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on Business, Economic and Financial History |
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Issue of 2019‒06‒10
37 papers chosen by |
| By: | Gojko Barjamovic (Harvard University); Thomas Chaney (Département d'économie); Kerem Cosar (Department of Economics (University of Virginia)); Ali Hortacsu (University of Chicago (UChicago)) |
| Abstract: | We analyze a large data set of commercial records produced by Assyrian merchants in the nineteenth century BCE. Using the information from these records, we estimate a structural gravity model of long-distance trade in the Bronze Age. We use our structural gravity model to locate lost ancient cities. In many cases, our estimates confirm the conjectures of historians who follow different methodologies. In some instances, our estimates confirm one conjecture against others. We also structurally estimate ancient city sizes and offer evidence in support of the hypothesis that large cities tend to emerge at the intersections of natural transport routes, as dictated by topography. Finally, we document persistent patterns in the distribution of city sizes across four millennia, find a distance elasticity of trade in the Bronze Age close to modern estimates, and show suggestive evidence that the distribution of ancient city sizes, inferred from trade data, is well approximated by Zipf’s law. |
| JEL: | F1 N7 N9 R12 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/c5agcqnoa9vg8sm5q63mold8p&r=all |
| By: | Brian A'Hearn; Stefano Chianese; Giovanni Vecchi |
| Abstract: | This paper presents the main economic features, in quantitative terms, of the society in which Leonardo Da Vinci lived from the second half of the 15th century to the early 16th century. Using data from Florence’s Land Register of 1427 combined with new data on the household budgets of Leonardo and of his family, the paper proposes two hypotheses. The first regards the importance of the demand for goods linked to art and culture. The city’s economic élite managed to appropriate about two thirds of the economy’s surplus for itself (i.e. what was left after the population had been guaranteed a minimum level of subsistence) and it showed a growing demand for luxury goods that permitted and incentivized the work of talented individuals of the time. In this context, Leonardo’s genius fell on fertile ground. The second hypothesis regards pre-industrial social mobility (upward mobility in particular): Leonardo’s household accounts support the theory that the economic fluidity of renaissance Florence may have been considerably greater than the literature on economic history would have us believe. |
| Keywords: | economic inequality, Florence, household budgets, living standards, Reinassance, social mobility, Tuscany |
| JEL: | D63 I30 N01 N33 |
| Date: | 2019–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:hbu:wpaper:17&r=all |
| By: | Heni Boubaker (IPAG LAB, IPAG Business School, 184 Boulevard Saint-Germain, 75006 Paris, France); Juncal Cunado (University of Navarra, School of Economics, Edificio Amigos, E-31080 Pamplona, Spain); Luis A. Gil-Alana (University of Navarra, School of Economics, Edificio Amigos, E-31080 Pamplona, Spain.); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa) |
| Abstract: | Using annual data spanning the period of 1258-2018, we test the safe haven characteristic of gold in the wake of global crises. We find that, when we allow for regime-switching to capture nonlinearity and structural breaks, gold serves as a strong hedge against crises, especially during the bullish regime of the market, and in particular from the post-World War I period, as suggested by a time-varying model. In comparison, silver, however, does not seem to possess the safe haven property over the historical period of 1688-2018. Finally, we also find that global crises can accurately predict real gold returns over a long-span (1302-2018) out-of-sample period. |
| Keywords: | Global Crises, Gold, Safe Haven, Regime-Switching Model |
| JEL: | C22 Q02 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201941&r=all |
| By: | Cormac Ó Gráda |
| Abstract: | Ireland on the eve of the Great Famine was a poor and backward economy. The Great Irish Famine of the 1840s is accordingly often considered the classic example of Malthusian population economics in action. However, unlike most historical famines, the Great Famine was not the product of a harvest shortfall, but of a major ecological disaster. Because there could be no return to the status quo ante, textbook famine relief in the form of public works or food aid was not enough. Fortunately, in an era of open borders mass emigration helped contain excess mortality, subject to the limitation that the very poorest could not afford to leave. In general, the authorities did not countenance publicly assisted migration. This paper discusses the lessons to be learned from two exceptional schemes for assisting destitute emigrants during and in the wake of the Famine. |
| Keywords: | Malthus; Famine; Population |
| JEL: | N00 N33 N53 N93 B12 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201821&r=all |
| By: | Cha, Myung Soo; Prados de la Escosura, Leandro |
