nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2018‒09‒03
thirty papers chosen by

  1. From Convergence to Divergence: Portuguese Economic Growth, 1527-1850 By Nuno Palma; Jaime Reis
  2. Capabilities Accumulation and Development: What History Tells the Theory By Giovanni Dosi; Xiaodan Yu
  3. Representation Of The People: Franchise Extension And The "Sinn Féin Election" In Ireland, 1918 By Alan de Bromhead; Alan Fernihough; Enda Hargaden
  4. Ethnic Enclaves and Immigrant Outcomes: Norwegian Immigrants during the Age of Mass Migration By Katherine Eriksson
  5. Historic Sex-Ratio Imbalances Predict Female Participation in the Market for Politicians By Grant, Iris; Kesternich, Iris; Steckenleiter, Carina; Winter, Joachim
  6. The physical economy of France (1830-2015). The story of a parasite? By Nelo Magalhães; Jean-Baptiste Fressoz; François Jarrige; Gaëtan Levillain; Margot Lyautey; Thomas Le Roux; Guillaume Noblet; Christophe Bonneuil
  7. The Growth of the Italian Economy, 1861-1913: Revised Second-Generation Expenditure-Side Estimates By Fenoaltea, Stefano
  8. Kaldor and Piketty's Facts: the Rise of Monopoly Power in the United States By Gauti Eggertsson; Jacob Robbins
  9. “This one is 400 Libyan dinars, this one is 500”: Insights from Cognitive Human Capital and Slave Trade By Asongu, Simplice; Kodila-Tedika, Oasis
  10. The Technology Frontier and the Rise and Fall of Cities By Enrico Berkes; Marti Mestieri; Ricardo Dahis
  11. The Ethnic Segregation of Immigrants in the United States from 1850 to 1940 By Katherine Eriksson; Zachary A. Ward
  12. Economic Analysis of Education in Post-War America: New Insights from Theodore Schultz and John Kenneth Galbraith By Alexandre Chirat; Charlotte Le Chapelain
  13. International Spillovers of Monetary Policy: Evidence from France and Italy By Vincent Bignon; Cecilia Garcia-Peñalosa
  14. Educación superior y crecimiento económico en Colombia (1971-2016): una relación de cointegración. By Barón Ortegón, Brayan Alexander
  15. The Curious Incident of Luxury Imports during the Top-Income Surge By Stephanie Houle; Pau S. Pujolas; Michael R. Veall
  16. Time-Varying Predictability of Oil Market Movements Over a Century of Data: The Role of US Financial Stress By Rangan Gupta; Patrick Kanda; Aviral Kumar Tiwari; Mark E. Wohar
  17. The Role of Monetary Policy Uncertainty in Predicting Equity Market Volatility of the United Kingdom: Evidence from over 150 Years of Data By Rangan Gupta; Mark E. Wohar
  18. A History of the Bank of Japan, 1882-2016 By Masato Shizume
  19. External debts and real exchange rates in developing countries: evidence from Chad. By Kouladoum, Jean-Claude
  20. The Changing (Dis-)Utility of Work By Greg Kaplan; Sam Schulhofer-Wohl
  21. Algunos aspectos de los fundamentos de la tributación By Isidro Hernández Rodríguez
  22. The Impact of Government Spending on GDP in a Remitting Country By Al-Abri, Almukhtar; Genc, Ismail H.; Naufal, George S
  23. Did the 1980s in Latin America Need to Be a Lost Decade? By Victor Leão Borges de Almeida; Carlos Esquivel; Juan Pablo Nicolini; Timothy Kehoe
