nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2018‒05‒14
thirty-six papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Utility Matters: Edmond Malinvaud and growth theory in the 1950s and 1960s By Matheus Assaf; Pedro Garcia Duarte
  2. Agriocliometrics and Agricultural Change in the Nineteenth and Twentieth Centuries By Vicente Pinilla
  3. The Soviet economy: the late 1930s in historical perspective By Davies, R.W.; Harrison, Mark; Khlevniuk, Oleg; Wheatcroft, Stephen G.
  4. How Hard Is It to Maximise Profit? Evidence from a 19-th Century Italian State Monopoly By Carlo Ciccarelli; Gianni De Fraja; Silvia Tiezzi
  5. Who benefited from industrialization? The local effects of hydropower technology adoption By Stefan Leknes; Jørgen Modalsli
  6. Mercado de trabajo doméstico en los inicios de la República: 1876 – 1940 By Cecilia Garavito
  7. The Perennial Thirty Years’ War By Ulrika Carlsson
  8. Test der neoklassischen Produktionsfunktion By Quaas, Georg
  9. A közös ős nyomában: modern nyugati közgazdasági gondolkodás és az iszlám hagyomány By Olah, Daniel
  10. I see myself as an empirical Keynesian By Henri Sterdyniak
  11. Jusqu’où l’économie écologique pense-t-elle l’inégalité environnementale ? Autour de l’oeuvre de Joan Martinez-Alier By Laura Centemeri; Gildas Renou
  12. Central banks going long By Reis, Ricardo
  13. ‘Getting to Denmark’: the Role of Elites for Development By Jensen, Peter Sandholt; Lampe, Markus; Sharp, Paul
  14. The Politics of Disinflation By Robert Hancké; Tim Vlandas
  15. Colonial Origins and Comparative Development: Institutions Matter By Chakraborty, Adrij
  16. Neocolonialism or Balanced Partnership? Reframing Agricultural Relations Between the EU and Africa By Lungu, Ioana
  17. Property Rights to Frontier Land and Minerals: US Exceptionalism By Gary D. Libecap
  18. The Power of the Government: China's Family Planning Leading. Group and the Fertility Decline since 1970 By Chen, Yi; Huang, Yingfei
  19. Book Review: myths and macro: macroeconomics and the Phillips curve myth by James Forder By Goodheart, Charles
  20. Pensamiento de Raúl Prebisch 1950-1963 By Alejandro Granados Zambrano
  21. Some Notes on the Concept of Social Capital: A Review of Perspectives, Definitions and Measurement By Motkuri, Venkatanarayana
  22. Chocs technologiques, chocs des prix et fluctuations du chômage en République Démocratique du Congo By Henry Ngongo; Antoine Miyamueni
  23. "Reflections on the New Deal: The Vested Interests, Limits to Reform, and the Meaning of Liberal Democracy" By John F. Henry
  24. Is internet on the right track? The digital divide, path dependence, and the rollout of New Zealand’s ultra-fast broadband By Eyal Apatov; Nathan Chappell; Arthur Grimes
  25. Dynamic Tax Externalities and the U.S. Fiscal Transformation in the 1930s By Dirk Niepelt
  26. Measuring Moore’s Law: Evidence from Price, Cost, and Quality Indexes By Kenneth Flamm
  27. Helicopter Ben, monetarism, the New Keynesian credit view and loanable funds By Brett Fiebinger; Marc Lavoie
  28. Diversity and Conflict By Cemal Eren Arbatli; Quamrul H. Ashraf; Oded Galor; Marc P. B. Klemp
  29. What Drives Money Velocity? By Luca Benati
  30. The analytics of the Greek crisis By Gourinchas, Pierre-Olivier; Philippon, Thomas; Vayanos, Dimitri
  31. Money Velocity and the Natural Rate of Interest By Luca Benati
  32. Vergi ve Anayasal Düzenlemelerin Politik Krizler Çağında Önemi: 1903–1909 Döneminde Osmanlı İmparatorluğu ve Paris Borsası By Avni önder Hanedar; Mustafa Çalışkan
  33. Bank Networks and Systemic Risk: Evidence from the National Banking Acts By Mark Paddrik; Jessie Jiaxu Wang
  34. Why an EU Referendum? Why in 2016? By Becker, Sascha O.; Fetzer, Thiemo
  35. La economía peruana en vísperas del bicentenario de la independencia By Carlos Contreras Carranza
  36. Political shocks and financial markets : regression-discontinuity evidence from national elections. By Daniele Girardi

  1. By: Matheus Assaf; Pedro Garcia Duarte
    Abstract: The present-day standard textbook narrative on the history of growth theory usually takes Robert Solow’s 1956 contribution as a key starting point, with extensions on the savings decision (done by David Cass and Tjalling Koopmans in 1965) being the next important development. However, such account is historically misleading because it organizes past developments based on theoretical concerns. Our goal is to tell a richer story about the developments of growth theory from the 1950s to the mid 1960s, in the activity analysis literature that started before Solow’s model and never had him as a central reference. We stress the role played by Edmond Malinvaud, and take his travel from the French milieu of mathematical economics to the Cowles Commission in 1950-1951 and back to France as a guiding line. The rise of turnpike theory in the end of the 1950s generated a debate on the choice criteria of growth programs, opposing the productive efficiency typical of these models to the utilitarian approach supported by Malinvaud and Koopmans. The Vatican Conference of 1963, where Koopmans presented a first version of his 1965 model, was embedded in this debate. We argue that Malinvaud’s (and Koopmans’s) contributions were crucial to steer the activity analysis literature towards a utilitarian analysis of growth paths.
