nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2018‒11‒19
38 papers chosen by

  1. Corporate Governance, Accounting Transparency and Stock Exchange Sizes in Germany, Japan and “Anglo-Saxon” Economies, 1870-1950 By HANNAH, Leslie
  2. Flight-to-safety and the Credit Crunch: A new history of the banking crisis in France during the Great Depression By Baubeau, Patrice; Monnet, Eric; Riva, Angelo; Ungaro, Stefano
  3. The Rise of Private Foundations as Owners of Swedish Industry: The Role of Tax Incentives 1862–2018 By Johansson, Dan; Stenkula, Mikael; Wykman, Niklas
  4. The reversal of fortune, extractive institutions and the historical roots of racism By Bonick, Matthew; Farfán-Vallespín, Antonio
  5. Long-Lasting Social Capital and its Impact on Economic Development: The Legacy of the Commons By Daniel Montolio; Ana Tur-Prats
  6. Higher Education in Management : the Case of France By Guillaume Carton; Stéphanie Dameron; Thomas Durand
  7. Has the American Output Growth Path Experienced a Permanent Change? By Thomas Lustenberger
  8. Family Economics Writ Large By Jeremy Greenwood; Nezih Guner; Guillaume Vandenbroucke
  9. Measuring development: from the UN’s perspective By Morgan, Mary S.; Bach, Maria
  10. A Revisit to the Forgotten Debate after Half-Century: Balanced Versus Unbalanced Growth By Xiao Jiang; Chau Nguyen
  11. An appraisal of Friedman's positively sloped Phillips Curve conjecture By Rod Cross
  12. A Theory of Conservative Revivals By Murat Iyigun; Jared Rubin; Avner Seror
  13. The energy transition in the Swedish iron and steel sector, 1800-1939 By Ducoing, Cristián; Olsson-Spjut, Fredrik
  14. A Nazi "Killer" Amendment By Moldovanu, Benny
  15. "Finance and growth" re-loaded By Méndez, Lizethe; Ongena, Steven
  16. Business and Economics in the cold war: an approach from a non-core country (Spain) By ANGEL CALVO
  17. Circumventing the Hart Puzzle By Lionel de Boisdeffre
  18. Long Run Growth in Haiti By Martín Cicowiez; Agustín Filippo; Sebastián Katz
  19. Inequality in the Joint Distribution of Consumption and Time Use By Jeehoon Han; Bruce Meyer; James X. Sullivan
  20. Could a large scale asset purchase programme have mitigated the Great Depression? By Garabedian, Garo; Stuart, Rebecca
  21. Cosmographies for the discovery, development and diffusion of useful and reliable knowledge in pre-industrial Europe and Late imperial China: a survey and speculation By O'Brien, Patrick
  22. The Rise and Fall of the Natural Interest Rate By Gabriele Fiorentini; Alessandro Galesi; Gabriel Pérez-Quirós; Enrique Sentana
  23. The Economics of Renaissance Art By Federico Etro
  24. The Lack of European Productivity Growth: Causes and Lessons for the U.S. By Jesus Fernandez-Villaverde; Lee Ohanian
  25. Two controlling terms: half a century of quiet coexistence By Juraj Misun; Ivana Misunova Hudakova
  26. Small planet in the vastness of space: Globalization and the proliferation of UFOs, aliens, and extraterrestrial threats to humanity By Boli, John
  27. Agricultural Development under Environmental Constraints: A Micro-Level Study of Four Villages in Eastern Hebei By Cheng, Y.
  28. How slow is the recovery of loans to firms in Italy? By Ginette Eramo; Roberto Felici; Paolo Finaldi Russo; Federico Signoretti
  29. Thirty Years of Economic Growth in Africa By António Santos; João Amador
  30. Completing Markets with Contracts: Evidence from the First Central Clearing Counterparty By Vuillemey, Guillaume
  31. Arrival of Young Talents: The Send-down Movement and Rural Education in China By Chen, Yi; Fan, Ziying; Gu, Xiaomin; Zhou, Li-An
  32. 100 Jahre deutsches Steuersystem: Revolution und Evolution By Stefan Bach
  33. The Nobel Prize in Economics: individual or collective merits? By José Alberto Molina; David Iñiguez; Gonzalo Ruiz; Alfonso Tarancón