  24. Conceptualization and Climate for New Deal Farm Laws of the 1930s By Breimyer, Harold F.
  25. The formalization of banking supervision: A comparison between Japan and Sweden By Hotori, Eiji; Wendschlag, Mikael
  26. The Heterogeneous Effects of Government Spending : It’s All About Taxes By Axelle Ferrière; Gaston Navarro
  27. The Big Bang: Stock Market Capitalization in the Long Run By Dmitry Kuvshinov; Kaspar Zimmermann
  28. Економски односи Србије и Румуније на почетку 21. века и могућности унапређења By Bukvić, Rajko; Pajović, Ivan
  29. Shareholder Protection, Stock Markets and Cross-Border Mergers By Frederick S. Ahiabor; Gregory A. James; Frank O. Kwabi; Mathias M. Siems; Centre for Business Research
  30. The Six Linkages between Foreign Direct Investment, Domestic Investment, Exports, Imports, Labor Force and Economic Growth: New Empirical and Policy Analysis from Nigeria By Bakari, Sayef; Mabrouki, Mohamed; Othmani, Abdelhafidh

  1. By: Nuno Palma (Department of Economics, University of Manchester and CEPR); Jaime Reis (Instituto de Ciências Sociais, Universidade de Lisboa)
    Abstract: We construct the first time-series for Portugal’s per capita GDP for 1527-1850, drawing on a new database. Starting in the early 1630s there was a highly persistent upward trend which accelerated after 1710 and peaked 40 years later. At that point, per capita income was high by European standards, though behind the most advanced Western European economies. But as the second half of the eighteenth century unfolded, a phase of economic decline was initiated. This continued into the nineteenth century, and by 1850 per capita incomes were not different from what they had been in the early 1530s.
    Keywords: Early Modern Portugal, Historical National Accounts, Standards of Living Debate, the Little Divergence, Malthusian Model.
    JEL: N13 O52
    Date: 2018–08
  2. By: Giovanni Dosi; Xiaodan Yu
    Abstract: In this contribution we offer a broad overview of the technological, institutional and policy dynamics associated with the great transformation - borrowing Karl Polanyi (1944) expression - leading from traditional, mostly rural, economies to economies driven by industrial activities (and nowadays also advanced services), able to systematically learn how to implement and eventually how to generate new ways of producing and new products under conditions of dynamic increasing returns. Such a `great transformation' entails a major process of accumulation of knowledge and capabilities, both at the levels of individuals and organizations. Certainly, part of such capabilities builds on education and formally acquired skills (what in the economists' jargon often goes under the heading of `human capital'). However, at least equally important, capabilities have to do with the problem-solving knowledge embodied in organizations - concerning e.g. production technologies, the technical and social division of labor, labor relations as well as `dynamic capabilities' of search and learning. In turn, the rates and directions of knowledge accumulation during the catch-up process and the ensuing effects upon the patterns of production and trade are shaped by the economic and institutional framework in which such processes are embedded.
    Keywords: catching-up, capability accumulation, innovation, development, Great Transformation
    Date: 2018–08–26
  3. By: Alan de Bromhead (Queen's Management School); Alan Fernihough (Queen's Management School); Enda Hargaden (Department of Economics, University of Tennessee)
    Abstract: Electoral reforms in 1918 nearly tripled the number of people eligible to vote in Ireland. Following the reforms - the largest franchise extensions in UK history – the previously obscure Sinn Féin party secured 73 of Ireland's 105 seats, an outcome that presaged a guerrilla war and ultimately independence from the United Kingdom. This paper examines the relationship between the franchise extension and the election results. We find little evidence of a connection between the two. New female voters appear less likely to have supported Sinn Féin. New male voters were slightly more likely to vote for Sinn Féin, but the magnitude of this effect was small and statistically insignificant. In fact, non-voting appears particularly high for both groups of new voters. Our results suggest that the extension of the franchise cannot explain Sinn Féin's victory. We conclude their electoral success was more likely driven by a change of heart on behalf of the Irish electorate, rather than a change in its composition.
