nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2018‒08‒13
thirty-two papers chosen by

  1. Sustainability and Green Business in Latin America during Globalization Waves By Geoffrey Jones
  2. Book review: Why Minsky matters, by L. Randall Wray, Princeton University Press, Princeton, NJ, 2015, £19.95 hardback, 288 pp. 9780691159126 By Goodhart, Charles
  3. Wealth and inheritance in Britain from 1896 to the present By Atkinson, Anthony B.
  4. Alta Desigualdad en América Latina: desde cuándo y por qué By Rodríguez Weber, Javier
  5. Historical Evolution of Entrepreneurial Development in the Global South: The Case of Ghana, 1957-2010 By Amankwah-Amoah, Joseph; Lu, Yindfa
  6. Cincuenta años de la economía del Cesar: De la agroindustria del algodón a la extracción del Carbón By Jaime Bonet-Morón; María Aguilera-Díaz
  7. 80 Economic Bestsellers before 1850: A Fresh Look at the History of Economic Thought By Erik S. Reinert; Kenneth Carpenter; Fernanda A. Reinert; Sophus A. Reinert
  8. Tax incidence and fiscal systems: some problems on tax compared history in XIX and XX centuries By José Alves
  9. Wealth inequality in the long run: A Schumpeterian growth perspective By Jakob B. Madsen; Antonio Minniti; Francesco Venturini
  11. Internal Conflict, Elite Action, and State Failure: Evidence from China, 1000-1911 By Dincecco, Mark; Wang, Yuhua
  12. Jean-Michel Grandmont A forthcoming mind By Laurent Linnemer; Michael Visser
  13. Brasil sem imigrantes: estimativas de longo prazo baseadas em microdados By Monasterio, Leonardo; Lopes, Daniel
  14. Trump's tariff’s impact on Africa and the ambiguous role of African agency By Kohnert, Dirk
  15. Tjong Yong Hian And the Development of The City of Medan, The Existence of Chinese The Economy Field in Indonesia By Pin, Pin; Subhilhar, Subhilhar; Kusmanto, Heri; Purba, Amir
  16. The Rise and Fall of the Natural Interest Rate By Gabriele Fiorentini; Alessandro Galesi; Gabriel Pérez-Quirós; Enrique Sentana
  17. On the use of composite indices in economic history. Lessons from Italy, 1861-2017 By Nicola Amendola; Giacomo Gabbuti; Giovanni Vecchi
  18. Fiscal Policy Shocks and Stock Prices in the United State By Mumtaz, Haroon; Theodoridis, Konstantinos
  19. Minimum Wage and the Labor Market: What Can We Learn from the French Experience? By Jérôme Gautié; Patrice Laroche
  20. Banks, Insider Connections, and Industrialization in New England: Evidence from the Panic of 1873 By Eric Hilt
  21. Gravity and Migration before Railways: Evidence from Parisian Prostitutes and Revolutionaries By Kelly, Morgan; Ó Gráda, Cormac
  22. The Spatial Impacts of a Massive Rail Disinvestment Program: The Beeching Axe By Stephen Gibbons; Stephan Heblich; Ted Pinchbeck
  23. Reporting the natural environmental hazards occurrences and fatalities over the last century By Halkos, George; Zisiadou, Argyro
  24. Immigrant Artists: Enrichment or Displacement? By Karol Jan Borowiecki; Kathryn Graddy
  25. The Great Moderation of Grain Price Volatility: Market Integration vs. Climate Change, Germany, 1650–1790 By Hakon Albers; Ulrich Pfister; Martin Uebele
  26. Uncertainty and Volatility Jumps in the Pound-Dollar Exchange Rate: Evidence from Over One Century of Data By Konstantinos Gkillas; Rangan Gupta; Dimitrios Vortelinos
  27. Of Gold and Paper Money By Jagjit S. Chadha
  28. Some Facts of High-Tech Patenting By Michael Webb; Nick Short; Nicholas Bloom; Josh Lerner
  29. Federal Lands, Opportunity Costs, and Bureaucratic Management By Gary D. Libecap
  30. Of Mice and Merchants: Trade and Growth in the Iron Age By Jan David Bakker; Ferdinand Rauch; Stephan Maurer; Jörn-Steffen Pischke
  31. Reallocation of Tangible Assets and Productivity By UESUGI Iichiro; HOSONO Kaoru; MIYAKAWA Daisuke; ONO Arito; UCHIDA Hirofumi
  32. News-driven uncertainty fluctuations By Song, Dongho; Tang, Jenny

  1. By: Geoffrey Jones (Harvard Business School, General Management Unit)
    Abstract: This working paper examines the impact of modern business enterprise on the natural environment of Latin America during the globalization waves between the nineteenth century and the present day. It argues that although global capitalism created much wealth for the region, this was at the cost of massive ecological destruction in Latin America. During the first global economy considerable wealth was created from the exploitation of natural resources for the land-owning elite in Latin America, at the cost of large-scale ecological destruction. During the Great Reversal in the mid-twentieth century, public policies aimed at "catching up" resulted in the co-proliferation of hydro-electric schemes and resulting co-creation of ecological damage by firms and governments. In the new global economy since 1980, renewed economic growth and consumerism resulted in mountains of waste in increasingly polluted mega-cities. Biodiversity and the natural environment have been challenged across the subcontinent. However there were interesting positives as these ecological horrors also created opportunities for a surprising cohort of green businesses across sectors ranging from beauty and health to eco-tourism. In the twenty first century both business and governments in the region needed to address sustainability issues far more seriously, before a point of no return was reached.
