nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2018‒05‒28
forty papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Inequality and Instability By Bain, George Sayers
  2. The Roots of a Dual Equilibrium: GDP, Productivity and Structural Change in the Italian Regions in the Long-run (1871-2011) By Emanuele Felice
  3. A Critique on the Social Justice Perspectives in the Works of Friedrich A. Hayek By Anusha Mahendran
  4. Evolution of mortgage regulations in Asian countries By Rita Yi Man Li; Beiqi Tang
  5. A VAR evaluation of classical growth theory By Tim Lueger
  6. Walking on two legs: Growth accounting with labor-saving and capital-saving technical change By Pierre Barral; Mehdi Senouci
  7. The random character of the financial fluctuation (1930 -1960): Construction and polysemy of a research object By Thomas Delcey
  8. Traditional Agricultural Practices and the Sex Ratio Today By Alesina, Alberto; Giuliano, Paola; Nunn, Nathan
  9. Hayek in the context of South Korea By Hoon Hong
  10. The Geopolitics of Renewable Energy By O'Sullivan, Meghan; Overland, Indra; Sandalow, David
  11. The Age Distribution of the Labour Force as Evidence of Prior Events: The Italian Data for 1911 and the Long Swing in Investment from Unification to the Great War By Roberto Pezzuto
  12. Predicting Stock Market Movements in the United States: The Role of Presidential Approval Ratings By Rangan Gupta; Patrick Kanda; Mark E. Wohar
  13. Rentier-financier capitalism By Pereira, Luiz C. Bresser
  14. Bad Investments and Missed Opportunities? Postwar Capital Flows to Asia and Latin America By Ohanian, Lee E.; Restrepo-Echavarria, Paulina; Wright, Mark L. J.
  15. Philosophical and historical causes of social transformation in the attitude of Ibn khaldun By Mohammad Akvan; Mahmood Seyyed
  16. Stunting: past, present, future By Schneider, Eric B.
  17. The enduring link between demography and inflation By Mikael Juselius; Előd Takáts
  18. Impact of green office buildings on productivity. A literature review By Ion Anghel; Costin Ciora
  19. The career dynamics of high-skilled women and men: Evidence from Sweden By Albrecht, James; Bronson, Mary Ann; Skogman Thoursie, Peter; Vroman, Susan
  20. How Hard Is It to Maximise Profit? Evidence from a 19-th Century Italian State Monopoly By Ciccarelli, Carlo; De Fraja, Gianni; Tiezzi, Silvia
  21. Business Cycles, Credit Cycles, and Bank Holdings of Sovereign Bonds: Historical Evidence for Italy 1861-2013 By Silvana Bartoletto; Bruno Chiarini; Elisabetta Marzano; Paolo Piselli
  22. Towards a Marxist theory of financialised capitalism By Powell, Jeffrey
  23. Sustainable economic policy and well-being: The relationship between adjusted net savings and subjective well-being By Mubashir Qasim; Arthur Grimes
  24. Community currency, local currency, negotiable voucher and others: a theoretical attempt to classify money substitutes into a system By József Varga; Gábor Sárdi; Tamás Kovács
  25. Structural Change and Patterns of Inequality in the South African Labour Market By Haroon Bhorat; Safia Khan
  26. Directed Technological Change and Technological Congruence: A New Framework for the Smart Specialization Strategy. By Antonelli, Cristiano; Feder, Christophe; Quatraro, Francesco
  27. Colonial Legacy, State-building and the Salience of Ethnicity in Sub-Saharan Africa By Ali, Merima; Fjeldstad, Odd†Helge; Jiang, Boqian; Shifa, Abdulaziz B.
  28. El sector minero antioqueño en la segunda mitad del siglo XIX: construcción hacia una economía modernizadora By Cindy Paola Leal Valero
  29. Working Moms, Childlessness, and Female Identity By Steinhauer, Andreas
  30. Populism and the Economics of Globalization By Rodrik, Dani
  31. To Clarify the Role of Historical Semantics in Lexicostatistical Substantiations of Hypotheses Distant Linguistic Affinity By Starostin, Georgiy; Trofimov, Artem
  32. The virtues of dialogue between academics and businessmen By Lise Arena; Leonard Minkes
  33. Keynes: ley de Say y demanda de dinero. By Barón Ortegón, Brayan Alexander
  34. The Social Trajectory of a Finance Professor and the Common Sense of Capital By Marion Fourcade; Rakesh Khurana
  35. Towards a Critique of Neoclassical Economics: how to Neutralize and Radicalize our Understanding of the Postulate of Independence of Agents and Goods By Hoon Hong
  36. Do we really know that US monetary policy was destabilizing in the 1970s? By Qazi Haque; Nicolas Groshenny; Mark Weder
  37. The Fruits of Disaggregation: the Engineering Industry, Tariff Protection, and the Industrial Investment Cycle in Italy, 1861-1913 By Stefano Fenoaltea
  38. Diversity and Conflict By Arbatli, Cemal Eren; Ashraf, Quamrul; Galor, Oded; Klemp, Marc
  39. Kann Karl Marx die Finanzkrise 2007/08 erklären? Eine Einordnung seiner Geld- und Kredittheorie By Neuberger, Doris
  40. No country for young people. Poverty and age in Italy, 1948-2018 By Massimo Baldini; Giulia Mancini; Giovanni Vecchi

  1. By: Bain, George Sayers
    Abstract: Inequality of wealth and income is currently a hotly debated subject not only in the academy but also in society more generally. The protagonists disagree about how inequality should be meeasured. But however they measure it - whether by Gini coefficients, the share of the total distribution earned by a particular group (e.g., the top one per cent), or other ways - they generally agree that inequality has greatly increased in a wode range of countries since the mid-1970s. Agreement does not exist, however, about what causes inequality, what problems result from it, and what might be done to solve them. This paper attempts to answer these questions by reviewing and assessing a diverse literature drawn from economic theory, political science, sociology,philosophy, and economic and financial history.