    Keywords: Edmond Malinvaud; Optimal Growth; Tjalling Koopmans; History of Growth Theory
    JEL: B21 B22 B23
    Date: 2018–04–11
  2. By: Vicente Pinilla (Universidad de Zaragoza and Instituto Agroalimentario de Aragon -IA2- (Universidad de Zaragoza-CITA), Spain)
    Abstract: Before the industrial revolution, agriculture was the most important economic activity of traditional societies. The spread of industrialisation processes, first throughout a large part of the western world and later across many more countries, gave rise to an abundance of literature on the role of agriculture in these processes. The initial perspectives offered by economic history, particularly for the British case, and the approaches of development economics specialists, largely based on previous studies by economic historians, became subject to reconsideration when numerous studies emerged that, from a cliometric point of view, sought to evaluate the changes experienced by agriculture and their contribution to economic growth. In this context, the objective of this study is to use these contributions to analyse the profound transformations that have occurred in agriculture around the world over the last two centuries.
    Keywords: Economic History, Cliometrics, Agricliometrics, Agricultural Production, Agricultural Productivity, Technological Change, Agricultural Trade, Globalisation, Agricultural Policies, Agrarian Institutions
    JEL: N01 N50 Q10
    Date: 2018–05
  3. By: Davies, R.W. (University of Birmingham); Harrison, Mark (University of Warwick); Khlevniuk, Oleg (Russian Federation); Wheatcroft, Stephen G. (Deakin Univesity)
    Abstract: This paper is draft of the concluding chapter of The industrialisation of Soviet Russia,vol.7:The Soviet economyand the approach of war,1937– 1939, in preparation for publication by Palgrave Macmillan. We consider the development of the Soviet economy over the period of the series, that is, from the launching of the first five-year plan and the collectivisation of agriculture to the outbreak of the Second World War. We review, in turn, the pattern of forced industrialisation, the measurement and mismeasurement of economic progress, the extraordinary militarisation of a mobilised society and economy, the emergence of the Soviet Union as a global military power, and the scope for reforms within the economic system that Stalin created and ruled over. Keywords: communism, economic development, economic growth,incentives, industrialisation, military power, mis measurement, mobilisation, policy reform, power, Soviet Union, violence, war economy JEL Classification: H56, N44, P21
    Date: 2018
  4. By: Carlo Ciccarelli (DEF & CEIS,University of Rome "Tor Vergata"); Gianni De Fraja (DEF & CEIS,University of Rome "Tor Vergata", Nottingham School of Economics, CEPR); Silvia Tiezzi (Università di Siena)
    Abstract: In this paper we study the ability of the 19-th century Italian government to choose profit maximising prices for a multiproduct monopolist. We use very detailed historical data on the tobacco consumption in 62 Italian provinces from 1871 to 1888 to estimate a differentiated product demand system. The demand conditions and the legal environment of the period made this market as close to a textbook monopoly as is practically possible. The government’s stated aim for this industry was profit maximisation: since at the time tobacco revenues constituted between 10 and 15 percent of the revenues for the cash-strapped government, the stated aim was very likely the true one. Cost data for the nine products suggest that the government was not wide off the mark: the tobacco prices were “not far” from those dictated by the standard monopoly formulae for profit maximisation with interdependent demand functions.
    Keywords: Demand for Tobacco, Multiproduct monopoly profit maximisation, 19-th century Italy, QAI demand system, Habit formation
    JEL: L12 L66 I18 N33
    Date: 2018–05–08
  5. By: Stefan Leknes; Jørgen Modalsli (Statistics Norway)
    Abstract: This paper studies the impact of the construction of hydropower facilities on labor market outcomes in Norway at the turn of the twentieth century (1891-1920). The sudden breakthrough in hydropower technology provides a quasi-experimental setting, as not all municipalities had suitable natural endowments and the possible production sites where often located in remote areas. We find that hydropower municipalities experienced faster structural transformation and displayed higher occupational mobility. Unskilled workers and workers from low-status families did to a greater extent obtain skilled jobs in hydropower municipalities. We interpret this as evidence that this early twentieth-century technology was skill-biased, and that workers in the new skilled jobs were recruited from a broad segment of the population. However, areas affected by the new technology also experienced occupational polarization, with an increase in high- and low-skilled manual jobs at the expense of intermediate-skilled jobs.
