nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2017‒12‒18
thirty-six papers chosen by

  1. Between Malthus and the industrial take-off: regional inequality in Sweden, 1571-1850 By Enflo, Kerstin; Missiaia, Anna
  2. Turgot, Smith and Steuart on Stadial Histories By José M. Menudo
  3. Institutional copying in the 20th century: The role of 14,000 British colonial officers By Valentin Seidler
  4. Managing the UK National Debt 1694-2017 By Martin Ellison; Andrew Scott
  5. Openness and growth in a historical perspective: a VECM approach By Giovanni Federico; Paul Sharp; Antonio Tena-Junguito
  6. UNREAL WAGES? REAL INCOME AND ECONOMIC GROWTH IN ENGLAND, 1260-1850 By Jane Humphries; Jacob Weisdorf
  7. The Gains from Import Variety in Two Globalisations: Evidence from Germany By Wolf-Fabian Hungerland
  8. Replication in experimental economics: A historical and quantitative approach focused on public good game experiments By Nicolas Vallois; Dorian Jullien
  9. International Evidence on Long Run Money Demand By Warren E. Weber; Robert Lucas; Juan Pablo Nicolini; Luca Benati
  10. The Long-run Effects of Agricultural Productivity on Conflict, 1400-1900 By Murat Iyigun; Nathan Nunn; Nancy Qian
  11. Garegnani, Ackley and the years of high theory at Svimez By Cesaratto, Sergio
  12. Evidence on finance and economic growth By Popov, Alexander
  13. Economic Origins of Cultural Norms: The Case of Animal Husbandry and Bastardy By Christoph Eder; Martin Halla
  14. Market Access, Technology, and Plant Lifecycles: A Natural Experiment from Japan's Opening to Trade in 1859 By Tomohiro Machikita; Tetsuji Okazaki
  15. Is Job Polarization a Recent Phenomenon? Evidence from Sweden, 1950–2013, and a Comparison to the United States By Gustavsson, Magnus
  16. The Rural Economics of René de Girardin: Landscapes at the Service of l’Idéologie Nobiliaire By José M. Menudo; Nicolas Rieucau
  17. Reacting to the Lucas Critique: The Keynesians' Pragmatic Replies By Aurélien Goutsmedt; Erich Pinzón-Fuchs; Matthieu Renault; Francesco Sergi
  18. A review of the IFRS adoption literature By De George, Emmanuel T.; Li, Xi; Shivakumar, Lakshmanan
  19. Socio-Economic Activities of Former Feudal Lords in the Meiji Japan By Takeshi Abe; Izumi Shirai; Takenobu Yuki
  20. The Postwar British Productivity Failure By Crafts, Nicholas
  21. Rentabilité et coût du capital dans le projet industriel algérien Le cas de la Société Nationale des Véhicules Industriels (SNVI) By Rachid Mira
  22. Spatial Patterns of Development: A Meso Approach By Stelios Michalopoulos; Elias Papaioannou
  23. Un récit historique alternatif sur l’indépendance des banques centrales: la doctrine et les pratiques avant la théorie ou l’art avant la science By Adriano Do Vale
  24. Innovation Trends and Industrial Renewal in Finland and Sweden 1970-2013 By Kander, Astrid; Taalbi, Josef; Oksanen, Juha; Sjöö, Karolin; Rilla, Nina
  25. Household Wealth Trends in the United States, 1962 to 2016: Has Middle Class Wealth Recovered? By Edward N. Wolff
  26. Copying informal Institutions: The role of British colonial officers during the decolonization of British Africa By Valentin Seidler
  27. From Land Grants to Loan Farms: Property Rights and the Extent of Settlement in Dutch South Africa, 1652-1750 By Alan Dye; Sumner La Croix
  28. Efficient Market Hypothesis, Eugene Fama and Paul Samuelson: A reevaluation By Thomas Delcey
  29. Spatial Patterns of Development: A Meso Approach By Michalopoulos, Stelios; Papaioannou, Elias
  30. The Origins of Cultural Divergence: Evidence from a Developing Country By Ho, Hoang-Anh; Martinsson, Peter; Olsson, Ola
  31. Testing the interest parity condition with Irving Fisher's example of Indian rupee and sterling bonds in the London financial market (1869 - 1906) By Nils Herger
  32. Middle Class in Iran: Oil Rents, Modernization, and Political Development By Mohammad Reza Farzanegan; Pooya Alaedini; Khayyam Azizimehr
  33. The Transformation of Working-Class Identity in Post-Soviet Russia: A Case-Study of an Ural Industrial Neighborhood By Polukhina Elizaveta; Strelnikova Anna; Vanke Alexandrina
  34. The gold digger and the machine. Evidence on the distributive effect of the artisanal and industrial gold rushes in Burkina Faso By Rémi BAZILLIER; Victoire GIRARD
  35. Work-sharing from Different Angles: A literature review By Arvind Ashta
  36. Forecasting realized volatility: a review By Bucci, Andrea

  1. By: Enflo, Kerstin (Department of Economic History, Lund University); Missiaia, Anna (Department of Economic History, Lund University)
    Abstract: The causes and extent of regional inequality in the process of economic growth are at the core of historical economic research. So far, much attention has been devoted to studying the role of industrialization in driving regional divergence. But empirical studies on relatively unequal countries such as Italy or Spain show that inequality was already high when their modern industrialization began (Felice, 2011; Rosés et al., 2010). This paper studies the extent and drivers of pre-industrial inequality for the first time with reference to a pre-industrial European economy. Using new estimates of regional GDP for the regions of Sweden for the period 1571-1850 (Enflo and Missiaia, 2017), we find that regional inequality increased dramatically between 1571 and 1750 and stayed high until the mid-19th century. This result discards the view that industrial take-off was the main driver of regional divergence. Decomposing the Theil index for GDP per worker, we find that the bulk of inequality from 1750 onwards was driven by structural differences across sectors rather than different regional productivity within sectors. We then show that counties with higher agricultural productivity followed a classic Malthusian pattern in its population dynamics when experiencing technological advancement, while ones with higher industrial productivity did not. The difference in the two sectors is what boosted pre-industrial regional inequality. We suggest that institutional factors such as the creation of the Swedish Empire, the monopoly trading rights for Stockholm and the protective industrial policy explain this exceptional pattern.