    Keywords: Voting; Elections; Ireland; Sinn Féin
    JEL: D72 N44 N94
    Date: 2018–06
  4. By: Katherine Eriksson
    Abstract: This paper examines the effect of ethnic enclaves on economic outcomes of Norwegian immigrants in 1910 and 1920, the later part of the Age of Mass Migration. Using different identification strategies, including county fixed effects and an instrumental variables strategy based on chain migration, I consistently find that Norwegians living in larger enclaves in the United States had lower occupational earnings, were more likely to be in farming occupations, and were less likely to be in white-collar occupations. Results are robust to matching method and choice of occupational score. This earnings disadvantage is partly passed on to the second generation.
    JEL: J61 N31
    Date: 2018–06
  5. By: Grant, Iris (KU Leuven); Kesternich, Iris (KU Leuven); Steckenleiter, Carina (University of St. Gallen); Winter, Joachim (LMU Munich)
    Abstract: We analyze the long-term effects of gender imbalances on female labor force participation, in particular in the market for politicians. We exploit variation in sex ratios - the number of men divided by the number of women in a region - across Germany induced by WWII. In the 1990 elections, women were more likely to run for office in constituencies that had relatively fewer men in 1946. We do not find a significant effect of the sex ratio on the likelihood of a woman winning the election. These results suggest that while women were more likely to run for a seat in parliament in constituencies with lower historical sex ratios, voters were not more inclined to vote for them. Voter demand effects thus do not appear to be as strong as candidate supply effects.
    Keywords: female politicians; gender stereotypes; occupational choice; sex imbalance;
    JEL: J16 J24 N44
    Date: 2018–08–28
  6. By: Nelo Magalhães (LADYSS - Laboratoire dynamiques sociales et recomposition des espaces - UP1 - Université Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique); Jean-Baptiste Fressoz (CAK-CRHST - Centre Alexandre Koyré - Centre de Recherche en Histoire des Sciences et des Techniques - EHESS - École des hautes études en sciences sociales - Cité des Sciences et de l'Industrie - CNRS - Centre National de la Recherche Scientifique); François Jarrige (CGC - Centre Georges Chevrier. Ordre et désordre dans l'histoire des sociétés (UMR5605) - CNRS - Centre National de la Recherche Scientifique - UB - Université de Bourgogne); Gaëtan Levillain (ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay, EHESS - École des hautes études en sciences sociales); Margot Lyautey (EHESS - École des hautes études en sciences sociales, Eberhard Karls Universität Tübingen); Thomas Le Roux (IDHE - Institutions et Dynamiques Historiques de l'Economie - ENS Cachan - École normale supérieure - Cachan - UP1 - Université Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Guillaume Noblet (UP1 - Université Panthéon-Sorbonne); Christophe Bonneuil (CAK-CRHST - Centre Alexandre Koyré - Centre de Recherche en Histoire des Sciences et des Techniques - EHESS - École des hautes études en sciences sociales - Cité des Sciences et de l'Industrie - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This article explores the long-term dynamics of material use in France over a period of 185 years. It is based on material flow accounts that are perfectly consistent with the standards of Material Flows Analysis at the national economic scale. This work - which covers domestic extraction, imports and exports - is the first long-term study of material flows for France, with annual and national data for most of the period. Our database allows us to study the evolution of French metabolism during the industrialization of the country, together with the increasing dependence on abiotic materials. We highlight a singular metabolic trajectory: that of a state that benefits from successive world-systems to develop economically via massive imports of materials. First, we present the sources and the quality of the data collected. We then show the main long-term characteristics of the French material economy. Finally, we propose a socio-historical reading inspired by the notion of world-ecology introduced by Moore (2015).
    Abstract: Cet article explore les dynamiques de long terme de l'usage de matière en France sur une période de 185 ans. Il se base sur des comptes de flux de matières qui sont parfaitement cohérents avec les standards de l'Analyse des Flux de Matières à l'échelle économique nationale. Ce travail – qui couvre l'extraction domestique, les importations et les exportations – est la première étude sur le temps long des flux de matières pour la France, avec des données annuelles et nationales pour la plus grande partie de la période. Notre base de données nous permet d'étudier l'évolution du métabolisme français au cours de l'industrialisation du pays, synonyme de dépendance croissante aux matières abiotiques. Nous mettons en évidence une trajectoire métabolique singulière : celle d'un État qui profite de système-monde successifs pour se développer économiquement via des importations massives de matières. Dans un premier temps, nous revenons sur les sources et la qualité des données récoltées. Nous présentons ensuite les grandes caractéristiques de long terme de l'économie matérielle française. Enfin, nous proposons une lecture socio-historique inspirée par la notion d'écologie-monde au sens de Moore (2015).