    Keywords: industrial revolution; hydropower production; structural transformation; occupational mobility; intergenerational mobility
    JEL: J62 N7 N9 R1 R12
    Date: 2018–05
  6. By: Cecilia Garavito (Departamento de Economía de la Pontificia Universidad Católica del Perú)
    Abstract: El objetivo de este artículo es analizar la evolución del trabajo doméstico en las primeras décadas de la República, tomando como base los datos de los Censos de 1876 y 1940, así como algunas estimaciones hechas por otros autores sobre la estructura del empleo y los ingresos de esta fuerza laboral. Aun cuando el trabajo doméstico remunerado cambió de una relación amo – esclavo anterior a otra relación patrón – trabajador libre, las estructuras jerárquicas del régimen colonial basadas en la supuesta inferioridad de los descendientes de los habitantes nativos y de los esclavos de origen africano se mantuvieron hasta bien entrado el siglo XX. Esto retrasó el desarrollo de un mercado laboral propiamente dicho. Hubo dos cambios importantes entre ambos censos. En primer lugar, se redujo el porcentaje de varones dedicados a esta ocupación se redujo del 50% al 25% del total de la fuerza laboral en esta ocupación. Las causas serían las mayores alternativas laborales para los varones debido a la mayor urbanización; así como el bajo nivel de educación de las mujeres rurales, y la supuesta seguridad de vivir en la casa del patrón. En segundo lugar, se da una lenta sustitución de trabajadoras afrodescendientes por trabajadoras de etnicidad nativa. Esto se debería a la mayor migración rural – urbana y al rechazo de los empleadores a contratar trabajadoras afrodescendientes libres. Finalmente, si bien existen estimaciones de los ingresos monetarios de los trabajadores domésticos en el siglo XIX, no se han hecho estimaciones similares para la primera mitad del siglo XX. Aun así, podemos decir que los ingresos monetarios de los trabajadores domésticos eran menores que los ingresos de los trabajadores no calificados, diferencia que se mantiene hasta hoy. JEL Classification-JEL: J15 , J16 , J46 , N36
    Keywords: Censos , Género , Historia económica , Trabajo doméstico
    Date: 2018
  7. By: Ulrika Carlsson
    Abstract: I argue that the conflict that arose in Europe as a result of the Reformation and culminated in the Thirty Years’ War persists to this day, as the two spirits corresponding respectively to Protestantism and Catholicism continue to divide us. Analyzing phenomena such as the Pepsi Challenge and the French resistance to headscarves, I argue that this culture war is a war between an aesthetic and a moralistic worldview. I defend one of these as life-affirming and condemn the other as life-denying.
    Date: 2018–02
  8. By: Quaas, Georg
    Abstract: The Cobb-Douglas production function has applications for firms, branches, industries, and for the macro-economies of nation-states as a whole. Throughout the course of his life, with the exception of his years as a senator, Paul H. Douglas consistently strived to gather all the supporting empirical evidence he could. Among others, he placed his hope in his former student, Paul A. Samuelson, and in Samuelson’s colleague Robert M. Solow, who pushed the production function forward “into new and more sophisticated fields.” Meanwhile, plenty of data on capital, labor, and output are available, but it seems as though no one is interested anymore in either the empirical evidence or the underlying logic of Solow’s sophisticated version of the old Cobb-Douglas theory. In this study, his method of segregating variations in output per head due to technical change from those due to changes in the availability of capital per head is applied to the (West) German economy. The temporal domain covers the development of the West German economy from 1950 to 1990 and after German unification, from 1991 to 2015. Even though it turns out that the underlying, true production functions are very similar, ex post prognoses of real wages with the help of the approximated first derivation of the complete production function are much better in the earlier than in the later period. This raises the question of whether factors are paid their marginal cost. Because the study is thought to serve as teaching material, certain mathematics concerning the production function are added. Several problems regarding the accurate testing of the function on the basis of Germany’s National Account dataset are discussed. Patterns that are consequences of the theory are confronted with empirical evidence resulting from 67 years of economic development. It might well be of political importance that the upward shift of the production function hypothetically caused by technical change has a tendency to fall.
    Keywords: production function, technical change, Cobb, Douglas, Solow, development of the German economy
    JEL: C12 C51 E23
    Date: 2018–04–25
  9. By: Olah, Daniel
    Abstract: This scientific essay aims to examine the relationship between Western mainstream economics and its Islamic counterpart. It shows that the creation of Islamic economics is a new scientific program, and representatives of this discipline do not agree on its methodological foundations. Islamic economics does not make a distinction between normative and positive scientific attitudes and sets the influence of human behavior as one of its important goals. To prove that there is potential for future convergence the author argues that the „Schumpeterian gap” in history of economic thought does not exist. Analysing the thoughts of Ibn Khaldun, the paper sets the ground for a new paradigm by representing Khaldun as a common ancestor of Western and Islamic economics.
    Keywords: history of thought, islamic thought, Ibn Khaldun
    JEL: B11 B31
    Date: 2016–11
  10. By: Henri Sterdyniak (Observatoire français des conjonctures économiques)
    Abstract: Henri Sterdyniak is a scientific adviser at the OFCE research institute – the Observatoire français des conjonctures économiques – where he has been working for more than 30 years, among other posts as a director of the department ‘economics of globalization’. From 1985 until 2013 he was also a professor of economics at the University Paris Dauphine, France. He is also one of the founding members of the Économistes Atterrés (the Appalled Economists), an association of French economists who object to neoliberal policies, formed in 2010. He has written extensively on various topics, including empirical macroeconomics, monetary policies, fiscal policies, globalization, European policies, and more specifically social policies and retirement systems. He has published hundreds of articles and reports, lately with Catherine Mathieu.