    Date: 2018–08
  2. By: Goodhart, Charles
    Abstract: Yes, Minsky does matter! He had an extraordinarily acute understanding of the interactions between banking, and finance more generally, on one side and the real economy on the other. As the author parades Minsky’s monetary analysis, partly in well-chosen quotations, I was continuously struck by the freshness, even when several decades have elapsed since his death in 1996, and the originality of his monetary analysis
    JEL: N0
    Date: 2017–01
  3. By: Atkinson, Anthony B.
    Abstract: Personal wealth has grown since the 1970s twice as fast in real terms as national income. Has this rise in the wealth-income ratio led to a corresponding increase in the wealth being passed on from one generation to the next? Are we returning to the levels of inheritance found in the 19th century? The aim of this paper is to construct UK evidence on the extent of the transmission of wealth in the form of estates and gifts inter vivos. It takes a long-run view of inheritance, starting from 1896, when the modern Estate Duty was introduced, and exploits the extensive estate data published over the years. Construction of a long-run time series for more than a century is challenging, and there are important limitations. The resulting time-series demonstrates the major importance of inheritance in the UK before the First World War, when the total transmitted wealth represented some 20 per cent of net national income. In the inter-war period, the total was around 15 per cent, falling to some 10 per cent after the Second World War, and then falling further to below 5 per cent in the late 1970s. Since then, there has indeed been an upturn: a rise from 4.8 per cent in 1977 to 8.2 per cent in 2006. This increase was more or less in line with the increase in personal wealth, and has to be interpreted in the light of the changing net worth of the corporate and public sectors of the economy.
    JEL: N0
    Date: 2018–06–21
  4. By: Rodríguez Weber, Javier
    Abstract: In recent years, a dense and fruitful debate on the history of inequality in Latin America has developed. The central points of the debate are: 1) the origin of Latin American inequality; 2) the role of the region’s colonial legacy; 3) whether the continent went through a period of “levelling” between 1930 and 1980; and 4) the sustainability of the recent trend towards inequality reduction. In this context, this paper has two main objectives. First, to evaluate the merits and empirical base of different positions under debate. Second, and most important, to offer a brief history of income inequality in Latin America based on the best evidence available. Thus, the paper presents an analytical narrative centered on the linkages between peripheral capitalism -to which Latin American economies moved in nineteenth century- and the institutional heritage, much of it of colonial origin. The main argument is that both changes and persistent features of inequality can be explained by the way in which the price cycles of exports interact with a political-institutional framework.
    Keywords: Inequality, Latin America, Institutions, History, Peripheral capitalism
    JEL: B52 D63 N36 O1 O54
    Date: 2018–06–27
  5. By: Amankwah-Amoah, Joseph; Lu, Yindfa
    Abstract: In spite of growing awareness among strategy, business history and entrepreneurship scholars of the benefits of entrepreneurial development, our understanding of the evolution of entrepreneurial development in developing nations remains limited. A historical analysis of the issue in post-colonial Ghana from 1957 to 2010 led to the identification of three distinctive phases. The first phase represented the immediate post-colonial reforms (1957–1966), where large-scale nationalisation and establishment of state-owned enterprises hampered development of private enterprises. The second phase was the turbulent period (1967–1979), where totalitarianism and confiscation of assets deterred private investments and ownership, thereby creating a harsh economic and institutional environment. These culminated in the last phase, the renaissance of social entrepreneurship (1980–2010) where different entrepreneurial models flourished, including the diaspora philanthropy and the “philanthropic chief”.