    Keywords: Écologie monde,Histoire économique,Histoire environnementale,Métabolisme social,Analyse des flux de matières
    Date: 2018–07–20
  7. By: Fenoaltea, Stefano
    Abstract: This paper presents revised expenditure-side constant-price historical national accounts for Italy from Unification to 1913. The extant estimates at 1911 prices by the present author on the one hand and Alberto Baffigi on the other are both derived from the better-documented production side, but with significantly different algorithms and results. The new estimates are based on the new, extensively revised production-side accounts; the underlying methodology remains the present author’s, arguably altogether sounder than Baffigi’s.
    Keywords: Measurement, pre-WW1 Italy,
    JEL: N13 N53 N63 N73
    Date: 2018–07
  8. By: Gauti Eggertsson (Brown University); Jacob Robbins (Brown University)
    Abstract: The macroeconomic data of the last thirty years has overturned at least two of Kaldor's famous stylized growth facts: constant interest rates, and a constant labor share. At the same time, the research of Piketty and others has introduced several new and surprising facts: an increase in the financial wealth-to-output ratio in the US, an increase in measured Tobin's Q, and a divergence between the marginal and the average return on capital. In this paper, we argue that these trends can be explained by an increase in market power and pure profits in the US economy, i.e., the emergence of a non-zero-rent economy, along with forces that have led to a persistent long term decline in real interest rates. We make three parsimonious modifications to the standard neoclassical model to explain these trends. Using recent estimates of the increase in markups and the decrease in real interest rates, we show that our model can quantitatively match these new macroeconomic facts.
    Date: 2018
  9. By: Asongu, Simplice; Kodila-Tedika, Oasis
    Abstract: One of the most disturbing contemporary episodes in human history that has been decried globally is the recent Libyan experience of slave trade, where migrants captured end-up being sold as slaves. We contribute to the understanding of this phenomenon by investigating the role of cognitive human capital in slave trade. To this end, we use the historic intelligence and slave trade variables respectively, as the independent and outcome variables of interest. Our findings show a negative relationship between slave trade and cognitive human capital. Hence, slave trade is more apparent when cognitive human capital is low. The Ordinary Least Squares findings are robust to the control for outliers, uncertainty about the model and Tobit regressions. We substantiate why from the perspective of massive sensitisation and education, the non-contemporary relationship between cognitive ability and slave trade established in this study has contemporary practical policy relevance in efforts to stem the tide of clandestine travel to Europe through countries in which clandestine migrants are captured and sold as slaves.
    Keywords: Intelligence; Human Capital; Slavery
    JEL: I20 I29 N30
    Date: 2018–01
  10. By: Enrico Berkes (Northwestern University); Marti Mestieri (Northwestern University); Ricardo Dahis (Northwestern University)
    Abstract: Abstract We analyze the universe of U.S. patents over the period 1830-2015. We document how innovation patterns have evolved over time and space, paying special attention to the evolution of leading technological sectors and the location of innovation hubs. We infer the leading technologies at different points in time from the evolution of the patent citation network. We document the rise and fall in prominence of different technologies and show that the technology frontier has moved towards more income elastic and skill-intensive sectors. We document innovation patterns at the city level using geocoded information for all patents in our sample. We find that innovation has become more clustered in space over time and, at the same time, the average distance between inventors of a patent has also increased over time. We then analyze whether the technological mix of a city has predictive power for future city growth. We also explore whether recombinant growth has become more prominent over time.
