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on Business, Economic and Financial History |
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Issue of 2017‒08‒13
eighteen papers chosen by |
| By: | Emilio Ocampo |
| Abstract: | This paper seeks to identify what worked and what didn’t work to stop inflation in Argentina in the last seventy years. The approach is descriptive rather than theoretical and examines the relative performance of the only ten stabilization plans that, during the period 1952-2015, lasted at least 24 months. The paper also compares the performance of these plans along other dimensions, such as economic growth, unemployment and income distribution and evaluates the impact of international economic conditions. The analysis sheds light on the debates shock vs. gradualism and orthodox vs. heterodox and puts the current stabilization plan in a historical context. |
| Keywords: | Argentina, economic policy, inflation, stabilization plans, shock, gradualism, orthodoxy, heterodoxy. |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:613&r=his |
| By: | Giuliano, Paola (University of California, Los Angeles) |
| Abstract: | Social attitudes toward women vary significantly across societies. This chapter reviews recent empirical research on various historical determinants of contemporary differences in gender roles and gender gaps across societies, and how these differences are transmitted from parents to children and therefore persist until today. We review work on the historical origin of differences in female labor-force participation, fertility, education, marriage arrangements, competitive attitudes, domestic violence, and other forms of difference in gender norms. Most of the research illustrates that differences in cultural norms regarding gender roles emerge in response to specific historical situations, but tend to persist even after the historical conditions have changed. We also discuss the conditions under which gender norms either tend to be stable or change more quickly. |
| Keywords: | gender, cultural transmission, historical persistence |
| JEL: | N0 Z1 J16 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10931&r=his |
| By: | Tetsuji Okazaki |
| Abstract: | This paper attempts to contribute to the "factory debate" by disentangling the effects of the technological change and the organizational change in the rise of the factory, using a unique dataset from Japan in the early twentieth century. It is found that the productivity of a factory worker was 2.46 times larger than that of an outworker under the putting-out system, after controlling for the effect of the power loom. The impact of the factory system was almost as large as that of the power loom in the case where all the hand looms were replaced by power looms. This finding indicates how substantial the effect of the organizational change was that gathered dispersed workers under the one roof. |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:cnn:wpaper:17-006e&r=his |
| By: | Albrecht Glitz; Eric Meyersson |
| Abstract: | In this paper, we investigate the economic returns to industrial espionage by linking information from East Germany’s foreign intelligence service to sector-specific gaps in total factor productivity (TFP) between West and East Germany. Based on a dataset that comprises the entire flow of information provided by East German informants over the period 1970-1989, we document a significant narrowing of sectoral West-to-East TFP gaps as a result of East Ger- many’s industrial espionage. This central finding holds across a wide range of specifications and is robust to the inclusion of several alternative proxies for technology transfer. We further demonstrate that the economic returns to industrial espionage are primarily driven by rela- tively few high quality pieces of information and particularly strong in sectors that were closer to the West German technological frontier. Based on our findings, we estimate that the average TFP gap between West and East Germany at the end of the Cold War would have been 6.3 percentage points larger had the East not engaged in industrial espionage. |
| Keywords: | espionage, Productivity, R&D, technology diffusion |
| JEL: | D24 F52 N34 N44 O30 O47 P26 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:982&r=his |
| By: | Luca Benati (University of Bern); Peter N. Ireland (Boston College) |
| Abstract: | Shocks to the M1 multiplier–in particular, shocks to the reserves/deposits ratio–played a key role in driving U.S. macroeconomic fluctuations during the interwar period, but their role in the post-WWII era has been almost uniformly negligible. The only exception are shocks to the currency/deposits ratio, which played a sizeable role for inflation and M1 velocity. By contrast, shocks to the multiplier of the non-M1 component of M2, which had been irrelevant in the interwar period, have played a significant role in driving the nominal side of the economy during the post-WWII period up to the collapse of Lehman Brothers, in particular during the Great Inflation episode. During either period, the multiplier of M2-M1 has been cointegrated with the short rate. The monetary base had exhibited a non-negligible amount of permanent variation during the interwar period, whereas it has been trend-stationary during the post-WWII era. In spite of the important role played by shocks to the multiplier of M2-M1 during the post-WWII period, we still detect a non-negligible role for a nonmonetary permanent inflation shock, which has the natural interpretation of a disturbance originating from the progressive de-anchoring of inflation expectations which started in the mid-1960s, and their gradual re-anchoring following the beginning of the Volcker disinflation. |
