nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2019‒04‒01
thirty-two papers chosen by

  1. A global compass for the great divergence: emissions vs. production centers of gravity 1820-2008 By Caspar Sauter; Jean-Marie Grether; Nicole A. Mathys
  2. Japan and the Asian Divergence: Market Integration, Climate Anomalies and Famines during the 18th and 19th Centuries By Bassino, Jean-Pascal; van der Eng, Pierre
  3. Long-term Trends in Gross Domestic Expenditure in Indonesia: Provisional Estimates By van der Eng, Pierre
  4. When history leaves a mark: a new measure of Roman roads By V. Licio
  5. The precocious mechanization of a global industry: English cotton textile production from the Flying Shuttle (1733) to the self-acting mule (1825): a bibliographical survey and critique By O'Brien, Patrick
  6. Dirty float or clean intervention? The Bank of England in the foreign exchange market By Naef, Alain
  7. Fiscal Destruction: Confiscatory Taxation of Jewish Property and Income in Nazi Germany By Ritschl, Albrecht
  8. The Phenomenon of Summer Diarrhea and its Waning, 1910-1930 By D. Mark Anderson; Daniel I. Rees; Tianyi Wang
  9. Changing Business Cycles: The Role of Women’s Employment By Stefania Albanesi
  10. Preface to the Chinese Edition of A History of Macroeconomics from Keynes to Lucas and Beyond By Michel De Vroey
  11. Tall buildings and land values: height and construction cost elasticities in Chicago, 1870 – 2010 By Ahlfeldt, Gabriel M.; McMillen, Daniel P.
  12. Higher Education Supply, Neighbourhood effects and Economic Welfare. By Elena Cottini; Paolo Ghinetti; Simone Moriconi
  13. The Intergenerational Behavioural Consequences of a Socio-Political Upheaval By Alison Booth; Xin Meng; Elliott Fan; Dandan Zhang
  14. Two Divergent Approaches To Comparative Legal Studies In Europe And Their Implications For Legal History By Dmitry Y. Poldnikov
  15. Technology and the promise of decentralization: Origins, development, patterns of arguments By Schrape, Jan-Felix
  16. Legacies of Loss: The intergenerational outcomes of slaveholder compensation in the British Cape Colony By Martins, Igor; Cilliers, Jeanne; Fourie, Johan
  17. Labor share and growth in the long run By McAdam, Peter; Bridji, Slim; Charpe, Matthieu
  18. Innovation waves and technological transitions: Sweden, 1909-2016 By Taalbi, Josef
  19. An overview of German new economic sociology and the contribution of the Max Planck Institute for the Study of Societies By Wilkinson, John
  20. The lost ones: the opportunities and outcomes of non-college-educated Americans born in the 1960s By Margherita Borella; Mariacristina De Nardi; Fang Yang
  21. Internal Migration, Education and Upward Rank Mobility:Evidence from American History By Zachary Ward
  22. The Re-emergence of the Federal Reserve Funds Market in the 1950s By Sriya Anbil; Mark A. Carlson
  23. What is New in the Japanese-Style Management System? An Analysis of HR Policy Processes in Japanese Companies (Japanese) By UMEZAKI Osamu; YASHIRO Atsushi
  24. Signalling quality in a developing capital market: underwriting, security choice and disclosure in Australian equity issuances, 1920-1939 By Grant Fleming; Zhangxin (Frank) Liu; David Merrett; Simon Ville
  25. Fake News and Propaganda: Trump's Democratic America and Hitler's National Socialist (Nazi) Germany By Allen, D.E.; McAleer, M.J.
  26. Understanding Inflation in Emerging and Developing Economies By Ha, Jongrim; Kose, Ayhan; Ohnsorge, Franziska
  27. Structural Change and the Fertility Transition By Ager, Philipp; Herz, Benedikt
  28. The Consumer Credit Act 1974 and the emergence of the APR as a consumer protection policy tool By Bernardo Batiz-Lazo; Santiago Carbo-Valverde; Sergio Castellanos-Gamboa
  29. Introducing the Distributional Financial Accounts of the United States By Michael M. Batty; Jesse Bricker; Joseph S. Briggs; Elizabeth Ball Holmquist; Susan Hume McIntosh; Kevin B. Moore; Eric Nielsen; Sarah Reber; Molly Shatto; Kamila Sommer; Tom Sweeney; Alice M. Henriques
  30. Development not drug control: the evolution of counter narcotic efforts in Thailand By Diskul, M.L. Dispanadda; Ninnad, Ramrada; Skinner, Andrea; Rajatanarvin, Visit-orn