    Keywords: regional GDP; Sweden; long-run regional inequality; pre-industrial regional development; Malthusian dynamics
    JEL: N01 N13 N93
    Date: 2017–12–12
  2. By: José M. Menudo (Department of Economics, Universidad Pablo de Olavide)
    Abstract: The theory of the stages of society appeared in the mid-18th century. Following a successful reception over the course of the second half of the century, the four-stage theory was finally adopted by Classical Economics, holding that the exchange economy is the final outcome of a long period of economic development. This paper carries out a comparative analysis of the stadial histories of Turgot, Smith and Steuart. We found theories which were similar, but which were identical in the pre-eminence of the productive forces and economic organisation. Firstly, a number of dynamic principles are noted?i.e., a natural tendency to improve their conditions, a series of shocks that change the historical stage and the innovative capacity of some individuals. Secondly, the necessary conditions for the movement from the agricultural stage to commercial society do not coincide. Turgot requires an accumulation of capital, Smith uses the market and Steuart points to the artificial institutions created by merchants. This is the central point in order to understand the differences between their economic theories.
    Keywords: Turgot, History of Economic Thought, Development Enlightenment, and Economic Methodology.
    JEL: B31 B10 O20 B11 B41
    Date: 2017–12
  3. By: Valentin Seidler (University of Warwick (Visiting Fellow 2016/17))
    Abstract: Did individual British officers determine the institutional development of former colonies? The article presents a new research program into institutional reform and economic development based on a newly established dataset of over 14,000 biographical entries of senior colonial officers in 54 British colonies between 1939 and 1966. The rich data permit a new methodological approach towards the question of how institutions are copied into countries with a radical focus on the individual actors involved in the institutional reforms before independence. The article discusses fundamental background information on the British colonial service in the 20th century and presents first preliminary analyses from within the new research agenda.
    Keywords: JEL Classification:
    Date: 2017
  4. By: Martin Ellison; Andrew Scott
    Abstract: Abstract We construct a new monthly dataset for UK government debt over the period 1694 to 2017 based on price and quantity data for each individual bond issued. This enables us to examine long run fiscal sustainability using the theoretically relevant variable of the market value of debt, and investigate the historical importance of debt management. We find the general implications of the tax smoothing literature are replicated in our data, especially around financing wars, although we find major shifts over time in how fiscal sustainability is achieved. Before the 20th century, governments continued to pay bond holders a high rate of return and achieved sustainability through running fiscal surpluses but since then governments have relied on low growth adjusted real interest rates. The optimal debt management literature tends to favour the use of long bonds but we find the government would have been better off over the 20th century issuing short bonds. The contrast with the literature occurs because of an upward sloping yield curve and long bonds rarely providing fiscal insurance. This is particularly true during periods of financial crises when falling interest rates lead to sharp rises in the price of long bonds, making them an expensive form of finance. We examine the robustness of our conclusions to liquidity e¤ects, rollover risks, buyback operations and leverage. In general, these do suggest a greater role for long bonds but do not overturn an issuance strategy based mainly on short term bonds.
    Keywords: Debt Management, Fiscal Deficits, Fiscal Policy, Government Debt, Inflation, Maturity, Yield Curve
    JEL: E43 E62 H63
    Date: 2017–09–20
  5. By: Giovanni Federico (University of Pisa, CEPR); Paul Sharp (University of Southern Denmark, CAGE, CEPR); Antonio Tena-Junguito (Universidad Carlos III Madrid)
    Abstract: Since Adam Smith, most economists have held the belief that trade fosters economic growth, although it has not been possible to establish a strong causal relationship. The results of growth regressions are, at best, mixed, and several historical studies have found a positive relationship between tariffs and economic growth in the nineteenth century. This paper adopts a different strategy. We look for cointegration between GDP per capita and openness for about thirty countries since 1830. About half return no cointegration – i.e. no relationship. The rest show mixed results, which change through time. An ordered probit model suggests that significantly positive relationships are more likely at low-to-middle income levels.