  34. Viet Nam: The dragon that rose from the ashes By Finn Tarp
  35. The Hurwicz Program, Past and Suggestions for the Future By Andrew Postlewaite; David Schmeidler
  36. Impact of agricultural output on economic growth in West Africa: Case of Benin By Karimou, S.M.
  37. Credit mechanics - a precursor to the current money supply debate By Decker, Frank; Goodhart, Charles A
  38. Resilience to Economic Shrinking: A Social Capability Approach to Processes of Catching up in the Developing World 1951-2016 By Andersson, Martin

  1. By: HANNAH, Leslie
    Abstract: Modern discussions of corporate governance have focused on convergence of “varieties of capitalism,” particularly the recent “Americanisation” of laws and voluntary codes in Germany, Japan, and other civil law countries. However German and Japanese legal and business historians have suggested that corporate governance, accounting transparency or other favourable factors in their countries were historically a match for - or even superior to - those in the US. An alleged consequence was deeper penetration by the Berlin and Tokyo stock exchanges of their domestic economies than of the US by the New York Stock Exchange (NYSE), using measures such as market capitalization/GDP ratios. This paper reviews the classic Rajan and Zingales (2003) data on the sizes of stock exchanges. It concludes that the evidence for Japanese historical precocity relative to the US, after the necessary allowance is made for regional stock exchanges and corporate bond finance, stands up better to this closer examination than that for Germany. Many financial historians (e.g. Musacchio and Turner 2013) now agree that stock exchange development was not historically determined by legal origins (“Anglo-Saxon” common vs Euro-Japanese civil law), though today it appears to be driven by legal rules protecting shareholders and/or bondholders and limiting directorial autocracy and information asymmetry. However, both today and historically in some cultures private order rules (voluntary codes, bourse listing requirements, bankers as trusted intermediaries, block-holder monitoring, etc) offered substitute protections, or at least complemented protective laws. This paper reviews the plausibility of these determinants of historical stock exchange sizes - and others that have been neglected - in Japan, Germany, and elsewhere, before 1950.
    Keywords: legal origins, corporate governance, stock exchanges, auditing, OTC markets
    JEL: F21 G10 G30 N20
    Date: 2018–11
  2. By: Baubeau, Patrice; Monnet, Eric; Riva, Angelo; Ungaro, Stefano
    Abstract: Despite France's importance in the interwar world economy, the scale and consequences of the French banking crises of 1930-1931 were never assessed quantitatively due to lack of data in the absence of banking regulation. Using a new dataset of individual balance sheets from more than 400 banks, we show that the crisis was more severe and occurred earlier than previously thought, and it was very asymmetric, without affecting main commercial banks. The primary transmission channel was a flight-to-safety of deposits from banks to savings institutions and the central bank, leading to a major, persistent disruption in business lending. In line with the gold standard mentality, cash deposited with savings institutions and the central bank was used to decrease marketable public debt and increase gold reserves, rather than pursue countercyclical policies. Despite massive capital inflows, France suffered from a severe, persistent credit crunch.
    Keywords: banking panics; flight-to-safety; France; gold standard; Great Depression; Savings Banks
    JEL: E44 E51 E58 G01 G21 G23 G33 N14 N24
    Date: 2018–10
  3. By: Johansson, Dan (Örebro University School of Business); Stenkula, Mikael (Research Institute of Industrial Economics (IFN)); Wykman, Niklas (Örebro University School of Business)
    Abstract: The tax system has at times favoured firm control through private foundations, which has been argued to inhibit high-impact entrepreneurship and economic growth. However, research has been hampered due to a lack of systematic historical tax data. The purpose of this study is threefold. First, we describe the evolution of tax rules for private foundations in Sweden between 1862 and 2018. Second, we calculate the marginal effective tax rate on capital income. Third, we examine the incentives to use private foundations as a means for corporate control by comparing the taxation of private foundations and of high-impact entrepreneurs. Tax incentives help explain why economically significant private foundations were founded between World War I and the 1960s.​
    Keywords: Family firms; Foundations; High-impact entrepreneurship; Owner; Taxation
    JEL: D31 H32 K34 L26 N23 O43 P12 P14
    Date: 2018–11–06
  4. By: Bonick, Matthew; Farfán-Vallespín, Antonio
    Abstract: We show that differences in present levels of racism within a sample of former European colonies can be traced back to historical institutions. Our identification strategy relies on the reversal of fortune, a historical shock capturing the exogenous establishment of different institutions during the onset of European colonization. Using both OLS and multilevel analysis, we find extractive historical institutions to be a strong predictor of higher levels of racism independent of present and other explanatory factors at the individual and country levels. We argue and provide evidence this relationship is causal and operates through persistent internal norms, beliefs and values, resilient to changes in institutional and economic circumstances.
    Date: 2018
  5. By: Daniel Montolio (Department of Economics, University of Barcelona and Barcelona Institute of Economics.); Ana Tur-Prats (Department of Economics, University of California, Merced.)
    Abstract: This paper analyzes the historical determinants and long-term persistence of social capital, as well as its effect on economic development, by looking at the legacy of the commons in a Spanish region. In medieval times, common goods were granted to townships and were managed collectively by local citizens. This enabled the establishment of institutions for collective action and self-government. Common goods persisted until the second half of the nineteenth century. We argue that the experience of cooperation among villagers, repeated over the centuries, increased the social capital in each local community. In 1845, a law forced small villages to merge with others, a fact which generated exogenous variation in the number of mergers (i.e., cooperative networks) that each modern municipality was required to have. We exploit this change in an IV and RD setting and find that current municipalities formed by a greater number of old townships have a denser network of associations. We also find that higher social capital is associated with more economic development.