    Keywords: inequality; equality; economic and social instability; rent-seeking; capitalism; fairness; social mobility;
    JEL: P10
    Date: 2018–05–14
  2. By: Emanuele Felice (Università degli Studi "G. d'Annunzio" Chieti - Pescara)
    Abstract: This paper explores the evolution of Italy's regional inequality in the long run, from around Unification (1871) until our days (2011). To this scope, a unique and up-to-date dataset of GDP per capita, GDP per worker (productivity) and employment, at the NUTS II level and at current borders, for the whole economy and its three branches - agriculture, industry, services - is here presented and discussed. Sigma and beta convergence are tested for GDP per capita, productivity and workers per capita (employment/population). Four phases in the history of regional inequality in post-unification Italy are confronted: mild divergence (the liberal age), strong divergence (the two world wars and Fascism), general convergence (the golden age) and the "two-Italies" polarization. In this last period, for the first time GDP and productivity, as well as workers per capita and productivity, have been following opposite paths: the North-South divide increased in GDP, decreased in productivity.
    Keywords: Italy, regional convergence, long-run growth, economic geography, institutions
    JEL: O11 O18 O52 N13 N14
    Date: 2017–08
  3. By: Anusha Mahendran (Curtin University)
    Abstract: Given that the academic work of Friedrich Hayek has received eminent accolades (including the 1974 Nobel Memorial Prize in Economics Sciences) and has been well recognised and widely referenced, this paper reviews the denial of the concept of social justice in many of the academic economic theory papers written by the renowned British-Austrian economist. The paper therefore effectively provides a critical analysis of some of Hayek’s socio-political and economic theories relating to this issue. It attempts to do this by adopting the perspective of an objective and analytical economist with reference to and by examining the content of three of Hayek’s well known economic texts, namely The Road to Serfdom (1944); Law, Legislation and Liberty (1973-79) and the Fatal Conceit Conceit: The Errors of Socialism (1988).
    Keywords: social justice, economics, Friedrich Hayek
    Date: 2018–04
  4. By: Rita Yi Man Li; Beiqi Tang
    Abstract: Since the mid-1970s, at least six banking crises correlated with housing bubbles. When housing prices reach the peak or fall sharply, financial crises occur. In some places, housing is an economic growth driver and corner stone of social stability. Whilst mortgage finance plays indispensable role financial system stability, regulations provide useful framework in governing the rules of games for many homeowners. Well or poor design of mortgage regulations often affects economy from this perspective. History tells many of the changes in regulations are due to the major economic incidents. In this paper, we aim to study the evolution of mortgage finance regulation in Japan, Hong Kong, China, Korea, Singapore and Thailand.
    JEL: R3
    Date: 2017–07–01
  5. By: Tim Lueger (Darmstadt University of Technology)
    Abstract: Over the past two decades, there have been numerous attempts in economic theory to model the historical regime of a Malthusian trap as well as the transition to growth in one coherent framework, or in other words, a unified growth theory. However, in most of these models, an important effect suggested by Malthus has been frequently omitted. By including what he had called ?the great preventive check? in the traditional Malthusian model which is based on the principle of population, the principle of diminishing returns and the principle of labour division, the transition can be modelled in a very simple dynamic macroeconomic framework. The aim of this paper is to first construct and calibrate the suggested classical model and to eventually employ a conventional VAR-Method to provide evidence of the above principles using country-specific annual historical data on crude birth rate, crude death rate and GDP per capita growth rate. As a result, it is argued that emerging economies follow a universal macroeconomic pattern of development. A decreasing death rate is succeeded by a decreasing birth rate which at the same time induces GDP per capita to rise sustainably. The correspondingly advanced microeconomic theory suggests that increasing life expectancy tends to create a demographic structure that is much less prone to overpopulation.
    Keywords: Demographic Transition, Malthusian Trap, Unified Growth Theory, Classical Growth Theory, Vectorautoregression
    JEL: B12 J11 O11
    Date: 2018–04
  6. By: Pierre Barral; Mehdi Senouci (LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec)
    Abstract: We present an alternative to growth accounting à la Solow, on the same set of variables, that provides a metric for labor-saving technical change ('λ') and capital-saving technical change ('µ'). These two components are identified through the variations of the factor shares, which we assume to reflect marginal productivities. We run our algorithm using BEA data from 1948 to 2015, and compare the predictive power of our time series of (λ_t,µ_t) with the one of the Solow residual. Through simple regressions, we find: (i) that λ and µ are as good predictors of the growth rate of GDP per capita as the Solow residual, and (ii) that λ and µ, together with capital accumulation, are strong predictors of the variation of the factor shares, while the Solow residual is not. We conclude that a bi-dimensional representation of productivity has a stronger empirical relevance than the usual linear representation; however the former carries some different theoretical properties than the latter – notably on the consequences of capital accumulation.