  31. The Origins of the Swedish Wage Bargaining Model By Bengtsson, Erik
  32. The Total Risk Premium Puzzle? By Jorda, Oscar; Schularick, Moritz; Taylor, Alan M.

  1. By: Caspar Sauter; Jean-Marie Grether; Nicole A. Mathys
    Abstract: We construct the world’s centers of gravity for human population, GDP and CO2 emissions by taking the best out of five recognized data sources covering the last two centuries. On the basis of a novel distorsion-free representation of these centers of gravity, we find a radical Western shift of GDP and CO2 emissions centers in the 19th century, in sharp contrast with the stability of the demographic center of gravity. Both GDP and emissions trends are reversed in the first half of the 20th century, after World War I for CO2 emissions, after World War II for GDP. Since then, both centers are moving eastward at an accelerating speed. These patterns are perfectly consistent with the lead of Western countries starting the industrial revolution, the gradual replacement of coal by oil and gas as alternative sources of energy, and the progressive catch up of Asian countries in the recent past.
    Keywords: center of gravity, growth, CO2 emissions, GDP, population, great divergence
    JEL: Q56 Q59
    Date: 2019
  2. By: Bassino, Jean-Pascal; van der Eng, Pierre
    Abstract: This paper asks whether better integration of rice markets in Japan during the 19th and 20th centuries compared to China and India explains the ‘Little Divergence’ in Asia and Japan’s role in the ‘Great Divergence’. It analyses rice prices for 13 markets across Japan during 1720-1857 and finds that Japan had relatively well-integrated rice markets, particularly western Japan. In eastern Japan market integration was partially impeded by distance to Osaka, which was the core market, and the greater ecological vulnerability of rice in northeast Japan to lower temperatures during the ‘little ice age’ that lasted until the mid-19th century. Relatively well-integrated markets did not prevent major famines during 1732-1733, 1783-1786, and 1833-1838, because stocks and supplies were insufficient to withstand the consequences of sequences of crop failures. Better integration of rice markets is indicative of higher allocative efficiency of markets in Japan which is a likely reason that ‘shrinking’ episodes caused fewer setbacks in long-term economic growth compared to in China and India.
    Keywords: Great Divergence, Famine, market integration, Tokugawa Japan, VAR, ECM
    JEL: I39 N15 N35 N45 N75 N95
    Date: 2019–03
  3. By: van der Eng, Pierre
    Abstract: This paper seeks to overcome the fact that historical estimates of Gross Domestic Product (GDP) for Indonesia are currently only available in constant prices. Using the expenditure approach it offers new estimates of Gross Domestic Expenditure (GDE), the equivalent of GDP, in current prices. The paper anchors the estimates on Indonesia’s Input-Output (I-O) Tables available for benchmark years between 1969 and 2010, which reveal that until 1995 Indonesia’s official national accounts underestimated GDP and GDE. The paper combines corrections based on the I-O Tables with additional sources to present provisional new estimates of GDE in current prices for 1870-1941 and 1948-1995. It then analyses the composition of GDE, noting the generally modest proportions of discretionary public expenditure and capital formation, particularly during 1870-1913 and 1948-1966.
    Keywords: GDP, Indonesia, expenditure, economic growth
    JEL: E01 N15 O47
    Date: 2019–03
  4. By: V. Licio
    Abstract: It has been twenty years since a new literature emerged. Nunn (2009) and three volumes edited by Michalopoulos and Papaioannou (2017) represent the most complete surveys on this 'new economic history' literature. In recent years empirical works on the persistence of history multiplied. If the 'new economic history' literature has no hesitation in confirming the long-term effect of history, some recent contributions reveal that this persistence does not always occur. By inserting into this framework, the paper has a twofold aim. First, it provides an alternative summary of this literature, collecting those contributions that do not retrieve in history an important factor explaining current economic results. On the other hand, starting from the huge amount of works that confirm the persistence of historical facts, it focuses on those contributions that find in the old transport infrastructure the link between past and present. In last five years, the historical Roman road network has assumed a leading role in this field. And by reviewing the original works that focus on the long- lasting effect of the Roman domination and infrastructure, this paper introduces a new measure of Roman roads that has been constructed at the Italian NUTS3 level. The measure computes the length in kilometers of Roman roads for each province in Italy, and contributes to the literature on historical infrastructures, providing a new precise measure to use for empirical purposes, easy to extend at the regional or at the country level and simple to replicate in all those territories where Roman roads have been constructed.
