to assess the value of tokens offered for sale, how startups should structure their ICOs, and what the implications of assigning various roles to tokens on a platform might be.
    Keywords: Blockchain, Crypto-tokens, Cryptocurrency, Initial Coin Offering, Bitcoin, KYC, AML, ICO
    JEL: E5 G1
    Date: 2017–06–06
  25. By: Taylor Jaworski
    Abstract: When private incentives are insufficient, a big push by government may lead to industrialization. This paper uses mobilization for World War II to test the big push hypothesis in the context of postwar industrialization in the American South. Specifically, I investigate the role of capital deepening at the county level using newly assembled data on the location and value of wartime investment. Despite a boom in manufacturing activity during the war, the evidence is not consistent with differential growth in counties that received more investment. This does not rule out positive effects of mobilization on firms or sectors, but a decisive role for wartime capital deepening in the Souths postwar industrial development should be viewed more skeptically.
    JEL: N12
    Date: 2017–06
  26. By: Yuchi Che (Field Education Intern at IPSEC via Harvard Divinity School)
    Abstract: In the long history of the patriarchal culture of China, women were consistently stigmatized as naïve. What made this situation worse was the mentality that, a woman who lacks talent is a virtuous woman a famous quote, which had became the standard to measure the qualities of a woman. This portrayal was quite permanent throughout the cultural history of China, as even today, this stereotype is still prominent in the poor, rural, and illiterate areas of China. This paper highlights in a chronological fashion the portrayal of the woman in the Chinese culture through sound, music, religion, and mythology.
    Keywords: China, woman, sound, religion, Communism, Nuwa, Pangu, Mulan, Confucianism, Lao Tsu
    Date: 2016
  27. 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.
    JEL: F14 F15 N75
    Date: 2017–06
  28. By: KOGURE, Katsuo
    Abstract: A growing body of literature examines the relationships between historical events and contemporary economic outcomes. Recent studies estimate the causal effects using detailed historical data and contemporary microdata of individuals and/or households. In this paper, we discuss conceptual and econometric issues inherent in the causal inference following the potential outcomes framework. We also discuss a simple alternative approach to avoid these issues that is coherent with the potential outcomes framework. An empirical example based on the approach is then presented.
    Keywords: history, economic development, causal effect, Rubin causal model
    JEL: C01 N01
    Date: 2017–05
  29. By: Rubem Polo Costa Mafra (Universidade Federal de Minas Gerais – UFMG); Márcia Siqueira Rapini (Cedeplar-UFMG); Tulio Chiarini (Instituto Nacional de Tecnologia - INT)
    Abstract: Starting from the concept of techno-economic paradigms developed by Freeman and Perez (1988) and by the articulation between productive and financial capital (Perez, 2002) in the consolidation of each Technological Revolution, this paper articulates innovation and financial bubbles. In the first four Technological Revolutions - Era of Mechanization; Era of Steam and the Railways; Era of Heavy Engineering, Steel and Electricity; And Oil, Automobile and Mass Production - the financial capitalwas responsible for economic speculation related to innovations and to the construction of a new industrial infrastructure.Productive capital took a lead in the construction of industrial infrastructure from the strong speculation and the detachment of real economy asset prices, that is, from the generation of a financial bubble. In contrast, a fifth Technological Revolution - the Microelectronic Era - has altered the dynamics of previous technological revolutions: the financialization of the economy changed the logic of the relationship between productive and financial capital. In other words, productive capital did not overlap with financial capital, which can be explained by profound structural transformations.
    Keywords: Technological revolutions, Financial bubbles, Capitalism crises
    JEL: O30 O31 O33
    Date: 2017–05
  30. By: Marco Lonzi; Samuele Riccarelli; Ernesto Screpanti
    Abstract: In his theoretical model of production prices Marx follows the classical economists in treating wages as being paid in advance. Sraffa, instead, tends to treat them as being paid post factum. However, when Marx tackles the problem under less abstract scrutiny, he abandons the classical approach and declares that, as a matter of fact, wages are postponed. We prove that, if the period of postponed wage payment differs from the length of the production process, the correct prices are better approximated by an equation with the full post-payment of wages than by one with full pre-payment. Under perfect competition and postponed wage payments, Sraffa’s approach to price determination is the correct one, and validates Marx’s non-classical vision, whatever the period of wage payment.
    Keywords: Value theory, Marx, Sraffa
    JEL: B31 B51
    Date: 2017–06
  31. By: Clorith Angélica Bahos-Olivera (Banco de la República de Colombia); Julián A. Parra-Polanía (Banco de la República de Colombia)
    Abstract: Los Borradores de Economía llegan, con este documento, a su número mil. Veintitrés años después de su inicio, la serie ha servido para incentivar la investigación en el interior del Banco de la República y como mecanismo de difusión de la misma. Por este motivo, hemos preparado este trabajo para rememorar el origen de la serie y presentar algunas estadísticas describiendo la misma en términos de su impacto, visibilidad y algunas características de sus autores, entre otros aspectos. Classification JEL: Y10, Y90
    Keywords: Visitas, Descargas, Citas, Documentos de Trabajo, Borradores de Economía
    Date: 2017–05
  32. By: Steven N. Kaplan
    Abstract: U.S. companies are often criticized for being overly short-term oriented. This paper documents that those criticisms have a long history, going back at least thirty-five years. The paper then considers the implications of sustained short-termism for corporate profits, venture capital investments and returns, private equity investments and returns, and corporate valuations. The paper finds little long-term evidence that is consistent with the predictions of the short-term critics.
    JEL: G3 L25
    Date: 2017–06

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