    Keywords: collective action, self-government, long-term persistence, common goods
    JEL: N90 P48 Z10 H49
    Date: 2018–11
  6. By: Guillaume Carton (DRM - Dauphine Recherches en Management - Université Paris-Dauphine - CNRS - Centre National de la Recherche Scientifique); Stéphanie Dameron (DRM - Dauphine Recherches en Management - Université Paris-Dauphine - CNRS - Centre National de la Recherche Scientifique); Thomas Durand (LIRSA - Laboratoire interdisciplinaire de recherche en sciences de l'action - CNAM - Conservatoire National des Arts et Métiers [CNAM])
    Abstract: When compared to the social sciences, the science of management is an altogether new field in France. J.B. Say taught his first courses at Cnam in what was called at that time "applied political economy" from 1805 onwards. The first major management schools in France appeared between the nineteenth and the early twentieth centuries, notably with the founding of ESCP in 1819, HEC in 1881 and ESSEC in 1907. These business schools were created primarily by the Chambers of Commerce and Industry (CCI), a group of public institutions fashioned by Napoleon in 1803 in order to sustain the development of both private companies and the regional economy (De Montmorillon 2011). Until the 1960s, most knowledge of business management belonged primarily to practitioners and consultants. It was only in 1955 that the first master's degree in management was offered by a public university, followed by Pierre Tabotoni's creation of the first institute for business management (Institut d'Administration des Entreprises, IAE).
    Keywords: management research,business schools,management education systems,business schools governance,business models,students,business faculties,academic
    Date: 2018
  7. By: Thomas Lustenberger
    Abstract: In this paper, I derive and apply three univariate methods and one bi-variate method to estimate permanent and transitory components of the American output growth path during the 1790 to 2017 period. The results show that statistical tests give little support to the hypothesis of significant permanent growth rate changes (univariate methods). The "special century" (1870-1970, as defined by Gordon (2016)) exhibited more volatile permanent shifts in the output level compared to recent decades (bivariate method).
    Keywords: Output growth, business cycle, permanent and transitory components
    JEL: E32 E47
    Date: 2018
  8. By: Jeremy Greenwood (University of Pennsylvania); Nezih Guner (CEMFI, Centro de Estudios Monetarios y Financieros); Guillaume Vandenbroucke (Federal Reserve Bank of St. Louis)
    Abstract: Powerful currents have reshaped the structure of families over the last century. There has been (i) a dramatic drop in fertility and greater parental investment in children; (ii) a rise in married female labor-force participation; (iii) a significant decline in marriage and a rise in divorce; (iv) a higher degree of positive assortative mating; (v) more children living with a single mother; (vi) shifts in social norms governing premarital sex and married women's roles in the workplace. Macroeconomic models explaining these aggregate trends are surveyed. The relentless flow of technological progress and its role in shaping family life are stressed.
    Keywords: Assortative mating, baby boom, baby bust, family economics, female labor supply, fertility, household income inequality, household production, human capital, macroeconomics, marriage and divorce, quality-quantity tradeoff, premarital sex, quantitative theory, single mothers, social change, survey paper, technological progress, women's rights.
    JEL: D58 E1 E13 J1 J2 J12 J13 J22 N30 O3 O11 O15
    Date: 2017–01
  9. By: Morgan, Mary S.; Bach, Maria
    Abstract: Recipes for creating development have changed radically since the international community first thought to intervene in such historical processes soon after WWII. During this time, views about how to measure development have also changed dramatically, moving from relatively simple to relatively complex measurement systems. This paper charts these changes using both the oral interview histories and retrospective book accounts given by those involved with the UNDP, and offers an analysis of their ‘political economy of numbers’. Their move from using GNP per head to the SDGs is analysed in terms of the potential performativity of those numbers in prompting development and for creating accountability.
    JEL: N0
    Date: 2018–08–08
  10. By: Xiao Jiang (Denison University); Chau Nguyen (Oxford University)
    Abstract: The debate between balanced and unbalanced growth doctrines has generated much heat since the publication of Rosenstein-Rodan’s seminal work in 1943 but vanished in early 1980s. This paper intends to empirically revisit the forgotten debate by first compiling a harmonized international dataset that contains sectorial value-added data for up to 175 countries over 45 years. This dataset enables us to construct the index of sectorial imbalance for each country, which further allows us to update the key empirical tests for the balanced and unbalance growth hypotheses that appeared in the literature. Moreover, we also conduct cross-country growth regression analysis to systematically examine the effects of sectorial balance (or imbalance) on growth. Overall, we have found empirical support for the balanced growth hypothesis.
    Keywords: Growth, sectorial balance, development, cross-country regression
    JEL: O40 O25 C12 B29
    Date: 2018–11
  11. By: Rod Cross (Department of Economics, University of Strathclyde)
    Abstract: In this paper we ask what happens in the medium-term interregnum between the domain of the short-run Phillips curve and that of the long-run effects on the natural rate of unemployment, according to Friedman's conjecture. We discuss the new classical and hysteresis alternatives to Friedman's conjecture, and some of the methodological issues involved in appraising the conjecture. A simple model, and some data, are employed in this task.
    Keywords: Friedman, Nobel Prize Address, Phillips Curves, Short Run, Medium Run, Long Run.