    Keywords: Roman roads;history;Historical infrastructure;Persistence;italy;Provinces
    Date: 2019
  5. By: O'Brien, Patrick
    Abstract: This survey and critique covers recent debates and part of a library of books and articles that have endeavoured to explain a seminal conjuncture in economic, industrial and technological history; namely the precocious mechanization of English cotton textile production
    JEL: N0
    Date: 2019–03–01
  6. By: Naef, Alain (University of Cambridge)
    Abstract: The effectiveness of central bank intervention is debated and despite literature showing mixed results, central banks regularly intervene in the foreign exchange market, both in developing and developed economies. Does foreign exchange intervention work? Using over 60,000 new daily observations on intervention and exchange rates, this paper is the first study of the Bank of England’s foreign exchange intervention between 1952 and 1972. The main finding is that the Bank of England was unsuccessful in managing a credible exchange rate over that period. Running an event study, I demonstrate that betting systematically against the Bank of England would have been a profitable trading strategy. The Bank of England failed to maintain credibility in offshore markets and eventually manipulated the publication of its reserve figures to avoid a run on sterling.
    Keywords: intervention; foreign exchange; central bank; Bank of England; Bretton Woods
    JEL: E50 F31 N14 N24
    Date: 2019–03–20
  7. By: Ritschl, Albrecht
    Abstract: Nazism got to power with the stated goal of destroying the economic livelihood of Germany's Jewish population. For the most part, dispossession of Germany's Jews was a highly bureaucratic process. This paper identifies the main fiscal instruments used in this process and assesses the quantitative impact. The principal finding is that the fiscal booty from the dispossession of Germany's Jews was small: the Jewish share of Germany's real wealth matched the Jewish population share quite well. I also find that together with prohibitive bureaucratic obstacles, punitive taxes on emigrants provided a substantial disincentive to emigrate and often rendered emigration outright impossible. This incentive was only mitigated when confiscatory capital levies were imposed also on the resident Jewish population in 1938. Nevertheless the spoils from Jewish dispossession were nowhere nearly large enough to warrant an economic interpretation of the Holocaust as in (Aly, 2007). Germany's Jews were on the whole better trained than the average German but not necessarily much richer.
    Keywords: antisemitism; Capital levy; extortionary taxation; Nazi Germany; persecution
    JEL: N14 N34 N44
    Date: 2019–03
  8. By: D. Mark Anderson; Daniel I. Rees; Tianyi Wang
    Abstract: During the first two decades of the 20th century, diarrheal deaths among American infants and children surged every summer. Although we still do not know what pathogen (or pathogens) caused this phenomenon, the consensus view is that it was eventually controlled through public health efforts at the municipal level. Using data from 26 major American cities for the period 1910-1930, we document the phenomenon of summer diarrhea and explore its dissipation. We find that water filtration is associated with a 15-17 percent reduction in diarrheal mortality among children under the age of two during the non-summer months, but does not seem to have had an effect on diarrheal mortality during the summer. In general, we find little evidence to suggest that public health interventions undertaken at the municipal level contributed to the dissipation of summer diarrhea. Our results are relevant for many parts of the developing world today, where climate change is expected to affect the length and intensity of seasons as well as the incidence of diarrheal diseases.
    JEL: I10 I18 N3 Q54
    Date: 2019–03
  9. By: Stefania Albanesi (University of Pittsburgh)
    Abstract: This paper studies the impact of changing trends in female labor supply on productivity, TFP growth and aggregate business cycles. We find that the growth in women’s labor supply and relative productivity added substantially to TFP growth from the early 1980s, even if it depressed average labor productivity growth, contributing to the 1970s productivity slowdown. We also show that the lower cyclicality of female hours and their growing share can account for a large fraction of the reduced cyclicality of aggregate hours during the great moderation, as well as the decline in the correlation between average labor productivity and hours. Finally, we show that the discontinued growth in female labor supply starting in the 1990s played a substantial role in the jobless recoveries following the 1990-1991, 2001 and 2007-2009 recessions. Moreover, it depressed aggregate hours, output growth and male wages during the late 1990s and mid 2000s expansions. These results suggest that continued growth in female employment since the early 1990s would have significantly improved economic performance in the United States.
