nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2017‒06‒18
fifteen papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Las bioenergías en España. Una serie de producción, consumo y stocks entre 1860 y 2010 By Juan Infante-Amate; Iñaki Iriarte-Goñi
  2. The local environment shapes refugee integration: Evidence from post-war Germany By Braun, Sebastian; Dwenger, Nadja
  3. Estimating the Recession-Mortality Relationship when Migration Matters By Vellore Arthi; Brian Beach; W. Walker Hanlon
  4. What money does: An inquiry into the backbone of capitalist political economy By Koddenbrock, Kai
  5. Comment: Betting on Secession: Quantifying Political Events Surrounding Slavery and the Civil War By Paul Hallwood
  6. Irrungen und Wirrungen im Umfeld der Geldtheorie: Wohin einseitige Darstellungen der Zentralbanken führen By Quaas, Georg
  7. Monetary and Fiscal Policy in England during the French Wars (1793-1821) By P. Antipa; C. Chamley
  8. Making Puerto Rico A State: A Win-Win Opportunity By J. Tomas Hexner; Arthur MacEwan
  9. Undergraduate econometrics instruction: through our classes, darkly By Joshua D. Angrist; Jorn-Steffen Pischke
  10. "Countercyclical Labor Productivity: The Spanish Anomaly" By Borja Jalón; Simón Sosvilla-Rivero; José A. Herce
  11. Capital Taxation and Investment: Matching 100 Years of Wealth Inequality Dynamics By Boehl, Gregor; Fischer, Thomas
  12. Still More On Mariel: The Role of Race By George J. Borjas
  13. Do Remittances Promote Labor Productivity Growth in Mexico? An Empirical Analysis, 1970-2014. By Miguel D. Ramirez
  14. Industry Evolution in Varieties of Capitalism: a Comparison of the Danish and US Wind Turbine Industries By Menzel, Max-Peter; Kammer, Johannes
  15. Changes in income, education and health inequality over the last 20 years: evidence from Latin America, sub-Saharan Africa and South Asia By Giovanni Andrea Cornia

  1. By: Juan Infante-Amate; Iñaki Iriarte-Goñi
    Abstract: This paper presents the methodological and statistical basis of a new data series of Spain's bioenergy consumption between 1860 and 2010. We have estimated the primary production, appropriation, and the type of final use of all woody biomass, which represents the most consumed bioenergy. The series distinguishes the production source, including forests, olives, vineyards, and the rest of woody fruit orchards, as well as regional disaggregation at partido judicial level (425 in Spain) between 1860 and 1960. The bioenergy consumption series is represented both in primary (by energy source) and final (by energy carrier) energy. Our findings point out that i) consumption was higher than traditionally assumed in the previous literature; ii) there are four major phases in the period, including a slow decline from 1860 to 1914, a return to firewood with a small increase until 1955, a rapid decline from then to 1980, and finally, a return to bioenergies (with modern uses) from 1980 to the present; iii) there are strong regional disparities in firewood consumption between 1860 and 1960, ranging from 1 to 5 kg hab-1 día-1; iv) in the supply of bioenergies, geography also explains the type of product consumed: in Mediterranean provinces, woody crop-based consumption gained prominence, as they expanded over traditional forest areas; and v) stock of woody biomass has multiplied unprecedently since the mid-20th Century due to the abandonment of forestlands, the introduction of fast-growing species, and the optimal geographical allocation.
    Keywords: Energy Transition, Bioenergies, Firewood, Forestry History, Environmental History, Carbon Stocks
    JEL: N50 O13 Q42 Q57
    Date: 2017–06
  2. By: Braun, Sebastian; Dwenger, Nadja
    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 in 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
  3. By: Vellore Arthi; Brian Beach; W. Walker Hanlon
    Abstract: A large literature following Ruhm (2000) suggests that mortality falls during recessions and rises during booms. The panel-data approach used to generate these results assumes that either there is no substantial migration response to temporary changes in local economic conditions, or that any such response is accurately captured by intercensal population estimates. To assess the importance of these assumptions, we examine two natural experiments: the recession in cotton textile-producing districts of Britain during the U.S. Civil War, and the coal boom in Appalachian counties of the U.S. that followed the OPEC oil embargo in the 1970s. In both settings, we find evidence of a substantial migratory response. Moreover, we show that estimates of the relationship between business cycles and mortality are highly sensitive to assumptions related to migration. After adjusting for migration, we find that mortality increased during the cotton recession, but was largely unaffected by the coal boom. Overall, our results suggest that migration can meaningfully bias estimates of the impact of business-cycle fluctuations on mortality.