    JEL: B22 E30 E31 N10
    Date: 2018–09
  12. By: Murat Iyigun (University of Colorado, Boulder); Jared Rubin (Chapman University); Avner Seror (Chapman Univeristy)
    Abstract: Why do some societies fail to adopt more efficient political and economic institutions in response to changing economic conditions? And why do such conditions sometimes generate conservative ideological backlashes and, at other times, progressive social and political movements? We propose an explanation that highlights the interplay—or lack thereof—between productivity, cultural beliefs and institutions. In our model, production shocks that benefit one sector of the economy may induce forward-looking elites to provide public goods associated with a different, more traditional sector that benefits their interests. This investment results in more agents generating cultural beliefs complementary to the provision of the traditional good, which in turn increases the political power of the traditional elite. Hence, productivity shocks in a more advanced sector of the economy can increase investment, political power, and cultural capital associated with the more traditional sector of the economy, in the process generating a revival of beliefs associated with an outdated economic environment.
    Keywords: Institutions, Conservatism, Cultural Beliefs, Cultural Transmission, Institutional Change, Technological Change
    JEL: D02 N40 N70 O33 O38 O43 Z10
    Date: 2018
  13. By: Ducoing, Cristián (Department of Economic History, Lund University); Olsson-Spjut, Fredrik (Umeå University)
    Abstract: This article analyses the particular energy transition of the Swedish iron and steel sector (1800- 1939), a relevant actor in the European context during the nineteenth and twenteenth century. The Swedish iron and steel sector is an interesting case to analyse in the perspective of energy transition and the composition and change of the capital stock (classified by energy technology). An in-depth study of the change of the capital stock in the sector will enable us to study the dynamics of energy transition; moreover, the Swedish iron and steel sector, with particular emphasis in technology adoption, lock-in carbon infrastructure and energy transitions is a powerful tool to understand current difficulties to change our infrastructure towards cleaner energy sources.
    Keywords: Energy transition; Sweden; Iron and Steel
    JEL: N53 N73 Q32 Q40
    Date: 2018–11–06
  14. By: Moldovanu, Benny
    Abstract: We study killer amendments under various informational regimes and postulated voter behavior. In particular, the success chances of killer amendments are shown to differ across several well-known binary, sequential voting procedures. In light of this theory, we describe a remarkable instance of a motion-proposing and agenda-setting strategy by the Nazi party, NSDAP, during the Weimar Republic. Their purpose was to kill a motion of toleration of the new 1928 Government, and they were supported by their fiercest enemies on the far left, the communist party. The combined killer strategy was bound to be successful, but it ultimately failed because of another agenda-setting counter-move undertaken by the Reichstag president.
    Date: 2018–10
  15. By: Méndez, Lizethe; Ongena, Steven
    Abstract: We assess the relationship between finance and growth over the period 1980-2014. We estimate a cross-country growth regression for 48 countries during 20 periods of 15 years starting in 1980 (to 1995) and ending in 1999 (to 2014). We use OLS and IV estimations and we find that: 1) overall financial development had a positive effect on economic growth during all periods of our sample, i.e., we confirm that from 1980 to 2014 financial services provided by the various financial systems were significant (to various degrees) for firm creation, industrial expansion and economic growth; but that, 2) the structure of financial markets was particularly relevant for economic growth until the financial crisis; while 3) the structure of the banking sector played a major role since; and finally that, 4) the legal system is the primary determinant of the effectiveness of the overall financial system in facilitating innovation and growth in (almost) all of our sample period. Hence, overall our results suggest that the relationship between finance and growth matters but also that it varies over time in strength and in sector origination.
    Keywords: Financial Structure,Economic Growth,Financial Development
    JEL: O16 G20
    Date: 2018
  16. By: ANGEL CALVO (University of Barcelona)
    Abstract: The imposition of political motives on far-reaching economic decisions has been at the center of international debate for many years, especially during the Cold War. Frequent attacks of international terrorism have brought to the foreground the paramount importance of international security and policies that are conducive to it. This paper aims to deepen the understanding of the functioning of some features of the world economy during the Cold War. It analyzes the scope of policies to control the transfer of Western advanced technology to enemy countries in the framework of a division of the world into blocks. In particular, it is proposed to examine the mechanisms of the technological embargo imposed by the hegemonic power in the West -USA- and its economic impact on several Spanish companies of the high-end sectors. This contribution adopts an interdisciplinary perspective that combines the economic approach of Adler-Karlsson (1968), the most general of the geo-economics and the business of Segreto (2006). The work lies on an updated bibliography and incorporates new primary sources, including business and USA governmental documents.
    Keywords: Cold War, Transfer of technology, entrepreneurship, CoCom, exports control.