    Keywords: female employment, business cycles, productivity slowdown, great moderation, jobless recoveries
    JEL: E17 E32 E37 J11 J21
    Date: 2019–03
  10. By: Michel De Vroey (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: In this preface, I reflect on the evolution of macroeconomics in the wake of the 2018 recession. I give a sketch of the developments that have taken place and assess the validity of some of the main criticisms that have been addressed to DSGE macroeconomics
    Keywords: History of macroeconomics, 2008 recession, DSGE macroeconomics, RBC model, New Keynesian model
    JEL: B22 E12 E E30
    Date: 2019–01
  11. By: Ahlfeldt, Gabriel M.; McMillen, Daniel P.
    Abstract: Cities around the world are experiencing unprecedented vertical growth. Yet, the econom-ics of skyscrapers remain empirically understudied. This paper analyzes the determinants of the urban height profile by combining a micro-geographic data set on tall buildings with a unique panel of land prices covering 140 years. We provide novel estimates of the land price elasticity of height, the height elasticity of construction cost, and the elasticity of substitution between land and capital for tall build-ings. In line with improvements in construction technology, the land price elasticity of height increased substantially over time, rationalizing a trend to ever taller buildings. The land price elasticity of height is larger for commercial than for residential buildings, suggesting that the typical segregation of land uses within cities is not exclusively shaped by the demand side, but also by the supply side.
    Keywords: chicago; construction cost; density; height; land value; skyscraper
    JEL: Q15
    Date: 2018–12–01
  12. By: Elena Cottini (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Paolo Ghinetti; Simone Moriconi
    Abstract: This paper uses an own built dataset on the history of universities in Italy during 1861- 2010 to estimate neighbourhood effects in the local supply of higher education, and incorporate them in a welfare analysis. We implement an instrumental variables approach that exploits initial conditions in the pre-unitarian Italian states, interacted with post-unification university reforms. We provide robust evidence of local displacement between higher education supply in neighbouring provinces. These e ects are mostly concentrated within the same field of study, the same region, and a spatial reach of 90 Km. We show that accounting for these displacement forces is important to evaluate the local economic returns related to higher education supply. On average, these explain more than 4% of local value added per capita. Economic returns are very localised, and larger in provinces that host university hubs.
    Keywords: neighbourhood effects; higher education supply; historical data; initial conditions; economic welfare.
    JEL: I23 I28 N00 R1
    Date: 2019–02
  13. By: Alison Booth; Xin Meng; Elliott Fan; Dandan Zhang
    Abstract: Social scientists have long been interested in the effects of social-political upheavals on a society subsequently. A priori, we would expect that, when traumas are brought about by outsiders, within-group behaviour would become more collaborative, as society unites against the common foe. Conversely, we would expect the reverse when the conflict is generated within-group. In our paper we are looking at this second form of upheaval, and our measure of within-group conflict is the 1966-1976 Cultural Revolution (CR) that seriously disrupted many aspects of Chinese society. In particular, we explore how individuals' behavioural preferences are affected by within-group traumatic events experienced by their parents or grandparents. Using data from a laboratory experiment in conjunction with survey data, we find that individuals with parents or grandparents affected by the CR are less trusting, less trustworthy, and less likely to choose to compete than their counterparts whose predecessors were not direct victims of the CR.
    Keywords: Preferences, Behavioural Economics, Cultural Revolution
    JEL: C91 N4
    Date: 2019–02
  14. By: Dmitry Y. Poldnikov (National Research University Higher School of Economics)
    Abstract: Comparative legal studies have established themselves as the reaction of legal scholarship towards the legal diversity of our shrinking world today and in the past. Despite their potential, such studies occupy a marginal place in legal curricula and practice across Europe. This unhappy situation has brought about debates within the community of comparatists about possible causes and eventual remedies. In this paper, I look at this debate as the incarnation of the century-long confrontation among 'erudite' and 'pragmatic' legal scholars; the former group identify with the agenda of Rodolfo Sacco and the latter are led by Basil Markesinis. My aim is to draw implications from this debate for comparative legal history. In order to do so, I begin by introducing the main tenants of the two 'schools'. Secondly, I investigate the main stumbling blocks of the debate between them: Eurocentrism, the selective scope of research, interdisciplinary and cultural studies. Thirdly, I contemplate the implications of the debate for legal history and a possible synthesis of the two approaches suggested by Uwe Kischel. My main point here is to encourage legal historians in two respects: (1) to engage in cooperation with comparatists in order to enhance our understanding of the context(s) and the paradigm(s) of European legal culture in the face of the ongoing internationalisation of law and legal studies and, (2) to pursue the task of revealing the hidden factors that slow down the transformation of positive law when the changing world calls for it, as is the case with acknowledging new kinds of legal subjects
    Keywords: comparative legal history, legal scholarship, methodology, post-modern cultural studies, Eurocentrism, contextual comparison, hidden legal formants
    JEL: Z
    Date: 2019
  15. By: Schrape, Jan-Felix
    Abstract: Digitalization has long been associated with the promise of a technology-enabled decentralization of social conditions. Although such expectations have regularly fallen short, their underlying generic vision has proven to be astonishingly stable. This paper strives to trace the origin of the notion of decentralizing socio-economic forms of coordination through technological means - from the do-it-yourself scene of the late 1960s, the computer counterculture of the 1970s and the 1980s, and the debates on cyberspace and Web 2.0 in the 1990s and 2000s to present day ideas of decentralized and distributed forms of production and economic systems. An elaboration of the basic patterns of arguments behind technology-based promises of decentralization and their communicative functions then follows.
