nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2019‒07‒15
25 papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Return of the tariffs: The interwar trade collapse revisited By Adam, Marc Christopher
  2. Prices, Wages, and Welfare in Early Colonial South Australia, 1836-1850 By Sumner La Croix; Edwyna Harris
  3. The Biological Standard of Living in Urban Bolivia, 1880S – 1920S: Stagnation and Persistent Inequality By Boris Branisa; José Peres-Cajías; Nigel Caspa
  4. Demographic Origins of the Startup Deficit By Fatih Karahan; Benjamin Pugsley; Aysegül Sahin
  5. Substantive Economics and Avoiding False Dichotomies in Advancing Social Ecological Economics By Spash, Clive L.
  6. School Desegregation and Black Teacher Employment By Owen Thompson
  7. Was the US Great Depression a credit boom gone wrong? By Postel-Vinay, Natacha
  8. Guilds in the transition to modernity: the cases of Germany, United Kingdom, and the Netherlands By Hoogenboom, Marcel; Kissane, Christopher; Prak, Maarten; Wallis, Patrick; Minns, Chris
  9. Staple Products, Linkages, and Development: Evidence from Argentina By Federico Droller; Martin Fiszbein
  10. Time Preference and the Great Depression: Evidence from Firewood Prices in Portland, Oregon. By Nicholas Z. Muller
  11. The Marginal Labor Supply Disincentives of Welfare Reforms By Robert A. Moffitt
  12. Whitelashing: Black Politicians, Taxes, and Violence By Trevon D. Logan
  13. China's lost generation: Changes in beliefs and their intergenerational transmission By Roland, Gerard; Yang, David Y.
  14. Diversity and Conflict By , Cemal; Ashraf, Quamrul; Galor, Oded; Klemp, Marc
  16. Currency Collapses and Output Dynamics in Commodity Dependent Countries By Vincent Bodart; Jean-François Carpantier
  17. Prendre la parole sous l’État français: Le cas de François Perroux By Nicolas Brisset; Raphaël Fèvre
  18. The Failure of Free Entry By Germán Gutiérrez; Thomas Philippon
  19. The Long-Run Effects of Recessions on Education and Income By Stuart, Bryan
  20. Economic Theory, Phoenician Pre-coinage External Trade, Changes in the Economic Surplus and its Appropriation - An Initial Perspective By Tisdell, Clement A.; Svizzero, Serge
  22. A non-linear Keynesian Goodwin-type endogenous model of the cycle: Bayesian evidence for the USA By Mariolis, Theodore; Konstantakis, Konstantinos N.; Michaelides, Panayotis G.; Tsionas, Efthymios G.
  23. Industrial clusters in the long run: evidence from Million-Rouble plants in China By Stephan Heblich; Marlon Seror; Hao Xu; Yanos Zylberberg
  24. From state resource allocation to a 'low-level equilibrium trap': re-evaluation of economic performance of Mao's China, 1949-78 By Deng, Kent; Shen, Jim Huangnan
  25. Sovereign Risk and Fiscal Information: A Look at the U.S. State Default of the 1840s By Bi, Huixin; Traum, Nora

  1. By: Adam, Marc Christopher
    Abstract: Was the collapse of world trade between 1928 and 1937 caused by higher transport costs, increased protectionism or the collapse of the gold standard? Using recent advances in the estimation of gravity equations, I examine the partial and general equilibrium effects of bilateral distance, international borders, and the payment system on trade. My results suggest that had average tari and non-tari trade barriers remained at their 1928 level, total international trade would have been 64.6 % higher in 1937. Had the gold standard not collapsed in 1931 and had the British Empire not departed to establish its own currency and trade blocs, international trade would have been 3 % larger. Finally, had transport costs remained at their 1928 level, global trade would not have been significantly different nine years on. These results are supported by over 6,000 new hand-collected observations of ad-valorem ocean freight rates for cotton, which show an average increase of only 1.2 percentage points between 1928 and 1936. When expressed as an index, the movement of freight rates mirrors the evolution of the elasticity of trade to distance over the period.
    Keywords: International trade,Gravity equation,Great Depression
    JEL: F10 F12 F13 F33 N70
    Date: 2019
  2. By: Sumner La Croix (University of Hawaii); Edwyna Harris (Monash University)
    Abstract: From first settlement of South Australia (SA) in November 1836, the colony underwent a series of crises due to delays in surveying and distributing lands, producing crops, and employing new migrants. Histories of this period emphasize that a combination of high food prices and high wages burdened the government and new farms. To check and refine standard explanations for early colonization crises, we employ a number of sources, including SA newspapers and colonial government blue books, to develop monthly series for prices, wages, and the cost of “respectable†and “bare bones†consumption baskets over the 1838-1850 period. We use Corden’s model of a booming economy with traded and non-traded goods to understand how various shocks, including the 1840 stop in immigration and the 1844/1845 copper discoveries, could have affected the SA economy. We find that the model’s implications are consistent with changes in our newly developed SA data series.