    Keywords: entrepreneurial development; Ghana; Africa; government policy
    JEL: L0 L1 L5
    Date: 2018–07–19
  6. By: Jaime Bonet-Morón; María Aguilera-Díaz
    Abstract: El Cesar es uno de los cuatro departamentos del Caribe colombiano que se constituyeron en la década de los sesenta del siglo XX. En los cincuenta años transcurridos desde su creación, su economía experimentó cambios estructurales ya que pasó de ser una región primordialmente agropecuaria a ser una economía minera. Este estudio analiza la historia económica cesarence basada en tres etapas de su desarrollo: (i) los primeros 12 años correspondieron a una bonanza económica generada por la agroindustria del algodón, donde tuvo un alto crecimiento económico y alcanzó uno de los mayores ingresos per cápita del país; (ii) luego, entró durante dos décadas en una etapa de estancamiento, por la crisis algodonera que afectó otras actividades como la ganadería y, además, fue un periodo de inseguridad en el campo por las acciones de grupos al margen de la ley; y (iii) en los últimos 17 años la minería de carbón se ha convertido en la actividad que genera el mayor porcentaje de su producto interno bruto y provee regalías que han incrementado las arcas de los presupuestos municipales y departamental. **** ABSTRACT: Cesar was one of the four departments in the Colombian Caribbean region that was constituted 1960s. During the last five decades its economy has faced important structural changes, such as going from an agricultural model to a mining dependent economy. This paper analyzes the economic history of the department based on three stages of its development. The first 12 years corresponded to the boom of the cotton agroindustry, where the main characteristic was a high economic and population growth, with one of the highest per capita income in the country. Then, the department went through a two decade stagnation period mainly caused by the cotton’s production crisis where some other primary sector activities were also affected. On top of that, it was a period of increasing violence due to the terrorist actions from illegal armed groups. The last period of analysis covers the last 17 years where coal mining strengthened and became the activity that generates the highest participation of Cesar’s gross domestic product and provides economic resources for municipal and departmental governments.
    Keywords: Departamento del Cesar, Caribe colombiano, agricultura, minería, Department of Cesar, Colombian Caribbean, agriculture, mining.
    JEL: N56 Q18 Q34 R11
    Date: 2018–08–02
  7. By: Erik S. Reinert; Kenneth Carpenter; Fernanda A. Reinert; Sophus A. Reinert
    Abstract: 80 Economic Bestsellers before 1850: A Fresh Look at the History of Economic Thought
    Date: 2017–05
  8. By: José Alves
    Abstract: The study of tax systems have been deeply discussed regarding the early modern period. However, there is a lack of comparative historical studies about the last two centuries in what respect the tax state developments. In our article we analyse the tax history of the last two hundred years for five countries, intending to analyse the mechanisms levied by the different governments to efficiently collect more revenues and the power to coerce several economic agents as well as we reflect about the power of those agents to condition the tax political policies
    Keywords: Tax history; Tax developments; Fiscal systems; State building
    Date: 2018–07
  9. By: Jakob B. Madsen; Antonio Minniti; Francesco Venturini
    Abstract: This paper extends Piketty’s analysis of the wealth-income ratio used as a proxy for wealth inequality, to allow for innovation. Drawing on a Schumpeterian (R&D-based) growth model that incorporates both tangible and intangible capital and using historical data for 21 OECD countries, we find the wealth-income ratio to be significantly and positively related to R&D intensity and the fixed capital investment ratio, but negatively related to income growth. Accounting for the innovation-induced counteracting growth-effect on the wealth-income ratio, we show that the net effect of R&D on wealth inequality is positive.
    Keywords: Wealth-income Ratio, Piketty's Second Law, Schumpeterian Growth.
    JEL: D30 E10 E20 O30 O40
    Date: 2018–07
  10. By: Blanche Segrestin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Andrew Johnston; Armand Hatchuel (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)
    Abstract: While management emerged as a distinctive function at the turn of the 20 th century, managers have no particular status in law compared to directors. This article examines how technological and innovation concerns motivated the rise of management; but shows that they have been largely overlooked by company law since 1945.