    Keywords: Openness, growth, VECM, cointegration, trade
    JEL: F1 N1 N7
    Date: 2017–12
  6. By: Jane Humphries (Professor of Economic History, All Souls College, Economics and Business, University of Oxford); Jacob Weisdorf (Professor of Economics, Department of Economics and Business, University of Southern Denmark, DK-5320 Odense)
    Abstract: Historical estimates of workers’ earnings suffer from the fundamental problem that annual incomes are inferred from day wages without knowing the length of the working year. This uncertainty raises doubts about core growth theories that rely on existing income estimates to explain the origins of the wealth of nations. We circumvent the problem by building an income series of workers employed on annual rather than casual contracts. Our data suggests that existing annual income estimates based on day wages are badly off target, because they overestimate the medieval working year but underestimate the working year during the industrial revolution. Our revised annual income estimates indicate that modern economic growth began almost two centuries earlier than commonly thought and was driven by an ‘Industrious Revolution’.
    Keywords: England; Industrial Revolution; Industrious Revolution; Labour Supply; Living standards; Malthusian Model; Modern Economic Growth; Real Wages
    JEL: J3 J4 J5 J6 J7 J8 N33
    Date: 2017–12
  7. By: Wolf-Fabian Hungerland (Institute of Economic History, School of Economics and Business, Humboldt-University of Berlin, Spandauer Strasse1, 10178 Berlin, Germany)
    Abstract: What are the gains from trade today compared to those in the globalisation hundred years ago? To answer this question I rely on Krugman’s (1980) idea that consumers value growing import variety, and very granular German product-level data from the first globalisation (ahead of World War I), and today. First, I derive structural estimates of the elasticity of substitution at the product-level for both globalisation episodes. I find substantial heterogeneity in terms of how elastic demand over goods and their varieties is, especially when compared over the long run. The median elasticity is 3.8 in the first globalisation, but only 2.5 in the second. This suggests that demand was more elastic in the first globalisation and that the structure of demand is not easily approximated by using a single elasticity of substitution, which is often done in the literature. Second, I use these estimated elasticities and calculate the consumer gains from growing import variety ahead of World War I and for today. The welfare calculations suggest that the gains from trade in the first globalisation are twice as much as today. Welfare turns out much lower—falling down to a fifth of the benchmark— when using non-contemporary, that is, inadequate elasticities. Simply taking one single elasticity or a set of ahistorical elasticities can be easily misleading because gains from international trade as well as the effects of changes in trade costs may be wrongly captured.
    Keywords: Product variety, elasticity of substitution, gains from trade, first globalisation
    JEL: F12 F14 N33 N74
    Date: 2017–12
  8. By: Nicolas Vallois (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Dorian Jullien (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS - Centre National de la Recherche Scientifique - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - UCA - Université Côte d'Azur)
    Abstract: We propose a historical perspective on replication in experimental economics focused on public good games. Our intended contribution is twofold: in terms of method and in terms of object. Methodologically, we blend traditional qualitative history of economics with a less traditional quantitative approach using basic econometric tools to detect unnoticed historical patterns of replication. In terms of our object, we highlight a type of replication that we call " baseline replication " , which is not present in explicit methodological discussions, yet central in the specificity of experimental economics regarding replication in economics.
    Keywords: Experimental Economics, Replication, History of Economic Thought,Methodology, Public Good Experiments
    Date: 2017–11–28
  9. By: Warren E. Weber (University of South Carolina); Robert Lucas (University of Chicago); Juan Pablo Nicolini (Minneapolis Fed); Luca Benati (University of Bern)
    Abstract: We explore the long-run demand for M1 based on a data set that has comprised 32 countries since 1851. In many cases, cointegration tests identify a long-run equilibrium relationship between either velocity and the short rate or M1, GDP, and the short rate. Evidence is especially strong for the United States and the United Kingdom over the entire period since World War I and for moderate and high-inflation countries. With the exception of high-inflation countries–for which a “log-log” specification is preferred–the data often prefer the specification in the levels of velocity and the short rate originally estimated by Selden (1956) and Latané (1960). This is especially clear for the United States and other low-inflation countries.
    Date: 2017
  10. By: Murat Iyigun; Nathan Nunn; Nancy Qian
    Abstract: This paper provides evidence of the long-run effects of a permanent increase in agricultural productivity on conflict. We construct a newly digitized and geo-referenced dataset of battles in Europe, the Near East and North Africa covering the period between 1400 and 1900 CE. For variation in permanent improvements in agricultural productivity, we exploit the introduction of potatoes from the Americas to the Old World after the Columbian Exchange. We find that the introduction of potatoes permanently reduced conflict for roughly two centuries. The results are driven by a reduction in civil conflicts.