    Keywords: Adelaide, colonization, welfare ratio, standard of living, South Australia, relief, Wakefield, migrants
    JEL: N47 N57 N97 R30 D44
    Date: 2019–07
  3. By: Boris Branisa (Universidad Católica Boliviana “San Pablo”); José Peres-Cajías (Universitat de Barcelona); Nigel Caspa (Universidad Mayor de San Andrés)
    Abstract: Based on almost 5.000 direct observations on National Identification Cards, this paper offers the first estimation of the evolution of average heights in urban Bolivia for the decades 1880s-1920s. The analysis focuses on men aged 19-50 years registered in the city of La Paz. Despite city’s growing economic importance and modernization, average heights remained stagnant around 163 cm. This level is not so different to that found in the still disperse available evidence for rural Bolivia. Furthermore, there is evidence of inequalities throughout the period under study: those men who were indigenous, illiterate or worked in manual occupations were persistently shorter than non-indigenous, literates and non-manual workers, respectively. In coincidence with recent studies on Latin America, these findings suggest that the boost in exports and the regained dynamism of the economy that took place at the onset of the 20th century were not accompanied by improvements in biological standards of living.
    Keywords: Anthropometric history, heights; welfare, inequality, first globalization.
    JEL: I31 N16 N36
  4. By: Fatih Karahan; Benjamin Pugsley; Aysegül Sahin
    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.
    Keywords: Firm dynamics, Demographics, Business Dynamism, Macroeconomics
    JEL: J11 E24 D22
    Date: 2019–07
  5. By: Spash, Clive L.
    Abstract: The proposal has been put forward that ecological economics seek to become substantive economics (Gerber and Scheidel 2018). This raises important issues about the content and direction of ecological economics. The division of economics into either substantive or formal derives from the work of Karl Polanyi. In developing his ideas Polanyi employed a definition from Menger and combined this with Tönnies theory of historical evolution. In this paper I explore why the resulting substantive vs. formal dichotomy is problematic. In particular the article exposes the way in which trying to impose this dichotomy on history of economic thought and epistemology leads to further false dichotomies. Besides Polanyi, the positions of other important thinkers informing social ecological economics (SEE) are discussed including Neurath, Kapp and Georgescu-Roegen. The aim is to clarify the future direction of ecological economics and the role, in that future, of ideas raised under the topic of substantive economics.
    Keywords: Substantive economics; Karl Polanyi; Formal economics; History of thought; Epistemology; Social ecological economics; Economic anthropology
    Date: 2019
  6. By: Owen Thompson
    Abstract: Prior to the racial integration of schools in the southern United States, predominantly African American schools were staffed almost exclusively by African American teachers as well, and teaching constituted an extraordinarily large share of professional employment among southern blacks. The large-scale desegregation of southern schools occurring after passage of the 1964 Civil Rights Act represented a potential threat to this employment base, and this paper estimates how student integration affected black teacher employment. Using newly assembled archival data from 781 southern school districts observed between 1964 and 1972, I estimate that a school district transitioning from fully segregated to fully integrated education, which approximates the experience of the modal southern district in this period, led to a 31.8% reduction in black teacher employment. A series of tests indicate that these employment reductions were not due to school district self-selection into desegregation or unobserved district characteristics associated with desegregation. Additional analyses estimate changes in the occupational distribution by race in the 1960 and 1970 Decennial Censuses and indicate that displaced southern black teachers either entered lower skill occupations within the South or migrated out of the region to continue teaching, and that southern school districts compensated for reduced black teacher employment by employing fewer total teachers and by increasing their recruitment of white teachers, especially less experienced white teachers and white male teachers.
    JEL: I24 J23 J7
    Date: 2019–06
  7. By: Postel-Vinay, Natacha
    Abstract: The US Great Depression was preceded by almost a decade of credit growth. This review paper suggests that the 1920s credit boom went through two phases: one, up to around 1927, when credit grew in concert with money; another one, from around 1928 to 1929, when credit grew faster than money. Credit from commercial banks grew tremendously, but credit from savings institutions grew even more. The fact that money was relatively stable in the second phase fits Friedman and Schwartz’s finding that the 1920s were not an inflationary decade. Rather, the credit boom was reflected in asset price inflations which occurred in certain parts of the economy, such as the real estate and stock markets. As the literature tends to show, the growth of credit made households and financial institutions vulnerable to shocks. While a decoupling of credit growth from money growth in the post-1945 period has been previously noted (Schularick and Taylor 2012), this paper suggests that such a decoupling already occurred in 1920s America. Standard monetary policy tightening was not enough to quell the boom, which points to macro- and micro-prudential tools as potentially more successful alternative measures to keep credit under control.