    Date: 2019
  16. By: Martins, Igor (Department of Economic History, Lund University); Cilliers, Jeanne (Department of Economic History, Lund University); Fourie, Johan (Stellenbosch University)
    Abstract: Can wealth shocks have intergenerational health consequences? We use the partial compensation slaveholders received after the 1834 slave emancipation in the British Cape Colony to measure the intergenerational effects of a wealth loss on longevity. Because the share of partial compensation received was uncorrelated to wealth, we can interpret the results as having a causal influence. We find that a greater loss of slave wealth shortened the lifespans of the generation of slaveholders that experienced the shock and those of their children, but not those of their grandchildren. We speculate on the mechanisms for this intergenerational persistence.
    Keywords: intergenerational health; intergenerational persistence; wealth shock; lifespan; longevity; slaveemancipation; Cape Colony
    JEL: D60 I19 J47 N37 N47 N97
    Date: 2019–03–20
  17. By: McAdam, Peter; Bridji, Slim; Charpe, Matthieu
    Abstract: This paper establishes some stylized facts of the long run relationship between growth and labor shares using historical data for the United States (1898-2010), the United Kingdom (1856-2010), and France (1896-2010). Performing individual country time-frequency analysis, we demonstrate the existence of long-term cycles in labor share of thirty to fifty years explaining a major part of the variance in the data. Further, the impact of labor share on growth changes sign with the frequency considered from negative at high frequencies to positive at low frequencies. Finally, the positive coefficient associated with the labor share at low frequencies increases over time. JEL Classification: E24, E25, N1
    Keywords: growth, income distribution, labor share, wavelet analysis
    Date: 2019–03
  18. By: Taalbi, Josef (Department of Economic History, Lund University)
    Abstract: There are important unresolved questions about long-term trends of in- novation activity and the nature of the interplay between innovation and economic development and transformation. This study explores the promise of a literature-based innovation output indicator, constructed for the Swedish engineering industry, 1909-2016. The findings suggest a long-run increasing trend in innovations per capita. Meanwhile, product innovations have also become more complex and it is suggested that crude innovation counts underestimate the long-run innovation performance. In order to analyse innovation and economic development across different frequencies, the study uses a wavelet decomposition approach. The results suggest that innovation activity has surged in periods of intense industry rationalization and struc- tural crisis (1930s, 1970s and 2010s) and that such pulses were intimately connected to the second and third industrial revolutions.
    Keywords: Innovation; Wavelet analysis; Technological systems
    JEL: N13 O14 O31
    Date: 2019–03–20
  19. By: Wilkinson, John
    Abstract: New economic sociology (NES) in Germany has many similarities with economic sociology in the United States in its conscious efforts to institutionalize its presence within the broader sociology community, its promotion of a canon via handbooks, and its focus on the sociology of markets. At the same time, it differs in its stronger connections to the German classics, the greater vitality of a macrosociological tradition in Germany, the prior existence of a "bridging" generation of economic sociologists, and its later consolidation in a period of neo-liberal globalization, all of which have given NES in the German-speaking world a distinctive character. In addition, it has been influenced by successive waves of French economic sociology - Bourdieu, convention, and actor-network theory - and its bilingual academic tradition has ensured its integration into English-speaking NES. In its contribution to the sociology of markets, the fact that NES emerged later in Germany than in the US led to a greater concern with quality markets rather than commodity markets, and a concomitantly greater attention to issues of value and price. These latter themes, in their turn, establish a continuity with German economic sociology's enduring concern with understanding the role of money. Not surprisingly, therefore, German NES is now making key contributions to discussions on the sociology of money and is increasingly situating its analysis within the broader dynamic of capitalism and current processes of financialization.
