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on Business, Economic and Financial History |
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Issue of 2018‒02‒05
27 papers chosen by |
| By: | Rishabh Kumar (Department of Economics, California State University) |
| Abstract: | The evolution and metamorphoses of wealth underpins historical questions of growth and distribution. This article develops new, homogenized series of the wealth-income ratio in India over fifteen transformational decades: from colonial rule after the demise of the Mughals to the contemporary rise of Indian capitalists on a global scale. Over the long run, there were two major waves of wealth accumulation. The first ended around World War II and was characterized by a Ricardian vision - landlords appropriated surplus value under low productivity conditions, benefiting from a large divergence of asset prices relative to consumer price infl ation. Between 1939 and 2012, the Indian wealth-income ratio mimics the U shaped trend observed in other large economies. The second wave (between 1960 and 2012) is partly explained by capital accumulation but price effects consistently dominate large changes in wealth dynamics. Implications for distribution are noteworthy. Upswings of the wealth-income ratio are nearly always accompanied by rising concentration of economic power. Finally, over the last three decades the structure of national wealth favors private wealth over public capital. These ndings underline an important stylized fact: despite large structural differences between rich and emerging countries, wealth-income ratios are rising everywhere in the twenty first century. |
| Keywords: | India, Growth, Wealth-Income Ratio |
| JEL: | E10 D30 D31 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1802&r=his |
| By: | Sanchís Llopis, M. Teresa; Díez Minguela, Alfonso |
| Abstract: | This paper studies regional income inequality in France since mid-nineteenth century. Given the dominant role played by Île-de-France and the city of Paris, which inspired the publication of “Paris et le désert française” (Gravier, 1947) and a debate on regional development in the aftermath of World War II, France seems an ideal scenario to examine the dynamics of regional income. In doing so, we first document the existing evidence before and after the development of national accounting. Using different approaches, several studies have produced regional (département, NUTS3) Gross Domestic Product (GDP) estimates from 1840 to 1930. Thus, our first contribution is to present these findings, assess the appropriateness of each methodology, and address potential concerns. The comparison of existing estimates for 1861-1930 raises some doubts about the pattern of regional inequality followed since 1861 to 1911. Hence we present new estimates for 1860-1930 based in the Geary and Stark (2002) method. In short, our estimates sum up new evidence in favour of an incessant decline in regional inequality since mid 19th up to 1930 and turn down the hypothesis of a potential U-shaped pattern in France since mid 19th century to nowadays. Additionally, we found that the use of nominal relative wages could overestimate the level or regional income inequality. |
| Keywords: | France; Regional inequality; Economic History |
| JEL: | R11 O18 N94 N93 |
| Date: | 2018–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cte:whrepe:26152&r=his |
| By: | Franck, Raphael; Michalopoulos, Stelios |
| Abstract: | During the French Revolution, more than 100,000 supporters of the Old Regime, fled France. Local elites in some departments were dramatically reduced, whereas in others the social structure remained largely unchanged. Instrumenting emigration with temperature shocks during an inflection point of the Revolution, the summer of 1792, we find that émigrés have a non-monotonic impact on comparative development. During the 19th century, the decline of landed elites in high-emigration regions led to the fragmentation of agricultural holdings, depressing labor productivity. Nevertheless, this facilitated the rise in human capital investments, leading to a reversal in economic performance during the 20th century. |
| Keywords: | Climate Shocks; Development; Elites; France; Revolution |
| JEL: | N23 N24 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12573&r=his |
| By: | Kelly, Morgan; Ó Gráda, Cormac |
| Abstract: | We measure technological progress in oceanic shipping directly by using a large database of daily log entries from British, Dutch, and Spanish ships to estimate daily sailing speed in different wind conditions from 1750 to 1850. Against the consensus among economic (but not maritime) historians that the technology of sailing ships was fairly static during this time, we find that average sailing speeds of British East India Company and navy ships in moderate to strong winds rose considerably after 1770s. Driving this progress was the introduction of coppering in the 1780s but subsequent rises are probably due to a continuous evolution of sails and rigging, and improved hulls that allowed a greater area of sail to be set safely in a given wind. By contrast, speeds of Dutch and Spanish vessels were stagnant. Using separate data on crossing times of Atlantic mail packets, we find steady progress from the 1750s, followed by marked improvements when American packets appeared in the 1820s |