    Date: 2018–08–10
  11. By: Dincecco, Mark; Wang, Yuhua
    Abstract: This paper analyzes the long-run dynamics of internal conflict, elite action over privately- versus publicly-provided security, and state development outcomes in China. We construct new county-level data that span nearly one millennium. We find that, traditionally, elites turned away from clans and toward the imperial government for safety in times of internal conflict. After the new globalizing Western influence took hold in the mid-1800s, however, threatening the imperial government's viability, we find that elites turned back toward clans for protection, particularly during the Taiping Rebellion. Finally, we find a positive link between renewed clan activity and the eventual failure of the imperial Qing state. Our analysis provides a new perspective on the political origins of the Great Divergence, by which Europe took off economically, but China fell behind.
    Keywords: Violent Conflict, State-Making, Elite Action, Great Divergence, China
    JEL: N45 P48
    Date: 2018–07–06
  12. By: Laurent Linnemer (CREST; ENSAE); Michael Visser (CREST; ENSAE; CNRS; CRED)
    Abstract: This profile of Jean-Michel Grandmont is based on several interviews we had with him between September 2016 and April 2017. The interviews took place at our CREST offices, located at that time in Malakoff, just south of Paris. The objective of the profile is twofold. First, we trace the career of this highly influential mathematical economist who made seminal contributions to the fields of monetary economics, temporary equilibrium, business cycle theory, and aggregation of individual behavior. Second, we show how Grandmont and his colleagues contributed to changing the French landscape of economic research.
    Keywords: General Equilibrium, Money, Nonlinear Dynamics
    JEL: B31 D5 D7 E3
    Date: 2018–05–17
  13. By: Monasterio, Leonardo; Lopes, Daniel
    Abstract: This paper estimates the effect of non-Iberian immigration to Brazil based on historical and contemporary microdata. The historical database encompasses over 1.7 million immigrant records; the contemporary has more than 165 million records. The estimation of immigrant numeracy suggests that Stolz, Baten e Botelho (2013) underestimated their skills and, therefore, their impact on Brazil. An algorithm classified the surnames of contemporary Brazilians according to their ancestral origins. Two counterfactual estimates are constructed in order to estimate the income per capita if there had never been any non-Iberian immigration. The first counterfactual is built upon the regression of income on the percentages of each ancestral group in municipalities. The second, results from the regression of individual wages on the surname ancestry of workers. The coefficients of these regressions are used to estimate the income of a counterfactual Brazil with no descendants of immigrants. It was estimated that in the absence of non-Iberian immigrants today’s income would be from 12.6% to 17% lower.
    JEL: F21 O54
    Date: 2018–07–23
  14. By: Kohnert, Dirk
    Abstract: The international discussion of Trump's dispute over import tariffs for steel, aluminum and even cars are so far focused on the big global players. However, smaller African countries in particular suffer too from the planned punitive tariffs, similar to the famous African proverb, "When elephants fight, it is the grass that suffers". After years of talk on partnership for economic development (AGOA, Cotonou Agreement, EPAs, etc) Trump’s tariffs mean a severe blow to participatory foreign trade and sustainable industrialization in Africa. Egypt and South Africa for example, the potentially most affected African countries, face massive job losses and earning opportunities, with all the consequences that this entails for their already fragile economy and the population in dire poverty. Trump’s intervention thus joins the continued power politics of former colonial powers vis à vis Africa. Nevertheless, despite these asymmetric power relations, unfair trade relations and the desolate state of African infant industries are not necessarily due to externalities but often home-made. African agency plays an ambiguous role in enhancing participatory trade and indigenous industrialization.
    Keywords: foreign trade, tarrifs, USA, Africa, South Africa, Egypt, Nigeria, agency, corruption,
    JEL: F13 F51 F52 H21 N67 N77 P16 P52 Z1
    Date: 2018–06–19
  15. By: Pin, Pin; Subhilhar, Subhilhar; Kusmanto, Heri; Purba, Amir
    Abstract: The domination of economy and trading by a Chinese group in Indonesia could not be separated from the ”open door policy” since colonial age. Politically, Chinese had been granted special privilege through vreemde oosterlingen system, which was the separation of foreign eastern people and native inhabitants. Besides the officer system, residential system, construction of the social order were the construction of power hegemony in order to achieve development objectives. Tjong Yong Hian was one of the prominent businessman in a colonial age that arose from the production of that colonial policy system. Position and status that were given to Tjong Yong Hian, as well as political policy that were given by the government to the Chines,e enabled Tjong Yong Hian to strengthen his existence in the economy field. His success in developing his business empire had given contribution in the development of the City of Medan since the beginning of the 20th century.