    JEL: I1 J60 N32 N33
    Date: 2017–06
  4. By: Koddenbrock, Kai
    Abstract: The theory and critique of capitalism is back at the center of scholarly debate. With it comes a growing awareness of the analytical and political importance of money and money creation. Moving from the more systemic reflections of Karl Marx to more recent work on money theory by Geoffrey Ingham and in financial economics, the paper focuses on three of money's "deeds." As a social structure and process, it makes moneymaking through capital permeate all our societies. As a public-private partnership between the state, rentiers, banks, and taxpayers that has existed since the foundation of the Bank of England in 1694, it binds these actors together in shifting relations of dependence. In today's financial capitalism, what counts as money and how far moneyness stretches into the realms of financial innovation has been the core object of struggle in the public-private partnership of money. In conclusion, the paper discusses how contemporary money redistributes intra-socially and internationally.
    Keywords: capitalism,Bank of England,derivatives,inequality,banks,US dollar,Marx,Ingham
    Date: 2017
  5. By: Paul Hallwood (University of Connecticut)
    Abstract: Abstract: This paper argues that falling slave prices in the earliest months of the American Civil War in April 1861 indicates lack of confidence in the durability of the Confederacy. The key to this understanding is use of an asset pricing model that distinguishes between the expected outcomes of the war, whether the war was thought to be over quickly or otherwise, and whether any compensation for emancipation would be paid. This view concurs with other investigators who have examined falling gold bond and cotton bond prices and, in the very early months, rising Confederate dollar prices of gold, as well as difficulties in selling Confederate bonds to finance its war effort.
    Keywords: Confederacy, default risk, secession, slavery, US Civil War
    JEL: D72 D74 D83 G14 H77 N31 N41
    Date: 2017–06
  6. By: Quaas, Georg
    Abstract: This article is the long-version of a discussion paper published on „Ökonomenstimme“ at June-15-2017. Both papers defend essential parts of the macro-economic theory of the modern banking system. The discussion was triggered by Dirk Ehnts who argued that bank deposits are created out of nothing. According to his view, the Bank of England and the European Central Bank (including the Deutsche Bundesbank) are about to revise the macro-economic theory of money. In this article it is shown that Ehnt’s position cannot be based on publications recently made by those central banks. The banking authorities reject the deterministic interpretation of the money-multiplier theory. Their criticism is based on the fact that the multiplier proves empirically not to be a constant parameter. Without this acceptable critique and not regarding a few misleading formulations, the authors of the central banks’ publications cling to the modern theory of money in all remaining aspects.
    Keywords: money creation by banks, broad money and monetary base, money multiplier approach
    JEL: A20 G17 G21
    Date: 2017–06–16
  7. By: P. Antipa; C. Chamley
    Abstract: The French Wars (1793-1815) exerted unprecedented pressures on Britain's fiscal and monetary policy settings. Policy makers had to constantly adjust the policy mix as events unfolded. This meant implementing monetary and fiscal policy innovations, such as the suspension of the gold standard and the instauration of Britain's first income tax. These adjustments signalled the government's commitment to undertake the necessary to win the war, without jeopardizing fiscal sustainability. Drawing on new hand-collected data, we also show that the Bank of England played an essential role in two successive phases of the war. The Bank granted ample liquidity to the domestic payment system, by discounting large amounts of private bills. It also financed the decisive phase of the wars by purchasing large amounts of public debt. The successful winding down of the balance sheet and the resumption of the gold standard influenced the Bank's policies and shaped the political and financial landscape for the century to come.