| Abstract: | During the last one‐and‐a‐half centuries, average world income grew 10‐fold, the composition of output and relative factor returns shifted, and globalization occurred. How have the fruits of growth been distributed among different income groups and countries? How did the West compare to the Rest of the world in terms of improving well‐being? In this survey, we conclude that consumption per person has grown over time, but more slowly than GDP per capita, as the share of private consumption declined, although was partly offset by the rising share of public consumption. Income inequality within countries fell from the early to late twentieth century and has risen in the recent decades. Living standards improved across the world, but the gap between the West and the Rest increased, and between‐country inequality widened over time until the 1990s, when the trend reversed. Among world inhabitants, income distribution has followed a similar trend, with inequality increasing up to 1990 and declining in the 21st century. Impressive long‐run gains in human development have taken place in the world without being interrupted by the economic slowdown and globalization backlash during 1914‐50. |
| Keywords: | Human Development; Well-being; Inequality; Living Standards |
| JEL: | O15 N30 I00 |
| URL: | http://d.repec.org/n?u=RePEc:cte:whrepe:28438&r=all |
| By: | Julio Cesar Zuluaga; Víctor Cobo Medina (Faculty of Economics and Management, Pontificia Universidad Javeriana Cali) |
| Abstract: | Los empresarios crean asociaciones gremiales para coordinar la acción colectiva frente a otras organizaciones y grupos de interés, además de proveer bienes y servicios a sus afiliados. Este artículo explora la evolución de la Sociedad de Agricultores y Ganaderos del Valle SAGV desde su creación en 1937 y analiza los roles y funciones que asumió como representante de los intereses agrícola-ganaderos en el contexto colombiano. Para ello revisa actas, correspondencia, informes de presidencia y editoriales de la Revista Agrícola y Ganadera. El análisis revela la posición de la SAGV frente a tres proyectos: la misión del Banco Mundial liderada en 1950 por Lauchlin B. Currie, la aplicación del programa de inversiones propuesto por David Lilienthal en 1954, y la Ley 135 de 1961 o Ley de Reforma Agraria. Con base en esto se muestra que el comportamiento de la SAGV estuvo determinado por una lógica de la influencia y de los servicios. |
| Keywords: | business associations, Business history, Colombia |
| JEL: | N86 N96 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:ddt:wpaper:42&r=all |
| By: | Prados de la Escosura, Leandro |
| Abstract: | This paper provides a long run view of human development as a capabilities measure of well‐being for the last one‐and‐a‐half centuries on the basis of an augmented historical human development index [AHHDI] that combines achievements in health, education, living standard, plus liberal democracy, and provides an alternative to the UN Human Development Index, HDI. The AHHDI shows substantial gains in world human development since 1870, especially during 1913‐1970, but much room for improvement exists. Life expectancy has been the leading force behind its progress, especially until 1970. Human development spread unevenly. The absolute gap between western Europe and its offshoots plus Japan ‐the OECD‐ and the Rest of the world deepened over time, though fell in relative terms, with catching‐up driven by longevity during the epidemiological transition and by democratization thereafter. This result compares favourably with the growing income gap. Economic growth and human development do not always go hand‐in‐hand. |
| Keywords: | Liberal Democracy; Income; Schooling; Health Transition; Life Expectancy; Capabilities; Well‐being; Human Development |
| JEL: | O15 N30 I00 |
| Date: | 2019–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:cte:whrepe:28450&r=all |
| By: | Fatih Karahan; Benjamin Pugsley; Ayşegül Şahin |
| Abstract: | We propose a simple explanation for the long-run decline in the startup rate. It was caused by a slowdown in labor supply growth since the late 1970s, largely pre-determined by demographics. This channel explains roughly two-thirds of the decline and why incumbent firm survival and average growth over the lifecycle have been little changed. We show these results in a standard model of firm dynamics and test the mechanism using shocks to labor supply growth across states. Finally, we show that a longer startup rate series imputed using historical establishment tabulations rises over the 1960-70s period of accelerating labor force growth. |
| JEL: | D22 E24 J11 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25874&r=all |
| By: | Nikolova, Milena (University of Groningen); Popova, Olga (CERGE-EI); Otrachshenko, Vladimir (Nova School of Business and Economics) |
| Abstract: | We show that current differences in trust levels within former Soviet Union countries can be traced back to the system of forced prison labor during Stalin's rule, which was marked by high incarceration rates, repression, and harsh punishments. We argue that those exposed to forced labor camps (gulags) became less trusting and transferred this social norm to their descendants. Combining contemporary individual-level survey data with historical information on the location of forced labor camps, we find that individuals who live near former gulags have low levels of social and institutional trust. Our results are robust to a battery of sensitivity checks, which suggests that the relationship we document is causal. We outline several causal mechanisms and test whether the social norm of mistrust near gulags developed because of political repression or due to fear that inmates bring criminality. As such, we provide novel evidence on the channels through which history matters for current socio-economic outcomes today. |