    Date: 2018
  11. By: Katherine Eriksson; Zachary A. Ward
    Abstract: We provide the first estimates of ethnic segregation between 1850 and 1940 that cover the entire United States and are consistent across time and space. To do so, we adapt the Logan-Parman method to immigrants by measuring segregation based on the nativity of the next-door neighbor. In addition to providing a consistent measure of segregation, we also document new patterns such as the high levels of segregation in rural areas, in small factory towns and for non-European sources. Early 20th century immigrants spatially assimilated at a slow rate, leaving immigrants’ lived experience distinct from natives for decades after arrival.
    JEL: F22 J61 N31
    Date: 2018–06
  12. By: Alexandre Chirat (TRIANGLE, Université Lyon 2); Charlotte Le Chapelain (CLHDPP, BETA, Université Lyon 3)
    Date: 2018
  13. By: Vincent Bignon; Cecilia Garcia-Peñalosa
    Abstract: This paper examines a novel negative impact of trade tariffs and the costs they induce by documenting how protectionism reversed the long-term improvements in education and the fertility transition that were well under way in late 19th-century France. The Méline tariff, a tariff on cereals introduced in 1892, was a major protectionist shock that shifted relative prices in favor of agriculture and away from industry. In a context in which the latter was more intensive in skills than agriculture, the tariff reduced the relative return to education, which in turn affected parents’ decisions about the quantity and quality of children. We use regional differences in the importance of cereal production in the local economy to estimate the impact of the tariff. Our findings indicate that the tariff reduced enrollment in primary education and increased birthrates and fertility. The magnitude of these effects was substantial. In regions with average shares of employment in cereal production, the tariff offset the (downward) trend in birthrates for 13 years; in those with the highest cereal employment shares, there was a delay of up to 22 years.
    Keywords: Education, fertility, protectionism, unified growth theory, France
    JEL: J13 N33 O15
    Date: 2018
  14. By: Barón Ortegón, Brayan Alexander
    Abstract: This article analyzes the relation between GDP per capita (CPIBpc) and access to tertiary education, seen from the perspective of growth rate of the number of enrollments (TCMes) in higher education in Colombia for the period (1971-2016). By using a VEC model and assuming everything else constant, it is concluded that TCMes Granger caused the Colombian GDP per capita and vice-versa, therefore, the existence of a long run relation between both variables is verified. This result helps to explain the dynamics of Colombian economic growth per capita of the last forty-five years and the impact of the accumulation of human capital on it.
    Keywords: Economic growth; Human Capital; Access to higher education; Colombia; VEC model.
    JEL: I25 O4 O47
    Date: 2018–09–07
  15. By: Stephanie Houle; Pau S. Pujolas; Michael R. Veall
    Abstract: Atkinson, Piketty, and Saez [2011] find a post-1979 surge in taxfiler top income shares in “English speaking countries” (surge countries) but not in “continental European countries and Japan” (no-surge countries). We find the puzzle that Comtrade import-to-GDP ratios and import-to-total-import ratios for apparent luxuries pearls, precious stones, diamonds, works of art, jewellery, furs and coins do not increase post-1979 in surge countries relative to no-surge countries. Explanations could include issues with the taxfiler or import data or that top income individuals do not have a particularly high marginal to propensity to consume these luxury goods, at least within their own country. Overall, this is a fragment of evidence that there may not have been a large post-1979 increase in top-end domestic consumption inequality in surge countries compared to no-surge countries.
    Keywords: income distribution, taxfiler data, luxury goods
    JEL: D12 D31 D63 F19 N30
    Date: 2018–08
  16. By: Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Patrick Kanda (THEMA, Université de Cergy-Pontoise); Aviral Kumar Tiwari (Montpellier Business School, Montpellier, France); Mark E. Wohar (College of Business Administration, University of Nebraska at Omaha, Omaha, USA; School of Business and Economics, Loughborough University, Leicestershire, UK.)