    Keywords: capital accumulation,factor-saving technical change,Productivity
    Date: 2018–08–27
  7. By: Thomas Delcey (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne)
    Abstract: The historical construction of modern financial economics has been widely analyzed autonomously from the rest of the economic thought. Hence, an unanswered question is how financial markets become a specific topic of research distinct from the rest of economics research and requiring its own subfield in the second half of the 20 th century. The present article aims to take a first step to answer this issue. We analyzed the construction of one of the main and the earlier object of research in financial economics: the Random Character of Financial Fluctuation (RCFF). We show that the RCFF has been understood in two different ways: (a) a former approach that focuses on constant patterns and denies the random fluctuation as an object itself, (b) a new approach that focuses on the explanation of the random fluctuation itself. We conclude that the second approach will prevail after the 1960s in financial economics.
    Date: 2018–05–16
  8. By: Alesina, Alberto (Harvard University); Giuliano, Paola (University of California, Los Angeles); Nunn, Nathan (Harvard University)
    Abstract: We study the historical origins of cross-country differences in the male-to-female sex ratio. Our analysis focuses on the use of the plough in traditional agriculture. In societies that did not use the plough, women tended to participate in agriculture as actively as men. By contrast, in societies that used the plough, men specialized in agricultural work, due to the physical strength needed to pull the plough or control the animal that pulls it. We hypothesize that this difference caused plough-using societies to value boys more than girls. Today, this belief is reflected in male-biased sex ratios, which arise due to sex-selective abortion or infanticide, or gender-differences in access to family resources, which results in higher mortality rates for girls. Testing this hypothesis, we show that descendants of societies that traditionally practiced plough agriculture today have higher average male-to-female sex ratios. We find that this effect systematically increases in magnitude and statistical significance as one looks at older cohorts. Estimates using instrumental variables confirm our findings from multivariate OLS analysis.
    Keywords: sex ratio, gender roles, cultural transmission, historical persistence
    JEL: J1 N00 Z1
    Date: 2018–04
  9. By: Hoon Hong (School of Economics, Yonsei University)
    Abstract: This paper aims to place Hayek¡¯s evolutionary approach in the context of South Korea, focusing on South Korea¡¯s socioeconomic development in recent decades. On reviewing his perspective in broad outline, this paper points out some of its weaknesses as regards the following issues: order and rules; units of agency and being; motivation; institutions and rules; knowledge; leadership.
    Keywords: JEL Classification:
    Date: 2018–05
  10. By: O'Sullivan, Meghan (Harvard University); Overland, Indra (Norwegian Institute of International Affairs); Sandalow, David (Columbia University)
    Abstract: For a century, the geopolitics of energy has been synonymous with the geopolitics of oil and gas. However, geopolitics and the global energy economy are both changing. The international order predominant since the end of World War II faces mounting challenges. At the same time, renewable energy is growing rapidly. Nevertheless, the geopolitics of renewable energy has received relatively little attention, especially when considering the far reaching consequences of a global shift to renewable energy.
    Date: 2017–06
  11. By: Roberto Pezzuto (MSc. Candidate, Department of Economics and Finance, University of Rome Tor Vergata)
    Abstract: Data on the age distribution of the labour force, by activity, appear in numerous early twentieth-century European censuses; but economic historians seem never to have explored them. This paper provides an initial examination of the age-distribution data in the Italian census of 1911, showing how they shed light on various aspects of the economy of the day, and on its preceding path. A point of particular interest is that these data reflect the long cycle in construction, and in the production of construction materials. They further suggest that the long cycle of the engineering industry documented by its aggregate metal consumption was indeed present in the production of construction-related hardware, but notably absent from the production of machinery and, derivatively, industrial investment. This last point denies the empirical premise of the extant interpretations of Italy's post-Unification industrial growth; but it sits we ll with the new disaggregated time-series estimates of the engineering industry's product.
    Keywords: Demographic Trends; Geographic Labour Mobility; Job, Occupational, and Intergenerational Mobility; Manufacturing and Construction in Europe: Pre-1913
    JEL: J11 J61 J62 N33 N63
    Date: 2017–11
  12. By: Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Patrick Kanda (Laboratoire THéorie Économique, Modélisation et Applications (THEMA), Université de Cergy-Pontoise, France); Mark E. Wohar (College of Business Administration, University of Nebraska at Omaha, Omaha, USA and School of Business and Economics, Loughborough University, Leicestershire, UK)
    Abstract: In this paper we analyze whether presidential approval ratings can predict the S&P500 returns over the monthly period of 1941:07 to 2018:04, using a dynamic conditional correlation multivariate generalized autoregressive conditional heteroscedasticity (DCC-MGARCH) model. Our results show that, standard linear Granger causality test fail to detect any evidence of predictability. However, the linear model is found to be misspecified due to structural breaks and nonlinearity, and hence, the result of no causality from presidential approval ratings to stock returns cannot be considered reliable. When we use the DCC-MGARCH model, which is robust to such misspecifications, in 69 percent of the sample period, approval ratings in fact do strongly predict the S&P500 stock return. Moreover, using the DCC-MGARCH model we find that presidential approval rating is also a strong predictor of the realized volatility of S&P500. Overall, our results highlight that presidential approval ratings is helpful in predicting stock return and volatility, when one accounts for nonlinearity and regime changes through a robust time-varying model.
    Keywords: US Presidential Approval Ratings, DCC-MGARCH, Stock Returns, Realized Volatility, S&P500
    JEL: C32 G10
    Date: 2018–05
  13. By: Pereira, Luiz C. Bresser
    Abstract: Since the beginning of the twentieth century there are three basic social classes: the capitalist class or bourgeoisie, the working class and the professional class or technobureaucracy. In the first part of the century, the high technobureaucrats replaced the business entrepreneurs in the management of the corporations; from the 1980s, the rentier capitalist, most of them heirs, replaced the entrepreneurs in the ownership of such corporations. To manage their wealth a special class of professionals emerged, the financiers, bright people formed in the best universities, who assumed also the role of economic policymakers and of ideologues or organic intellectuals. They adopt the neoliberal ideology, and, as its justification, either the neoclassical, or the Austrian economics.
