nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2018‒09‒10
twenty papers chosen by

  1. The wealth of the Swedish peasant farmer class 1750–1900: Composition and distribution By Bengtsson, Erik; Svensson, Patrick
  2. Flowers of Evil? Industrialization and Long Run Development By Franck, Raphaël; Galor, Oded
  3. Responding to the First Era of Globalization: Canadian Trade Policy, 1870–1913 By Patrick Alexander; Ian Keay
  4. From Immigrants to Americans: Race and Assimilation during the Great Migration By Vasiliki Fouka; Soumyajit Mazumder; Marco Tabellini
  5. Market Potential and Global Growth over the Long Twentieth Century By David S. Jacks; Dennis Novy
  6. Falling Behind and Catching up : India’s Transition from a Colonial Economy By Gupta, Bishnupriya
  7. Discrimination, Managers, and Firm Performance: Evidence from "Aryanizations" in Nazi Germany* By Huber, Kilian; Lindenthal, Volker; Waldinger, Fabian
  8. Did Speculation in Land Pay Off for British Investors? Buying and Selecting Land in South Australia, 1835-1850 By Edwyna Harris; Sumner La Croix
  9. Immigrant Artists: Enrichment or Displacement? By Borowiecki, Karol Jan; Graddy, Kathryn
  10. The Postwar British Productivity Failure By Crafts, Nicholas
  12. The Monetary and Fiscal History of Venezuela 1960-2016 By Diego Restuccia
  13. Tax Revenues, Development, and the Fiscal Cost of Trade Liberalization, 1792-2006 By Cage, Julia; Gadenne, Lucie
  14. The German anti-Keynes? On Walter Eucken's macroeconomics By Feld, Lars P.; Köhler, Ekkehard A.; Nientiedt, Daniel
  15. Trade Openness and Fertility Rates in Africa: Panel-Data Evidence By Manoel Bittencourt; Matthew Clance; Yoseph Y. Getachew
  16. Some Mathematical and Historical Clariffcations on Aggregation in Effciency and Productivity Analysis and Connection to Economic Theory By Valentin Zelenyuk
  17. Transfer of European technologies and their adaptations: the case of the Bengal silk industry in the late-eighteenth century By Hutková, Karolina
  18. The Soviet Economy, 1917-1991 : Its Life and Afterlife By Harrison, Mark
  19. "The Sources and Methods Used in the Creation of the Levy Institute Measure of Economic Well-Being for the United States, 1959-2013" By Ajit Zacharias; Thomas N. Masterson; Fernando Rios-Avila
  20. Do Museums Promote Reconciliation? A Field Experiment on Transitional Justice By Elsa Voytas; Laia Balcells; Valeria Palanza

  1. By: Bengtsson, Erik (Economic History Unit, Gothenburg University); Svensson, Patrick (Department of Urban and Rural Development, Swedish University of Agricultural Sciences)
    Abstract: Using about 1,730 probate inventories, this paper studies the wealth of peasant farmers in Sweden for the years 1750, 1800, 1850 and 1900. The Gini coefficient for the farmers’ wealth grew from 0.46 in 1750 to 0.73 in 1900. Average wealth grew rapidly, tripling over the nineteenth century. Looking in greater depth at four local areas (Kullings, Sjuhundra, Lagunda, and Bara hundreds), we show that over the period the diversity of farmers’ wealth grew, as did their financial sophistication; borrowing and lending patterns became more complex and the use of banks and other institutions grew while personal financial transactions became rarer. Farmers who lived close to the major grain markets in Stockholm and the mining district Bergslagen were wealthier than others, as were farmers on fertile plains and, in 1900, those living in coastal areas. Increased market access by 1900 – in terms of cities and foreign demand – meant that farmers well-placed in terms of geography and infrastructure benefited much more than farmers on what became the periphery, as regional inequality within the farmer class increased. Over the nineteenth century land prices increased much more in some areas than in others, but in the country as a whole they rose steeply.