| JEL: | N0 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12576&r=his |
| By: | Michael D. Bordo; Robert N. McCauley |
| Abstract: | Triffin gained enormous influence by reviving the interwar story that gold scarcity threatened deflation. In particular, he held that central banks needed to accumulate claims on the United States to back money growth. But the claims would eventually surpass the US gold stock and then central banks would inevitably stage a run on it. He feared that the resulting high US interest rates would cause global deflation. However, we show that the US gold position after WWII was no worse than the UK position in 1900. Yet it took WWI to break sterling’s gold link. And better and feasible US policies could have kept Bretton Woods going. This history serves as a backdrop to our critical review of two later extensions of Triffin. One holds that the dollar’s reserve role required US current account deficits. This current account Triffin is popular, but anachronistic, and flawed in logic and fact. Nevertheless, it pops up in debates over the euro’s and the renminbi’s reserve roles. A fiscal Triffin holds that global demand for safe assets will either remain dangerously unsatisfied, or force excessive US fiscal debt. Less flawed, this story posits implausibly inflexible demand for and supply of safe assets. Thus, these stories do not convince in their own terms. Moreover, each lacks Triffin’s clear cross-over point from a stable system to an unstable one. Triffin’s seeming predictive success leads economists to wrap his brand around dissimilar stories. Yet Triffin’s dilemma in its most general form correctly points to the conflicts and difficulties that arise when a national currency plays a role as an international public good. |
| JEL: | F32 F33 F34 F41 H63 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24195&r=his |
| By: | Ciccarelli, Carlo; Weisdorf, Jacob |
| Abstract: | Blindfolded by a lack of earlier systematic data, comparative studies of regional developments in historical Italy begin with the formation of the Italian state, in 1861. We use literacy rates reported in post-1861 population censuses combined with the fact that literacy skills were usually achieved during youth to predict regional literacy developments all the way back to 1821. Our analysis informs ongoing debates about the origins and long-run evolution of Italy's north-south divide. By lifting the veil into Italy's pre-unification past, we establish that the north-south literacy gap was substantial already in 1821, grew markedly wider in the first half of the 19th century, only to revert back in 1911 to the 1821 level. Gender gaps in literacy essentially close in the north during 1821-1911, while in the south they registered a secular stagnation. This opens an avenue for investigating a new dimension of the north-south gap largely overlooked in the existing literature. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12582&r=his |
| By: | Roger Sandilands (Department of Economics, University of Strathclyde) |
| Abstract: | This paper introduces a hitherto unpublished 1970 paper written by the distinguished development economist Lauchlin Currie (1902-93) on Paul Rosenstein Rodan’s famous 1943 paper on the “Big Push†which led to the balanced-unbalanced growth debate to which Albert Hirschman (1915-2012) was an important contributor. Both Currie and Hirschman had been key economic advisers to the Colombian government and their respective views on development planning are contrasted. In particular, it is shown how Currie’s 1970 paper illuminates the theory behind the 1971-74 national plan for Colombia that he prepared and helped deliver; and how the related institutional innovations have had an enduring impact on Colombia’s recent economic history. |
| Keywords: | 'linkages theory', 'big push' |
| JEL: | B31 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1717&r=his |
| By: | L. Randall Wray |
| Abstract: | This paper examines the views of Hyman Minsky and Abba Lerner on the functional finance approach to fiscal policy. It argues that the main principles of functional finance were relatively widely held in the immediate postwar period. However, with the rise of the Phillips curve, the return of the Quantity Theory, the development of the notion of a government budget constraint, and accelerating inflation at the end of the 1960s, functional finance fell out of favor. The paper compares and contrasts the evolution of the views of Minsky and Lerner over the postwar period, arguing that Lerner’s transition went further, as he embraced a version of Monetarism that emphasized the use of monetary policy over fiscal policy. Minsky’s views of functional finance became more nuanced, in line with his Institutionalist approach to the economy. However, Minsky never rejected his early beliefs that countercyclical government budgets must play a significant role in stabilizing the economy. Thus, in spite of some claims that Minsky should not be counted as one of the “forefathers†of Modern Money Theory (MMT), this paper argues that it is Minsky, not Lerner, whose work remains essential for the further development of MMT. |
| Keywords: | Functional Finance; Hyman Minsky; Abba Lerner; Deficit Owl; Budget Deficits; Government Budget Constraint; Phillips Curve; Sovereign Currency; Modern Money Theory |