    Date: 2018–05
  14. By: Ohanian, Lee E. (Federal Reserve Bank of Minneapolis); Restrepo-Echavarria, Paulina (Federal Reserve Bank of St Louis); Wright, Mark L. J. (Federal Reserve Bank of Minneapolis)
    Abstract: After World War II, international capital flowed into slow-growing Latin America rather than fast-growing Asia. This is surprising as, everything else equal, fast growth should imply high capital returns. This paper develops a capital flow accounting framework to quantify the role of different factor market distortions in producing these patterns. Surprisingly, we find that distortions in labor markets — rather than domestic or international capital markets — account for the bulk of these flows. Labor market distortions that indirectly depress investment incentives by lowering equilibrium labor supply explain two-thirds of observed flows, while improvement in these distortions over time accounts for much of Asia’s rapid growth.
    Keywords: Capital flows; Labor markets; Domestic capital markets; International capital markets
    JEL: E21 F21 F41 J20
    Date: 2018–05–14
  15. By: Mohammad Akvan (Islamic Azad University); Mahmood Seyyed (Department of History, Central Tehran Branch, Islamic Azad University)
    Abstract: Every society, whether simple and elementary or complex and advanced, has changed in the historical context. This change has always been due to some reasons which have absorbed historians', philosophers' and researchers' attention. In fact, change and transformation have been considered as integral parts, inherent nature and internal features of human societies. What matter is that every change and transformation happens because of some reasons that have historical, cultural, political and social roots, all of which realize in the context of history and force the human society to experience change and transformation.Ibn Khaldun as a social researcher and history philosopher has constantly paid attention to the inherent dynamics and internal upheaval of the human society and discussed its movement course, quality of change procedure in the context of history. He concerned both short-term and long-term changes. He has spent time seeking such social changes. Ibn Khaldun' attitude to social changes can be considered as a kind of evolutionism, because he in his historical explanation and analysis of human communities and relevant processes, looked at both evolution and its causes and also various stages of social transformation and its features. In fact, from Ibn Khaldun's point of view, movement from a certain kind of community to another takes place in a longitudinal link and communities are located in cyclic and evolutionary process, that is, every community comes into existence and takes steps to perfection, it begins its downward trend then, finally changes into another one. What matters in the attitude of Ibn Khaldun, is that he never believes this cyclic and evolutionary movement of communities and their repeatability to be algebraic and uniform. In his opinion this movement is a kind of evolution and creation accompanied by growth and perfection. Thus societies emerge, are formed, grow and develop, eventually are transformed, but their existence signs, that is, culture and civilization never disappear completely and just are transferred from one community to another. So another community with previous cultural background and civilization is formed in another horizon. Therefore, in Ibn Khaldun's view, change and transformation is not a closed cycle but it has an open horizon toward perfection and progress. In this article, efforts have been made to study the historical, philosophical causes of social changes and transformation from Ibn Khaldun's perspective.
    Keywords: Ibn Khaldun, social transformation, social evolution, perfectionism, cyclic movement , evolutionary movement .
    Date: 2018–04
  16. By: Schneider, Eric B.
    Abstract: Child malnutrition is a very important global health challenge. 155 million children globally suffer from malnutrition and are consequently stunted, much shorter than healthy children at the same age. Reducing stunting was an important target in the Millenium Development Goals and is also a target under Goal 2 of the Sustainable Development Goals. This report summarises recent research on child stunting that was presented and discussed at a conference, STUNTING: PAST, PRESENT AND FUTURE, at the London School of Economics and Political Science in September 2017. The conference brought together academics across a wide range of disciplines with policy experts and influencers from the third sector. There were four key lessons that participants took away from the conference. First, stunting was present in currently developed countries at the beginning of the twentieth century, which suggests that reductions in stunting were a corollary to the secular increase in mean adult height across the twentieth century. Second, there needs to be more research on catchup growth in adolescence to determine whether catch-up growth in height is also associated with improvements in other dimensions of health and human capital that are affected by malnutrition, for instance cognitive deficiencies. If interventions in adolescence can be effective, then it may be possible to mitigate some of the consequences of stunting for already stunted children. Third, researchers need to be aware of the large degree of spatial variation in stunting within countries and the distinct age pattern of stunting between ages 0 and 5 when trying to understand why children become stunted. Fourth, participants agreed that more interdisciplinary collaboration is necessary to design experiments and models to capture the multi-dimensional nature of child stunting.
    JEL: N0 I1
    Date: 2017–09
  17. By: Mikael Juselius; Előd Takáts
    Abstract: Demographic shifts, such as population ageing, have been suggested as possible explanations for the past decade's low inflation. We exploit cross-country variation in a long panel to identify age structure effects in inflation, controlling for standard monetary factors. A robust relationship emerges that accords with the lifecycle hypothesis. That is, inflationary pressure rises when the share of dependants increases and, conversely, subsides when the share of working age population increases. This relationship accounts for the bulk of trend inflation, for instance, about 7 percentage points of US disinflation since the 1980s. It predicts rising inflation over the coming decades.
    Keywords: demography, ageing, inflation, monetary policy
    JEL: E31 E52 J11
    Date: 2018–05
  18. By: Ion Anghel; Costin Ciora
    Abstract: The knowledge economy created the demand for the new type of working space. The office buildings replaced the former factories and currently the number of green building have increased significantly. Many studies have pointed out the impact of green buildings on productivity, and this paper's main purpose is to integrate the growing body of literature. Moreover, the changing working methods like working from home will continue to have an effect on this sector. We discussed this in the paper together with perspectives on future working and office development.