| Keywords: | social trust, institutional trust, trustworthiness, forced labor, economic history, former Soviet Union |
| JEL: | D02 H10 N94 Z13 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12326&r=all |
| By: | C\'ecile Bastidon; Antoine Parent; Pablo Jensen; Patrice Abry; Pierre Borgnat |
| Abstract: | Assessing world-wide financial integration constitutes a recurrent challenge in macroeconometrics, often addressed by visual inspections searching for data patterns. Econophysics literature enables us to build complementary, data-driven measures of financial integration using graphs. The present contribution investigates the potential and interests of a novel 3-step approach that combines several state-of-the-art procedures to i) compute graph-based representations of the multivariate dependence structure of asset prices time series representing the financial states of 32 countries world-wide (1955-2015); ii) compute time series of 5 graph-based indices that characterize the time evolution of the topologies of the graph; iii) segment these time evolutions in piece-wise constant eras, using an optimization framework constructed on a multivariate multi-norm total variation penalized functional. The method shows first that it is possible to find endogenous stable eras of world-wide financial integration. Then, our results suggest that the most relevant globalization eras would be based on the historical patterns of global capital flows, while the major regulatory events of the 1970s would only appear as a cause of sub-segmentation. |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1905.11842&r=all |
| By: | Daniel Levy (Department of Economics, Bar-Ilan University, Israel; Department of Economics, Emory University, USA; Rimini Centre for Economic Analysis); Andrew T. Young (College of Business Administration, Texas Tech University, USA) |
| Abstract: | We study the cost of breaching an implicit contract in a goods market, building on a recent study that documented the presence of such a contract in the Coca-Cola market, in the US, during 1886‒1959. The implicit contract promised a serving of Coca-Cola of a constant quality (the “real thing”), and of a constant quantity (6.5oz in a bottle or from the fountain), at a constant nominal price of 5¢. We offer two types of evidence. First, we document a case that occurred in 1930, where the Coca-Cola Company chose to incur a permanently higher marginal cost of production, instead of a one-time increase in the fixed cost, to prevent a quality adjustment of Coca-Cola, which would be considered a breach of the implicit contract. Second, we explore the consequences of the Company’s 1985 decision to replace the original Coke with the “New Coke.” Using the model of Exit, Voice, and Loyalty (Hirschman 1970), we argue that the unprecedented public outcry that followed the New Coke’s introduction, was a response to the Company’s breaching of the implicit contract. We document the direct and quantifiable costs of this implicit contract breach, and demonstrate that the indirect, although unquantifiable, costs in terms of lost customer goodwill were substantial. |
| Keywords: | Implicit Contract, Cost of Breaching a Contract, Cost of Breaking a Contract, Invisible Handshake, Customer Market, Long-Term Relationship, Price Rigidity, Sticky Prices, Nickel Coke, Coca-Cola, Secret Formula |
| JEL: | A14 E12 E31 K10 L14 L16 L66 M30 N80 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:19-11&r=all |
| By: | Mickael Melki; Andrew Pickering |
| Abstract: | We document a robust positive correlation between the size of government and the labor share of income in data from European countries covering the period 1869-1975. Following Facchini et al (2017), we interpret this correlation as evidence that labor costs drive public spending. The long-term increase in the labor share observed over this period explains half of the overall growth of central government. The relationship holds when the labor share is instrumented with movements in technological change at the frontier. When decomposing public spending, transfers, not intensive in labor, are the only component not associated with the labor share. |
| Keywords: | Labor share, Public Spending, 20th Century Europe. |
| JEL: | N4 J3 E25 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:19/07&r=all |
| By: | Fu, Tong; Wei, Zhongmei; Jian, Ze |
| Abstract: | The effect of liberal colonialism on the allocation of capital persists to this day. As Lange et al. (Colonialism and development: A comparative analysis of Spanish and British colonies. 2006) define and suggest, the authors exploit the colonial history of China during 1896-1911 with qualitative evidence to measure liberal colonialism. They document that liberal colonialism promotes the subsequent efficiency of financial policies on capital allocation in 2004 through the quality of economic institutions. |
| Keywords: | liberal colonialism,economic institutions,allocative efficiency |
| JEL: | P34 N45 P26 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201936&r=all |
| By: | Emilio Ocampo |