| Keywords: | Money multiplier; money demand; Lucas critique; structural VARs; unit roots; cointegration; long-run restrictions. |
| JEL: | E31 E32 E41 E42 E51 E52 E58 |
| Date: | 2017–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:933&r=his |
| By: | Pierre Van Der Eng |
| Abstract: | How do multinational enterprises (MNE) respond to the ‘liability of foreignness’ (LoF) they experience in foreign markets? The case study in this paper demonstrates that firms develop dynamic, interactive strategies to minimise the LoF risks they perceive. The Australian subsidiary of Dutch MNE Philips Electronics experienced a significant LoF during 1939-1943, when it came close to being nationalised. In response, Philips Australia set out to build ‘FDI legitimacy’ after 1945 in order to maximise both its ‘national embeddedness’ in the host country and its influence on government policy that guided the rapid development of Australia’s postwar electronics industry. This strategy aimed to minimise risk and maximise commercial opportunities for the firm. Philips Australia localised senior management, maximised local procurement and local manufacturing, took a leading role in industry associations, engaged politically influential board members and used marketing tools to build a strong brand and a positive public profile in Australia. The firm became aware of the limitations of this strategy in 1973, when a new Labor government reduced trade protection. Increasing competition from Japanese electronics firms forced Philips Australia to restructure and downsize its production operations. Despite increasing reliance on imports from the parent company’s regional supply centres and efforts to specialise production on high- value added products, the firm saw its profitability and market share in Australia decrease. The case demonstrates that the success of strategic responses to minimise LoF and maximise ‘FDI legitimacy’ is highly context-dependent. |
| Keywords: | liability of foreignness, FDI legitimacy, Philips, Australia, electronics industry |
| JEL: | F23 L68 M16 N87 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:auu:hpaper:057&r=his |
| By: | Javier Torres (Universidad del Pacífico); Fiorella Parra (Universidad del Pacífico); Jorge Rubio (Universidad del Pacífico) |
| Abstract: | Este estudio estima la relación entre los años de educación de padres e hijos. Se observa a las generaciones nacidas entre 1950 y 1989 en el Perú, utilizando múltiples años de la Encuesta Nacional de Hogares. Ello nos permite analizar con mayor detalle la evolución general de la movilidad social en el país, así como la de diferentes grupos demográficos, geográficos y étnicos durante la segunda mitad del siglo XX. Se encuentra que la relación entre el nivel educativo de los padres para con sus hijos es positiva y significativa a lo largo de todo el periodo analizado. Sin embargo, el coeficiente beta de transmisión educativa intergeneracional disminuye marcadamente a través de las décadas estudiadas; es decir, se observa un aumento del grado de movilidad y oportunidades de mejora educativa. El coeficiente beta de transmisión es bastante elevado (0.73) para aquellos que nacieron entre 1950 y 1959, pero menor a 0.45 para aquellos que nacieron entre 1980 y 1989. |
| Keywords: | I24, J62 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:apc:wpaper:2017-101&r=his |
| By: | Bauernschuster, Stefan; Driva, Anastasia; Hornung, Erik |
| Abstract: | We investigate the impact on mortality of the world's first compulsory health insurance, established by Otto von Bismarck, Chancellor of the German Empire, in 1884. Employing a multi-layered empirical setup, we draw on international comparisons and difference-in-differences strategies using Prussian administrative panel data to exploit differences in eligibility for insurance across occupations. All approaches yield a consistent pattern suggesting that Bismarck's Health Insurance generated a significant mortality reduction. The results are largely driven by a decline of deaths from infectious diseases. We present prima facie evidence that diffusion of new hygiene knowledge through physicians was an important channel. |
| Keywords: | demographic transition; Health Insurance; Mortality; Prussian Economic History |
| JEL: | I13 I18 J11 N33 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12200&r=his |
| By: | Taguchi, Hiroyuki; Shammi, Rifah Tamannah |
| Abstract: | This paper examines varying macroeconomic impacts of international emigrant remittances in Bangladesh since 1976 by using a vector auto-regression (VAR) framework. Bangladesh has recorded better economic performance during last two decades, 1996-2014, compared to earlier two decades, 1976-1995. The time-series analysis therefore uncovers some transition in the remittance impacts composed of the “Dutch Disease” effect and the capital accumulation effect. The empirical results reveal the existence of the Dutch Disease effect for the first period, 1976-1995, but turned to show the positive impact on capital accumulation for the second period, 1996-2014. We speculate that the recent manufacturing-oriented policies together with institutional improvements have contributed to the transformation in the remittance impact towards a positive direction between two periods. |
| Keywords: | Bangladesh, Emigrant’s remittances, Dutch Disease, Capital accumulation, Vector auto-regression estimation |
| JEL: | F22 F39 O53 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80703&r=his |