    Keywords: Green Buildings; Investments; Performance; Productivity
    JEL: R3
    Date: 2017–07–01
  19. By: Albrecht, James (Department of Economics, Georgetown University); Bronson, Mary Ann (Department of Economics, Georgetown University); Skogman Thoursie, Peter (Department of Economics, Stockholm University); Vroman, Susan (Department of Economics, Georgetown University)
    Abstract: In this paper, we use matched worker-firm register data from Sweden to examine the career dynamics of high-skill women and men. Specifically, we track wages for up to 20 years among women and men born in the years 1960 - 70 who completed a university degree in business or economics. These women and men have similar wages and earnings at the start of their careers, but their career paths diverge substantially as they age. These men and women also have substantial differences in wage paths associated with becoming a parent. We look at whether firm effects account for the differences we observe between women's and men's wage profiles. We document differences between the firms where men work and those where women work. However, a wage decomposition suggests that these differences in firm characteristics play only a small role in explaining the gender log wage gap among these workers. We then examine whether gender differences in firm-to-firm mobility help explain the patterns in wages that we see. Men and women both exhibit greater mobility early in their careers, but there is little gender difference in this firm-to-firm mobility. We find that the main driver of the gender difference in log wage profiles are that men experience higher wage gains than women do both as "switchers" and as "stayers".
    Keywords: Wages; Earnings; Gender gaps; Firms
    JEL: J16 J31
    Date: 2018–05–22
  20. By: Ciccarelli, Carlo; De Fraja, Gianni; Tiezzi, Silvia
    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: 19-th century Italy; Demand for Tobacco; Habit formation.; Multiproduct monopoly profit maximisation; QAI demand system
    JEL: I18 L12 L66 N33
    Date: 2018–05
  21. By: Silvana Bartoletto (University of Naples, "Parthenope"); Bruno Chiarini (University of Naples, "Parthenope"); Elisabetta Marzano (University of Naples, "Parthenope" and CESifo); Paolo Piselli (Bank of Italy, DG Economics, Statistics and Research)
    Abstract: We propose a joint dating of Italian business and credit cycles on a historical basis by applying a local turning-point dating algorithm to the level of the variables. Along with short cycles corresponding to traditional business cycle fluctuations, we also investigate medium cycles, because there is evidence that financial booms and busts are longer and more persistent than business cycles. After comparing our cycles with the prominent qualitative features of the Italian economy, we carry out some statistical tests for comovement between credit and business cycles and find evidence that credit and business cycles are poorly synchronized, especially in the medium term. Nonetheless, we demonstrate that only for medium-term frequencies the coincidence of financial downturns and economic recessions significantly increases output losses. We do not find evidence that the credit cycle leads the business cycle, both in medium and short-term fluctuations. On the contrary, in the short cycle, we find some evidence that the business cycle leads the credit cycle. Finally, credit and business cycle comovement increases when credit embodies public bonds held by banks, i.e., bank financing to the public sector.
    Keywords: business fluctuations, financial cycle, bank credit, medium-term fluctuations
    JEL: E32 E44 N13 N14
    Date: 2017–11
  22. By: Powell, Jeffrey
    Abstract: In the rapid growth of the literature on financialisation, the term risks becoming meaningless (‘take x, add finance’). This contribution first reviews this literature, highlighting characteristic empirical features at the macroeconomic level and their variegation across different institutional contexts, then turning to meso- and micro-level multidisciplinary studies of how processes of financialisation have manifest in the transformed behaviour of firms, states and households, as well as in the changing mode of provision of public services and the appropriation of the commons. Marxist attempts to theorize the essences of financialisation are examined and found wanting. Two proposals are made in the spirit of advancing this project. First, financialisation as cyclical process must be disentangled from financialised capitalism as secular stage. Second, it is argued that the emergence of financialised capitalism as a new stage within mature capitalism is linked with the central role played by finance in the internationalisation of the circuit of production.
    Keywords: Financialisation; Financialised capitalism; internationalisation; global production networks; Marxist theory;
    JEL: B51 F36
    Date: 2018–05–22
  23. By: Mubashir Qasim (University of Waikato); Arthur Grimes (Motu Economic and Public Policy Research)
    Abstract: We analyse the relationship between subjective wellbeing (SWB) and the World Bank’s measure of a country’s economic sustainability, adjusted net savings (ANS). We model SWB at individual level and at aggregated group level as a function of past ANS levels, after controlling for a country’s initial levels of SWB. The empirical models utilise World Values Surveys (WVS) data for self-reported life-satisfaction (our proxy for SWB). Our results show that ANS is negatively associated with future SWB outcomes over relatively short timespans (10-15 years) but this relationship is neutralised, or even reversed, for a longer timespan (20 years). The results demonstrate an important challenge in political economy. Governments that choose to save less in the short term may be able to spend more on the well-being of the current generation (i.e. current voters) but they diminish the reserves available to improve future generations’ well-being. At a more technical level, our results reinforce the concept that ANS is a useful sustainability indicator for infinite (or at least very long) time horizons, but it is not a good indicator of well-being developments over short time horizons.