    Keywords: Keynes; Economist
    Date: 2017–12
  11. By: Laura Centemeri (IMM - Institut Marcel Mauss - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique); Gildas Renou (SAGE - Sociétés, Acteurs, Gouvernement en Europe - UNISTRA - Université de Strasbourg - CNRS - Centre National de la Recherche Scientifique)
    Abstract: L’objectif de cette contribution est, d’abord, de présenter l’oeuvre de l'économiste catalan Joan Martinez-Alier, un des fondateurs de l'économie écologique, en la situant dans sa trajectoire politique et intellectuelle. Il s’agira ensuite de développer une réflexion plus large concernant le type de pluralisme des valeurs qui est en question dans une critique écologique ayant l’ambition d’être attentive aux inégalités environnementales mais également à la pluralité des modes qu’ont les humains de tenir à l’environnement.
    Keywords: critique écologique, valeur, décroissance, transition écologique, inégalités environnementales , justice environnementale,economie écologique, mouvements sociaux
    Date: 2017
  12. By: Reis, Ricardo
    Abstract: Central banks have sometimes turned their attention to long-term interest rates as a target or as a diagnosis of policy. This paper describes two historical episodes when this happened—the US in 1942-51 and the UK in the 1960s—and uses a model of inflation dynamics to evaluate monetary policies that rely on going long. It concludes that these policies for the most part fail to keep inflation under control. A complementary methodological contribution is to re-state the classic problem of monetary policy through interest-rate rules in a continuous-time setting where shocks follow diffusions in order to integrate the endogenous determination of inflation and the term structure of interest rates.
    Keywords: Taylor rule; yield curve; pegs; ceilings; affine models
    JEL: E31 E52 E58
    Date: 2018–03
  13. By: Jensen, Peter Sandholt (University of Southern Denmark); Lampe, Markus (Vienna University of Economics and Business); Sharp, Paul (University of Southern Denmark, CAGE, CEPRAuthor-Name: Skovsgaard, Christian Volmar; University of Southern Denmark)
    Abstract: We explore the role of elites for development and in particular for the spread of cooperative creameries in Denmark in the 1880s, which was a major factor behind that country’s rapid economic catch-up. We demonstrate empirically that the location of early proto-modern dairies, so-called hollænderier, introduced onto traditional landed estates as part of the Holstein System of agriculture by landowning elites from the Duchies of Schleswig and Holstein in the eighteenth century, can explain the location of cooperative creameries in 1890, more than a century later, after controlling for other relevant determinants. We interpret this as evidence that areas close to estates which adopted the Holstein System witnessed a gradual spread of modern ideas from the estates to the peasantry. Moreover, we identify a causal relationship by utilizing the nature of the spread of the Holstein System around Denmark, and the distance to the first estate to introduce it, Sofiendal. These results are supported by evidence from a wealth of contemporary sources and are robust to a variety of alternative specifications.
    Keywords: Institutions, technology, cooperatives, dairying JEL Classification: N53, O13, Q13
    Date: 2018
  14. By: Robert Hancké; Tim Vlandas
    Abstract: What explains the shift from the moderate to high inflation rates of the Golden Age of post-war capitalism to the low inflation regime of monetarism in the 1970s and 1980s? Conventional views emphasise the rise of monetarism as a new economic paradigm that convinced policy makers to delegate monetary policy to conservative and independent central banks – a view that comes in many variants, from constructivist to orthodox economics. In contrast to these arguments, we introduce electoral and party politics into the debate. This paper models and examines the shifts in the inflationary preferences of the median voter and their translation into party politics and economic policies. As the median voter accumulates nominal assets against a background of de facto and de jure increasing job security and rising wages, her preferences on macro-economic policies shift from concerns about employment-friendly to inflation-averse policies. Social democratic parties, who are pivotal players in this regard because of their ‘natural’ preference for high employment over low inflation, are thus forced to adopt antiinflation policies as well to remain electorally viable. We show that the employment situation of the average worker improved in every respect during the 1960s and 1970s, that most of the population became inflation averse during the 1970s and 1980s, and that social democratic parties were forced to adopt more economically orthodox party manifestos. We then analyse the shift to a low inflation regime in a series of country case studies.
    Keywords: inflation, Western Europe, Monetarism, Keynesianism, electoral politics
    Date: 2017–12
  15. By: Chakraborty, Adrij
    Abstract: A large literature is present on how colonial origins through the channels of Institutions and human capital explain the income variation between countries. In most cases, it is argued that colonial European settlement outside of Europe has shaped the type of institutions present today that explain the gap between income levels of countries. Others criticize this claim on the basis that firstly, geography plays a prominent role in income variation and secondly, the studies in favor of the primacy of the role of institutions suffer from measurement error and bias. In this study, we analyze the role colonial origins and geography play in comparative income levels of countries today. In this study, we present a theoretical analysis for what determines growth in the long run and how colonial origins come into play and then make an empirical study using OLS and IV techniques, while utilizing recent data and different proxies, into the claims that colonial origins and/or geography play the prominent role. We also investigate whether the institutions primacy studies suffer from measurement error. Our findings point out that while geography may play a small role, majority of the income variation is associated with institutions and colonial origins.