    Keywords: German economic sociology,Max Planck Institute for the Study of Societies and economic sociology,new economic sociology,deutsche Wirtschaftssoziologie,Max-Planck-Institut für Gesellschaftsforschung und Wirtschaftssoziologie,Neue Wirtschaftssoziologie
    Date: 2019
  20. By: Margherita Borella (University of Torino); Mariacristina De Nardi (University College London / Federal Reserve Bank of Chicago / IFS / NBER); Fang Yang (Louisiana State University)
    Abstract: White, non-college-educated Americans born in the 1960s face shorter life expectancies, higher medical expenses, and lower wages per unit of human capital compared with those born in the 1940s, and men’s wages declined more than women’s. After documenting these changes, we use a life-cycle model of couples and singles to evaluate their effects. The drop in wages depressed the labor supply of men and increased that of women, especially in married couples. Their shorter life expectancy reduced their retirement savings but the increase in out-of-pocket medical expenses increased them by more. Welfare losses, measured as a one-time asset compensation, are 12.5%, 8%, and 7.2% of the present discounted value of earnings for single men, couples, and single women, respectively. Lower wages explain 47-58% of these losses, shorter life expectancies 25-34%, and higher medical expenses account for the rest.
    Keywords: education, Health, wage gap, welfare losses, life expectancy
    JEL: E21 H31
    Date: 2019
  21. By: Zachary Ward
    Abstract: To what extent does internal migration lead to upward mobility? Using within-brother variation and a new linked dataset from 1910 to 1940, I estimate that internal migrants were more likely to improve on their father’s percentile rank than non-migrants. On average, the effect of migration was nearly four times the effect of one year of education; for those raised in poorer households, migration’s effect was about nine times that of education. The evidence suggests that internal migration was a key strategy for intergenerational progress in a context of rapid industrialization, high rates of rural-to-urban migration and large interregional income gaps.
    Keywords: internal migration, intergenerational mobility, urbanization
    JEL: J61 J62 N31 N32
    Date: 2019–03
  22. By: Sriya Anbil; Mark A. Carlson
    Abstract: In this note, we highlight the re-emergence of the federal funds market in the 1950s.
    Date: 2019–03–22
  23. By: UMEZAKI Osamu; YASHIRO Atsushi
    Abstract: This study analyzes changes in the HR policy of Japanese corporations led by Nikkeiren (the Japan Federation of Employers' Association), based on the Nikkeiren reports and oral history documents that we created by interviewing former staff. The study focuses on the "New Japanese-Style Management System—Direction and Concrete Practices that Should Be Attempted," which was announced in 1995, and examines the novelty and continuity of its HR policy. The results revealed the following four findings: (1) During the 1970s and 1980s, HR policies were primarily ability-based systems. The job-ability-based grade system and pay-for-job-qualifications systems caused problems, such as having excess numbers of qualified people and a lack of open positions. Internal professional systems were introduced to overcome such issues. (2) New Japanese-style management has been criticized as the origin of the "employment portfolio" and associated with reductions in labor costs and unstable employment after the collapse of the bubble economy. However, employment portfolios applied to two categories of human resources (i.e., "flow" human resources and "stock" human resources) during the economic bubble in the late 1980s. (3) New Japanese-style management practices were positioned such that they should have inherited a long-term perspective and emphasized human resource development in a similar fashion to the HR policies of the 1970s and 1980s. (4) The novelty of new Japanese-style management as an HR policy lies in the fact that it further separated the two categories of human resources to include the new category of "employment portfolio" (resulting in three categories) human resources. Advanced, professional skills-oriented groups that were supposed to be short-term employees were different from the internal professional systems in vogue until the 1980s. This new category of employment portfolio—personnel that created high added value—was embodied within the HR policy of integrating outside talent. However, a debate remained regarding whether the threefold classification system of categories of human resources should be maintained as opposed to the twofold system. Moreover, no confirmation of the increase in advanced, professional skills-oriented groups was provided until the early 2000s. In other words, it was presented as an HR policy but was not put into practice. Discussions on how advanced, professional skills-oriented groups should be developed still continue to this day.
    Date: 2019–03
  24. By: Grant Fleming; Zhangxin (Frank) Liu; David Merrett; Simon Ville
    Abstract: Equity investors face imperfect information about the quality of the firm that is raising capital. Modern capital markets provide safeguards for investors through plentiful information sources and market regulations that help to prevent adverse selection. In developing markets that lack these safeguards, firms may attempt to attract funds by signalling their reputation to potential investors. We examine the effectiveness of three signalling techniques in the Australian capital market during its early rapid growth phase in the interwar period. Using percentage of offered capital raised as a measure of success, we find that the use of underwriters was an important positive signal to investors who also differentiated between IPOs and SEOs, but that the form of security offered by firms made little or no difference.