    Keywords: Adjusted net savings, subjective wellbeing, intergenerational sustainability
    JEL: L92 L96 N97
    Date: 2018–05
  24. By: József Varga (Kaposvár University, Faculty of Economics); Gábor Sárdi (Kaposvár University, Faculty of Economics); Tamás Kovács (University of Sopron Alexandre Lamfalussy Faculty of Economics)
    Abstract: In our study we tried to group money substitutes including complementary currencies known as "community currencies? in particular pursuing a new kind of approach. This objective was supported by the question whether there is a structuring principle according to which we can make groups of the different types of currencies and money substitutes in a structured manner. We have substantial and continuously developing literature of community currencies. However, as we know there are not many publications and studies about their classification. It is true that several authors and organizations have tried to make categories of currencies that exist besides legal currencies or that can be operated (e.g. Lietaer, Kennedy, Regiogelde. V Cooperation, Utterguggenberger Institution, Blanc, Bode, Boonstra and his colleagues, Greco, Mertignoni), but our opinion is that they are incomplete.On the one hand the aspects of classification developed in literature do not put the criteria of the classification into the whole monetary system and the currency system, on the other hand the main goal of certain criteria was not to create a structured system but to classify and to categorise the unique trials of money substitutes on the basis of some criteria. In our study we try to fill the two gaps above placing the certain types of money substitutes into a single system and a conceptual scheme.
    Keywords: community currency, money substitutes, classification
    JEL: E40 E42 R51
    Date: 2018–04
  25. By: Haroon Bhorat; Safia Khan (University of Cape Town; Director)
    Abstract: In the post-apartheid era South Africa has found itself in a long run growth trap with growth in Agriculture and Manufacturing notably absent from the economy, resulting in an inability of the economy to absorb excess labour supply. To understand the role that structural change has had on inequality in the labour market this paper provides an overview of key labour market trends in the post-apartheid era followed by an analysis of labour demand trends, and structural transformation. The impact of structural transformation on wage shifts and wage inequality is investigated pointing to the existence of a “missing middle” in the real-earnings distribution of those employed. Post-apartheid wage inequality is explained using a participation, employment and quantile regression framework, showing that wage inequality has increased over time. The role of unions, the impact of the New Minimum Wage, and the influence of legislative changes such as the regulatory amendment accounting for workers in Temporary Employment Services, and the employment tax incentive is evaluated. We show that in the two decades following the end of apartheid South Africa’s growth path has been characterised by a rapid relative expansion in the services (or tertiary) sector resulting in the marginalization of workers in the middle of the skills and wage distribution. Ultimately, inequality in South Africa has been replicated through a reversion to a skills biased employment trajectory. With policies in place to protect the bottom end worker, a hollowing out of workers in the middle of the wage distribution has arisen. This “missing middle” is a key new manifestation of the persistent and high inequality in the South African labour market.
    Keywords: Structural change, inequality, labour markets, missing-middle, wage distribution, south Africa, labour market
    JEL: J21 J3 J6 N17 N37 O1 O14 O17
    Date: 2018–03
  26. By: Antonelli, Cristiano; Feder, Christophe; Quatraro, Francesco (University of Turin)
    Abstract: Technological congruence implements the analysis of directed technological change showing how the match between the relative size of outputs’ elasticity and the relative abundance and cost of production factors has powerful effects on total factor productivity (TFP). Smart specialization strategies can rely upon technological congruence to support the introduction and diffusion of new directed technologies characterized by the best mix of factors relative cost -as determined by pecuniary externalities in the regional factor markets- and output elasticity. The evidence of 278 European regions in the years 1980-2011 confirms that the levels and the changes in technological congruence, brought about by the introduction of directed technological changes, have significant effects on the levels and the changes of TFP. The key policy implication is that the optimal S3 policy mix should not only look at the history of local industrial or technological specializations, but it should also take into account the pecuniary externalities that characterize local factor markets to promote technological changes directed to augmenting the output elasticity of the cheaper regional production factors.
    Date: 2018–04
  27. By: Ali, Merima; Fjeldstad, Odd†Helge; Jiang, Boqian; Shifa, Abdulaziz B.
    Abstract: African colonial history suggests that British colonial rule may have undermined state centralisation due to legacies of ethnic segregation and stronger executive constraints. Using micro†data from anglophone and francophone countries in sub†Saharan Africa, we find that anglophone citizens are less likely to identify themselves in national terms (relative to ethnic terms). To address endogeneity concerns, we utilise regression discontinuity by focusing on observations near anglophone−francophone borders, both across countries and within Cameroon. Evidence on taxation, security and the power of chiefs also suggests weaker state capacity in anglophone countries. These results highlight the legacy of colonial rule on state†building.
    Keywords: Governance,
    Date: 2018
  28. By: Cindy Paola Leal Valero
    Abstract: Con el fin de realizar un aporte a la teoría del desarrollo local, este trabajo pretende responder a la pregunta de cómo se articula el desempeño económico de Antioquia con la minería decimonónica. A partir de un análisis cualitativo entre las investigaciones que han tratado el tema, las fuentes primarias recolectadas y el estudio llevado a cabo en la empresa minera El Zancudo, enfocado en su impacto económico regional, se ha encontrado que la minería, como respuesta a los intereses extractivos de los empresarios y favorecida por el contexto político y económico, dinamiza los sectores productivos e impulsa la industrialización y formación de capital humano regional, promoviendo los elementos para el despegue económico antioqueño de la segunda mitad del siglo XIX.
    Keywords: Minería, Antioquia, economía antioqueña, empresa El Zancudo, industrialización.