| By: | Viktor Slavtchev (Halle Institute for Economic Research (IWH)); Michael Wyrwich (FSU Jena) |
| Abstract: | Can TV influence the entrepreneurial decisions of individuals? To identify causal effects, we utilize a quasi-natural experiment, namely that during the division of Germany after WWI into the capitalistic West Germany and the socialistic East Germany, West TV was exogenously available only in some regions of the latter. Using regional and individual data, we show that, after the Reunification, entrepreneurship is higher among the residents of East German regions with West TV signal, indicating a direct effect of TV on the entrepreneurial mindset of exposed individuals. Moreover, we find second-order effects due to intergenerational transmission, which cause persistent differences. |
| Keywords: | Entrepreneurship, TV, Culture, Occupational choice, Institutions |
| JEL: | L26 J24 M13 P20 P30 O30 D02 D03 Z10 |
| Date: | 2017–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2017-007&r=his |
| By: | Bruce D. Meyer; James X. Sullivan |
| Abstract: | Official income inequality statistics indicate a sharp rise in inequality over the past five decades. These statistics do not accurately reflect inequality because income is poorly measured, particularly in the tails of the distribution, and current income differs from permanent income, failing to capture the consumption paid for through borrowing and dissaving and the consumption of durables such as houses and cars. We examine income inequality between 1963 and 2014 using the Current Population Survey and consumption inequality between 1960 and 2014 using the Consumer Expenditure Survey. We construct improved measures of consumption, focusing on its well-measured components that are reported at a high and stable rate relative to national accounts. While overall income inequality (as measured by the 90/10 ratio) rose over the past five decades, the rise in overall consumption inequality was small. The patterns for the two measures differ by decade, and they moved in opposite directions after 2006. Income inequality rose in both the top and bottom halves of the distribution, but increases in consumption inequality are only evident in the top half. The differences are also concentrated in single parent families and single individuals. Although changing demographics can account for some of the changes in consumption inequality, they account for little of the changes in income inequality. Consumption smoothing cannot explain the differences between income and consumption at the very bottom, but the declining quality of income data can. Asset price changes likely account for some of the differences between the measures in recent years for the top half of the distribution. |
| JEL: | H23 H53 I3 I31 I32 I38 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23655&r=his |
| By: | David K. Baugh; Henry T. Ireys; Carol V. Irvin; Carey O. Appold |
| Abstract: | This issue brief examines the history of Medicaid data and identifies current opportunities to use emerging data systems to guide the program’s continued evolution. |
| Keywords: | Medicaid data, T-MSIS, CHIP |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:19b3af4d8be54352b4d3a109c309187f&r=his |
| By: | Giampaolo Lecce (Bocconi University - Department of Economics); Laura Ogliari (Bocconi University); Tommaso Orlando (Bank of Italy) |
| Abstract: | We study how cultural distance affects the rejection of imposed institutions. To this purpose, we exploit the transplantation of Piedmontese institutions on Southern Italy which occurred during the Italian unification. We assemble a novel and unique dataset containing information on episodes of brigandage, a form of violent uprising against the unitary government, at the municipal level. We use geographic distance from local settlements of Piedmontese descent as a proxy for cultural distance between each municipality and the new rulers. We find robust evidence that cultural distance from the origins of the transplanted institutions is significantly associated with more intense resistance to these institutions. Our results further suggest that the rejection of the transplanted institutions may have a long lasting effect on political participation. |
| Keywords: | Institutions, Institutional Transplantations, Culture, Social Unrest, Electoral Turnout |
| JEL: | N43 D74 P16 Z10 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2097&r=his |
| By: | Bitros, George C.; Nadiri, M. Ishaq |
| Abstract: | Using data from the U. S. Bureau of Economic Analysis for the period 1947-2015, we test two investment models of neoclassical decent. Model A is based on the conceptualization that business firms have an active replacement investment policy, which renders the replacement rate a determinant of business investment behavior, whereas Model B is based on the traditional hypothesis that replacement investment is an engineering proportion of the capital stock, thus turning into a constant. The evidence that emerges from the estimations is heavily in favor of Model A on at least three grounds. Namely, first it establishes that the replacement rate is a decisive determinant of investment at all levels of aggregation; Second, it leads to estimates of investment equations with succinct short run and long run dynamics, thus facilitating policy applications; and thirdly, it gives rise to remarkably robust estimates of the elasticities of substitution of capital for labor, output and the replacement rate. When Model B is estimated for the period 1947-1960, it performs as expected, most likely because in short periods remains fairly constant due to long swings in replacement investment. |