    Keywords: inequality; wealth; Sweden; peasant farmers; rural society; living standards; probate inventories
    JEL: N00 N33 N53 Q10
    Date: 2018–09–04
  2. By: Franck, Raphaël (The Hebrew University of Jerusalem); Galor, Oded (Brown University)
    Abstract: This research explores the effect of industrialization on the process of development. In contrast to conventional wisdom that views industrial development as a catalyst for economic growth, the study establishes that while the adoption of industrial technology was conducive to economic development in the short-run, it has detrimental effects on the standard of living in the long-run. Exploiting exogenous geographic and climatic sources of variation in the diffusion and adoption of steam engines across French departments during the early phases of industrialization, the research establishes that intensive industrialization in the middle of the 19th century increased income per capita in the subsequent decades but diminished it by the turn of the 21st century. The analysis further suggests that the adverse effect of earlier industrialization on long-run prosperity can be attributed to the negative impact of the adoption of unskilled-intensive technologies in the early stages of industrialization on the long-run level of human capital and thus on the incentive to adopt skill-intensive technologies in the contemporary era. Preferences and educational choices of second generation migrants within France indicate that industrialization has triggered a dual techno-cultural lock-in characterized by a reinforcing interaction between technological inertia, reflected by the persistence predominance of low-skilled-intensive industries, and cultural inertia, in the form of a lower predisposition towards investment in human capital. These findings suggest that the characteristics that permitted the onset of industrialization, rather than the adoption of industrial technology per se, have been the source of prosperity among the currently developed economies that experienced an early industrialization. Thus, developing economies may benefit from the allocation of resources towards human capital formation and skilled intensive sectors rather than toward the promotion of traditional unskilled-intensive industrial sectors.
    Keywords: economic growth, human capital, industrialization, steam engine, cultural inertia
    JEL: N33 N34 O14 O33
    Date: 2018–07
  3. By: Patrick Alexander; Ian Keay
    Abstract: In this paper we document Canada’s trade policy response to late-nineteenth- and earlytwentieth-century globalization. We link newly digitized annual product-specific data on the value of Canadian imports and duties paid from 1870–1913 to establishment-specific production and location information drawn from the manuscripts of the 1871 industrial census. Our findings reveal a highly selective move towards protectionism following the adoption of the National Policy in 1879. Changes in the Canadian tariff schedule narrowly targeted final consumption goods that had close substitutes produced by relatively large, politically influential domestic manufacturers.
    Keywords: Trade integration; Economic models; International topics
    JEL: F F1 F13 F14 F42 N N71
    Date: 2018
  4. By: Vasiliki Fouka (Stanford University); Soumyajit Mazumder (Harvard University); Marco Tabellini (Harvard Business School, Business, Government and the International Economy Unit)
    Abstract: How does the appearance of a new out-group affect the economic, social, and cultural integration of previous outsiders? We study this question in the context of the first Great Migration (1915-1930), when 1.5 million African Americans moved from the US South to urban centers in the North, where 30 million Europeans had arrived since 1850. We test the hypothesis that black inflows led to the establishment of a binary black-white racial classification, and facilitated the incorporation of - previously racially ambiguous - European immigrants into the white majority. We exploit variation induced by the interaction between 1900 settlements of southern-born blacks in northern cities and state-level outmigration from the US South after 1910. Black arrivals increased both the effort exerted by immigrants to assimilate and their eventual Americanization. These average effects mask substantial heterogeneity: while initially less integrated groups (i.e. Southern and Eastern Europeans) exerted more assimilation effort, assimilation success was larger for those that were culturally closer to native whites (i.e. Western and Northern Europeans). These patterns are consistent with a framework in which perceptions of racial threat among native whites lower the barriers to the assimilation of white immigrants.
    Keywords: Immigration, assimilation, Great Migration, race, group identity.
    JEL: J11 J15 N32
    Date: 2018–08
  5. By: David S. Jacks; Dennis Novy
    Abstract: We examine the evolution of market potential and its role in driving economic growth over the long twentieth century. Theoretically, we exploit a structural gravity model to derive a closed-form solution for a widely-used measure of market potential. We are thus able to express market potential as a function of directly observable and easily estimated variables. Empirically, we collect a large dataset on aggregate and bilateral trade flows as well as output for 51 countries. We find that market potential exhibits an upward trend across all regions of the world from the early 1930s and that this trend significantly deviates from the evolution of world GDP. Finally, using exogenous variation in trade-related distances to world markets, we demonstrate a significant causal role of market potential in driving global income growth over this period.