    JEL: D74 O13 Q34
    Date: 2017–11
  11. By: Cesaratto, Sergio (University of Siena)
    Abstract: In the late 1950s, Svimez was an influential research centre on Italian economic and regional policies. It was advised and visited by top international development experts and by leading Italian economists. Pierangelo Garegnani, fresh from his seminal Ph.D. thesis on capital theory at Cambridge, wrote a report for Svimez, published in 1962, on the relevance of Keynes’ theory for economies at an intermediate stage of development, like Italy. Interestingly, in 1963 Gardner Ackley published a similar report for Svimez. The theoretical parts of Garegnani’s report were published in English in 1978-79 and 2015. In a final applied section, which has not yet been published, Garegnani estimates that a fuller utilisation of productive capacity would have allowed for the creation of 550 thousand additional jobs without problems relating to the balance of payments. In this section, Garegnani also raises several interesting theoretical issues. Ackley’s report is an econometric explanation of the Italian ‘economic miracle’ based on a demand-led growth supermultiplier model – a theoretical approach re-discovered by Bortis and Serrano, and recently taken up by Marc Lavoie and others. A comparison between these two genuine Keynesian approaches looks very promising.
    Keywords: Garegnani; Ackley; Svimez; Keynesian theory; growth theory
    JEL: B22 B24 B51
    Date: 2017–12
  12. By: Popov, Alexander
    Abstract: This paper reviews and appraises the body of empirical research on the association between financial markets and economic growth that has accumulated over the past quarter-century. The bulk of the historical evidence suggests that financial development affects economic growth in a positive, monotonic way, yet recent research endeavors have provided useful and important qualifications of this conventional wisdom. Moreover, the proliferation of micro-level datasets has enabled researchers to study more precise links between theory and measurement. The paper highlights the mechanisms through which financial markets benefit society, as well as the channels through which finance can slow down long-term growth. JEL Classification: O4, G1
    Keywords: financial markets, growth
    Date: 2017–12
  13. By: Christoph Eder; Martin Halla
    Abstract: This paper explores the historical origins of the cultural norm regarding illegitimacy (formerly known as bastardy). We test the hypothesis that traditional agricultural production structures influenced the historical illegitimacy ratio, and have had a lasting effect until today. Based on data from the Austro-Hungarian Empire and modern Austria, we show that regions that focused on animal husbandry (as compared to crop farming) had significantly higher illegitimacy ratios in the past, and female descendants of these societies are still more likely to approve illegitimacy and give birth outside of marriage today. To establish causality, we exploit, within an IV approach, variation in the local agricultural suitability, which determined the historical dominance of animal husbandry. Since differences in the agricultural production structure are completely obsolete in today’s economy, we suggest interpreting the persistence in revealed and stated preferences as a cultural norm. Complementary evidence from an ‘epidemiological approach’ suggests that this norm is passed down through generations, and the family is the most important transmission channel. Our findings point to a more general phenomenon that cultural norms can be shaped by economic conditions, and may persist, even if economic conditions become irrelevant.
    Keywords: Cultural norms, persistence, animal husbandry, illegitimacy.
    JEL: Z1 A13 J12 J13 J43 N33
    Date: 2017–12
  14. By: Tomohiro Machikita; Tetsuji Okazaki
    Abstract: This paper examines how trade regime change has affected the lifecycle of manufacturing plants. For this purpose, we exploited the historical event of Japan's opening to trade in 1859 as a natural experiment. Based on plant-level data for 1902 and 1919, we explore how lifecycles of plants differ between the periods before and after 1859. It was found that lifecycles of plants were indeed different between these two periods: (1) a plant grew much faster as it aged after 1859 than before 1859; (2) this effect is larger for plants in exporting industries and plants located in metropolitan areas; (3) plant size at entry was larger for plants that entered after 1859 compared to those that entered before 1859. The difference in plant lifecycles between the periods before and after 1859 was confirmed by long-term time series data covering both periods. Based on these findings, we argue that access to markets and advanced technologies affected the lifecycle of plants.
    Date: 2017–10
  15. By: Gustavsson, Magnus (Department of Economics)
    Abstract: In this paper, I first show that Swedish job polarization is––contrary to common belief––a long-run phenomenon: the share of middle-wage jobs has declined relative to the highest- and lowest-paid jobs since at least the 1950s. Based on previous results for the US, I then demonstrate that the same major employment shifts across routine and nonroutine jobs drive long-run job polarization in both Sweden and the US. In particular, the shrinking manufacturing sector, with the subsequent decline of routine manual (blue-collar) jobs, stands out as the main explanation for why job polarization is a long-run phenomenon. However, consistent with the hypothesis of routine-biased technological change, both countries display across-the-board declines of routine jobs from around the 1980s, as well as polarizing employment patterns not only between but also within industries. But despite these trend breaks, Sweden actually experienced a stronger job-polarization process—a more pronounced hollowing out of the job-wage distribution—in the pre- than in the post 1980-era.
    Keywords: Automation; Industrial Composition; Routine-Biased Technological Change; Routinization; Structural Change
    JEL: J21 J23 N10 N30 O33
    Date: 2017–11–16
  16. By: José M. Menudo (Department of Economics, Universidad Pablo de Olavide); Nicolas Rieucau (Université Paris 8)
    Abstract: René-Louis de Girardin is remembered for having invited Rousseau at Ermenonville estate. Girardin believed it was necessary to further the debate on gardens on the basis of a principle of continuity that rejects any idea of enclosure. This made it possible to establish an agricultural model that increased production, and finally allowed the monopoly in grain sales to be broken. At the service of l’idéologie nobiliaire, his analysis shows the existence of a form of economic thinking in the second half of the 18th century that, giving primacy to agriculture, nevertheless cannot fall within the paths of physiocrats and agronomes.