    Abstract: In this paper we analyze whether a news-based measure of financial stress index (FSI) in the US can predict West Texas Intermediate oil returns and (realized) volatility over the monthly period of 1889:01 to 2016:12, using a dynamic conditional correlation multivariate generalized autoregressive conditional heteroscedasticity (DCC-MGARCH) model. Our results show that, standard linear Granger causality test fails 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 FSI to oil returns and volatility cannot be considered reliable. When we use the DCC-MGARCH model, which is robust to such misspecifications, in 75 percent and 80 percent of the sample periods, FSI in fact do strongly predict the oil returns and volatility respectively. Overall, our results highlight that FSI is helpful in predicting oil returns and volatility, when one accounts for nonlinearity and regime changes through a robust time-varying model.
    Keywords: US Financial Stress Index, DCC-MGARCH, WTI Oil Returns, Realized Volatility
    JEL: C32 Q41
    Date: 2018–07
  17. By: Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Mark E. Wohar (College of Business Administration, University of Nebraska at Omaha, Omaha, USA; School of Business and Economics, Loughborough University, Leicestershire, UK.)
    Abstract: Theory suggests a strong link between monetary policy rate uncertainty and equity return volatility, since asset pricing models assume the risk-free rate to be a key factor for equity prices. Given this, our paper uses historical monthly data for the United Kingdom over 1833:01 to 2018:07, to show that monetary policy uncertainty increases stock market volatility within sample. In addition, we show that the information on monetary policy uncertainty also adds value to forecasting out-of-sample equity market volatility.
    Keywords: Equity prices, Monetary policy rate uncertainty, Realized volatility, Risk-free interest rates, Volatility forecasting
    JEL: C22 C52 E52 G12
    Date: 2018–08
  18. By: Masato Shizume (Waseda University)
    Date: 2017–10
  19. By: Kouladoum, Jean-Claude
    Abstract: The objective of this work is to analyze the effect to external debts on the real exchange rate rate in Chad from 1975 to 2014. The generalized method of moment is used. Findings show that external debts positively and significantly affect the real exchange rate at 5% significant level. Moreover, debt servicing affects negatively and significantly real exchange rate. The main recommandation goes to Chadian government, it should adopt a budgetary policy, in such a way to reorient its debt towards economic sectors that is able to boost economic growth and reinforce that the strategies contribute re-equilibrate industrial activities.
    Keywords: External debts, real exchange rate, debt servicing, econmic growth.
    JEL: F3 F31
    Date: 2018–08–12
  20. By: Greg Kaplan; Sam Schulhofer-Wohl
    Abstract: We study how changes in the distribution of occupations have affected the aggregate non-pecuniary costs and benefits of working. The physical toll of work is smaller now than in 1950, with workers shifting away from occupations in which people report experiencing tiredness and pain. The emotional consequences of the changing occupation distribution vary substantially across demographic groups. Work has become happier and more meaningful for women, but more stressful and less meaningful for men. These changes appear to be concentrated at lower education levels.
    JEL: I31 J22 J24 J28 N32
    Date: 2018–06
  21. By: Isidro Hernández Rodríguez
    Abstract: El documento tiene como propósito exponer los fundamentos históricos y económicos de la tributación. Se muestra cómo las principales corrientes de pensamiento económico plantean los fundamentos de los gravámenes, y se traza la trayectoria histórica para mostrar los cimientos y cómo cambian los elementos básicos de la imposición de acuerdo al desarrollo que alcanzan las sociedades. Se expone cómo los principios sobre los que se asientan los gravámenes según la historiografía difieren en aspectos esenciales de los que plantean las teorías económicas. Mientras los sucesos históricos señalan que la tributación está ligada a la construcción y reconstrucción del Estado, el poder político, en la teoría económica se descarta esas relaciones y centra el interés analítico en los efectos que tiene la imposición sobre el proceso de acumulación del ingreso y el equilibrio económico.