| Keywords: | Neoclassical models of business investment, elasticities of substitution and output, modes of replacement investment |
| JEL: | E22 E52 E62 |
| Date: | 2017–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80594&r=his |
| By: | Buonnano, Paolo; Vargas, Juan F. |
| Abstract: | This paper investigates the relationship between economic inequality and crime in Colombian municipalities. Following recent scholarly research that suggests that the legacy of slavery is largely manifest in persistent levels of economic inequality, we instrument economic inequality with a census-based measure of the proportion of slaves in each municipality before the abolition of slavery in the 19 century. We also explore the robustness of our estimates to relaxing the exclusion restriction, as the slavery instrument is only plausibly exogenous. We document a strong association between inequality and both violent and property crime rates at the municipal level. Our estimates are robust to including traditional determinants of crime (like population density, the proportion of young males, the average education level, the quality of law enforcement institutions, and the overall economic activity), as well as current ethnic differences and geographic characteristics that may be correlated both with the slave economy and with crime. |
| Keywords: | Educación, Economía, Equidad e inclusión social, Investigación socioeconómica, Pobreza, Seguridad, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:dbl:dblpap:987&r=his |
| By: | Roy, Chandan |
| Abstract: | Handloom industry provides widest employment opportunities in West Bengal, where 5.8% of the households involved have been found to be silk handloom weavers, which bears a rich legacy. Shantipur and Phulia in Nadia district are the two major handloom concentrated areas in West Bengal. The main objective of this paper is to make a situational analysis of the handloom workers by focusing on the problems of the handloom weavers of Nadia district. The paper briefly elaborates the historical perspective of handloom clusters over this region at the backdrop of the then Bengal. It also analyzes the present crisis faced by the weavers of Phulia and Shantipur region of Nadia district. It makes a SWOT analysis of the handloom industry where strength, weakness, opportunity and threat of the handlooms sector has been analyzed. The paper recommends several measures like awareness campaign, financial literacy programme, SHG and consortium formation, common facility centre, dye house, market exposure to upgrade the present situation of the handloom industry. |
| Keywords: | Silk Handloom, Weavers, Nadia, Shantipur, Phulia |
| JEL: | J61 N90 R11 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80601&r=his |
| By: | Cagé, Julia |
| Abstract: | This paper investigates the impact of increased media competition on the quantity and quality of news provided and, ultimately, on political participation. Drawing upon existing literature on vertical product differentiation, I explore the conditions under which an increase in the number of newspapers can decrease both the quantity and quality of news provided. I build a new county-level panel dataset of local newspaper presence, newspapers' newsrooms, costs and revenues and political turnout in France, from 1944 to 2014. I estimate the effect of newspaper entry by comparing counties that experience entry to similar counties in the same years that do not. Both sets of counties exhibit similar trends prior to newspaper entry, but those with entry experience substantial declines in the average number of journalists (business-stealing effect). An increased number of newspapers is also associated with fewer articles and less hard news provision. These effects are stronger in counties with more homogeneous populations, as predicted by my simple theoretical framework, whereas there is little impact in counties with more heterogeneous populations. Newspaper entry, and the associated decline in information provision, is ultimately found to decrease voter turnout at local elections. |
| Keywords: | hard news; media competition; newspaper content; political participation; size of the newsroom; soft news |
| JEL: | D72 L11 L13 L82 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12198&r=his |
| By: | Giuliano, Paola (University of California, Los Angeles); Nunn, Nathan (Harvard University) |
| Abstract: | When does culture persist and when does it change? We examine a determinant that has been put forth in the anthropology literature: the variability of the environment from one generation to the next. A prediction, which emerges from a class of existing models from evolutionary anthropology, is that following the customs of the previous generation is relatively more beneficial in stable environments where the culture that has evolved up to the previous generation is more likely to be relevant for the subsequent generation. We test this hypothesis by measuring the variability of average temperature across 20-year generations from 500–1900. Looking across countries, ethnic groups, and the descendants of immigrants, we find that populations with ancestors who lived in environments with more stability from one generation to the next place a greater importance in maintaining tradition today. These populations also exhibit more persistence in their traditions over time. |
| Keywords: | cultural persistence, cultural change, tradition |
| JEL: | N10 Q54 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10930&r=his |