| Abstract: | Although the application of the conceptual and analytical framework of economics to the study of populism is still in its infancy, great advances have been made in recent years. This paper reviews some key contributions behind this progress. When analyzing populism, economists face two methodological hurdles: lack of consensus and clarity about its definition and reconciling the populist vote with voter rationality. The former has plagued sociologists and political scientists for decades. As to the latter, it raises a conundrum: if populist policies are detrimental to economic growth, as most economists agree, the vote for a populist candidate suggests some irrationality or inefficiency in the political markets. The works reviewed in this paper propose alternative approaches to address both issues. The most promising line of research in the economic analysis of populism draws concepts from other social sciences such political theory, sociology, history and social psychology. |
| Keywords: | Populism, political economy, voter behavior, rationality, democracy. |
| JEL: | B2 D72 D78 D83 H0 P47 P48 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:694&r=all |
| By: | Alan Fernihough; Cormac Ó Gráda |
| Abstract: | The link between demographic pressure and economic conditions in pre-Famine Ireland has long interested economists. This paper re-visits the topic, harnessing the highly disaggregated parish-level data from the 1841 Census of Ireland. Using population per value adjusted acre as a measure of population pressure, our results indicate that on the eve of the Great Famine of 1846{50, population pressure was positively associated with both illiteracy rates and the prevalence of poor quality housing. But while our analysis shows that population pressure was one of the primary factors underpinning pre-Famine poverty, it also highlights the importance of geography and human agency. A counterfactual computation indicates that had Ireland's population stayed at its 1800 level, this would have led to only modest improvements in literacy and housing. |
| Keywords: | Famine; Malthus; Population; Ireland |
| JEL: | N33 B30 J11 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201820&r=all |
| By: | Niemesh, Gregory; Shester, Katharine |
| Abstract: | The black-white gap in low birth weight in the United States remains large and mostly unexplained. A large literature links segregation to adverse black birth outcomes but, to the best of our knowledge, no studies explore how this relationship has changed over time. We explore the relationship between racial residential segregation on black and white birth weights for the period 1970-2010. We find a negative effect of segregation on black birth outcomes that only emerges after 1980. We explore the potential pathways through which segregation influenced black birth outcomes and how these mechanisms may have changed over time. Measures for maternal socioeconomic status and behaviors accounts for 35 to 40 percent of the full segregation effect between 1990 and 2010. Single-motherhood and mother's education, and unobservable factors that load onto these variables, play important and increasing roles. After controlling for MSA and parent characteristics, segregation explains 21-25 percent of the raw black-white gap in low birth weight between 1990 and 2010. |
| Keywords: | Racial segregation, residential segregation, low birth weight, infant health |
| JEL: | I14 J13 J15 R23 |
| Date: | 2019–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:93972&r=all |
| By: | Stephan Heblich; Marlon Seror; Hao Xu; Stephan Yanos Zylberberg |
| Abstract: | This paper exploits a short-lived cooperation program between the U.S.S.R. and China, which led to the construction of 156 "Million-Rouble plants" in the 1950s. We isolate exogenous variation in location decisions due to the relative position of allied and enemy airbases and study the long-run impact of these factories on local economic activity. While the "156" program accelerated industrialization in treated counties until the end of the command-economy era, this significant productivity advantage fully eroded in the subsequent period. We explore the nature of local spillovers responsible for this pattern, and provide evidence that treated counties are overspecialized and far less innovative. There is a large concentration of establishments along the production chain of the Million-Rouble plants, which limits technological spillovers across industries. |
| Keywords: | USSR, China, million-rouble plants. |
| Date: | 2019–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:bri:uobdis:19/712&r=all |
| By: | Markus Brunnermeier; Simon Rother; Isabel Schnabel |
| Abstract: | We analyze the relationship between asset price bubbles and systemic risk, using bank-level data covering almost thirty years. Systemic risk of banks rises already during a bubble’s build-up phase, and even more so during its bust. The increase differs strongly across banks and bubble episodes. It depends on bank characteristics (especially bank size) and bubble characteristics, and it can become very large: In a median real estate bust, systemic risk increases by almost 70 percent of the median for banks with unfavorable characteristics. These results emphasize the importance of bank-level factors for the build-up of financial fragility during bubble episodes. |
| Keywords: | Asset price bubbles, systemic risk, financial crises, credit booms, CoVaR, MES |
| JEL: | E32 G01 G12 G20 G32 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2019_095&r=all |
| By: | Ahmed Skali; David Stadelmann und Benno Torgle |