    Date: 2018–07
  17. By: Lionel de Boisdeffre (Université Paris1 Panthéon-Sorbonne - Centre d'Economie de la Sorbonne)
    Abstract: The paper demonstrates the existence of sequential equilibria in a pure exchange economy, where asymmetrically informed agents exchange consumption goods and securities of all kinds, on incomplete markets. Standard models rely on Radner's (1972, 1979) rational expectation assumptions, along which agents know the maps between the information signals, the states of nature and the equilibrium prices. As shown by Hart (1975), equilibrium may then fail to exist, even when agents have symmetric information and smooth preferences. In that setting, Duffie-Shafer (1985) shows from differential topology arguments, that interior equilibria exist generically. The current paper proceeds differently. It drops rational expectations to allow for an infinitesimal uncertainty over future spot prices. This device permits to circumvent Hart's 1975 problem, without using differential topology. Then, the paper shows that a generic condition on payoffs and forecasts guarantees the exostence of equilibria. It is consistent with non-transitive preferences, non-interior consumptions, asymmetric information and normalized spot prices at equilibrim. It also serves to prove existence in a more general model, which drops Radner's rational expectations
    Keywords: sequential equilibrium; perfect foresight; existence of equilibrium; rational expectations; financial markets; asymmetric information; arbitrage
    JEL: D52
    Date: 2018–09
  18. By: Martín Cicowiez (CEDLAS-FCE-UNLP); Agustín Filippo (IADB); Sebastián Katz
    Abstract: In this paper, we first assess the historical evolution of total factor productivity in Haiti and then consider alternative scenarios related to accelerating growth. Specifically, we focus on issues of intertemporal coordination between population growth, TFP (Total Factor Productivity), capital accumulation, foreign debt, output, and consumption. To that end, we developed a model of the Ramsey-Cass-Koopmans type. This class of models are the workhorse of most contemporary work in modeling the long and very long term growth of countries (Barro and Sala-i-Martin 2004 and Acemoglu 2009). In doing so, we make two contributions to the empirical economic analysis of developing countries such as Haiti: (a) we estimate Haiti’s capital stock and perform a growth accounting exercises using data that goes back to the 1950s; and (b) we built a 2016 macro consistent dataset and use it to calibrate a long-run growth model for a small open economy such as Haiti.
    JEL: F43 O41 O20
    Date: 2018–11
  19. By: Jeehoon Han (University of Chicago); Bruce Meyer (The University of Chicago); James X. Sullivan (University of Notre Dame)
    Abstract: This paper examines inequality in both leisure and consumption over the past four decades using time use surveys stretching from 1975 to 2016. We show that individual and family characteristics, especially when including work hours, explain most of the long run variation in leisure. We then use these characteristics to predict the distribution of leisure in the Consumer Expenditure Survey, a survey that also provides detailed information on consumption. The advantage of this approach is that it gives us measures of consumption and leisure at the family level within a single data source. We find that leisure time is highest for families at the bottom of the consumption distribution, and typically declines monotonically as consumption rises. However, the consumption-leisure gradient is small. We find noticeable differences across family types, with the gradient being largest for single parent families and single individuals and smallest for families with a head age 65 or older. Overall, these results indicate that including both leisure and consumption, as opposed to just consumption, in a measure of economic well- being will result in less inequality. However, because the consumption-leisure gradient is not very steep, the dampening effect of leisure on overall inequality is small.
    Keywords: Inequality, welfare, poverty, Labor Supply
    JEL: D63 I30 J22
    Date: 2018–11
  20. By: Garabedian, Garo (Central Bank of Ireland); Stuart, Rebecca (Central Bank of Ireland)
    Abstract: Since Friedman and Schwarz (1963), the role of the Federal Reserve during the Great Depression has been an issue of debate. In this paper, we focus on the purchases of government securities by the Federal Reserve over a four-month period in 1932. Using a Bayesian VAR model, we estimate the effect of an extension of this programme in conjunction with an interest rate cut on a range of variables capturing prices, output and macro-financial linkages. Our results indicate that this policy would have substantially shortened and reduced the impact of the Great Depression.
    Keywords: Federal Reserve, Bayesian VARs, Quantitative easing, Great Depression
    JEL: B16 E51 E58
    Date: 2018–07
  21. By: O'Brien, Patrick
    Keywords: economic history; long run growth; methodology; education; science; technology and culture
    JEL: N01 N30 N70
    Date: 2018–11
  22. By: Gabriele Fiorentini; Alessandro Galesi; Gabriel Pérez-Quirós; Enrique Sentana
    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
  23. By: Federico Etro
    Abstract: I analyze the market of paintings in Florence and Italy (1285-1550). Hedonic regressions on real prices allow me to advance evidence that the market was competitive and that an important determinant of artistic innovation was driven by economic incentives. Price differentials reflected quality differentials between painters as perceived at the time (whose proxy is the length of the biography of Vasari) and did not depend on regional destinations, as expected under monopolistic competition with free entry. An inverse-U relation between prices and age of execution is consistent with reputational theories of artistic effort, and prices increased since the 1420s
    Date: 2018
  24. By: Jesus Fernandez-Villaverde (Department of Economics, University of Pennsylvania); Lee Ohanian (Department of Economics, Stanford University)
    Abstract: This paper draws lessons from post-World War II Western European economic performance for the current U.S. economy. We document that much of Western Europe grew very quickly from the end of World War II up to the mid-1970s, reflecting policies that incentivized technology adoption and investment in physical and human capital. But since then, European policies have changed considerably, with higher tax rates and increased regulatory barriers that have reduced competition and new business formation. We discuss how the U.S. has shown signs of becoming like Europe over the last decade, and argue why policy reforms are key to restoring U.S. growth.