    Keywords: Interactions between monetary and fiscal policies, central bank balance sheet, unconventional monetary policy, open market operations.
    JEL: N13 H63 E58 E62
    Date: 2017
  8. By: J. Tomas Hexner (Founder and director, Science Initiative Group at the Institute for Advanced Study at Princeton, New Jersey); Arthur MacEwan (University of Massachusetts Boston)
    Abstract: Since Puerto Rico was ceded by Spain to the United States at the end of the Spanish-American War, the status of Puerto Rico has been adjusted at various times and has continually been an issue of controversy. In recent decades, the controversy has focused on whether Puerto Rico should become a state, remain in its current territorial status, or become an independent nation. This paper explains how Puerto Rico’s territorial status has created a condition of dependency, doing substantial harm to the island’s economic condition. The period of successful economic growth in decades immediately following World War II created some rapid economic growth, but firmly established the era of dependence that has been so economically detrimental. Thus the current status has to be rejected as a basis for long-run economic success in Puerto Rico. Statehood, in particular, holds out the likelihood of gains for both the United States and Puerto Rico, a win-win situation. The Puerto Rican people have increasingly come to favor the statehood option. With a recognition of the opportunity for a win-win outcome, the foundation for a move to statehood would be established.
    Keywords: Puerto Rico status, Puerto Rico statehood, PROMESA
    JEL: O1 O2 Z32
    Date: 2017
  9. By: Joshua D. Angrist; Jorn-Steffen Pischke
    Abstract: The past half-century has seen economic research become increasingly empirical, while the nature of empirical economic research has also changed. In the 1960s and 1970s, an empirical economist's typical mission was to "explain" economic variables like wages or GDP growth. Applied econometrics has since evolved to prioritize the estimation of specific causal effects and empirical policy analysis over general models of outcome determination. Yet econometric instruction remains mostly abstract, focusing on the search for "true models" and technical concerns associated with classical regression assumptions. Questions of research design and causality still take a back seat in the classroom, in spite of having risen to the top of the modern empirical agenda. This essay traces the divergent development of econometric teaching and empirical practice, arguing for a pedagogical paradigm shift.
    JEL: A22 C01
    Date: 2017
  10. By: Borja Jalón (University Complutense of Madrid); Simón Sosvilla-Rivero (Complutense Institute for International Studies, Universidad Complutense de Madrid; 28223 Madrid, Spain.); José A. Herce (University Complutense of Madrid and International Financial Analysts (AFI).)
    Abstract: The cyclical pattern of labor productivity has been a subject of discussion in the economic literature for long time with important theoretical implications. Many authors point out the role of labor market institutions as determinants of the cyclical pattern. For these authors, the loss of procyclicality experimented in the United States since the mid-1980s could be explained by decrease of rigidities in labor market. Following the literature, this paper explores the role of labor regulation by analyzing the case of Spain, which has gone in a few years from a strongly procyclical pattern to a counterciclycal one. Our results suggest that the high rigidity in wages and the great flexibility in labor, related to the temporary workers after the 1984 legislative reform, is the main cause of the countercyclical pattern of the Spanish labor productivity. Our findings are in line with previous papers highlighting the crucial influence of labor market institutions over the cyclical pattern.
    Keywords: Business cycle, labor productivity, labor regulation, multifactor productivity. JEL classification:E32, J30, K31, O47.
    Date: 2017–06
  11. By: Boehl, Gregor (IFMS, Goethe University Frankfurt, Germany.); Fischer, Thomas (Department of Economics, Lund University)
    Abstract: Using a parsimonious, analytically tractable dynamic model, we are able to explain up to 100 years of the available data on the dynamics of top-wealth shares for several countries. We build a micro-founded model of heterogeneous agents in which - in addition to stochastic returns on investment - individuals disagree marginally on their expectations of future returns and thus hold different asset positions. We show that, given a positive tax on capital gains, the distribution converges to a double Pareto distribution for which the degree of wealth inequality decreases with the tax rate. Closed-form solutions confirm that without government intervention there is infinite inequality. Moreover, transition dynamics are shown to increase with the tax rate. We discuss the model's ability to match the measured wealth inequality for the US, the UK, Sweden, and France, both in levels and transitions. The heterogeneous development in the different countries and across time can be traced back to different tax regimes.