| Abstract: | Do crises erode trust in government? To answer this question, we leverage the quasi-experimental setting of the sharply increased military threat to the neutral county of Switzerland during the two world wars as an exogenous shock. In doing so, we exploit a unique feature of Swiss politics: government issuance of pre-referenda voting recommendations. We use constitu ent adherence to government recommendations as a behaviour al proxy for trus t in government, measured in real time prior to, duri ng, and after the crisis. Our difference-in- differences estimates provide strong evidence that constituents are significantly less likely to follow governmental voting recommendations during wartime. |
| Keywords: | Trust in Government; Crisis; WWII; World War II; Referenda; Switzerland |
| JEL: | D72 D74 H56 H79 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2019-04&r=all |
| By: | Karen Clay; Peter Juul Egedesø; Casper Worm Hansen; Peter Sandholt Jensen; Avery Calkins |
| Abstract: | This paper studies the immediate and long-run mortality effects of the first community-based health intervention in the world – the Framingham Health and Tuberculosis Demonstration, 1917-1923. The official evaluation committee and the historical narrative suggest that the demonstration was highly successful in controlling tuberculosis and reducing mortality. Using newly digitized annual cause-of-death data for municipalities in Massachusetts, 1901-1934, and different empirical strategies, we find little evidence to support this positive assessment. In fact, we find that the demonstration did not reduce tuberculosis mortality, all-age mortality, nor infant mortality. These findings contribute to the ongoing debate on whether public-health interventions mattered for the decline in (tuberculosis) mortality prior to modern medicine. At a more fundamental level, our study questions this particular type of community-based setup with non-random treatment assignment as a method of evaluating policy interventions. |
| JEL: | I15 I18 N32 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25884&r=all |
| By: | Makram El-Shagi (Center for Financial Development and Stability at Henan University, and School of Economics at Henan University, Kaifeng, Henan); W. Charles Sawyer (Texas Christian University, Fort Worth, TX, US); Kiril Tochkov (Texas Christian University, Fort Worth, TX, US) |
| Abstract: | Import demand has been a major research topic in international economics for the past 80 years because of its importance for analyzing trade and evaluating trade policies. The goal of this paper is to survey the literature and conduct a meta-analysis of empirical studies on import demand with the intention of clarifying the effect of economic development on income elasticity. In particular, we test the hypothesis that higher income levels are associated with a more elastic import demand. We apply a combination of parametric and non-parametric methods on estimates from a sample of 152 papers published over the period 1975-2014 and find that this relationship is significant and robust. Specifically, kernel densities of income elasticity estimates for high-income countries in North America and Europe are shown to exceed those for poorer parts of the world. The results from quartile regressions confirm this pattern and establish its robustness when controlling for the effect of model specifications. |
| Keywords: | trade, import demand, income elasticity, meta-analysis, survey |
| JEL: | F10 F14 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:fds:dpaper:201903&r=all |
| By: | McLaughlin, Eoin; Pecchenino, Rowena |
| Abstract: | In the decade before the famine, Ireland experienced a boom in Microfinance Institutions (MFIs). This paper analyses the motivations of MFI proponents and practitioners, and finds evidence linking the boom in MFIs with the introduction of the poor law in 1838. Many contemporary writers saw microfinance as a complex tax avoidance/reduction scheme that could lessen the burden on rate payers by helping the poor help themselves. The link between MFIs and the poor law is confirmed by an econometric analysis of MFIs at the level of the poor law union. |
| Keywords: | microfinance,inequality,development,Ireland |
| JEL: | G21 H75 I38 N23 N33 N83 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eabhps:1901&r=all |
| By: | Hope, David; Martelli, Angelo |
| Abstract: | The transition from Fordism to the knowledge economy in the world's advanced democracies was underpinned by the revolution in information and communications technology (ICT). The introduction and rapid diffusion of ICT pushed up wages for college-educated workers with complementary skills and allowed top managers and CEOs to reap greater rewards for their own talents. Despite these common pressures, income inequality did not rise to the same extent everywhere; income in the Anglo-Saxon countries remains particularly unequally distributed. To shed new light on this puzzle, the authors carry out a panel data analysis of eighteen OECD countries between 1970 and 2007. Their analysis stands apart from the existing empirical literature by taking a comparative perspective. The article examines the extent to which the relationship between the knowledge economy and income inequality is influenced by national labor market institutions. The authors find that the expansion of knowledge employment is positively associated with both the 90/10 wage ratio and the income share of the top 1 percent, but that these effects are mitigated by the presence of strong labor market institutions, such as coordinated wage bargaining, strict employment protection legislation, high union density, and high collective bargaining coverage. The authors provide robust evidence against the argument that industrial relations systems are no longer important safeguards of wage solidarity in the knowledge economy. |