    Keywords: Colonial Origins, Comparative Development, Institutions, Economic Growth
    JEL: I12 N10 O1 O11 O4 O57 P16 P51
    Date: 2017–03
  16. By: Lungu, Ioana
    Abstract: The media narratives with respect to EU external policies and their effects on developing countries generally paint a picture of unequal power dynamics and negative externalities, particularly with respect to international trade and land grabbing. In this paper, I use trade data to argue that reality is more nuanced and aim to provide a preliminary sketch of the institutional dynamics between the EU and Africa. I focus on agricultural relationships to highlight the interplay between historical path dependencies, colonialism, trade policy and domestic institutions on the EU and African side. While trade is often portrayed in an overly simplified manner as the main factor hindering agricultural development, African countries are often plagued by a long history of extractive institutions, both politically and economically, which lead to a vicious cycle of unequally distributed resources, exploitation, insecure human rights and a lack of incentives for innovation. This becomes apparent when examining phenomena such as land-grabbing, which often involve African elites partnering with foreign investors to conclude controversial deals. Overall, this paper aims to highlight the necessity of building institutional capacity particularly in countries with a long history of extractive institutional continuity, and to underline the importance of state centralisation for agricultural development, so that African partners can fully take advantage of the preferential trade regime with the EU and improve their position with respect to power dynamics.
    Keywords: Agricultural Economics,Development,International Trade,Agricultural Policy,Governance,Foreign Assistance,Institution Building,Institutions,Least Developed Countries,Trade Liberalization
    JEL: O19 O13 O17 O24 Q15 O20
    Date: 2017
  17. By: Gary D. Libecap
    Abstract: Property rights are the most fundamental institution in any society. They determine who has decision-making authority over assets and who bears the costs and benefits of those decisions. They assign ownership, wealth, political influence, and social standing. They make markets possible; define timelines; and provide incentives for investment, innovation, and trade. They mitigate the losses of open access and provide the basis for long-term economic growth. Economists and economic historians have long recognized the importance of secure property rights for economic outcomes. Other political economy, philosophy, historical, and legal literatures emphasize different, but critical attributes based on how property rights are allocated and to whom. The linkages among the social, political, and economic effects are examined here with respect to US and Latin American frontier land and minerals. Property rights were sharply different across the two frontiers with apparent long-term consequences for economic growth, innovation, wealth distribution, private investment in public goods, as well as social and political stability. The distinct assignment of property rights to land and minerals is likely a basis for long-term US exceptionalism in economic performance, individualism, mobility, and optimism. The mechanisms through which property rights to land in a frontier society affect outcomes in a contemporary, highly urban one are complex. Because property rights to land were broadly distributed, Americans could participate in capital markets using land as collateral. This ability shaped opinions regarding markets, capitalism, and individual opportunity. In the 21st century, these critical attributes may be eroding, inviting more analysis from economists and economic historians.
    JEL: K11 N5 N51 N56 Q15 Q24 Q32
    Date: 2018–04
  18. By: Chen, Yi; Huang, Yingfei
    Abstract: China introduced its world-famous One-Child Policy in 1979. However, its fertility appears to have declined even faster in the early 1970s than it did after 1979. In this study, we highlight the importance of the Family Planning Leading Group in understanding the fertility decline since the early 1970s. In 1970, provinces gradually established an institution named the Family Planning Leading Group to facilitate the restoration of family planning, which had previously been interrupted by the outbreak of the Cultural Revolution. An important feature of this policy change is that the process differed by province. We find provinces that formed the leading group earlier also experienced an earlier decline in the fertility rate. Exploiting this provincial variation in establishment year, we estimate a difference-in-difference model that can explain about half of the decline in China's total fertility rate from 5.7 in 1969 to 2.7 in 1978. In comparison to the 1979 One-Child Policy, which previous research has widely treated as an exogenous shock to the fertility rate, our empirical strategy has three features: it captures a greater decline in the fertility rate, does not result in a contemporaneous increase in the sex ratio, and is robust to the inclusion of province-specific trends.
    Keywords: Family Planning,Fertility Rate,Sex Ratio
    JEL: J13
    Date: 2018
  19. By: Goodheart, Charles
    JEL: J1 F3 G3
    Date: 2018–04
  20. By: Alejandro Granados Zambrano
    Date: 2018–04–27
  21. By: Motkuri, Venkatanarayana
    Abstract: This paper delves into various perspectives – philosophical, sociological, economic and financial / business or oganisational - in literature on the concept of social capital. It presents a review of the definitions in broad literature categorised under various perspectives. While doing so, the focus ultimately narrowed down to definitions of social capital in business or organisational studies.
    Keywords: Social Capital
    JEL: A14 M10 M51 Z13
    Date: 2018–04
  22. By: Henry Ngongo (UEA - Université Evangélique en Afrique); Antoine Miyamueni (UPC - Université Protestante au Congo)
    Abstract: The main purpose of this research is to analyze the effects of macroeconomic shocks on unemployment fluctuations in the Democratic Republic of Congo (DRC). Using the SVECM model on DRC data for the period 1960 to 2014, the conclusion is that the high and persistent level of unemployment is mainly explained permanently by technological and price shocks.
    Abstract: L'objet de cet article est d'analyser les effets des chocs macro-économiques sur les fluctuations du chômage en République Démocratique du Congo (RDC). En utilisant le modèle SVECM sur les données de la RDC pour la période allant de 1960 à 2014, on aboutit à la conclusion selon laquelle le niveau élevé et persistent du chômage est, à long terme, essentiellement expliqué de manière permanente par les chocs technologiques et des prix.