    Keywords: Turgot, History of Economic Thought, Development Enlightenment, and Economic Methodology.
    JEL: B31 B10 O20 B11 B41
    Date: 2017–12
  17. By: Aurélien Goutsmedt (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Chaire Energie & Prospérité - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - Ecole Polytechnique - X - ENS Paris - Ecole Normale Supérieure de Paris - Institut Louis Bachelier); Erich Pinzón-Fuchs (Universidad de los Andes [Bogota]); Matthieu Renault (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Francesco Sergi (University of Bristol [Bristol])
    Abstract: We illustrate how the Lucas Critique was called into question by Keynesian macroeconomists during the 1970s and 1980s. Our claim is that Keynesians' reactions were carried out from a pragmatic approach, which addressed the empirical and practical relevance of the Critique. Keynesians rejected the Critique as a general principle with no relevance for concrete macroeconometric practice; their rejection relied on econometric investigations and contextual analysis of the U.S. 1970s stagflation and its aftermath. Keynesians argued that the parameters of their models remained stable across this period, and that simpler ways to account for stagflation (such as the introduction of supply shocks into their models) provided better alternatives to improve policy evaluation.
    Keywords: History of macroeconomics,Lucas Critique,Keynesian macroeconometrics,Stagflation
    Date: 2017–10
  18. By: De George, Emmanuel T.; Li, Xi; Shivakumar, Lakshmanan
    Abstract: This paper reviews the literature on the effects of International Financial Reporting Standards (IFRS) adoption. It aims to provide a cohesive picture of empirical archival literature on how IFRS adoption affects: financial reporting quality, capital markets, corporate decision making, stewardship and governance, debt contracting, and auditing. In addition, we also present discussion of studies that focus on specific attributes of IFRS, and also provide detailed discussion of research design choices and empirical issues researchers face when evaluating IFRS adoption effects. We broadly summarize the development of the IFRS literature as follows: The majority of early studies paint IFRS as bringing significant benefits to adopting firms and countries in terms of (i) improved transparency, (ii) lower costs of capital, (iii) improved cross-country investments, (iv) better comparability of financial reports, and (v) increased following by foreign analysts. However, these documented benefits tended to vary significantly across firms and countries. More recent studies now attribute at least some of the earlier documented benefits to factors other than adoption of new accounting standards per se, such as enforcement changes. Other recent studies examining the effects of IFRS on the inclusion of accounting numbers in formal contracts point out that IFRS has lowered the contractibility of accounting numbers. Finally, we observe substantial variation in empirical designs across papers which makes it difficult to reconcile differences in their conclusions.
    JEL: F3 G3
    Date: 2016–06–03
  19. By: Takeshi Abe; Izumi Shirai; Takenobu Yuki
    Abstract: In the early phase of Japan's industrialization after 1886, upper class ex-samurai, known as daimyo with huge assets, played an important role as pioneers in equity investments in modern industries. Furthermore, when their ex-retainers founded modern enterprises, daimyo often invested in their businesses. In addition, daimyooften created opportunities for the education of young people in their former fiefs. After explaining the daimyo in the Meiji period, this article first elucidates how daimyo promoted equity investments in modern industries. Second, this study analyses the socio-economic activities of the main daimyo, Tsugaru Tsuguakira in Tsugaru region.
    Date: 2017–08
  20. By: Crafts, Nicholas (University of Warwick)
    Abstract: British productivity growth disappointed during the early postwar period. This reflected inadequate investment in equipment and skills but also entailed inefficient use of inputs. Weak management, dysfunctional industrial relations, and badly-designed economic policy were all implicated. The policy framework was partly the result of seeking low unemployment through wage restraint by appeasement of organized labour. A key aspect was weak competition. This exacerbated corporategovernance and industrial-relations problems in the British 'variety of capitalism' which sustained low effort bargains and managerial incompetence. Other varieties of capitalism were better placed to achieve fast growth but were infeasible for Britain given its history.
    Keywords: competition; productivity; relative economic decline; varieties of capitalism JEL Classification: N14; O62; P170
    Date: 2017
  21. By: Rachid Mira (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)
    Abstract: La restructuration des entreprises publiques en Algérie en vue de leur insertion dans un modèle d'économie de marché a nécessité depuis les années 1980 la mise en place d'un ensemble d'institutions et la transition d'un mode de régulation monopoliste vers un mode plus concur-rentiel. Cependant, l'institution Etat est restée jusqu'à nos jours l'institution clé soutenant un régime d'accumulation dépendant des ressources en hydrocarbures. La politique budgétaire et financière de l'Etat a donc soutenu et financé la restructuration des entreprises publiques dans le cadre d'une nouvelle stratégie industrielle orientée vers la substitution d'importation et la diversification des exportations. La restructuration de la SNVI opérée depuis les années 1990 s'est inscrite dans une démarche globale de politique industrielle visant à assainir les entreprises pu-bliques et refinancer les investissements productifs en vue de pouvoir soit privatiser, soit nouer des partenariats. Cette stratégie a nécessité le transfert de ressources budgétaires pour financer les investissements et assainir la dette et les découverts bancaires qui a constitué un coût du capital supporté par l'Etat. La politique de partenariat avec des investisseurs étrangers vise à poursuivre un processus de restructuration et de restauration de la compétitivité sur un marché ouvert à la concurrence mais sous régulation sous régulation de l'Etat.