    Keywords: Domination of economy; residential system; Tjong Yong Hian
    JEL: N01 N85 N95 O17 Q27
    Date: 2018–03
  16. By: Gabriele Fiorentini (Università di Firenze, Italy; Rimini Centre for Economic Analysis); Alessandro Galesi (Banco de España, Spain); Gabriel Pérez-Quirós (Banco de España, Spain); Enrique Sentana (CEMFI, Spain)
    Abstract: We document a rise and fall of the natural interest rate (r^*) for several advanced economies, which starts increasing in the 1960’s and peaks around the end of the 1980’s. We reach this conclusion after showing that the Laubach and Williams (2003) model cannot estimate r^* accurately when either the IS curve or the Phillips curve is flat. In those empirically relevant situations, a local level specification for the observed interest rate can precisely estimate r^*. An estimated Panel ECM suggests that the temporary demographic effect of the young baby-boomers mostly accounts for the rise and fall.
    Keywords: Natural rate of interest, Kalman filter, Observability, Demographics
    JEL: E43 E52 C32
    Date: 2018–07
  17. By: Nicola Amendola; Giacomo Gabbuti; Giovanni Vecchi
    Abstract: We argue against the use of composite indices, such as the Human Development Index, in economic history. We show that composite indices can be interpreted as paternalistic social welfare functions (PSWF), and therefore are nothing more than a formal representation of the analyst’s ethical system. This contrasts with the use economic historians typically make of composite indices, as tools to lend objectivity to the measurement of multidimensional phenomena. We support our claim by introducing a new constant-elasticity-of-substitution SWF family, which a) encompasses all composite indices put forth by the literature, and b) identifies the analyst’s implicit preferences by means of standard tools, e.g. marginal rates of substitution and elasticity of substitution parameters. The theoretical framework is illustrated by an empirical investigation of the long-run evolution of Italians’ living standards (1861-2017). We show how any history based on composite indices is one where both data and history play a minor role, if any.
    Keywords: CES, composite indices, hdi, human development index, Italy, living standards, paternalistic social welfare function
    JEL: N01 N30 O15
    Date: 2018–07–26
  18. By: Mumtaz, Haroon (Queen Mary University); Theodoridis, Konstantinos (Cardiff Business School)
    Abstract: This paper uses a range of structural VARs to show that the response of US stock prices to fiscal shocks changed in 1980. Over the period 1955-1979 an expansionary spending or revenue shock was associated with modestly higher stock prices. After 1980, along with a decline in the fiscal multiplier, the response of stock prices to the same shock became negative. We use an estimated DSGE model to show that this change is consistent with a switch from an economy characterised by a more active fiscal policy and passive monetary policy to one where fiscal policy was passive and the central bank acted aggressively in response to inflationary shocks.
    Keywords: Fiscal policy shocks, Stock prices, VAR, DSGE.
    JEL: C5 E1 E5 E6
    Date: 2018–08
  19. By: Jérôme Gautié (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEPREMAP - Centre pour la recherche économique et ses applications); Patrice Laroche (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine, ESCP Europe)
    Abstract: Since it was introduced in 1950, and even more since it was reformed in 1970, the statutory minimum wage has been playing a key role in the French labor market. It has very specific fixing mechanisms, and from the eighties, it has been one of the highest among the OECD countries - both in relative and absolute terms. After presenting the specific features of the minimum wage setting regime in France as well as the minimum wage policies implemented since the 1950s, we provide a comprehensive survey of existing empirical evidence on the impacts of the minimum wage on the French labor market. We use a meta-analysis to draw the lessons from the empirical studies on its effects on employment. We also survey the other potential effects, such as the impact on wage bargaining and other wages, on inequalities, on profit and prices, on working conditions.