    Keywords: equity issues; information asymmetries; market signalling; underwriters; Australian capital market
    Date: 2019–02
  25. By: Allen, D.E.; McAleer, M.J.
    Abstract: This paper features an analysis of President Trump's two State of the Union addresses, which are analysed by means of various data mining techniques including sentiment analysis. The intention is to explore the contents and sentiments of the messages contained, the degree to which they differ, and their potential implications for the national mood and state of the economy. In order to provide a contrast and some parallel context, analyses are also undertaken of President Obama's last State of the Union address and Hitler's 1933 Berlin Proclamation. The structure of these four political addresses is remarkably similar. The three US Presidential speeches are more positive emotionally than Hitler's relatively shorter address, which is characterized by a prevalence of negative emotions. However, it should be said that the economic circumstances in contemporary America and Germany in the 1930s are vastly different
    Keywords: Text Mining, Sentiment Analysis, Word Cloud, Emotional Valence
    JEL: C19 C65 D79
    Date: 2019–03–19
  26. By: Ha, Jongrim; Kose, Ayhan; Ohnsorge, Franziska
    Abstract: Emerging market and developing economies (EMDEs) have experienced an extraordinary decline in inflation since the early 1970s. After peaking in 1974 at 17.3 percent, inflation in these economies declined to 3.5 percent in 2017. Despite a checkered history of managing inflation among many EMDEs, disinflation occurred across all regions. This paper presents a summary of our recent book, "Inflation in Emerging and Developing Economies: Evolution, Drivers, and Policies," that analyzes this remarkable achievement. Our findings suggest that many EMDEs enjoy the benefits of stability-oriented and resilient monetary policy frameworks, including central bank transparency and independence. Such policy frameworks need to be complemented by strong macroeconomic and institutional arrangements. Inflation expectations are more weakly anchored in EMDEs than in advanced economies. In EMDEs that do not operate inflation targeting frameworks, exchange rate movements tend to have larger and more persistent effects on inflation.
    Keywords: Globalization; inflation; monetary policy; Monetary Systems; prices
    JEL: E31 E42 E52 E58
    Date: 2019–03
  27. By: Ager, Philipp; Herz, Benedikt
    Abstract: This paper provides new insights on the relationship between structural change and the fertility transition. We exploit the spread of an agricultural pest in the American South in the 1890s as plausibly exogenous variation in agricultural production to establish a causal link between earnings opportunities in agriculture and fertility. Households staying in agriculture reduced fertility because children are a normal good, while households switching to manufacturing reduced fertility because of the higher opportunity costs of raising children. The lower earnings opportunities in agriculture also decreased the value of child labor which increased schooling, consistent with a quantity-quality model of fertility.
    Keywords: Agricultural Income; Fertility Transition; Industrialization; structural change
    JEL: J13 N31 O14
    Date: 2019–03
  28. By: Bernardo Batiz-Lazo (Bangor University); Santiago Carbo-Valverde (CUNEF Colegio Universitario de Estudios Financieros; Bangor University); Sergio Castellanos-Gamboa
    Abstract: The ‘Crowther Committee’, in their report of 1971, proposed a fundamental change in consumer credit regulation in the UK. Among many aspects, they campaigned for the calculation and publication of the true cost of lending, i.e. the annualized percentage rate (APR), of all consumer credit products. The APR was introduced to reduce information asymmetries, thus improving consumers' rights and incentivizing competition among credit grantors. This report resulted in the enactment of the Consumer Credit Act 1974 (CCA74). This paper studies the effects of the CCA74 on the British economy, through the introduction of the APR. Moreover, it tests the presence of a structural break in the relationship between the price and volume of consumer credit. Furthermore, the paper analyses the effects of shocks to consumer credit on inflation and households’ savings. This article contributes to extending the data availability for consumer credit before 1975, and to debating the understanding of the role of consumer credit during a high-inflation period. There was evidence of a significant effect of the CCA74 on consumer credit, driven by the introduction of the APR. VAR models suggest that this law did not cause inflationary pressures, nor motivated households to dis-save, contrary to previous beliefs.
    Keywords: Consumer Credit Act 1974, structural break, APR, United Kingdom, inflation, savings.