    Keywords: Productivity growth, Europe’s economic performance, economic policy
    JEL: E02 E30 E60
    Date: 2018–09–07
  25. By: Juraj Misun (University of Economics in Bratislava); Ivana Misunova Hudakova (University of Economics in Bratislava)
    Abstract: The word control originates from Latin and is currently a popular expression in all European languages. During its development, it gained different meanings. In some cases, the key aspect was comparison, in other corrective action. The German term ?controlling? was put into use in early seventies in business economy, which marks the date of birth of the parallel use of the two terms of controlling. Due to certain conditions, this problem has been hidden. Currently the translation of the German term into English can cause problems. The aim of this conceptual paper is to highlight the issue of using the term controlling in Europe by analyzing the available literature and to propose a possible solution of the problem.
    Keywords: Controlling, management function, management accounting, management control
    JEL: M10 M19 M20
    Date: 2018–10
  26. By: Boli, John
    Abstract: Globalization entails conceiving the world as a single social unit whose boundary encompasses the entire globe. Beyond the boundary lies the Outside, which becomes the object of increasing attention as globalization intensifies. Since the late 19th century, and above all since the mid-20th century, numerous forms of cultural production have arisen to fill the great void of the Outside, including astronomy and astrophysics - which helped demarcate the boundary initially - and a wide variety of imaginative cultural spheres: observer reports of UFO sightings; crop circle formations attributed to extraterrestrials; tales of alien abductions; books, films, newspaper articles, video games, and doctoral dissertations about alien life and alien invasions. I use yearly data regarding these types of cultural production during the recent period of intensifying globalization (mostly since the 1940s) to test four hypotheses about globalization and the Outside: (1) that such cultural production increases with globalization, (2) that it declines during major disruptions in world society, (3) that some forms of such cultural production may be fads that decline even as globalization intensifies, and (4) based on a Durkheimian argument, that cultural production regarding the nature of aliens in close encounters strongly favors humanoid forms. The results generally support the hypotheses, with most cultural production forms according with the first two hypotheses and only crop circle production displaying a faddish form.
    Keywords: Globalization,UFOs,Extraterrestrial Threats
    Date: 2018
  27. By: Cheng, Y.
    Abstract: It is widely accepted that China's agrarian economy is experiencing a profound capitalization/modernization transformation. Peasants in Houjiaying village, where I conducted my field research,however, have been excluded from this great transition and instead are experiencing unstable development. At the same time, peasants in Jingerzhuang village, only two kilometers away, are getting rich by planting vegetables and have successfully achieved the transition from "old farming" to "new agriculture." Why are people who live only two kilometers apart experiencing totally different development paths? This article intended to answer the above question and explore the formation and development process of China's "new agriculture"(both labor and capital intensive) based on the micro experiences of four villages since 1936 until 2015 in eastern Hebei Province (North China). In addition to the Manchuria Railway Materials of North China (1936-1941), local archives (including soil and water records) and statistics since 1949 are used. By using grounded theory analysis and process tracking methods, and the GIS software, we draw the conclusion that the changing natural environmental constraints (soil types and irrigation condition) and village governance structure were playing an important role during this great transition. Acknowledgement : This article has benefited the detailed comments and critique of Philip Huang, to whom I express my sincerest thanks. I also thank Zhang Jiayan for his detailed comments and advice. I deeply appreciate the assistance and support of the staff of the Nijingzhen government and township statistics station. I would also like to acknowledge my debt to Richard Gunde for his help in improving my English.
    Keywords: Environmental Economics and Policy
    Date: 2018–07
  28. By: Ginette Eramo (Bank of Italy); Roberto Felici (Bank of Italy); Paolo Finaldi Russo (Bank of Italy); Federico Signoretti (Bank of Italy)
    Abstract: This paper studies the characteristics of the recent evolution of loans to non-financial firms in Italy from an historical perspective, with the aim of ascertaining whether the ongoing recovery is creditless; the main demand- and supply-side determinants of credit are also discussed. We find the following results. First, bank loan dynamics have been weak compared to the universe of recoveries in 13 euro-area countries since 1980; however, credit has evolved in line with the median pattern in the restricted sample of recoveries following deep and long recessions and/or recessions associated with banking crises. Second, the reduction in loans has been common to firms of all sizes, though it has been more pronounced for smaller ones. Third, based on a review of credit market indicators, survey evidence and econometric studies, the weakness of lending to firms has been in line with subdued dynamics of demand; the stringency of lending criteria has also contributed, in particular for smaller and riskier firms.
    Keywords: creditless recovery, credit demand, credit supply, small firms financing
    JEL: E32 E50 G20
    Date: 2018–11
  29. By: António Santos; João Amador
    Abstract: This paper examines the contribution of employment, capital accumulation and total factor productivity (TFP) to economic growth in African countries over the period 1986-2014. The methodology consists in the estimation of a translog dynamic stochastic production frontier for a set of 49 African economies, thus allowing for the breakdown of TFP along efficiency developments and technological progress. Although the heterogeneity amongst African countries poses a challenge to the estimation of a common production frontier, this is the best approach to perform cross-country comparisons. The results of our growth accounting exercise are more accurate for the contribution of input accumulation and TFP to GDP growth than for the separation between contributions of technological progress and efficiency. We conclude that economic growth patterns differ across African countries but they have been almost totally associated to input accumulation, notably in what concerns capital. The experience of Egypt, Nigeria and South Africa - the three largest African economies - confirms this pattern.