    Abstract: Depuis son introduction en 1950, et davantage encore depuis sa réforme en 1970, le salaire minimum légal a joué un rôle très important sur le marché du travail en France. Ses modalités de fixation présentent de fortes spécificités. Depuis les années 1980, il est parmi les plus élevés au sein des pays de l'OCDE - aussi bien en termes absolus que relatifs. Après avoir présenté l'institution du salaire minimum et les politiques qui ont été menées depuis les années 1950, nous passons en revue les travaux empiriques sur ses effets sur le marché du travail français. Nous menons une méta-analyse pour tirer les leçons des études sur l'impact du salaire minimum sur l'emploi. Nous présentons aussi les résultats des travaux sur les autres effets potentiels, tels que l'impact sur la négociation salariale et les autres salaires, sur les inégalités, sur les prix et les profits et sur les conditions de travail.
    Keywords: Minimum wage,wage bargaining,wage regulation,salaire minimum,France,négociation salariale,réglementation des salaires
    Date: 2018–07
  20. By: Eric Hilt
    Abstract: This paper studies the role of bank affiliations in mitigating frictions related to asymmetric information. The analysis focuses on Massachusetts, and tests whether firms with bank directors on their boards fared better following the Panic of 1873, which did not directly impact the state’s commercial banks, but produced a prolonged economic slump. Around 59 percent of all non-financial corporations in the state had a bank director on their board in 1872. These firms survived the recession of the 1870s at higher rates, grew faster and experienced less of a deterioration in their credit ratings. Consistent with banker-directors helping to resolve problems related to asymmetric information, these effects were strongest among young firms. Counterfactual estimates suggest that in the absence of bank affiliations, the total assets of the non-financial corporations in Massachusetts that existed in 1872 would have been 35 percent lower in the wake of the recession. These results suggest an important role for the banking sector in New England’s industrialization, namely that affiliations with commercial banks helped nonfinancial corporations maintain access to external finance during economic downturns.
    JEL: N11 N21
    Date: 2018–07
  21. By: Kelly, Morgan; Ó Gráda, Cormac
    Abstract: Abstract Although urban growth historically depended on large inflows of migrants, little is known of the process of migration in the era before railways. Here we use detailed data for Paris on women arrested for prostitution in the 1760s, or registered as prostitutes in the 1830s and 1850s; and of men holding identity cards or joining the army in the 1790s, to examine patterns of female and male migration. We supplement these with data on all women and men buried in 1833. We find that distance was a stronger deterrent to female migration than to male (consistent with more limited employment opportunities for women) that falls with the appearance of railways. Migration was highest from areas of high living standards, measured by literacy rates, with the largest impact again for women, especially those from higher social classes.
    Date: 2018–07
  22. By: Stephen Gibbons; Stephan Heblich; Ted Pinchbeck
    Abstract: Transport investment is a popular policy instrument and many recent studies have investigated whether new infrastructure generates economic benefits and has spatial economic impacts. Our work approaches the question differently and looks at what happens when a substantial part of a national railway network is dismantled, as happened during the 1950s, 60s and 70s in Britain. Part of this disinvestment occurred following controversial reports on railway profitability and structure in the early 1960s - a course of action known colloquially as 'the Beeching Axe' after the author of the reports. The removal of railways is often blamed for the decline of rural areas and peripheral towns in post-war Britain. This rail disinvestment program was targeted at removal of underused and unprofitable lines and not specifically targeted at local economic performance. Even so, we find that there is a relationship between pre-war population decline and the depth of the rail cuts in the post 1950 period. Conditional on these pre-trends, we show that loss of access by rail did cause relative population decline, decline in the proportion of skilled workers, and decline in the proportion of young people in affected areas. The elasticity of population with respect to changes in centrality (or market access) is around 0.3 in our main estimates. Instrumental variables estimates based on the network structure of the cuts yield higher elasticities. An implication of these findings is that rail transport infrastructure plays an important role in shaping the spatial structure of the economy.
    Keywords: rail, infrastructure, Beeching
    JEL: H54 R1 R4
    Date: 2018–08
  23. By: Halkos, George; Zisiadou, Argyro
    Abstract: This paper presents the occurrences and fatalities of natural environmental hazards drawing an initial picture of concentration, if there is any. For that reason, the authors use aggregate regional tables as well as map visualizations created in R- studio. As it is shown, there appears to be a space concentration on the natural environmental hazards that need to be deeply examined with the use of advanced econometric techniques.