    Keywords: Economic transition,Algeria,industrial development,public expenditures
    Date: 2017–09–26
  22. By: Stelios Michalopoulos; Elias Papaioannou
    Abstract: Over the last two decades, the literature on comparative development has moved from country-level to within-country analyses. The questions asked have expanded, as economists have used satellite images of light density at night and other big spatial data to proxy for development at the desired level. The focus has also shifted from uncovering correlations to identifying causal relations, using elaborate econometric techniques including spatial regression discontinuity designs. In this survey we show how the combination of geographic information systems with insights from disciplines ranging from the earth sciences to linguistics and history has transformed the research landscape on the roots of the spatial patterns of development. We discuss the limitations of the luminosity data and associated econometric techniques and conclude by offering some thoughts on future research.
    JEL: D0 N0 O0 Z1
    Date: 2017–11
  23. By: Adriano Do Vale (Centre d'Economie de l'Université de Paris Nord (CEPN))
    Abstract: La fin des années 80 et les années 90 ont été marquées par une grande vague d’adoption de l’indépendance des banques centrales (IBC). Les manuels et les revues de la littérature adoptent souvent un récit historique standard la présentant comme une sucess story, comme l’application d’un consensus théorique. L’art aurait suivi le pas de la science. Cet article a comme finalité ultime de proposer un récit alternatif concernant l’IBC. Adoptant une perspective historique centrée sur la première partie des années 20, nous entendons démontrer que la doctrine des banquiers centraux et les pratiques, comprises en tant qu’adoption de l’IBC, précédent la théorie, l’art venant alors avant la science. Vue de façon normative par la littérature économique à partir des années 80, l’indépendance est pensée, dès les années 20, par les praticiens qui posent eux-mêmes les principes du central banking. Dans la nouvelle donne de l’après-guerre, marquée par l’absence de l’ancrage nominal autrefois fourni par l’étalon-or, l’IBC s’avère un arrangement institutionnel alternatif face à l’inflation. Elle est recommandée au niveau international et constitue un principe central de la doctrine du central banking avancé par le gouverneur anglais Montagu Norman. Comme pour le principe d’indépendance, les pratiques précèdent la théorie. On considère qu’il y a eu une première vague d’adoption de l’IBC dans la première moitié des années 20, bien avant la vague d’adoption de l’IBC de la fin des années 80 et des années 90. Suite à des expériences hyper-inflationnistes et dans le cadre de plans de stabilisation monétaire sous tutelle internationale, les banques centrales de l’Autriche (1923), de la Hongrie (1924) et de l’Allemagne (1922-24) deviennent légalement indépendantes.
    Keywords: années 20, doctrine, indépendance des banques centrales, pratiques, récit, théorie
    JEL: B52 E58 F33 N44 N14
    Date: 2017–11
  24. By: Kander, Astrid (Department of Economic History, Lund University); Taalbi, Josef (Department of Economic History, Lund University); Oksanen, Juha; Sjöö, Karolin; Rilla, Nina
    Abstract: We examine trends in innovation output for two highly ranked innovative countries: Finland and Sweden (1970-2013). Our novel dataset, collected using the LBIO (literature-based innovation output) method, suggests that the innovation trends are positive for both countries, despite an extended downturn in the 1980s. The findings cast some doubt on the proposition that the current stagnation of many developed countries is due to a lack of innovation and investment opportunities. Our data show that Finland catches up to, and passes, Sweden in innovation output in the 1990s. In per capita terms, Finland stays ahead throughout the period. We find that the strong Finnish performance is largely driven by innovation increase in just a handfull of industries. Both countries saw a rise in innovation during the dot-com era and the structural changes that followed. Since 2000 however, Sweden has outperformed Finland in terms of total innovations, especially in machinery and ICT, while the Finnish rate of innovation has stabilized. We suggest that these patterns may be explained by different paths of industrial renewal.
    Keywords: innovation; literature-based innovation output; industrial renewal; structural decomposition; structural change
    JEL: N14 O30 O47
    Date: 2017–12–06
  25. By: Edward N. Wolff
    Abstract: Asset prices plunged between 2007 and 2010 but then rebounded from 2010 to 2016. The most telling finding is that median wealth plummeted by 44 percent over years 2007 to 2010. The inequality of net worth, after almost two decades of little movement, went up sharply from 2007 to 2010, and relative indebtedness for the middle class expanded. The sharp fall in median net worth and the rise in overall wealth inequality over these years are largely traceable to the high leverage of middle class families and the high share of homes in their portfolio. Mean and median wealth rebounded from 2010 to 2016, by 17 and 28 percent, respectively. While mean wealth surpassed its previous peak in 2007, median wealth was still down by 34 percent. More than 100 percent of the recovery in both was due to a high return on wealth but this factor was offset by negative savings. Relative indebtedness continued to fall for the middle class from 2010 to 2016, and wealth inequality increased somewhat. The racial and ethnic disparity in wealth holdings widened considerably between 2007 and 2016, and the wealth of households under age 45 declined in relative terms.