    Keywords: chocs technologiques,Chocs macro-économiques, SVECM",unemployment, price shocks, technological shocks, chômage, SVECM, chocs des prix,Macro-economic shocks
    Date: 2018
  23. By: John F. Henry
    Abstract: I subject some aspects of Roosevelt's "New Deal" to critical analysis, with particular attention to what is termed "liberal democracy." This analysis demonstrates the limits to reform, given the power of "vested interests" as articulated by Thorstein Veblen. While progressive economists and others are generally favorably disposed toward the New Deal, a critical perspective casts doubt on the progressive nature of the various programs instituted during the Roosevelt administrations. The main constraint that limited the framing and operation of these programs was that of maintaining liberal democracy. The New Deal was shaped by the institutional forces then dominant in the United States, including the segregationist system of the South. In the end, vested interests dictated what transpired, but what did transpire required a modification of the understanding of liberal democracy. The following paper provides a compressed account of this tradition of endogenous financial market instability.
    Keywords: Vested Interests; New Deal; Planning; Liberalism
    JEL: B52 N2 N4 P1
    Date: 2018–05
  24. By: Eyal Apatov (Ministry of Business, Innovation and Employment); Nathan Chappell (Motu Economic and Public Policy Research); Arthur Grimes (Motu Economic and Public Policy Research)
    Abstract: Using data on internet access for New Zealand’s 46,637 meshblocks, we examine issues of path dependence and the digital divide. We test whether areas that had the best railway access in the 1880s also have best access to new fibre internet infrastructure. Results suggest strong path dependence with respect to topography: people in areas that lacked 19th century rail due to remoteness or terrain are much less likely to have prioritised fibre access and slightly less likely to have current or (planned) future fibre access. Next, we examine path dependence with respect to ethnicity, given that 19th century railways deliberately avoided predominantly M?ori areas. The results suggest weak path dependence: countrywide, M?ori are slightly less likely to get fibre access than other New Zealanders, though are slightly more likely to have access within urban areas. Finally, we examine whether the rollout of fibre is increasing or decreasing the digital divide in access between rich and poor. Results show that those in more deprived areas are the most likely to benefit from fibre access, because these areas also tend to be denser and density was a factor in determining the path of the fibre rollout.
    Keywords: Digital divide, path dependence, economic history, inequality, broadband
    JEL: L92 L96 N97
    Date: 2018–05
  25. By: Dirk Niepelt
    Abstract: We propose a theory of tax centralization in politico-economic equilibrium. Taxation has dynamic general equilibrium implications which are rationally internalized at the federal, but not at the regional level. The political support for taxation therefore differs across levels of government. Complementarities on the spending side decouple the equilibrium composition of spending and taxation and create a role for inter governmental grants. The model provides an explanation for the centralization of revenue, introduction of grants, and expansion of federal income taxation in the U.S. around the time of the New Deal. Quantitatively, it accounts for between 30% and 100% of the federal revenue share’s doubling in the 1930s, and for the long-term increase in federal grants.
    Keywords: Fiscal policy, Federalism, Politico-economic equilibrium, Markov equilibrium, Public goods, Grants, Political Economy
    JEL: D72 E62 H41 H77
    Date: 2018–03
  26. By: Kenneth Flamm
    Abstract: “Moore’s Law” in the semiconductor manufacturing industry is used to describe the predictable historical evolution of a single manufacturing technology platform that has been continuously reducing the costs of fabricating electronic circuits since the mid-1960s. Some features of its future evolution were first correctly predicted by Gordon E. Moore in 1965, and Moore’s Law became an industry synonym for continuous, periodic reduction in both size and cost for electronic circuit elements. This paper develops develops some stylized economic facts, reviewing why and how this progression in manufacturing technology delivered a 20 to 30 percent annual decline in the cost of manufacturing a transistor, on average, as long as it continued. Other characteristics associated with smaller feature sizes would be expected to have additional economic value, and historical trends for these characteristics are reviewed. Lower manufacturing costs alone pose no special challenges for price and innovation measurement, but these other benefits do, and motivate quality adjustment methods when semiconductor product prices are measured. Empirical evidence of recent changes to the historical Moore’s Law trajectory is analyzed, and shows a slowdown in Moore’s Law as measured by prices for the highest volume products: memory chips, custom chip designs outsourced to dedicated contract manufacturers (foundries), and Intel microprocessors. Evidence to the contrary, which relates primarily to Intel microprocessors is reviewed, as are economic reasons why Intel microprocessor prices might behave differently from prices for other types of semiconductor chips. A computer architecture textbook model of how chip characteristics affect microprocessor performance is specified and tested in a structural econometric model of microprocessor computing performance. This simple econometric model, using only a small set of explanatory chip characteristics, explains 99% of variance across processor models in performance on commonly used performance benchmarks. This small set of characteristics should clearly be included in any hedonic model of computer or processor prices. Most of these chip characteristics also affect chip production cost, and therefore have an additional rationale for inclusion in a hedonic model that is separate from their demand-side effects on computer performance metrics relevant to users.