    Keywords: Biological, climatological, extra-terrestrial, geophysical, hydrological, meteorological, risk, hazard, disaster, economic damage,
    JEL: C63 D62 H12 I31 Q50
    Date: 2018–07–07
  24. By: Karol Jan Borowiecki (University of Southern Denmark); Kathryn Graddy (Brandeis University)
    Abstract: In order to investigate the role of immigrant artists on the development of artistic clusters in U.S. cities, we use the US Census and American Community Survey, collected every 10 years since 1850. We identify artists and art teachers, authors, musicians and music teachers, actors and actresses, architects, and journalists, their geographical location and their status as a native or an immigrant. We look at the relative growth rate of the immigrant population in these occupations over a ten year period and how it affects the relative growth rate of native-born individuals in these artistic occupations. We find that cities that experienced immigrant artistic inflows also see a greater inflow of native artists.
    Date: 2018–07
  25. By: Hakon Albers (Martin Luther University Halle-Wittenberg, Department of Economics); Ulrich Pfister (University of Münster, Institute of Economic and Social History); Martin Uebele
    Abstract: In Malthusian economies, crop shortages could be a matter of life and death. The development of regional and national markets for grain held the potential to provide insurance against the demographic consequences of local crop failure. Weather shocks that are reflected in price data, however, entail a measurement problem for market integration studies, which we solve against the background of the end of the Little Ice Age. We exemplify our method to measure price convergence and the link from grain prices to mortality for Germany based on a new data set of rye prices for 15 cities in 1650–1790. We find price convergence in North-Western Germany as well as along major rivers. In addition, a substantial moderation of aggregate rye price volatility occurred, which we link theoretically to increased arbitrage. Mortality was positively related to the aggregate rye price and thus, the decline of rye price volatility decreased the risk to die of hunger in pre-industrial Germany.
    Keywords: Market integration, price volatility, agriculture, weather, climate, unified growth theory.
    JEL: N13 N53 O13
    Date: 2018–08
  26. By: Konstantinos Gkillas (Department of Business Administration, University of Patras, Patras, Greece); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Dimitrios Vortelinos (Lincoln Business School, University of Lincoln, Lincoln, UK)
    Abstract: In this paper, we analyse the role of economic uncertainty, in predicting volatility jumps in the pound-dollar exchange rate over the monthly period of 1900:02 to 2018:05, with the jumps computed using daily data over the same period. Standard linear Granger causality test fail to detect any evidence of uncertainty causing volatility jumps. But given strong evidence of nonlinearity and structural breaks between jumps and economic uncertainty, we next use a nonparametric causality-in-quantiles test, given the misspecification of the linear model. Using this data-driven robust approach, we detect overwhelming evidence of uncertainty causing volatility jumps of the dollar-pound exchange rate over its entire conditional distribution, with the strongest effect observed at the lowest considered conditional quantile. In addition, our results are, in general, found to be robust to alternative measures of uncertainty, jumps generated at daily frequency based on shorter-samples of intraday data, and across three other dollar-based exchange rates.
    Keywords: Exchange Rates, Volatility Jumps, Uncertainty
    JEL: C22 F31
    Date: 2018–07
  27. By: Jagjit S. Chadha (Centre for Macroeconomics (CFM); National Institute of Economic and Social Research (NIESR))
    Abstract: We consider the role of money as a means of payment, store of value and medium of exchange. I outline a number of quantitative and qualitative experiences of monetary management. Successful regimes have sprung up in a variety of surprising places, and been sustained with state (centralised) interventions. Although the link between state and money, and its standard of identity and account may be clear, particularly in earlier stages of economic development, the extent to which the state is widely felt to hold responsibility for 'sound money' is less clear in modern democracies, where there are many other public responsibilities implying on going trade-offs.
    Keywords: Money, Gold standard, Paper money, Samuelson
    JEL: B22 E02 E31
    Date: 2018–07
  28. By: Michael Webb; Nick Short; Nicholas Bloom; Josh Lerner
    Abstract: Patenting in software, cloud computing, and artificial intelligence has grown rapidly in recent years. Such patents are acquired primarily by large US technology firms such as IBM, Microsoft, Google, and HP, as well as by Japanese multinationals such as Sony, Canon, and Fujitsu. Chinese patenting in the US is small but growing rapidly, and world-leading for drone technology. Patenting in machine learning has seen exponential growth since 2010, although patenting in neural networks saw a strong burst of activity in the 1990s that has only recently been surpassed. In all technological fields, the number of patents per inventor has declined near-monotonically, except for large increases in inventor productivity in software and semiconductors in the late 1990s. In most high-tech fields, Japan is the only country outside the US with significant US patenting activity; however, whereas Japan played an important role in the burst of neural network patenting in the 1990s, it has not been involved in the current acceleration. Comparing the periods 1970-89 and 2000-15, patenting in the current period has been primarily by entrant assignees, with the exception of neural networks.