    JEL: C11 O47 O55
    Date: 2018
  30. By: Vuillemey, Guillaume
    Abstract: I study the real effects a contracting innovation that suddenly made financial markets more complete: central clearing counterparties (CCPs) for derivatives. The first CCP to provide full insulation against counterparty risk was created in Le Havre (France) in 1882, in the coffee futures market. Using triple difference-in-differences estimation, I show that central clearing changed the geography of trade flows Europe-wide, to the benefit of Le Havre. Inspecting the mechanism using trader-level data, I show that the CCP was instrumental both to mitigate adverse selection issues and to solve a "missing market" problem. Increased risk-sharing possibilities enabled more gains from trade to be realized. The successful contractual innovation quickly spread to new exchanges.
    Keywords: Central clearing; Contracts; incomplete markets; International trade
    JEL: F14 G23
    Date: 2018–10
  31. By: Chen, Yi; Fan, Ziying; Gu, Xiaomin; Zhou, Li-An
    Abstract: This paper studies human-capital spillovers and its persistence by exploiting a unique event in modern China|the send-down movement. From 1962 to 1979, the Chinese central government mandated the temporary resettlement of roughly 18 million urban youths to rural areas across the country. The movement's coercive features, together with strict restrictions on migration during that period, provide an ideal natural experiment to identify the causal impact of the better-educated sent-down youths (SDYs) on the less-educated local rural residents. Using a county-level dataset compiled from over 3,000 book-length local gazetteers and microlevel population censuses, we find that a greater exposure to SDYs significantly increased local residents' educational achievement. Our estimate shows that the unintended gain of rural education almost compensated the loss in urban China due to the educational disruption during the Cultural Revolution. The positive effect gradually declined as SDYs started to return to their urban homes in the late 1970s, but it never dropped to zero, indicating the persistence of human-capital spillovers. We also find suggestive evidence that the arrival of young talents reshapes the attitudes of local residents toward education.
    Keywords: Send-down Movement,Rural Education,Human-capital Spillovers
    JEL: I25 J24 N35 O15 R23
    Date: 2018
  32. By: Stefan Bach
    Abstract: Die „Erzbergerschen Steuer- und Finanzreformen“ 1919/20 haben das deutsche Steuer- und Finanzsystem nahezu vollständig umgestaltet, modernisiert und stark ausgebaut. Wesentliche Elemente dieser Reformen haben bis heute Bestand– die Grundstrukturen des Steuersystems und der Steuerrechtsordnung sowie der zentralistische kooperative Finanzföderalismus. Das NS-Regime konsolidierte die Reformen und erhöhte die Steuerbelastungen weiter. Wiederaufbau und Wirtschaftswunder begannen bei sehr hohen Einkommensteuersätzen, die erst schrittweise gesenkt wurden. Steuervergünstigungen unterstützten die Struktur- und Regionalpolitik seit den 50er Jahren, der Sozialstaat wurde ausgebaut, seit den 60er Jahren wurden gesamtwirtschaftliche Stabilisierungsziele verfolgt. Ab den 70er Jahren dominierten Strukturprobleme und Konsolidierung die Steuer- und Finanzpolitik, seit den 80er Jahren angebotsökonomische und (neo)liberale Reformagenden. Die Steuern auf hohe Einkommen und Vermögen wurden gesenkt, die indirekten Steuern ausgebaut. Seit der Finanzkrise 2009 stehen Verteilungsfragen wieder stärker im Vordergrund.
    Keywords: History of taxation, taxation system, tax reform
    JEL: N44 H20 H11
    Date: 2018
  33. By: José Alberto Molina (Departamento de Análisis Económico, Universidad de Zaragoza); David Iñiguez (Fundación ARAID, Diputación General de Aragón); Gonzalo Ruiz (Instituto de Biocomputación y Física de Sistemas Complejos (BIFI), Zaragoza); Alfonso Tarancón (Departamento de Física Teórica, Universidad de Zaragoza)
    Abstract: We analyse the research production of Nobel laureates in Economics, employing the JCR Impact Factor (IF) of their publications. We associate this production indicator with the level of collaboration established with other authors, using Complex Networks techniques applied to the co-authorship networks. We study both individual and collaborative behaviours, and how the professional output, in terms of publications, is related to the Nobel Prize. The study encompasses a total of 2,150 papers published between 1935 and the end of 2015 by the laureates in Economics awarded between 1969 and 2016. Our results indicate that direct collaborations among laureates are, in general, rare, but when we add all the co-authors of the laureates, the network becomes more dense, and appears as a giant component containing 70% of the nodes, which means that more than two thirds of the laureates can be connected through only two steps. We have been able to measure that, in general, a higher level of collaboration leads to a larger production. Finally, when looking at the evolution of the research output of the laureates, we find that, for most of those awarded up to the mid-1990s, the production is more stable, with a gradual decrease after the awarding of the Prize, and those awarded later experience a sharp growth in the IF before the Prize, a decrease during the years immediately following, and a new increase afterwards, returning to high levels of impact.