    JEL: D31 J15
    Date: 2017–11
  26. By: Valentin Seidler (University of Warwick (Visiting Fellow 2016/17))
    Abstract: Institutional reforms in developing countries often involve copying institutions from developed countries. Such institutional copying is likely to fail, if formal institutions alone are copied without the informal institutions on which they rest in the originating country. This paper investigates the role of human actors in copying informal institutions. At independence, all British African colonies imported the same institution intended to safeguard the political neutrality of their civil services. While the necessary formal provisions were copied into the constitutions of all African colonies, the extent to which they were put into practice varies. The paper investigates the connection between the variation in the legal practice and the presence of British colonial officers after independence. A natural experiment around compensation payments to British officers explains the variation in the number of officers who remained in service after independence. Interviews with retired officers suggest that the extended presence of British personnel promoted the acceptance of imported British institutions among local colleagues.
    Keywords: JEL Classification:
    Date: 2017
  27. By: Alan Dye (Barnard College, Columbia University); Sumner La Croix (University of Hawai‘i-Mānoa)
    Abstract: This paper examines a paradox in the formation of property rights in land in the early settlement of the Dutch Cape Colony. In 1652, the Dutch East India Company (VOC) established an outpost at the Cape of Good Hope to serve VOC ships sailing between Europe and Asia. Over the next 75 years, the outpost expanded into a full-fledged VOC colony. As a thin but growing population expanded land claims to graze sheep and cattle. The VOC initially promoted settlement by extending well-specified and enforced land grants in restricted zones. But by 1714 it transitioned to accommodate rapidly expanding settlement with a more loosely specified form of property rights, the loan farm. We develop a profit-maximizing monopsony model to explain the VOC choice to transition from land grant to loan farm. We conclude that the decline in the population size and ability of the Khoikhoi, a first people who inhabited the Cape, to resist Dutch incursion was critical to the transition, as it lowered the government costs of enforcement and enabled the rapid expansion of the pastoral economy.
    Keywords: Cape Colony, sheep, cattle, property rights, loan farm, frontier, land tenure, VOC
    JEL: N47 N57 P48 Q24
    Date: 2017–12
  28. By: Thomas Delcey (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Two main claims are associated with the Efficient Market Hypothesis (EMH). First of all, the price changes are nearly random in the financial markets. Secondly, the prices reflect the economic fundamentals. The relation between these two claims remains unclear in the actual literature. The purpose of this article is to show that this confusion is not new but began during the theoretical construction of EMH in the 1960s. The analysis is based on the reading of their 1965 papers and on the archives of Paul Samuelson from the Paul A. Samuelson Papers, David M. Rubenstein Rare Book Manuscript Library at Duke University.
    Date: 2017–10–17
  29. By: Michalopoulos, Stelios (Federal Reserve Bank of Minneapolis); Papaioannou, Elias (London Business School)
    Abstract: Over the last two decades, the literature on comparative development has moved from country-level to within-country analyses. The questions asked have expanded, as economists have used satellite images of light density at night and other big spatial data to proxy for development at the desired level. The focus has also shifted from uncovering correlations to identifying causal relations, using elaborate econometric techniques including spatial regression discontinuity designs. In this survey we show how the combination of geographic information systems with insights from disciplines ranging from the earth sciences to linguistics and history has transformed the research landscape on the roots of the spatial patterns of development. We discuss the limitations of the luminosity data and associated econometric techniques and conclude by offering some thoughts on future research.
    Keywords: Development; Language; Ethnicity; History; Borders; Luminosity; Regression discontinuity; Regions
    JEL: N00 N9 O10 O43 O55
    Date: 2017–12–11
  30. By: Ho, Hoang-Anh (Department of Economics, School of Business, Economics and Law, Göteborg University); Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University); Olsson, Ola (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Cultural norms diverge substantially across societies, often even within the same country. In the present paper, we study the voluntary settlement hypothesis, proposing that individualistic people tend to self-select into migrating out of reach from collectivist states towards the periphery and that such patterns of historical migration are reflected even in the contemporary distribution of norms. During most of the first millennium CE, the modern north of Vietnam was under an exogenously imposed Chinese rule. From the eleventh to the eighteenth centuries, historical Vietnam gradually expanded its territory to the Mekong River Delta through various waves of conquest and migration. In contrast to some recent research, we find very little support from historical sources for any major discontinuities in this territorial expansion. Combining archives with household survey and lab-in-the-field experiment, we demon- strate that areas being annexed earlier into historical Vietnam are nowadays more (less) prone to collectivist (individualist) culture. We argue that the southward out-migration of individualistic people was the main mechanism behind this finding, which is also in line with many historical accounts.
    Keywords: Culture; Individualism-Collectivism; Voluntary Settlement
    JEL: N45 O53 Z13
    Date: 2017–12
  31. By: Nils Herger (Study Center Gerzensee)
    Abstract: This paper assesses the uncovered interest parity (UIP) condition by means of Indian government bonds during the 1869 to 1906 period. As emphasised by Irving Fisher, interest and exchange rates between Britain and India from that period concur closely with the theoretical assumptions of UIP since (i.) India issued bonds in different currencies (rupees and sterling) (ii.) these bonds were simultaneously traded in the London financial market, and (iii.) subject to negligible regulation and default risks. As long as the Indian currency system was stable, a close correlation arises indeed between sterling-to-rupee interest rate differences and exchange rate changes.