| JEL: | B10 B15 B22 B25 B31 B5 E12 E32 E62 H62 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_900&r=his |
| By: | Enflo, Kerstin; Karlsson, Tobias |
| Abstract: | Institutions for prevention and resolution of labor market conflicts were introduced all over the world in the early twentieth century. In this paper we analyze the impact of mediation on compromise outcomes in Swedish labor market conflicts, using a dataset of geo-coded strikes and lockouts from 1907 to 1927. Causality is identified by using the distance from the mediator's residence to the conflict as an instrument. Despite their limited authority and access to economic resources, the presence of mediators in a conflict resulted in about 30 per cent higher probability of a compromise outcome. Mediation was more likely to work as intended in settings where conflicting parties recognized each other and struggled over a prize that could be divided. The results suggest that mediation could have paved the way for a cooperative atmosphere in local labor markets. At the national level such an atmosphere was clearly manifested in the General Agreement in 1938 and with the rise of the Swedish Model. |
| Keywords: | industrial relations; labour market institutions; mediation; strikes |
| JEL: | J52 N33 N34 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12586&r=his |
| By: | Xie, Bin (Jinan University) |
| Abstract: | This paper exploits the exogenous and differential immigrant supply shocks caused by the immigration quota system in the 1920s to identify the causal effects of the immigration restriction on the US manufacturing wages, the Great Migration, and industrial production between 1920 and 1930. I find that the immigration restriction significantly increased manufacturing wages and encouraged the southern black population to migrate to the North. I also find that the decline in the immigrant supply constrained the growth of the scale of manufacturing production and discouraged technology adoption of electrification. |
| Keywords: | immigration restriction, Great Black Migration, industrial development |
| JEL: | J61 N32 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11214&r=his |
| By: | Garibaldi, Eugenio (Bocconi University); Garibaldi, Pietro (University of Turin) |
| Abstract: | History is a key subject in most educational system in Western countries, and there is ongoing concern about the the degree of historical knowledge and historical sensibility that students obtain after their high school graduation. This paper proposes a simple linetime test for quantitatively measuring a human sense of history. The paper reports the results of the test administered to approximately 250 Italian university students. There are two empirical results. First, students have remarkable difficulties in ordering basic events over the time line, with the largest mistakes observed around the events that took place in the Middle Age. Second, the paper uncovers a statistical regularity in the test performance across gender, with female subjects featuring a statistical significant and quantitatively sizable downward score. The gender difference is surprising, since existing literature on differences in cognitive abilities across gender suggests that female subjects outperform male subjects in memory related tests. The paper shows also that the gender difference survives to a variety of sub periods, and falls by only 20 percent when we distinguish between violent and non violent events. |
| Keywords: | sense of time, gender differences |
| JEL: | I12 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11202&r=his |
| By: | Gallardo Albarran, Daniel (Groningen University) |
| Abstract: | Income per capita suggests that the period 1913-1950 is one of missed opportunities for improving living standards in Europe. However, life in Europe during these years improved significantly, as citizens began experiencing dramatic declines in mortality, working time and inequality thanks to (among others) the spread of modern medicine and the introduction of the 8-hour working day. To measure the contribution of these aspects to broader welfare, I apply a new utility-based framework that, contrary to previous composite indices such as the Human Development Index, allows for a welfare analysis directly comparable to GDP across countries and time. The results using the new measure shows that income per capita underestimates welfare growth significantly (up to five percent annually). Moreover, with this indicator cross-country differences in living standards are much larger and more persistent than other composite indices of well-being imply. These findings call for a reappraisal of the evolution of living standards during the period 1913-1950 and, more generally, of the measurement of multi-dimensional welfare in historical contexts. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:gro:rugggd:gd-166&r=his |
| By: | Gupta, Bishnupriya |