    Keywords: economic geography, market potential, structural gravity, trade costs
    JEL: F10 N70
    Date: 2018
  6. By: Gupta, Bishnupriya
    Abstract: India fell behind during colonial rule. The absolute and relative decline of Indian GDP per capita with respect to Britain began before colonization and coincided with the rising textile trade with Europe in the 18th century. The decline of traditional industries was not the main driver Indian decline and stagnation. Inadequate investment in agriculture and consequent decline in yield per acre stalled economic growth. Modern industries emerged and grew relatively fast. The falling behind was reversed after independence. Policies of industrialization and a green revolution in agriculture increased productivity growth in agriculture and industry, but Indian growth has been led by services. A strong focus on higher education under colonial policy had created an advantage for the service sector, which today has a high concentration of human capital. However, the slow expansion in primary education was a disadvantage in comparison with the high growth East Asian economies
    Keywords: Financial Economics
    Date: 2018–01–01
  7. By: Huber, Kilian; Lindenthal, Volker; Waldinger, Fabian
    Abstract: We study whether antisemitic discrimination in Nazi Germany had economic effects. Specifically, we investigate how the forced removal of Jewish managers affected large German firms. We collect new data from historical sources on the characteristics of senior managers, stock prices, dividends, and returns on assets for firms listed on the Berlin Stock Exchange. After the removal of the Jewish managers, the senior managers at affected firms had fewer university degrees, less experience, and fewer connections to other firms. The loss of Jewish managers significantly and persistently reduced the stock prices of affected firms for at least 10 years after the Nazis came to power. We find particularly strong reductions for firms where the removal of the Jewish managers led to large decreases in managerial connections to other firms and in the number of university-educated managers. Dividend payments and returns on assets also declined. A back-of-the-envelope calculation suggests that the aggregate market valuation of firms listed in Berlin fell by 1.78 percent of German GNP. These findings imply that discrimination can lead to significant economic losses and that individual managers can be key to the success of firms.
    Keywords: "Aryanizations"; discrimination; firms; Managers; Nazi Germany
    JEL: G30 J7 J71 N24 N34 N8
    Date: 2018–07
  8. By: Edwyna Harris (Monash University); Sumner La Croix (Dept. of Economics, University of Hawaii)
    Abstract: In 1834, Britain’s Parliament passed the South Australia Act establishing South Australia as a colony. By December 1835, 130 British investors had purchased 437 priority land orders (PLO) at £81 per order, allowing selection of a surveyed one-acre lot in the capital city of Adelaide and 80 surveyed country acres. In March 1837, PLO investors selected 437 lots from 1,000 surveyed Adelaide lots, with remaining lots sold one week later at auction. Investors who sold city lots in 1838/1839 earned on average 59 times initial investment, while investors who held until 1850/1852 saw the average assessed value of Adelaide lots and buildings increase by 16 times the initial investment in the lot. Initial Investors were able to identify higher-value lots, as higher prices paid for lots in 1837 predict higher sales prices in 1838/1839 and early selection of lots and higher prices paid for lots in 1837 predict higher assessed property values in 1850.
    Keywords: Adelaide, colonization, priority land order, South Australia, auction, Wakefield, Hindmarsh
    JEL: N47 N57 N97 R30 D44
    Date: 2018–08
  9. By: Borowiecki, Karol Jan; Graddy, Kathryn
    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 artist inflows also see a greater inflow of native artists.
    Keywords: artistic occupations; artists; Immigration
    JEL: J4 J6 N3 N9 Z1
    Date: 2018–07
  10. By: Crafts, Nicholas
    Abstract: British productivity growth disappointed during the early postwar period. This reflected inadequate investment in equipment and skills but also entailed inefficient use of inputs. Weak management, dysfunctional industrial relations, and badly-designed economic policy were all implicated. The policy framework was partly the result of seeking low unemployment through wage restraint by appeasement of organized labour. A key aspect was weak competition. This exacerbated corporategovernance and industrial-relations problems in the British ‘variety of capitalism’ which sustained low effort bargains and managerial incompetence. Other varieties of capitalism were better placed to achieve fast growth but were infeasible for Britain given its history.