    JEL: L63 O31 O32 O33
    Date: 2018–04
  27. By: Brett Fiebinger; Marc Lavoie
    Abstract: The purpose of this paper is to examine the intellectual roots of monetary dominance; specifically, the view that fiscal policy is largely irrelevant to counter-cyclical macro stabilisation and long-run output growth. A first step towards monetary dominance was the monetarist reinterpretation of the Great Depression. In the 1990s orthodoxy replaced money supply targeting with inflation targeting while preserving monetarist results. In this monetarism without money, fiscal policy was not needed in the short-run for macro stabilisation, and in the long-run could only lead to higher inflation rates and to higher real interest rates that lowered potential output by crowding-out private investment. Expansionary fiscal policy was mostly overlooked in the early 2000s New Keynesian literature on the zero lower bound; instead, the optimism on unconventional monetary policies failed to prepare policymakers for the Global Financial Crisis. The crisis demands far-reaching changes to macro theory not least of which is a recognition that the theory of loanable funds is incapable of providing any insight into how the financial system works in practice or the long-term effects of fiscal policy.
    Keywords: quantitative easing, monetarism, bank lending channel, loanable funds
    JEL: B31 E51 E52 E58
    Date: 2018
  28. By: Cemal Eren Arbatli; Quamrul H. Ashraf; Oded Galor; Marc P. B. Klemp
    Abstract: This research advances the hypothesis and establishes empirically that interpersonal population diversity has contributed significantly to the emergence, prevalence, recurrence, and severity of intrasocietal conflicts. Exploiting an exogenous source of variations in population diversity across nations and ethnic groups, it demonstrates that population diversity, as determined predominantly during the exodus of humans from Africa tens of thousands of years ago, has contributed significantly to the risk and intensity of historical and contemporary internal conflicts, accounting for the confounding effects of geographical, institutional, and cultural characteristics, as well as for the level of economic development. These findings arguably reflect the adverse effect of population diversity on interpersonal trust, its contribution to divergence in preferences for public goods and redistributive policies, and its impact on the degree of fractionalization and polarization across ethnic, linguistic, and religious groups.
    Keywords: social conflict, population diversity, ethnic fractionalization, ethnic polarization, interpersonal trust, political preferences
    JEL: D74 N30 N40 O11 O43 Z13
    Date: 2018
  29. By: Luca Benati
    Abstract: Since WorldWar II, permanent interest rate shocks have driven nearly all of the fluctuations of U.S. M1 velocity, which is cointegrated with the short rate, and most of the long-horizon variation in the velocity of M2-M1. Permanent velocity shocks specific to M2-M1, on the other hand, have played a minor role. Further, counterfactual simulations show that, absent permanent interest rate shocks, M1 velocity would have been broadly flat, and fluctuations in the velocity of M2-M1 would have been more subdued than they have historically been. We show that failure to distinguish between M1 and M2-M1 causes a significant distortion of the inference, erroneously pointing towards a dominant role for M2 velocity shocks.
    Keywords: Money demand; structural VARs; unit roots; cointegration; longrun restrictions.
    Date: 2017–07
  30. By: Gourinchas, Pierre-Olivier; Philippon, Thomas; Vayanos, Dimitri
    Abstract: We provide an empirical and theoretical analysis of the Greek crisis of 2010. We first benchmark the crisis against all episodes of sudden stops, sovereign debt crises, and lending booms / busts in emerging and advanced economies since 1980. The decline in Greece’s output, especially investment, is deeper and more persistent than in almost any crisis on record over that period. We then propose a stylized macrofinance model to understand what happened. We find that a severe macroeconomic adjustment was inevitable given the size of the fiscal imbalance; yet, a sizable share of the crisis was also the consequence of the sudden stop that started in late 2009. Our model suggests that the size of the initial macro / financial imbalances can account for much of the depth of the crisis. When we simulate an emerging-market sudden stop with initial debt levels (government, private, and external) of an advanced economy, we obtain a Greek crisis. Finally, in recent years, the lack of recovery appears driven by elevated levels of nonperforming loans and strong price rigidities in product markets.
    JEL: N0 F3 G3
    Date: 2017–05–01
  31. By: Luca Benati
    Abstract: Since World War I, M1 velocity has been, to a close approximation, the permanent component of the short-term nominal rate. This logically implies that, under monetary regimes which cause inflation to be I(0), permanent fluctuations in M1 velocity uniquely reflect, to a close approximation, permanent shifts in the natural rate of interest. Evidence from the Euro area and several inflation-targeting countries is compatible with this notion, with velocity fluctuations being systematically strongly correlated with a Stock and Watson (1996, 1998) estimate of trend real GDP growth. I exploit this insight to estimate the natural rate of interest for the United Kingdom and Canada under inflation targeting: In either country, the natural rate has been consistently declining since the early 1990s.
    Keywords: Money demand; Lucas critique; structural VARs; unit roots; cointegration; long-run restrictions: natural rate of interest.