    JEL: L86 O34
    Date: 2018–07
  29. By: Gary D. Libecap
    Abstract: The federal government owns and administers 472, 892,659 acres or 21% of the land area of the lower US, making it both the country’s largest land owner and among the largest by a central government among western democracies. This condition is surprising, given that the US generally is viewed as more oriented toward private property rights and markets. The land largely is managed by the US Forest Service and the Bureau of Land Management, staffed by unelected, career civil servants who hold tenure to their positions. Access and use regulations are administered by agency officials who have wide latitude under all-purpose legislation passed by Congress. Their actions are influenced by bureaucratic incentives and by lobby groups seeking to influence federal land policy. General citizens have little information about how policies are determined and only costly recourse to challenge them. Other than the comparatively small, 27,400,000 acres in National Parks, most of the land has no important amenity values nor apparent major externalities associated with use. These lands were to be transferred to private claimants under 19th century land laws. This paper examines how this vast area came to be withheld by the federal government and the role of the environmental movement in the process. Market failure and externalities were asserted justifications, but there is no strong supportive evidence. Although externalities were possible, the most obvious solution was to define property rights more completely. This option was and remains rejected by politicians, agency officials, and those lobby groups that sought permanent management and control over federal lands. Sustained-yield was an overarching objective, but it is a biological and not an economic concept and the human welfare outcomes of bureaucratic management may be large.
    JEL: K11 N51 N52 Q15 Q24 Q28
    Date: 2018–06
  30. By: Jan David Bakker; Ferdinand Rauch; Stephan Maurer; Jörn-Steffen Pischke
    Abstract: We study the causal connection between trade and development using one of the earliest massive trade expansions: the ï¬ rst systematic crossing of open seas in the Mediterranean during the time of the Phoenicians. We construct a measure of connectedness along the shores of the sea. This connectivity varies with the shape of the coast, the location of islands, and the distance to the opposing shore. We relate connectedness to local growth, which we measure using the presence of archaeological sites in an area. We ï¬ nd an association between better connected locations and archaeological sites during the Iron Age, at a time when sailors began to cross open water very routinely and on a big scale. We corroborate these ï¬ ndings at the level of the world.
    Keywords: Urbanization, locational fundamentals, trade
    JEL: F14 N7 O47
    Date: 2018–07–06
  31. By: UESUGI Iichiro; HOSONO Kaoru; MIYAKAWA Daisuke; ONO Arito; UCHIDA Hirofumi
    Abstract: We study the reallocation of land and other tangible assets across firms and examine its relationship with productivity. Focusing on Japanese firms during the period 1980-2014, which includes massive asset price fluctuations, we find the following. First, there exists no obvious cyclicality in the extent of land and other tangible asset reallocation. Instead, the reallocation of land has been sluggish for more than 20 years since the burst of the asset price bubble. Second, reallocation of land and non-land tangible assets is efficiency-reducing rather than efficiency-enhancing in that firms with high total factor productivity (TFP) reduced their holdings of these assets more than low TFP firms. Third, the relationship between reallocation and productivity has changed over time. Even though the reallocation of land was efficiency-enhancing around the end of the 1980s, it turned efficiency-reducing afterward.
    Date: 2018–07
  32. By: Song, Dongho (Boston College); Tang, Jenny (Federal Reserve Bank of Boston)
    Abstract: We embed a news shock, a noisy indicator of the future state, in a two-state Markov-switching growth model. Our framework, combined with parameter learning, features rich history-dependent uncertainty dynamics. We show that bad news that arrives during a prolonged economic boom can trigger a “Minsky moment”—a sudden collapse in asset values. The effect is greatly amplified when agents have a preference for early resolution of uncertainty. We leverage survey recession probability forecasts to solve a sequential learning problem and estimate the full posterior distribution of model primitives. We identify historical periods in which uncertainty and risk premia were elevated because of news shocks.
    Keywords: Bayesian learning; discrete environment; Minsky moment; news shocks; recursive utility; risk premium; survey forecasts; uncertainty
    JEL: C11 E32 E37 G12
    Date: 2018–01–01

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