    Keywords: Financial Economics
    Date: 2017–11–11
  11. By: Giovanni Scarano
    Abstract: Since 2013 various eminent mainstream economists have proposed reviving the doctrine of “secular stagnation”. According to these authors, the only explanation for this new trend could be a negative Wicksellian natural rate of interest, produced by an excess of saving over investment at any positive interest rate. But the idea that the real world economy has entered into a new stagnation trend is really the other side of the coin in explaining the extraordinary long-term growth that characterised the aftermath of World War II. This peculiar growth period has been the main research objective of Régulation Theory, which found accumulation regimes and corresponding modes of regulation as its major determinants. In the paper the theoretical explanations of the new secular stagnation theory are compared with those of Régulation theory and with the original Marxist approaches that initially inspired the French régulation theorists.
    Keywords: Equilibrium Interest Rate, Business Cycles, Crisis, Rate of Profit, Profitability
    JEL: B51 E11 E12 E32 E43
    Date: 2018–09
  12. By: Diego Restuccia
    Abstract: I document the salient features of monetary and fiscal outcomes for the Venezuelan economy during the 1960 to 2016 period. Using the consolidated government-budget accounting framework of Chapter 2, I assess the importance of fiscal balance, seigniorage, and growth in accounting for the evolution of debt ratios. I find that extraordinary transfers, mostly associated with unprofitable public enterprises, and not central-government primary deficits, account for the increase in financing needs in recent decades. Seigniorage has been a consistent source of financing of deficits and transfers, especially in the last decade, with increases in debt ratios being important in some periods.
    Keywords: monetary, fiscal, policy, inflation, debt, growth, oil, Venezuela.
    JEL: E00 E02 E3 E4 E5 E6 O1 O4
    Date: 2018–08–22
  13. By: Cage, Julia; Gadenne, Lucie
    Abstract: This paper documents the fiscal cost of trade liberalization: the extent to which countries are able to recover the trade tax revenues lost from liberalizing trade by increasing tax revenues from other sources. Using a novel dataset on government revenues over the period 1792-2006 we compare the fiscal impact of trade liberalization in developing countries and in today’s rich countries at earlier stages of development. We find that trade liberalization episodes led to larger and longer-lived decreases in total tax revenues in developing countries since the 1970s than in rich countries in the 19th and early 20th centuries. Half the developing countries in our sample experience a fall in total tax revenues that lasts more than ten years after an episode. Results are similar when we consider government expenditures, suggesting decreases in trade tax revenues negatively affect governments’ capacity to provide public services in many developing countries.
    Keywords: Financial Economics
    Date: 2016–10–10
  14. By: Feld, Lars P.; Köhler, Ekkehard A.; Nientiedt, Daniel
    Abstract: Germany's approach to solving the Eurozone crisis is supposedly based on the ideas of Walter Eucken (1891-1950), the founder of ordoliberalism. In this and other contexts, Eucken's work has been described as being in direct opposition to that of John Maynard Keynes. Our paper aims to clarify and differentiate the relationship between the two scholars by making two main points. First, we show that Eucken supported a proto-Keynesian stimulus programme at the height of the Great Depression, the so-called Lautenbach plan of 1931. Second, we critically examine Eucken's description of 'full employment policy', a strategy with obvious parallels to Keynesian economic policy. Additionally, the paper maintains that when comparing Eucken and Keynes, more emphasis should be given to the fact that the former favours a rule-based rather than discretionary approach to policy-making.
    Keywords: Ordoliberalism,Eurozone Crisis,Monetary Policy,Fiscal Policy,History of Economic Thought
    JEL: B31 D78 E63
    Date: 2018
  15. By: Manoel Bittencourt (School of Economic and Business Sciences, University of the Witwatersrand, Johannesburg); Matthew Clance (Department of Economics, University of Pretoria, Pretoria, South Africa); Yoseph Y. Getachew (Department of Economics, University of Pretoria, Pretoria, South Africa)
    Abstract: We study the effect of trade openness on fertility rates in fifty African countries during the 1970 – 2010 period. Allowing for country and time fixed effects, our results indicate that trade openness and imports of manufactured goods are related to lower fertility. Furthermore, trade with the former colonial powers and imports of high-skilled manufactured goods, which include television receivers and telecommunications equipment, are related to lower fertility too. Although Africa still export agricultural products and raw materials, and in contrast with the comparative-advantages prediction, our results suggest that the knowledge and gender norms emanating from imported high-skilled manufactured goods are affecting fertility choices and, ultimately, having a reinforcing effect on Africa's ongoing demographic transition.