    Keywords: impuestos, distribución, eficiencia, equidad, clases sociales, Estado, y federalismo fiscal
    JEL: B1 H2 H7 N4
    Date: 2018–08–24
  22. By: Al-Abri, Almukhtar (Sultan Qaboos University); Genc, Ismail H. (American University of Sharjah); Naufal, George S (Texas A&M University)
    Abstract: The literature on remittances is large and growing. However, its focus has mainly been on the effects of remittance inflows on the receiving economies. Little has been done on the sending economies. In this paper, we use data from Saudi Arabia, one of the top remitting countries in the world, to identify the impact of government spending on Saudi Arabia's real output considering the role of remittance outflows. The results suggest that remittance outflows have a weak effect, if at all, on government spending, which, in turn, has an insignificant impact on GDP. The paper discusses some policy implications.
    Keywords: remittances, multipliers, fiscal policy, GCC
    JEL: C23 E61 F24 N15
    Date: 2018–07
  23. By: Victor Leão Borges de Almeida (University of Minnesota); Carlos Esquivel (University of Minnesota); Juan Pablo Nicolini (Minneapolis Fed); Timothy Kehoe (University of Minnesota)
    Abstract: In 1979, the Federal Reserve Board, led by Chairman Paul Volcker, drastically raised the federal funds rate as part of their efforts for taming inflation. As a consequence of this increase, borrowing costs for Mexico rose substantially. Eventually the country suspended its debt payments in 1982, which was followed by an economic crisis and seven years of little to no access to foreign credit. In this paper we use a standard sovereign default model to explore the extent to which the rise in U.S. interest rates caused the default in Mexico. We find that, even if interest rates had remained low, Mexico would still have defaulted. We then extend the model to allow for endogenous re-entry to financial markets via debt restructuring. Within this framework we analyze whether the crisis could have been shorter and less severe had interest rates remained low.
    Date: 2018
  24. By: Breimyer, Harold F.
    Keywords: Agricultural and Food Policy, Farm Management
  25. By: Hotori, Eiji; Wendschlag, Mikael
    Abstract: This study examines the formalization of banking supervision in Japan and Sweden that occurred in the decades around 1900. Using an incremental change approach, the respective cases are traced and examined from three dimensions: 1) the legal framework, 2) the banking supervisory agency, and 3) bank supervisory activities. As a result of the comparative analysis, we find several similarities and differences. The most important finding is that the two cases are similar, in that financial crises - generally considered to be a primary driver for major regulatory and supervisory reforms - did not play the main role in the formalization of supervision in either Japan or Sweden. Rather, the formalization was an incremental adjustment to the organic development of the banking sector, the general public's increasing exposure to the banks as deposit holders and borrowers, and the increased need for professionalization of the banking sector.
    Keywords: banking supervision,formalization,incremental change approach
    JEL: G18 G21 N20 N23 N25 N40 N43 N45
    Date: 2018
  26. By: Axelle Ferrière; Gaston Navarro
    Abstract: This paper investigates how government spending multipliers depend on the distribution of taxes across households. We exploit historical variations in the financing of spending in the U.S. since 1913 to show that multipliers are positive only when financed with more progressive taxes, and zero otherwise. We rationalize this finding within a heterogeneous-household model with indivisible labor supply. The model results in a lower labor responsiveness to tax changes for higher-income earners. In turn, spending financed with more progressive taxes induces a smaller crowding-out, and thus larger multipliers. Finally, we provide evidence in support of the model’s cross-sectional implications.