    JEL: L72 N01 N16 N56 N96 O10 O13 O14
    Date: 2018–05–18
  29. By: Steinhauer, Andreas
    Abstract: In this paper I provide empirical evidence that the strength of beliefs regarding the harm children suffer when their mothers work plays an important role in explaining gender gaps in labor market outcomes and fertility trends. I exploit a unique setting in Switzerland and compare outcomes of one cohort of Swiss women born in the 1950s either into the French or German ethno-linguistic group. This allows me to compare outcomes of women exposed to different norms regarding working mothers while holding constant typical confounding factors such as composition, labor market opportunities, and work-family policies. Consistent with the strong belief that children suffer with working mothers in the German region, I find that German-born women are 15-25% less likely to work as mothers and 20-20% more likely to remain childless compared to their French-born peers. Only the extensive margins show marked differences and especially among the highly educated. I argue that an identity framework along the lines of Akerlof and Kranton (2000) can rationalize these patterns in a tractable way.
    JEL: J13 J16 J22 Z10
    Date: 2018–05
  30. By: Rodrik, Dani (Harvard University)
    Abstract: Populism may seem like it has come out of nowhere, but it has been on the rise for a while. I argue that economic history and economic theory both provide ample grounds for anticipating that advanced stages of economic globalization would produce a political backlash. While the backlash may have been predictable, the specific form it took was less so. I distinguish between left-wing and right-wing variants of populism, which differ with respect to the societal cleavages that populist politicians highlight. The first has been predominant in Latin America, and the second in Europe. I argue that these different reactions are related to the relative salience of different types of globalization shocks.
    Date: 2017–06
  31. By: Starostin, Georgiy (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Trofimov, Artem (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: This preprint examines the role of historical semantics to substantiate hypotheses related to the postulation and verification of the so-called "macrofamilies" - taxonomic language units of a deep and super-deep chronological level. It is shown that, although one of the most formalized and reliable methods of such verification is usually lexicostatistics (the analysis of etymological coincidences between languages or language families at the level of "nuclear" basic vocabulary), at chronological levels exceeding 6-8 thousand years, the number of interlanguage parallels with completely coinciding semantics begins to decrease catastrophically, and in order to obtain more complete results for comparison, it is required to involve words with similar, and not coincident semantics - that is fraught with the discovery of "pseudo-castors" (random coincidences), if the semantic similarity is established intuitively and subjectively. The paper gives several examples of how to successfully circumvent the "semantic trap" by limiting the comparison to a formalized and strictly computed list of so-called. "Trivial" semantic transitions, widespread in different regions of the world.
    Date: 2018–04
  32. By: Lise Arena (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique); Leonard Minkes (University of Birmingham [Birmingham])
    Abstract: This article aims to understand the process of production of knowledge in the field of business organisation and in problems of administration. It argues that the acquisition of this type of knowledge is greatly assisted by the developments of dialogue between academics and industrialists. It looks at a method which has been applied in England during the period late 1940s to early 1970s in three academic seminars: the Seminar in Problems of Administration at the LSE (1947–1972); the Industrial Seminar at Birmingham University (late 1950s‒1972); and the BPhil Seminar in Economics of Industry at the University of Oxford (1957–1974). By the mid-1970s, these three seminars had ceased to exist and left room for the rapid development of management studies, on the one hand, and the formalisation of industrial economics (game theory), on the other.
    Keywords: University of Birmingham,empirical realism,seminar method,Management education,business organisation,LSE,University of Oxford
    Date: 2017
  33. By: Barón Ortegón, Brayan Alexander
    Abstract: In this bibliographic review, the Keynes‘main arguments against the Say’s law are gathered, this law was thought to be a special case of a broader and general theory and therefore more powerful as economic policy is concerned. These insights are vital, to understand Keynesian economics and its subsequent contributions in economic theory and economic policy.
    Keywords: Keynes,Say's Law, Economic theory, demand for money, uncertainty,
    JEL: B0 B2 B22 B31 E12
    Date: 2017–05–14
  34. By: Marion Fourcade (University of California [Berkeley]); Rakesh Khurana (Harvard Business School)
    Abstract: This paper traces the career of Michael Jensen, a Chicago finance PhD turned Harvard Business School professor to reveal the intellectual and social conditions that enabled the emergence and institutionalization of what we call the “neoliberal common sense of capital,” what others have called the “shareholder value” view of the American firm. Jensen's work was embraced by a generation of corporate raiders aggressively advancing new financial practices and discourses. His contribution, commonly understood as “agency theory,” was intertwined with the transformations in corporate management and governance of the last decades of the twentieth century—from the junk bond market in the 1980s to the exponential growth of CEO pay in the 1990s to the shareholder value management strategies of the 2000s. While debates about the spread of neoliberal ideas and governance tools have largely centered on the transformations of the state and international institutions or the role of actively organized intellectual networks, this essay emphasizes the importance of identifying specific carriers of particular transformations within the space of American “business discourse.”
    Keywords: Agency theory; Corporate governance; Executive pay; The firm; Michael Jensen; Neoliberalism; Shareholder value
    Date: 2017–06
  35. By: Hoon Hong (School of Economics, Yonsei University)
    Abstract: In line with Marx¡¯s Zur Kritik der Politischen Okonomie, this paper intends to work towards laying the groundwork for a critique of neoclassical economics (NC). For this goal, this paper attempts at: conceptualization of objects of analysis; revelation of assumptions; concentration on qualitative aspects; systemization; contextualization and socialization. On the basis of the view that NC is built upon two pillars: price mechanism; individuals¡¯ rational choices, this exploration offers preliminary results about NC¡¯s postulate of independence. This postulate can be specified as: (i) independence among individuals as agents; (ii) quasi-independence among goods (and resources); (iii) independence between an individual and goods or things. In refutation of NC¡¯s strong version of methodological individualism, an increasing number of studies advocate the existence of social relations and interdependent self. Moreover, complementarity or interdependence among goods is to be conceded on the basis of behavioral economics. Furthermore, the so-called socio-materiality lays stress on interdependence between an agent and things. Lastly, the significance of social norm and of qualitative aspects of price is demonstrated.