| Abstract: | India fell behind during colonial rule. The absolute and relative decline of Indian GDP per capita with respect to Britain began before colonization and coincided with the rising textile trade with Europe in the 18th century. The decline of traditional industries was not the main driver Indian decline and stagnation. Inadequate investment in agriculture and consequent decline in yield per acre stalled economic growth. Modern industries emerged and grew relatively fast. The falling behind was reversed after independence. Policies of industrialization and a green revolution in agriculture increased productivity growth in agriculture and industry, but Indian growth has been led by services. A strong focus on higher education under colonial policy had created an advantage for the service sector, which today has a high concentration of human capital. However, the slow expansion in primary education was a disadvantage in comparison with the high growth East Asian economies. |
| Keywords: | colonial history; Long-run development; Service Sector led growth |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12581&r=his |
| By: | de la Croix, David; Perrin, Faustine |
| Abstract: | We analyze how much a core rational-choice model can explain the temporal and spatial variation in fertility and school enrollment in France during the 19th century. The originality of our approach is in our reliance on the structural estimation of a system of first-order conditions to identify the deep parameters. Another new dimension is our use of gendered education data, allowing us to have a richer theory having implications for the gender wage and education gaps. Results indicate that the parsimonious rational-choice model explains 38 percent of the variation of fertility over time and across counties, as well as 71 percent and 83 percent of school enrollment of boys and girls, respectively. The analysis of the residuals (unexplained by the economic model) indicates that additional insights might be gained by interacting incentives with cross-county differences in family structure and cultural barriers. |
| Keywords: | demographic transition; education; Family macroeconomics; France; Gender Gap; Quality-Quantity Tradeoff |
| JEL: | J13 N33 O11 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12531&r=his |
| By: | Volckart, Oliver |
| Abstract: | The article uses new sources to review the hypotheses that Charles V’s currency bill of 1551 failed because of the electoral-Saxon resistance against the undervaluation of the taler that it stipulated, or because the emperor was too weak to overcome the estates’ resistance to collective action in monetary policies. The study shows that these issues were overshadowed by the dispute about whether a bimetallic currency should be established. Charles V’s currency bill failed because the Diet of Augsburg (1550-51) asked the emperor to publish it before all open issues had been resolved. This request placed the emperor in a dilemma where he had to make a decision but could not do so without antagonising important parties. It was the result of a coordination failure at the level of the Empire; this, in turn, was a consequence of a lack of continuity among the personnel involved in shaping monetary policies. |
| Keywords: | monetary policies; constitutional history; public debts; bimetallism; 16th century |
| JEL: | N13 N23 N43 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:wpaper:86534&r=his |
| By: | Tsoulfidis, Lefteris; Papageorgiou, Aris |
| Abstract: | Basic innovations and their diffusion, the expansion or contraction of the level of economic activity and the volume of international trade, rising sovereign debts and their defaults, conflicts and the outbreak of wars, are some of the major phenomena appearing during the downswing or upswing phases of long cycles. In this article, we examine the extent to which these phenomena constitute stylized facts of the different phases of long cycles which recur quite regularly in the turbulent economic history of capitalism. The main argument of this paper is that the evolution of long cycles is a result of the long-run movement of profitability. During the downswing of a long cycle, falling profitability induces innovation investment and the associated with it 'creative destruction' of the capital stock that eventually set the stage for the upswing phase of a new long cycle. |
| Keywords: | Long Cycles Innovations Profit rate Logistic regression Stagnation Kondratiev Schumpeter |
| JEL: | B14 B25 E11 E3 E32 N0 N1 N10 O3 O31 |
| Date: | 2017–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82853&r=his |
| By: | Luca Fiorito; Massimiliano Vatiero |
| Abstract: | This paper deals with the analysis on adventitious utility—that contains many aspects that are connected to the contemporary debate on positional goods—of the early twentieth century American economist, largely forgotten today, George Pendleton Watkins. According to the author, adventitious utility emerges from a process of social exclusion which can create negative externalities, in the sense that positive consumption of one individual implies negative consumption by another individual. Interestingly, a similar notion of positional competition as a zero-sum game has gained some consensus among contemporary authors (Pagano 1999; Hopkins and Kornienko 2004). In addition, for Watkins striving for adventitious utility does undermine social welfare. Not only it worsens both individual and social well-being by generating social waste, but it also disrupts the integrity of the social fabric. In discussing possible remedies, Watkins pointed out the necessity of a more egalitarian distribution of income and postulated a dichotomy between goods and services possessing adventitious utility and those possessing what he defined as multiple utility. In the latter group Watkins included public goods as well as those dimensions in human consumption that depend on social interaction and can be enjoyed only if shared in community. |