    Keywords: Fiscal stimulus ; Government spending ; Transfers ; Heterogeneous agents
    JEL: D30 E62 H23 H31 N42
    Date: 2018–08–22
  27. By: Dmitry Kuvshinov (Department of Economics, University of Bonn); Kaspar Zimmermann (Department of Economics, University of Bonn)
    Abstract: This paper presents annual stock market capitalization data for 17 advanced economies from 1870 to today. Extending our knowledge beyond individual benchmark years in the seminal work of Rajan and Zingales (2003) reveals a striking new time series pattern: over the long run, the evolution of stock market size resembles a hockey stick. The stock market cap to GDP ratio was stable for more than a century, then tripled in the 1980s and 1990s and remains high to this day. This trend is common across countries and mirrors increases in other financial and price indicators, but happens at a much faster pace. We term this sudden structural shift “the big bang” and use novel data on equity returns, prices and cashflows to explore its underlying drivers. Our first key finding is that the big bang is driven almost entirely by rising equity prices, rather than quantities. Net equity issuance is sizeable but relatively constant over time, and plays very little role in the short, medium and long run swings in stock market cap. Second, much of this price increase cannot be explained by more favourable fundamentals such as profits and taxes. Rather, it is driven by lower equity risk premia – a factor that is linked to subjective beliefs and can be quite fickle, and easily reversible. Third, consistent with this risk premium view of stock market size, the market cap to GDP ratio is a reliable indicator of booms and busts in the equity market. High stock market capitalization – the “Buffet indicator” – forecasts low subsequent equity returns, and low – rather than high – cashflow growth, outperforming standard predictors such as the dividend-price ratio.
    Keywords: Stock market capitalization, financial development, financial wealth, equity issuance, equity valuations, risk premiums, equity bubbles.
    JEL: E44 G10 G20 N10 N20 O16
    Date: 2018–08
  28. By: Bukvić, Rajko; Pajović, Ivan
    Abstract: Serbian. Економске односе, посебно спољнотрговинске односе, Србије и Румуније на почетку 21. века карактеришу стабилност али и релативно низак интензитет размене. Обе земље у целини бележе дефицит у спољнотрговинској размени са светом, али у међусобној размени суфицит је на страни Србије. Иако Румунија заузима једно од водећих места међу земљама спољнотрговинским партнерима Србије, њено учешће у укупном извозу Србије је свега око 5,5, а у увозу Србије нешто испод 3 процента, што указује да постоји много простора за унапређење. У раду се анализира структура размене и сугеришу могући правци њеног повећавања. English. Economic relations, especially foreign trade relations, between Serbia and Romania at the beginning of the 21st century are characterized by stability, but relatively low intensity of exchange. Both countries in general have a deficit in foreign trade with the world, but in the mutual exchange there is a surplus on the side of Serbia. Although Romania takes one of the leading positions among the foreign trade partners of Serbia, its share in the total export of Serbia is only about 5.5%, while Serbia's import is slightly below 3%, which indicates that there is many possibilities for improvement. The paper analyzes the structure of the exchange and suggests possible directions of its increase.
    Keywords: Србија, Румунија, економски односи, спољна трговина, унапређење, Serbia, Romania, economic relations, foreign trade, improvement
    JEL: F14 F50 N44 N74
    Date: 2017
  29. By: Frederick S. Ahiabor; Gregory A. James; Frank O. Kwabi; Mathias M. Siems; Centre for Business Research
    Abstract: This paper is the first one that uses a panel data of different types of shareholder protection in order to examine (i) the effect of such laws on stock market development and (ii) the convergence of shareholder protection laws through cross-border mergers and acquisitions. We find significant results for enabling laws but less so for paternalistic ones.
    Keywords: Law and finance; shareholder protection; corporate governance; corporate finance
    JEL: G32 K22 N20 O16 P50
    Date: 2018–09
  30. By: Bakari, Sayef; Mabrouki, Mohamed; Othmani, Abdelhafidh
    Abstract: The contribution of this study is to search the six linkages between Foreign Direct Investment, Domestic Investment, Exports, Imports, Labor Force and Economic Growth in Nigeria by using vector error correction model for the period 1981 – 2015. The empirical results indicate that there is no relationship between the six variables in the long run. In the short run imports cause economic growth and domestic investment; exports and FDI cause labor; and labor causes FDI. These findings present the critical situation of Nigeria, which requires an entry of urgent economic reforms.
    Keywords: Economic Growth, Domestic investment, FDI, Labor, Exports, Imports, VECM, Nigeria.
    JEL: E22 F14 J21 N77 O16 O47 O55
    Date: 2018

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