    Keywords: openness, fertility, Africa
    JEL: J10 N37 O55
    Date: 2018–08
  16. By: Valentin Zelenyuk (CEPA - School of Economics, The University of Queensland)
    Abstract: In this note we clarify a few important aspects about aggregation in effiency and productivity analysis. By doing so we also sketch a brief historical map on how the area of aggregation in effciency and productivity analysis has been developing to where it is now and its connection to classic studies in economic theory.
    Keywords: Aggregation, Scale Effciency, Industry Effciency, Duality.
    JEL: D24 C43 L25
    Date: 2018–04
  17. By: Hutková, Karolina
    Abstract: This article investigates the adaptations of Italian silk technologies to the environment of Bengal. The case is particularly interesting as the English East India Company (EEIC) invested considerable effort into making the technologies operational in the new climatic and socio-economic context. The article highlights the unequal focus on technical adaptations, although it points out that commercial and economic, and social adaptations were not completely neglected. It concludes that the key obstacle for the commercial success of the transferred technologies was the lack of attention to institutional adaptations. Institutional problems that arose were the result of lack of leadership and managerial innovations on the part of the company rather than the technology itself.
    Keywords: adaptation; technology transfer; Bengal silk industry; English East India Company; entrepreneurship and managerial innovations
    JEL: J50
    Date: 2017–02–23
  18. By: Harrison, Mark
    Abstract: In terms of economic development, Russia before and after the Soviet era was just an average economy. If the Soviet era is distinguished, it was not by economic growth or its contribution to human development, but by the use of the economy to build national power over many decades. In this respect, the Soviet economy was a success. It was also a tough and unequal environment in which to be born, live, and grow old. The Soviet focus on building national capabilities did improve opportunities for many citizens. Most important were the education of women and the increased survival of children. The Soviet economy was designed for the age of mass production and mass armies. That age has gone, but the idea of the Soviet economy lives on, fed by nostalgia and nationalism.
    Keywords: Financial Economics, International Development
    Date: 2017–05–05
  19. By: Ajit Zacharias; Thomas N. Masterson; Fernando Rios-Avila
    Abstract: This paper documents the sources of data used in the construction of the estimates of the Levy Institute Measure of Economic Wellbeing (LIMEW) for the years 1959, 1972, 1982, 1989, 1992, 1995, 2000, 2001, 2004, 2007, 2010, and 2013. It also documents the methods used to combine the various sources of data into the synthetic dataset used to produce each year's LIMEW estimates.
    Keywords: Levy Institute Measure of Economic Wellbeing (LIMEW); Statistical Matching; Synthetic Datasets
    JEL: D31 C10 H23 I30
    Date: 2018–08
  20. By: Elsa Voytas (Princeton University); Laia Balcells (Georgetown University); Valeria Palanza (Universidad Catolica de Chile)
    Abstract: Can transitional justice museums promote reconciliation after political violence? Existing scholarship suggests that transitional justice policies aid processes of reconciliation and promote tolerance by acknowledging and imparting a shared history of past events. These notions motivate the widespread construction of transitional justice museums. Skeptics, however, caution that such policies can induce a polarizing effect, ingraining societal divisions. This project draws on evidence from a novel field experiment studying the Museum of Memory and Human Rights in Santiago, Chile to answer this question. Our findings suggest that though perceptions of the museum vary along ideological lines, Chilean university students display greater support for democratic institutions, are more likely to reject institutions associated with the repressive period, and are more likely to approve of restorative transitional justice policies after visiting regardless of their ideological priors. These results suggest that memorial museums can support processes of reconciliation by influencing political attitudes of visitors.
    Keywords: Transitional justice, Latin America, field experiments, reconciliation, museums and memorials, memory, Chile
    JEL: N46 C93 D74 F51
    Date: 2018–08

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