| JEL: | A14 B15 B41 D01 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:772&r=his |
| By: | Acemoglu, Daron; De Feo, Giuseppe; De Luca, Giacomo |
| Abstract: | We document that the spread of the Mafia in Sicily at the end of the 19th century was in part shaped by the rise of socialist Peasant Fasci organizations. In an environment with weak state presence, this socialist threat triggered landholders, estate managers and local politicians to turn to the Mafia to resist and combat peasant demands. We show that the location of the Peasant Fasci is significantly affected by an exceptionally severe drought in 1893, and using information on rainfall, we establish the causal effect of the Peasant Fasci on the location of the Mafia in 1900. We provide extensive evidence that rainfall before and after this critical period has no effect on the spread of the Mafia or various economic and political outcomes. In the second part of the paper, we use the source of variation in the location of the Mafia in 1900 to estimate its medium-term and long-term effects. We find significant and quantitatively large negative impacts of the Mafia on literacy and various public goods in the 1910s and 20s. We also show a sizable impact of the Mafia on political competition, which could be one of the channels via which it affected local economic outcomes. We document negative effects of the Mafia on longer-term outcomes (in the 1960s, 70s and 80s) as well, but these are in general weaker and often only marginally significant. One exception is its persistent and strong impact on political competition. |
| Keywords: | criminal organizations; economic development; Mafia; Political Competition; weak states |
| JEL: | H11 H75 K42 P16 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12530&r=his |
| By: | Franck Aggeri (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The issue of performativity reverse the classical perspective in the social sciences, for they revolve less around describing a pre-existing reality than understanding how reality is produced by intentional interventions. Yet the link between intervention and performativity is by no means automatic. On the contrary, this approach encourages us to focus on the pragmatic conditions that allow this performation to be constructed. In this sense, the aim of this article is threefold. First, it expands the field of performativity, which is structured around three dominant approaches (Austinian, Callonian and Butlerian), to encompass lesser-known research on writing and calculation. Second, it proposes a comparison between theoretical perspectives of research on performativity, and two other research trends in social science and in organizations. These, without using the term performativity, present strong similarities to it from a theoretical and methodological point of view: Foucauldian approaches and instrument-based approaches to organizations. Based on the concepts thus introduced, this article then proposes an analysis framework for performation processes in organizations, articulated around three levels of analysis: i) the study, on an elementary level, of speech acts, acts of calculation, and acts of writing organized around instrumented activities; ii) their insertion within the management dispositifs that give them meaning and contribute to defining their boundaries; and iii) the putting into perspective of these dispositifs in historical transformations in forms of governmentality. This analytical framework is applied in the case of the car project referred to as L, an instance of collaborative research in which a crisis situation characterized by the disalignment between the elementary acts studied and the management dispositif implemented by the company was examine. This case illustrates a more general phenomenon in which management dispositifs produce negative effects on the skills dynamics in a company, and on individuals’ involvement in these collective projects. It also explains the infelicity of certain performative acts. |
| Abstract: | Qu'est-ce que la performativité peut apporter aux recherches en management et sur les organisations Mise en perspective théorique et cadre d'analyse Franck Aggeri Résumé. La problématique de la performativité renverse la perspective classique en sciences sociales : il s'agit moins de décrire une réalité préexistante que de comprendre comment la réalité est produite par des interventions intentionnelles. Toutefois, le lien entre intervention et performativité n'a rien d'automatique et cette approche invite, au contraire, à s'intéresser aux conditions pragmatiques qui permettent de construire cette performation. Dans cette perspective, cet article vise un triple objectif. Il élargit tout d'abord le champ de la performativité, structuré autour de trois approches dominantes (dites austinienne, callonienne et butlérienne), à des travaux moins connus sur les actes d'écriture et de calcul. Il propose ensuite une mise en perspective des travaux sur la performativité par rapport à deux autres courants de