| Keywords: | ICT; income inequality; industrial relations; information and communications technology; knowledge economy; labor market institutions; technological change; wage inequality |
| JEL: | N0 R14 J01 |
| Date: | 2019–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:100382&r=all |
| By: | Céline Antonin (Observatoire français des conjonctures économiques); Mattia Guerini (Scuola Superiore Sant'Anna); Mauro Napoletano (Observatoire français des conjonctures économiques); Francesco Vona (Observatoire français des conjonctures économiques) |
| Abstract: | With its public debt amounting to 132.1% of GDP and its negative productivity growth over the last twenty years, Italy appears to be the sick man of the European Union. In this Policy brief, we focus on its two main plights: high public debt burden on the one hand, sluggish GDP and productivity growth on the other hand. Both issues are intimately related: a slow growth limits the budgetary margins and casts doubts on public debt sustainability; the reduced fiscal space in turn weighs on growth and public investment. The first part is dedicated to describing the history and causes of Italian public debt. A first phase, from the 1960s to the 1980s, was characterized by a positive but moderate growth of debt. A second phase saw the explosion of public debt, from 54% of GDP in 1980 to roughly 117% in 1994. The budget law of the Amato's government in 1992 initiated a third phase, marked by a significant fiscal consolidation effort, and the decrease of the public debt to GDP ratio. The Great Recession interrupted this consolidation era and a last phase began from 2008 on, when the public debt-to-GDP ratio consequently increased. In the second part, we review some of the structural weaknesses of the Italian economy. We notably emphasize the specialization bias towards low tech sectors, the “nanism” of Italian firms, the misallocation of talents and resources, the North-South divide and its related labor market consequences. We conclude with four policy recommendations for a revival of growth in Italy. Our first proposal is technical and proposes a new European fiscal golden rule which would remove specific public investments from the computation of structural primary balance. Our second and third proposals are related to the regulation of the labor market, with the introduction of a minimum wage on the one hand, and the facilitation of retraining policies on the other hand. Last, we call for a revival of industrial policies in order to foster knowledge accumulation and firm learning. Our view is that Italy's fate is inextricably related to Europe's and that Italy needs more rather than less Europe. |
| Keywords: | Italy; Growth; Productivity; Public debt |
| JEL: | E60 E61 O40 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/7ebbvbelkk9oq90vtohpd2346t&r=all |
| By: | Luca Pensieroso (IRES, Universite catholique de Louvain); Romain Restout (Universite de Lorraine, Université de Strasbourg, CNRS, BETA, 54000, Nancy and IRES, Universite catholique de Louvain.) |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:afc:wpaper:06-19&r=all |
| By: | Barbara M. Fraumeni; Michael S. Christian |
| Abstract: | This paper covers a continuous and longer time period than previously possible to examine human and market capital because of research by Christian (2017). This paper focuses on the presentation and analysis of trends in human capital by gender. During 1975-2012 there were significant changes in participation by women, the wage gender gap, and educational attainment and time in household production by both women and men. Both the market and nonmarket sectors will be covered as well as multifactor productivity with and without human capital. (A previous paper (Fraumeni, et al. 2017) described the national income accounting system which underlies both this paper and the much earlier paper by Jorgenson and Fraumeni (1989).) New insights will be gained by looking in detail at the 1975-2012 time period. |
| JEL: | J16 J22 J24 O47 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25864&r=all |
| By: | Arthur Charpentier (Université du Québec à Montréal (UQAM), Quantact & CREM UMR CNRS 6211); Ewen Gallic (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE) |
| Abstract: | A l'ère du numérique, les données peuvent être collectées massivement, de manière collaborative et à moindre coût. Les sites de généalogie fleurissent sur Internet pour proposer à leurs utilisateurs de reconstituer en ligne leur arbre généalogique. Le travail de collecte et de saisie effectué par ces utilisateurs peut potentiellement être réutilisé en démographie historique pour compléter la connaissance du passé de nos ancêtres. Dans notre étude, utilisons les enregistrements concernant 2 457 450 individus français ou d'origine française ayant vécu au XIX e siècle. Dans un premier temps, nous étudions la qualité de ces données. Nous mettons en évidence la présence de biais importants, notamment concernant le genre des individus. Les femmes sont sous-représentées dans les données comparativement aux hommes. Des biais relatifs à la fécondité sont également observés. En dépit de ces limites dont souffrent les données collaboratives de généalogie, nous montrons dans un deuxième temps qu'il est possible de retrouver des résultats connus dans la littérature en démographie historique. Plus particulièrement, nous exploitons les dates de naissance et de décès afin d'examiner la mortalité des individus présents dans la base de données. Nous exploitons également la richesse des caractéristiques spatiales contenues dans les arbres généalogiques pour analyser les migrations internes en France. |