    Keywords: Wealth inequality; capital taxation; stochastic simulation; heterogeneity
    JEL: C63 D31 G11 H23
    Date: 2017–06–07
  12. By: George J. Borjas
    Abstract: Card’s (1990) study of the Mariel supply shock remains an important cornerstone of both the literature that measures the labor market impact of immigration, and of the “stylized fact” that immigration might not have much impact on the wage of workers in a receiving country. My recent reappraisal of the Mariel evidence (Borjas, 2017) revealed that the wage of low-skill workers in Miami declined substantially in the years after Mariel, and has already encouraged a number of re-reexaminations. Most recently, Clemens and Hunt (2017) argue that a data quirk in the CPS implies that wage trends in the sample of non-Hispanic prime-age men examined in my paper does not correctly represent what happened to wages in post-Mariel Miami. Specifically, there was a substantial increase in the black share of Miami’s low-skill workforce in the relevant period (particularly between the 1979 and 1980 survey years of the March CPS). Because African-American men earn less than white men, this increase in the black share would spuriously produce a drop in the average low-skill wage in Miami. This paper examines the robustness of the evidence presented in my original paper to statistical adjustments that control for the increasing number of black men in Miami’s low-skill workforce. The evidence consistently indicates that the race-adjusted low-skill wage in Miami fell significantly relative to the wage in other labor markets shortly after 1980 before fully recovering by 1990.
    JEL: J0 J61
    Date: 2017–06
  13. By: Miguel D. Ramirez (Department of Economics, Trinity College)
    Abstract: This paper investigates remittance flows to Mexico during the 1980-2014 period in absolute terms, relative to GDP, in comparison to FDI inflows, and in terms of their regional destination. Next, the paper reviews the growing literature that assesses the impact of remittances on investment spending and economic growth. Third, it presents a simple endogenous growth model that explicitly incorporates the potential impact of remittance flows on economic and labor productivity growth. Fourth, it presents a modified empirical counterpart to the simple model that tests for both single- and two-break unit root tests, as well as performs cointegration tests with an endogenously determined level shift over the 1970-2014 period. The error-correction model estimates suggest that remittance flows to Mexico have a positive and significant effect, albeit small, on both economic growth and labor productivity growth. The concluding section summarizes the major results and discusses potential avenues for future research on this important topic
    Keywords: Error-correction model, FDI inflows, Gregory-Hansen cointegration single-break test, Gross fixed capital formation, Johansen Cointegration test, KPSS no unit root test, Lee-Strazicich two-break unit root test, remittance flows, and Zivot-Andrews single-break unit root
    JEL: C10 F01
    Date: 2017–06
  14. By: Menzel, Max-Peter (University Bayreuth); Kammer, Johannes (University Hamburg)
    Abstract: In this study, we combine Klepper’s framework on the evolution of industries with the Varieties of Capitalism approach to argue that industry evolution is mediated by institutional differences. We expect that new industries will evolve with a stronger connection to established industries in coordinated marked economies than in liberal market economies. Our assumptions are supported by the survival analysis of US and Danish wind turbine manufacturers from 1974 to 2014.
    Keywords: industry evolution; varieties of capitalism; heritage theory; wind turbine industry; institutions
    JEL: L64 O15 P51
    Date: 2017–06–09
  15. By: Giovanni Andrea Cornia (Dipartimento di Scienze per l'Economia e l'Impresa)
    Abstract: This paper analyses the interactions among income, health and educational inequality, and reviews changes in the distribution of income, health and education during the last three decades in Latin America, sub-Saharan Africa and South Asia. The analysis tries to relate such changes to the development strategies followed by the countries of these regions during this period. Such strategies have exerted a considerable influence on public policy and human development inequality. The paper concludes with a set of policies that would help reduce inequality in these three dimensions based on the interconnections among them.
    Date: 2017

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