recherche en sciences sociales et dans les organisations qui, sans utiliser le terme de performativité, présentent de fortes similitudes sur le plan théorique et méthodologique : les approches foucaldiennes et les approches des organisations par les instruments. A partir des concepts introduits, l'article propose enfin un cadre d'analyse des processus de performation dans les organisations qui articule trois niveaux d'analyse : l'étude, à un niveau élémentaire, des actes de langage oraux, de calcul et d'écriture organisés autour d'activités instrumentées ; leur insertion dans des dispositifs de management qui leur donnent du sens et contribuent à les cadrer ; la mise en perspective de ces dispositifs dans les transformations historiques des formes de gouvernementalité. Ce cadre d'analyse est mobilisé sur le cas du projet automobile L, objet d'une recherche-intervention, dans lequel une situation de crise, caractérisée par un désalignement entre les actes élémentaires étudiés et le dispositif de management mis en place par l'entreprise, a pu être étudiée. Ce cas illustre un phénomène plus général où les dispositifs de management produisent des effets pervers sur la dynamique des compétences et sur l'adhésion des individus à de tels projets collectifs et expliquent l'infélicité de certains actes performatifs. |
| Keywords: | Management instrument,Dispositif,critical management studies,Performativity |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01609172&r=his |
| By: | Obschonka, Martin; Stützer, Michael; Peter, Rentfrow; Jeff, Potter; Samuel, Gosling |
| Abstract: | A widespread stereotype holds that the Germans are notorious worriers, an idea captured by the term, German Angst. An analysis of country-level neurotic personality traits (Trait Anxiety, Trait Depression, and Trait Neuroticism; N = 7,210,276) across 109 countries provided mixed support for this idea; Germany ranked 20th, 31st, and 53rd for Depression, Anxiety, and Neuroticism respectively suggesting, at best, the national stereotype is only partly valid. Theories put forward to explain the stereotypical characterization of Germany focus on the collective traumatic events experienced by Germany during WWII, such as the massive strategic bombing of German cities. We thus examined the link between strategic bombing of 89 German cities and today’s regional levels in neurotic traits (N = 33,534) and related mental health problems. Contrary to the WWII-bombing hypothesis, we found negative effects of strategic bombing on regional Trait Depression and mental health problems. This finding was robust when controlling for a host of economic factors and social structure. We also found Resilience X Stressor interactions: Cities with more severe bombings show more resilience today: lower levels of neurotic traits and mental health problems in the face of a current major stressor – economic hardship. |
| Keywords: | German Angst; Neuroticism; Personality; Strategic Bombing; Resilience; Cities; World War II |
| JEL: | I0 I3 N9 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83680&r=his |
| By: | Ole Peters; Alexander Adamou |
| Abstract: | Decision theory is the model of individual human behavior employed by neoclassical economics. Built on this model of individual behavior are models of aggregate behavior that feed into models of macroeconomics and inform economic policy. Neoclassical economics has been fiercely criticized for failing to make meaningful predictions of individual and aggregate behavior, and as a consequence has been accused of misguiding economic policy. We identify as the Achilles heel of the formalism its least constrained component, namely the concept of utility. This concept was introduced as an additional degree of freedom in the 18th century when it was noticed that previous models of decision-making failed in many realistic situations. At the time, only pre-18th century mathematics was available, and a fundamental solution of the problems was impossible. We re-visit the basic problem and resolve it using modern techniques, developed in the late 19th and throughout the 20th century. From this perspective utility functions do not appear as (irrational) psychological re- weightings of monetary amounts but as non-linear transformations that define ergodic observables on non-ergodic growth processes. As a consequence we are able to interpret different utility functions as encoding different non-ergodic dynamics and remove the element of human irrationality from the explanation of basic economic behavior. Special cases were treated in [1]. Here we develop the theory for general utility functions. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1801.03680&r=his |
| By: | Russo, Alberto |
| Abstract: | This paper presents a brief discussion on the evolution of macroeconomics and economic policy after Keynes. Particularly, we describe the emergence of a new standard of economic research, after the «stagflation» of the 1970s, which resurrects the (pre-Keynesian) confidence in the self-correcting properties of the market economy. It also considers economic policy as a potential obstacle for the economic system in reaching the «natural» equilibrium. Finally, some perspectives for macroeconomics in the aftermath of the Great Recession are discussed. |
| Keywords: | John Maynard Keynes; NAIRU; New Classical Macroeconomics; Great Recession; Financialization. |