    Date: 2017–06
  32. By: Avni önder Hanedar (Sakarya University, Faculty of Political Sciences); Mustafa Çalışkan (Sakarya University, Faculty of Political Sciences)
    Abstract: Çalışma, 1903 ve 1909 döneminde Osmanlı İmparatorluğu’nu etkisi altında bırakan idari ve mali değişimlerin etkin sonuçlar yaratıp yaratmadığını değerlendirme konusu yapmaktadır. Dönem içerisinde bütçe açıklarını kapatmak ve anayasal sistemi tesis etmek için uygulanan kişisel vergi düzenlemesi ve İkinci Meşrutiyet bulunmaktadır. Çalışma, 1903–1909 yılları arasında Paris Borsası’nda işlem gören Osmanlı Devleti'nin standart borçlanma aracı olan Konsolide Borç Tahvili günlük fiyat verilerini kullanmaktadır. Sonuçlar, Anayasal sistemin 1908 yılında tekrar tesis edilmesinin yatırımcılar açısından güven tazeleyici bir önlem olarak algılandığını göstermektedir. Ayrıca, yatırımcılarca yerel politik gerilimlere göre Rus-Japon Savaşı gibi uluslar arası sorunların daha fazla önemsendiği bulunmuştur.
    Date: 2018
  33. By: Mark Paddrik (Office of Financial ResearchAuthor-Name: Haelim Park; Office of Financial Research); Jessie Jiaxu Wang (Arizona State University)
    Abstract: The reserve requirements established by the National Banking Acts (NBAs) dictated the amounts and locations of interbank deposits, thereby reshaping the structure of U.S. bank networks. Using unique data on bank balance sheets, along with detailed interbank deposits in 1862 and 1867 in Pennsylvania, we study how the NBAs changed the bank network structure. Further, we quantify the effect on financial stability in a model of interbank networks with liquidity withdrawal. We find that the NBAs led to a concentration of interbank deposits at both the city and the bank level, creating systemically important banks in major financial centers. Our quantitative results show that the newly emerged system was "robust-yet-fragile" -- while the concentration of linkages made the system more resilient in general, it increased the likelihood of contagion when financial center banks faced large shocks.
    Keywords: Bank networks, financial interconnectedness, systemic risk, contagion, liquidity withdrawal, the National Banking Acts
    Date: 2016–12–06
  34. By: Becker, Sascha O. (University of Warwick); Fetzer, Thiemo (University of Warwick)
    Abstract: The outcome of the UK’s Brexit Referendum has been blamed on political factors, such as concerns about sovereignty, and economic factors such as migration, and trade integration. Analyses of the cross-sectional referendum voting pattern cannot explain how anti-EU sentiment built up over time. Since UKIP votes in the 2014 EU Parliament elections are the single most important predictor of the Vote Leave share, understanding the rise of UKIP might help to explain the role of political and economic factors in the build-up of Brexit. This paper presents new stylized facts suggesting that UKIP votes in local, national and European elections picked up dramatically in areas with weak socio-economic fundamentals, but only after 2010, at the expense of the Conservatives, and partly also Labour. The timing suggests that the Government’s austerity measures might have been a crucial trigger that helped to convert economic grievances into UKIP votes, putting increasing pressure on the Conservatives to hold the EU Referendum.
    Keywords: : Political Economy, Austerity, Globalization, Voting, EU JEL Classification: R23, D72, N44, Z13
    Date: 2018
  35. By: Carlos Contreras Carranza (Departamento de Economía de la Pontificia Universidad Católica del Perú)
    Abstract: Presentamos una interpretación sintética de la economía peruana, desde una perspectiva histórica. Resaltamos su naturaleza dual, entre un sector de subsistencia y uno exportador, este último más pequeño demográficamente que el otro, pero más dinámico. Ambos están conectados, sin embargo, por el mercado de trabajo y algunos otros mercados que se activan esporádicamente. El Estado nutre sus finanzas, básicamente del segundo sector, por lo que tiende a favorecerlo con sus políticas e inversiones. El artículo reseña la instauración del modelo liberal en el Perú desde los años noventa y su consolidación en las décadas siguientes y explica cómo al compás del último auge exportador iniciado en la misma fecha, el Estado inició una nueva modalidad de conexión con el sector de subsistencia mediante programas sociales de transferencias de dinero condicionadas. JEL Classification-JEL: N16 , O54 , P49
    Keywords: Dualismo económico , Economía peruana , Historia contemporánea , Reformas liberales
    Date: 2018
  36. By: Daniele Girardi (Department of Economics, University of Massachusetts, Amherst)
    Abstract: Despite growing interest in the effect of political-institutional factors on the economy, causally identified evidence on the reaction of financial markets to electoral outcomes is still relatively scarce, due to the difficulty of isolating causal effects. This paper fills this gap: we estimate the ‘average treatment effect’ of left-wing (as opposed to conservative) electoral victories on share prices, exchange rates, and sovereign bond yields and spreads. Using a new dataset of worldwide national (parliamentary and presidential) elections in the post-WWII period, we obtain a sample of 954 elections in which main parties/candidates can be classified on the left-right scale based on existing sources and monthly financial data are available. To achieve causal identification, we employ a dynamic regression-discontinuity design, thus focusing on close elections. We find that left-wing electoral victories cause significant and substantial short-term decreases in stock market valuations and in the US dollar value of the domestic currency, while the response of sovereign bond markets is muted. Effects at longer time horizons (6 to 12 months) are very dispersed, signaling large heterogeneity in medium-run outcomes. Stock market and exchange rate effects are stronger and more persistent in elections in which the Left’s proposed economic policy is more radical, in developing economies, and in the post-1990 period.
    Keywords: political shocks, elections, financial markets, regression discontinuity, stock market, exchange rate, bond yields
    JEL: P16 N2 E02 D72 G1 H0
    Date: 2018

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