| Keywords: | généalogie, données collaboratives, longévité, migration, XIXe siècle, R |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1916&r=all |
| By: | Lena Edlund; Cecilia Machado |
| Abstract: | US homicide rates fell sharply in the early 1990s, a decade that also saw the mainstreaming of cell phones – a concurrence that may be more than a coincidence, we propose. Cell phones may have undercut turf-based street dealing, thus undermining drug-dealing profits of street gangs, entities known to engage in violent crime. Studying county-level data for the years 1970-2009 we find that the expansion of cellular phone service (as proxied by antenna-structure density) lowered homicide rates in the 1990s. Furthermore, effects were concentrated in urban counties; among Black or Hispanic males; and more gang/drug-associated homicides. |
| JEL: | I0 I18 R0 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25883&r=all |
| By: | Vladislav Yakovenko (National Research University Higher School of Economics) |
| Abstract: | The paper examines healthcare in the anti-Bolshevik Northern Region during the Civil War in Russia. The author focuses on structures and institutions of the healthcare system, their methods and resources, as well as geographical peculiarities of the Northern Region concerning medicine. The main conclusion of the article is that healthcare and medicine were the areas, where interests of the interventionists, central authorities and zemstvos, coincided and contradictions between them disappeared. The specific political, demographic and geographical conditions of the Northern Region made regulation of the sanitary situation relatively effective. |
| Keywords: | Civil War in Russia, White Movement, healthcare, Northern Region, medicine |
| JEL: | Z |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:176/hum/2019&r=all |
| By: | Gunes Asik (Tobb Economics and Technology University, Turkey); Ulas Karakoc (Humboldt University Berlin, Germany); Mohamed Ali Marouani (UMR « Développement et Société », IEDES / Université Paris1-Panthéon-Sorbonne, PSL, Université Paris-Dauphine, LEDa, IRD UMR DIAL); Michelle Marshalian (University of Paris, Dauphine (PSL) and DIAL, France) |
| Abstract: | This article explores the contribution of structural change and the skill upgrading of the labor force to productivity in Tunisia and Turkey in the institutional context of the post-World War II period. Our growth decomposition shows that productivity is mainly explained by intra-industry changes for both countries during the import substitution period. Structural change played an important role in Turkey for a longer period of time than in Tunisia. Based on an instrumental variable regression setting, we find evidence that overall, the change in the share of high-educated workers had a causal impact on productivity levels in Turkey, but no such relation was found in Tunisia. Secondly, we show that this productivity increase has mainly been driven by the reallocation of higher educated labor between sectors rather than the absorption of highly educated workers within sectors. In Tunisia we do not find evidence of links between education demand and productivity. Moreover, the evidence from the instrumental variable regressions show that when we exclude the government sector in Tunisia, the overall skills upgrading is negatively associated with productivity growth, suggesting a downward return to educated labor demand over time. |
| Keywords: | Productivity, Skills, Structural change, Tunisia, Turkey, MENA. |
| JEL: | J24 L16 N15 N17 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt2019-06&r=all |
| By: | Marco Gallegati (Dipartimento di Scienze Economiche e Sociali - Universita' Politecnica delle Marche); James B. Ramsey (Department of Economics, New York University) |
| Abstract: | The aim of this study is to investigate the exact nature of Phillips' (1958) findings. We show that the application of the simplest type of wavelet basis function developed by Haar in 1910 allows to replicate the output of Phillips' data transformation procedure, i.e. the six mean coordinates. Specifically, the resemblance between the coarsest scale level coefficients from the Haar wavelet filter and the six crosses suggests the long-term nature of Phillips' (wage-unemployment) relationship. The application of the Haar wavelet filter allows us to examine the effects of two main features of Phillips' 'unorthodox' averaging procedure: the arbitrarily choice of variable-width intervals and the choice of sorting observations in ascending order of unemployment rate values. Our results show that the arbitrary selection of intervals affects only the smoothness (regularity) of the nonlinear pattern of the wage-unemployment relationship, but not its shape which is determined by sorting and grouping unemployment rate values in ascending order. Indeed, when observations are ordered according to a chronological sequence a simple linear relationship is evident. These findings are robust to different samples, 1861-1913 and 1861-1958. |