    Keywords: Nobel prize, Economics, research productivity, coauthorship, networks
    JEL: C45 D85 A11
    Date: 2018–10–20
  34. By: Finn Tarp
    Abstract: This study takes as its starting point what Gunnar Myrdal had to say about Viet Nam in the context of his seminal work, Asian Drama: An Inquiry into the Poverty of Nations, published in 1968. Myrdal pointed to the decisive nature of the Vietnamese people; and subsequent developments, which are explained in detail in this paper, demonstrate that amply. Viet Nam adopted a dogged and, in retrospect, very costly position on economic policy and management from 1976. At the same time, when the approach taken did not produce the hoped-for results, an effective course correction was initiated in 1986 in the context of a comprehensive, domestically owned reform programme known as Doi Moi. Since then, Viet Nam has come a very long way; the last three decades have witnessed one of the best performances in the world in terms of both economic growth and poverty reduction. People’s living standards have improved significantly, and the country’s socio-economic achievements are impressive from a human development perspective. Wide-ranging institutional reform has been introduced, including a greater reliance on market forces in the allocation of resources and the determination of prices. The shift from an economy completely dominated by the state and cooperative sectors, to one where the private sector and foreign investment both play key and dynamic roles. Significant strides have been made to further the transition from a centrally planned to a market economy, without giving up strategic leadership and influence by the state.
    Date: 2018
  35. By: Andrew Postlewaite (Department of Economics, University of Pennsylvania); David Schmeidler (Tel-Aviv University)
    Abstract: There are two parts in our note. The first highlights Leo's contribution that earned him the Nobel prize in economics, from a personal point of view. The second discusses further questions that can naturally be addressed using Leo's conceptual framework.
    Keywords: Hurwicz, Mechanism Design, Implementation
    JEL: D0
    Date: 2018–03–28
  36. By: Karimou, S.M.
    Abstract: The aim of this study is to analyse the impact of agricultural output on economic growth in West Africa using the case of Benin. Time series data covering the period of 1961 to 2014 were used. The data were analysed through a Vector Error Correction Model (VECM). The results reveal that there is a long run, or equilibrium, relationship between agricultural output, industrial output, capital and GDP. The error correction model indicates that 21.6 percent of the discrepancy between long run and short run GDP is corrected within a year. The variance decomposition shows that the largest contribution to shocks in GDP is its feedback shocks. The contribution of agricultural output to shocks in GDP is less than 2% for the first three year period and about 6% for the ten year period. Capital contribution to shocks in GDP is about 3% for the first three years and more than 15% for the ten year period. Hence, apart from feedback and capital shocks, GDP is most influenced by agricultural output. Therefore, capital formation is primordial to economic growth in Benin but the economic activity upon which capital should be primarily invested is agricultural production. Acknowledgement : The accomplishment of this study has been possible because of the financial, technical and moral support of a number of persons and institutions. Thus, I express my unreserved and profound gratitude to ECOWAS and the Association of African Universities (AAU) for according me this M.Sc. scholarship at the University of Ibadan. My special recognition and deepest gratitude also go to my supervisor and Head of Department, Prof. M.A.Y. Rahji for his constructive contribution to this research. Thanks for accepting me as an international student in your department and for your incessant advices.
    Keywords: Research Methods/ Statistical Methods
    Date: 2018–07
  37. By: Decker, Frank; Goodhart, Charles A
    Abstract: This paper assesses the theory of credit mechanics within the context of the current money supply debate. Credit mechanics and related approaches were developed by a group of German monetary economists during the 1920s-1960s. Credit mechanics overcomes a one-sided, bank-centric view of money creation, which is often encountered in monetary theory. We show that the money supply is influenced by the interplay of loan creation and repayment rates; the relative share of credit volume neutral debtor-to-debtor and creditor-to-creditor payments; the availability of loan security; and the behavior of non-banks and non-borrowing bank creditors . With the standard textbook models of money creation now discredited, we argue that a more general approach to money supply theory involving credit mechanics needs to be established.
    Keywords: balances mechanics; Bank credit; credit creation; credit mechanics; money supply theory
    JEL: E40 E41 E50 E51
    Date: 2018–10
  38. By: Andersson, Martin (Department of Economic History, Lund University)
    Abstract: This paper highlights and assesses the importance of the role of economic shrinking for the long-term growth process in the developing world over the period 1951-2016. On the basis of descriptive analysis it shows that resilience to shrinking, even among the miracle economies in Pacific Asia, plays a more important role for successful catching up than economic growth per se. The paper then proposes and elaborates on a novel way of how to understand resilience to shrinking and argues that five interrelated social capabilities are of special significance: inclusive and broad based economic growth; engagement in more complex and transformative economic activities; generation of social arrangements for conflict resolution; the state’s autonomy against vested interests; and the state’s accountability in delivering public goods. The implication of the paper is that economic development would be better encouraged by strengthening these social capabilities rather than focusing on the short-term growth rate.
    Keywords: Economic shrinking; social capability; economic growth; catching up; developing countries
    JEL: N10 O10 O11 O47 O57
    Date: 2018–11–06

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