    Date: 2017–12
  32. By: Mohammad Reza Farzanegan (University of Marburg); Pooya Alaedini (University of Tehran); Khayyam Azizimehr (University of Tehran)
    Abstract: This study probes the middle class in Iran in relation to oil rents and political development. We begin by discussing how the Iranian middle class has evolved through the 1979 Revolution and in the post-revolutionary period. We then empirically examine the relationships among per capita oil-rent shocks, the growth of the middle class, and the quality of political institutions as well as political conflict. We use annual time series data for 1965-2012 and employ a Vector Autoregressive (VAR) model along with impulse response and variance decomposition analyses. According to our results, the middle class response to positive oil shocks is positive and significant. Yet, positive oil shocks and the growth of the middle class have contrary effects on the quality of political institutions in the short term—negative and positive respectively. This prompts us to employ a weighted measure of conflict, whose positive response to the growth of the middle class in Iran we then capture. These results are robust when controlling for other channels in the nexus of oil rents and middle class. The estimated Autoregressive Distributed Lag (ARDL) models illustrated the long-run effects of oil rents on the size of middle class and long-run effects of both middle class and oil rents on conflict. Our findings hint at potential conflicts after oil shocks, whereby oil rents increase government’s control over political institutions but at the same time give impetus to the growth of the middle class that is in turn associated with political instability.
    Keywords: Middle class; Oil rents; Political institutions; Conflict; VAR model; ARDL model; Iran; Middle East
    JEL: O1 O4 Q3
    Date: 2017
  33. By: Polukhina Elizaveta (National Research University Higher School of Economics); Strelnikova Anna (National Research University Higher School of Economics); Vanke Alexandrina (National Research University Higher School of Economics)
    Abstract: This paper presents an analytical description of working-class identity in three key periods of the socioeconomic transformations which changed the structure of a plant’s industry and working-class life: the Soviet era (1930s-1980s), the time of economical change (1990s), and the post-Soviet years (2000s-2010s). The analytical framework of the study is based on the concept of ‘cultural class analysis’ (Savage 2015). It includes the concepts of habitus and cultural capital, and culture as embedded in economic and social relations (Bourdieu 1980). In the course of the research we conducted an ethnographic case-study in 2017 and lived in the neighborhood of Uralmash, which was designed for workers of a heavy machinery plant dating back to the 1920s in the city of Yekaterinburg. Based on 15 in-depth interviews with Uralmash workers living in the neighborhood and 8 experts, and our field observations, we discovered 3 restructuring shapes of the Uralmash worker identity. These working class identities shapes referred to 3 determined periods. The Soviet period showed a ‘consistent’ working-class identity of the Uralmash workers, whereby the plant and working spirits were the centers of their lives. The 1990s was marked by severe deterioration of workers’ social conditions and the loss of their familiar bearings in life. As a consequence, the Uralmash workers perceived themselves as ‘victims of circumstances’ with ‘collapsing’ worker identity in 1990s. Currently, ‘Soviet’ and ‘post-Soviet’ practices and values are combined in today’s ‘mixing’ and an inconsistent worker identity. The notions of ‘simple’ and ‘working-class’ as sense-making images are encapsulated in nostalgic memories and retain their role as criteria for the delineation between inequalities and social discrimination along the ‘them’ and ‘us’: ‘we are those who live belonging to the past’. The Soviet past still continues to be an important sense-making resource; in fact, it is the only ‘universal’ prop for them that support their subjective perception of themselves
    Keywords: industrial neighborhood, worker, working-class identity, ethnographic case-study
    JEL: Z
    Date: 2017
  34. By: Rémi BAZILLIER; Victoire GIRARD
    Date: 2017
  35. By: Arvind Ashta
    Abstract: Could work-sharing solves the problems of unemployment, inequality and global warming, and yet produce a happier world? This literature review takes a multidisciplinary view of the problem. We find that theoretically work-sharing can do all these things, but the existing evidence of its performance is debatable and there are hesitations from industry to implement it. We recommend a global initiative, riding on the sustainable development wave, with an appealing narrative to create a just distribution in today's world.
    Keywords: Unemployment; worktime; sharing; work reduction; inequality; happiness
    JEL: E24 J21 J64 J81 M55
    Date: 2017–12–05
  36. By: Bucci, Andrea
    Abstract: Modeling financial volatility is an important part of empirical finance. This paper provides a literature review of the most relevant volatility models, with a particular focus on forecasting models. We firstly discuss the empirical foundations of different kinds of volatility. The paper, then, analyses the non-parametric measure of volatility, named realized variance, and its empirical applications. A wide range of realized volatility models, both univariate and multivariate, is presented, such as time series models, MIDAS and GARCH-MIDAS models, Realized GARCH, and HEAVY models. We further discuss forecasting evaluation methods specifically suited for volatility models.
    Keywords: Realized Volatility; Stochastic Volatility; Volatility Models
    JEL: C22 C53 G10
    Date: 2017–12

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.