    Keywords: Marx, neoclassical economics, independence, interdependence, social relations, dialectics, context, behavioral economics JEL Classification:
    Date: 2018–05
  36. By: Qazi Haque; Nicolas Groshenny; Mark Weder
    Abstract: In this paper we examine whether or not monetary policy was a source of instability during the Great Inflation. We focus on a number of attributes that we see relevant for any analysis of the 1970s: cost-push or oil price shocks, positive trend inflation as well as real wage rigidity. We turn our artificial sticky-price economy into a Bayesian model and find that the U.S. economy during the 1970s is best characterized by a high degree of real wage rigidity. Oil price shocks thus created a trade-off between inflation and output-gap stabilization. Faced with this dilemma, the Federal Reserve reacted aggressively to inflation but hardly at all to the output gap, thereby inducing stability, i.e. determinacy.
    Keywords: Monetary policy, Great Inflation, Cost-push shocks, Trend inflation, Sequential Monte Carlo algorithm
    JEL: E32 E52 E58
    Date: 2018–05
  37. By: Stefano Fenoaltea (CESMEP, Department of Economics and Statistics "Cognetti de Martiis", University of Turin)
    Abstract: All the extant interpretations of united Italy's early industrial development focus on the long swing in industrial investment evident in the familiar indices of the engineering industry's aggregate product. Disaggregated production series for that industry have now been compiled. The evidence they incorporate establishes that the long swing that dominates the aggregate was actually in the production of hardware, tied to investment in infrastructure. The production of machinery followed a different path: against the extant literature it shows that tariff hikes were influential, and above all that industry's purchases of (domestic and foreign) equipment grew very steadily decade after decade. Industrial investment did not grow faster than before in the 1880s or over the belle époque, it did not follow the long swing at all: the disaggregation of the engineering-industry product series has undercut the empirical premise of sixty years of scholarship.
    Keywords: industrialization, protection, investment cycle
    JEL: E01 N13 N63
    Date: 2017–08
  38. By: Arbatli, Cemal Eren (National Research University); Ashraf, Quamrul (Williams College); Galor, Oded (Brown University); Klemp, Marc (University of Copenhagen)
    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: 2018–04
  39. By: Neuberger, Doris
    Abstract: Der ökonomische Mainstream steht seit Ausbruch der Finanzkrise 2007/08 vermehrt unter Kritik, hatten doch nur wenige Fachwissenschaftler die Krise vorhergesehen. In der entstandenen Debatte über Ausrichtung und Methoden in der Volkswirtschaftslehre wird auch eine Rückbesinnung auf nationalökonomische Klassiker gefordert, die der Mainstream aus den Lehrbüchern weitgehend getilgt hat. Hätte Karl Marx eine bessere Prognose zur Finanzkrise gestellt? Seine Geld- und Kredittheorie erschließt sich insbesondere aus der Lektüre des dritten Bandes des "Kapital", den Ökonomischen Manuskripten dazu (1863-1865) und den Londoner Heften (1850-1853). Der vorliegende Beitrag rekonstruiert diese aus dem Blickwinkel der herrschenden Ökonomik. In Aspekten wie Wesen und Erscheinungsformen des Geldes, Endogenität und Neutralität des Geldes, Rolle von Krediten, Zinsen und Krisen zeigt sich, dass Marx insbesondere durch seine Analysen zum Kreditgeld die Finanzkrise besser erklären kann als der ökonomische Mainstream. Es handelt sich dabei um eine Krise der Überakkumulation von Geldkapital, die weder einzigartig noch auf das Versagen einzelner Marktakteure zurückzuführen ist. Solche Krisen entstehen unweigerlich aus einem fundamentalen Widerspruch des kapitalistischen Wirtschaftssystems, wonach das endogene Kreditgeld zugleich Triebfeder der Produktion aber auch der Überproduktion und Überspekulation ist.
    Keywords: Finanzkrise,Geldfunktionen,Geldkapital,Kreditgeld,Verbriefung,Kapitalismus,financial crisis,money functions,money capital,credit money,securitization,capitalism
    JEL: B14 E1 E4 E5 G01
    Date: 2018
  40. By: Massimo Baldini; Giulia Mancini; Giovanni Vecchi
    Abstract: The paper explores the changing risk of poverty for older and younger generations of Italians throughout the republican period, 1948 to the present day. We show that poverty rates have decreased steadily for all age groups, but that youth has been left behind. The risk of poverty for children aged 0-17, relative to adults over 65, has increased steadily over time: in 1977, children faced a risk of poverty 30 percent lower than the elderly, but by 2016 they are 5 times likelier to be poor than someone in the age range of their grandparents. This intergenerational reversal of fortune is unprecedented in Italy’s post-WW2 history. We also assess the impact of the Great Recession on living standards by age, finding that the young have been hit hardest, particularly in Southern regions. What explains the extra poverty risk associated with young age? Our analysis points to the welfare state, which offers better protection for the elderly than it does for the young and their families. We find that the impact of cash transfers on the incidence of child poverty is considerably lower in Italy than in most comparable countries. Overall, in the last seven decades, Italy has become no country for young people.
    Keywords: age, cash transfers, Great Recession, living conditions, poverty, wellbeing
    JEL: C42 D31 I32 N30
    Date: 2018–05–22

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