| JEL: | B22 E60 |
| Date: | 2017–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83346&r=his |
| By: | Volckart, Oliver |
| Abstract: | The paper argues that in premodern Europe, the practice of debasement was far more ‘messy’ than research has generally recognised. First, high information costs often prevented the effective control of mint officials who could exploit their resulting autonomy in order to debase coins on their own account. Second, these costs made it impossible to monitor markets closely enough to enforce regulations. Attempts by governments to debase coins by increasing their nominal value therefore ‘worked’ only if they conformed to the market rates of these coins. Finally, high information costs prevented the creation of closed areas where the domestic currency enjoyed a monopoly. The resulting trade in coinage created incentives for governments to issue inferior copies of their neighbour’s coins – a practice that had the same consequences as a debasement – and forced the affected governments to follow suit by debasing their own coinage, too. |
| Keywords: | monetary policies; debasements; monitoring costs; currency markets; late middle ages; early modern period |
| JEL: | N13 N23 N43 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:wpaper:86533&r=his |
| By: | Chang, Pao-Li (School of Economics, Singapore Management University); Jin, Wei (School of Economics, Singapore Management University) |
| Abstract: | This paper provides a comprehensive evaluation of the welfare impact of GATT/WTO in its entire history of 1950-2015 for 180 countries. The analysis embeds nonparametric matching methods in structural quantitative simulations. The results indicate substantial (but highly heterogeneous) welfare gains created by GATT/WTO at the global level and across more than six decades of its history. An extensive set of robustness checks with respect to model speci fications, parameter values, and matching estimations are provided. We also characterize the effects of GATT/WTO on global income disparity, its interaction with preferential trade agreements, and the effects of China's WTO entry. |
| Keywords: | Matching estimator; Quantitative analysis; Welfare; Fi rm entry; Income disparity |
| JEL: | F13 F14 F17 |
| Date: | 2017–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:ris:smuesw:2018_002&r=his |
| By: | Martin T. Bohl; Pierre L. Siklos |
| Abstract: | In an important sense the present survey reaches a conclusion similar to the one highlighted by Laidler and Parkin (1975) over forty years ago. Inflation, if fully anticipated, produces modest social costs. We are no closer to knowing what is ‘optimal’ inflation except that low and stable inflation come closest to reducing the loss of purchasing power of money. Because prices of goods and services incorporate elements that are difficult to measure precisely we cannot even be sure what the actual level of inflation really is. Hence, what is deemed low may well differ across countries and across time. Nevertheless, avoiding inflation is not only desirable because it represents a form of taxation without representation but, in theory at least, low and stable inflation ought to be more easily forecasted thereby reducing the likelihood of large and persistent forecast errors. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2018-08&r=his |
| By: | Thu-Trang Vuong; Quan-Hoang Vuong |
| Abstract: | La colonisation suivie du règne communiste a laissé sa marque sur l’ancienne Indochine française, constituée des trois pays Vietnam, Laos et Cambodge. Cet article vise à analyser la relation étroite entre des bouleversements politiques de la fin XIXe-début XXe siècle et l’évolution des institutions religieuses en Indochine, pour conclure sur l’interaction et l’influence réciproque entre politique et religieux. |
| Keywords: | économie politique; pouvoir politique et pouvoir religieux; l’Indochine française (Vietnam, Laos et Cambodge) |
| JEL: | N15 N35 P48 |
| Date: | 2018–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/263595&r=his |
| By: | Monnet, Eric |
| Abstract: | The macroeconomic policy "trilemma" is widely used as a framework to discuss the rationale for capital controls and monetary policy autonomy under the Bretton Woods system (1944-1971). Without denying its usefulness, I highlight two facts at odds with assumptions underlying the "trilemma" argument. First, conflicts between internal and external objectives were uncommon. Second, using quantitative credit controls allowed central banks to disconnect their interest rate from the domestic monetary policy stance. They assigned the interest rate to the external side while managing domestic credit expansion with direct quantitative controls. This paper documents that such mechanism was explicitly considered by contemporary economists and central bankers as a way to escape international financial constraints. In such an environment, capital controls were used to complement credit controls. Interest rate spreads were neither a good measure of capital controls nor of central bank autonomy. |
| Keywords: | Bretton Woods; capital controls; central banking; credit controls; macroprudential policies; reserve requirements; trilemma |
| JEL: | E58 F32 N20 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12535&r=his |