| Keywords: | Phillips curve, Haar wavelet transform, Moving average filter |
| JEL: | B22 C63 E24 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wpaper:437&r=all |
| By: | Boone, Catherine; Simson, Rebecca |
| Abstract: | There is growing recognition in the economics literature that African countries are characterized by very large economic disparities across subnational regions. Yet the lack of systematic and reliable empirical data at subnational levels of aggregation has made it difficult to explore possible links between these spatial inequalities and political dynamics. This paper reviews some of the empirical literature that attempts to measure and compare spatial inequality within and acorss African countries, and asks whether and how it might be used to bring studies of Africa into dialogue with comparative political economy work on regional inequality in other parts of the world. |
| Keywords: | Africa; inequality; regionalism; political geography; urban-rural; political economy |
| JEL: | N0 Q15 |
| Date: | 2019–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:100861&r=all |
| By: | Joos, P.P.M. (Tilburg University, School of Economics and Management); Meijdam, Lex (Tilburg University, School of Economics and Management) |
| Abstract: | It is time for a major overhaul of higher education. Europe’s first university was established in Bologna in 1088. Its curriculum was rather narrow, largely devoted to the study of law. Since that time, universities have developed in an attempt to keep pace with our changing society. How have today’s knowledge institutes responded to the increasing pace of technological progress? How do they rise to new societal challenges? Why are they pursuing innovation in education – and how are they doing so? |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:242a4784-afb9-4347-a537-32295d7a15c4&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); Oasis Kodila-Tedika (TKishasa, The Democratic Republic of Congo) |
| Abstract: | This article examines the role of cognitive ability or intelligence on slave exports from Africa. We test a hypothesis that countries which were endowed with higher levels of cognitive ability were more likely to experience lower levels of slave exports from Africa probably due to comparatively better capacities to organise, corporate, oversee and confront slave traders. The investigated hypothesis is valid from alternative specifications involving varying conditioning information sets. The findings are also robust to the control of outliers. |
| Keywords: | Intelligence; Human Capital; Slavery |
| JEL: | I20 I29 N30 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:19/005&r=all |
| By: | Jablonski, Ryan S.; Oliver, Steven; Hastings, Justin V. |
| Abstract: | Transnational crime brings substantial foreign capital into a number of fragile and developing states. Yet the economic and political impacts of such capital have rarely been studied due to the challenges of obtaining accurate data on illicit activities. We overcome this challenge by compiling a dataset on the amount and disbursement dates of ransom payments made by ship owners and insurers to Somali pirates from 2005 to 2012, along with sub-national commodity prices and trade flows in Somalia. Using a difference-in-differences strategy, we hypothesize and find that ransoms have effects similar to those associated with the Dutch Disease. These effects include appreciating the local currency, decreasing export competitiveness, and increasing import dependence. The results illuminate a new channel through which illicit capital can undermine long-term economic development and foster an economic and political dependency on illicit sectors. |
| JEL: | N0 F3 G3 |
| Date: | 2017–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:67105&r=all |
| By: | Franses, Ph.H.B.F.; S. Vasilev (Simeon) |
| Abstract: | This paper provides a balanced panel data set for real GDP growth in Africa. For 18 of the 52 countries there are missing data. We use a model-based imputation technique based on World Bank data to fill in the gaps. |
| Keywords: | Balanced panel data, Africa, real GDP growth, Missing data, Imputation, Principal components regression |
| JEL: | E0 N1 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ems:eureir:116541&r=all |
| By: | Susana Párraga Rodríguez (Banco de España) |
| Abstract: | This paper estimates the impact of pension-related policies on household spending. The identification strategy exploits the deviation in pensioner income and expenditure caused by the introduction of a new pension system during the 1980s and 1990s in Spain and constructs a new narrative series of legislated pension changes. I present a variety of estimates, some of them imply that increases in the average pension have a roughly one-for-one effect on pensioner spending. The strongest effects are on the pensioners with the highest levels of expenditure, income, and wealth. Estimates for different categories of expenditure indicate that benefit increases trigger these pensioners to spend more on durables. At the same time, pension-related policies targeted to pensioners with low income levels seem to affect the spending on non-durables and necessities such as food positively. |
| Keywords: | fiscal policy, narrative public pensions changes, household expenditure |
| JEL: | D12 H31 H55 N14 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1913&r=all |