    JEL: G21 G28 N14 N24
    Date: 2019–02
  29. By: Michael M. Batty; Jesse Bricker; Joseph S. Briggs; Elizabeth Ball Holmquist; Susan Hume McIntosh; Kevin B. Moore; Eric Nielsen; Sarah Reber; Molly Shatto; Kamila Sommer; Tom Sweeney; Alice M. Henriques
    Abstract: This paper describes the construction of the Distributional Financial Accounts (DFAs), a new dataset containing quarterly estimates of the distribution of U.S. household wealth since 1989, and provides the first look at the resulting data. The DFAs build on two existing Federal Reserve Board statistical products --- quarterly aggregate measures of household wealth from the Financial Accounts of the United States and triennial wealth distribution measures from the Survey of Consumer Finances --- to incorporate distributional information into a national accounting framework. The DFAs complement other existing sources of data on the wealth distribution by using a more comprehensive measure of household wealth and by providing quarterly data on a timely basis. We encourage policymakers, researchers, and other interested parties to use the DFAs to help understand issues related to the distribution of U.S. household wealth.
    Keywords: Economic data ; Economic measurement ; Household economics ; Inequality ; National accounts ; Wealth distribution ; Wealth dynamics
    JEL: N3 E01 H5 H31
    Date: 2019–03–22
  30. By: Diskul, M.L. Dispanadda; Ninnad, Ramrada; Skinner, Andrea; Rajatanarvin, Visit-orn
    Abstract: In the 1960s, Thailand was the biggest opium producing country in the world. This article presents Thailand’s evolving strategy in solving the problem of illicit poppy cultivation through poverty alleviation and long-term national development. It argues that the root causes of drug crop cultivation and proliferation are poverty, insecurity, and the lack of livelihood opportuni- ties for marginalized communities. Thus, the problem is more a ‘development problem’ rather than a ‘drug problem,’ requiring the addressing of multi-dimensional human development facets in response to the geo-socio-economic conditions of the area. The “Thai approach” is focused on improving the overall well-being of communities, before rule of law can be strengthened, and is very importantly part of long-term broader national development plans. A brief close-up is provided of an example of Thailand’s long-term development project, the Doi Tung Develop- ment Project, to explain more concretely how Thailand’s approach to solve drug crop production translated into practice. Some of these lessons learned from Thailand can and have been shared with the international community in shaping attitudes and policies to drugs and development that are more people-centered, balanced, and sustainable.
    Keywords: Thailand; counter-narcotic; alternative development; livelihood development; sustainable development goals
    JEL: N0
    Date: 2019–01–14
  31. By: Bengtsson, Erik (Department of Economic History, Lund University)
    Abstract: That export-led industry sets the wage norm for the whole economy, acting as the “wage leader”, is a celebrated part of the Swedish wage bargaining and labour market model. Export- led wage leadership is assumed to lead to controlled, non-inflationary wage increases, as wages are set with international competition in mind. This paper maps the origins of this export industry wage leadership model, showing that the conventional cross-class alliance story focusing on the 1930s does not square with the facts. Going through the central trade union wage bargaining protocols from 1939 to 1959, I show that industry wage leadership was non-existent in the 1930s. In fact, wage formation at the time was quite decentralized. Instead, industry wage leadership was created only in the 1950s. The driving force behind it was not a cross-class alliance between workers and employers in export industry against home market workers, but rather the integration of the trade union wage policy into a Social Democratic macroeconomic project.
    Keywords: Swedish model; wage bargaining; wage leadership; labour market institutions
    JEL: J50 J51 N14 N34
    Date: 2019–03–20
  32. By: Jorda, Oscar (Federal Reserve Bank of San Francisco); Schularick, Moritz (University of Bonn); Taylor, Alan M. (University of California, Davis;)
    Abstract: The risk premium puzzle is worse than you think. Using a new database for the U.S. and 15 other advanced economies from 1870 to the present that includes housing as well as equity returns (to capture the full risky capital portfolio of the representative agent), standard calculations using returns to total wealth and consumption show that: housing returns in the long run are comparable to those of equities, and yet housing returns have lower volatility and lower covariance with consumption growth than equities. The same applies to a weighted total-wealth portfolio, and over a range of horizons. As a result, the implied risk aversion parameters for housing wealth and total wealth are even larger than those for equities, often by a factor of 2 or more. We find that more exotic models cannot resolve these even bigger puzzles, and we see little role for limited participation, idiosyncratic housing risk, transaction costs, or liquidity premiums.
    JEL: E44 G12 G15 N20
    Date: 2019–03–20

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