    JEL: E44 E32 N11 N12
    Date: 2019–07
  8. By: Hoogenboom, Marcel; Kissane, Christopher; Prak, Maarten; Wallis, Patrick; Minns, Chris
    Abstract: One important aspect of the transition to modernity is the survival of elements of the Old Regime beyond the French Revolution. It has been claimed that this can explain why in the late 19th and early 20th centuries some Western countries adopted national corporatist structures while others transformed into liberal market economies. One of those elements is the persistence or absence of guild traditions. This is usually analyzed in a national context. This paper aims to contribute to the debate by investigating the development of separate trades in Germany, the United Kingdom and the Netherlands throughout the 19th century. We distinguish six scenarios of what might have happened to crafts and investigate how the prevalence of each of these scenarios in the three countries impacted on the emerging national political economies. By focusing on trades, rather than on the national political economy, our analysis demonstrates that in each country the formation of national political economies and citizenship rights was not the result of a national pattern of guild survival. Rather, the pattern that emerged by the end of the 19th century was determined by the balance between old and new industries, and between national and regional or local government.
    Keywords: guilds; citizenship; political economy; modernization; Europe
    JEL: N0
    Date: 2018–06–01
  9. By: Federico Droller; Martin Fiszbein
    Abstract: We investigate how historical patterns of primary production influenced development across local economies in Argentina. Our identification strategy exploits exogenous variation in the composition of primary production induced by climatic features. We find that locations specializing in ranching had weaker linkages with other activities, higher concentration in land ownership, lower population density, and less immigration than cereal-producing areas. Over time, ranching localities continued to exhibit lower population density and they experienced relatively sluggish industrialization. Ultimately, ranching specialization had large negative effects on long-run levels of income per capita and human capital. Our findings show that early patterns of production can have a crucial influence on development patterns, providing suggestive support to the staple theory of economic growth.
    JEL: N16 N56 N96 O13 O14
    Date: 2019–06
  10. By: Nicholas Z. Muller
    Abstract: The present study gathers prices for firewood and estimates the premium paid for dry fuel, relative to green wood, on a monthly basis from 1922 to 1935. This premium conveys consumers’ willingness-to-pay for a good available for immediate consumption relative to the same good ready for use after roughly one year. Embedded in this premium are consumers’ time preferences. The paper documents time series variation in the dry fuel premium and associated time preference spanning the macroeconomic shocks before, during, and after the Great Depression. The dry fuel premium increased by a factor of four during the recession of 1923 to 1924, and fell by a factor of two following the Great Crash of October 1929. Key factors in determining the premium for dry fuel were variation in wages, inflation, stock market returns, and bond yields. This paper supports the uncertainty hypothesis as an explanation for the precipitous fall in consumption expenditures following the Great Crash of 1929.
    JEL: N12 N72 Q23 Q41
    Date: 2019–06
  11. By: Robert A. Moffitt
    Abstract: Existing research on the static effects of the manipulation of welfare program benefit parameters on labor supply has allowed only restrictive forms of heterogeneity in preferences. Yet preference heterogeneity implies that the marginal effects of welfare reforms on labor supply may differ in different time periods with different populations and which sweep out different portions of the marginal distribution of preferences. A new examination of the heavily studied AFDC program examines changes in its tax rates in 1967, 1981, and 1996 and estimates the marginal effects on labor supply of a change in participation in each of those reform years. The estimates are based on a theory-consistent reduced form model which allows for a nonparametric specification of how changes in welfare program participation affect labor supply on the margin. Estimates of the model using a form of local instrumental variables show that the marginal treatment effects are quadratic, rising and then falling as participation rates rise. Applying the estimates to the three historical reform periods shows that marginal responses differed in each period because of differences in the composition of who was on the program and who was not.
    JEL: C21 I3 J2
    Date: 2019–06
  12. By: Trevon D. Logan
    Abstract: This paper provides the first evidence of the effect of tax policy on the likelihood of violent attacks against black politicians. I find a strong positive effect of local tax revenue on subsequent violence against black politicians. A dollar increase in per capita county taxes increases the likelihood of a violent attack by more than 25%. The result is robust to numerous economic, social, historical, and political factors. I also find that counties where black officeholders were attacked had the largest negative tax revenue changes between 1870 and 1880 and that violence against black politicians is unrelated to other forms of post-Reconstruction racial violence. This provides the first quantitative evidence that political violence at Reconstruction's end was related to black political efficacy.
    JEL: H2 H7 J10 N3 N90 R1 R51
    Date: 2019–06
  13. By: Roland, Gerard; Yang, David Y.
    Abstract: Beliefs about whether effort pays off govern some of the most fundamental choices individuals make. This paper uses China’s Cultural Revolution to understand how these beliefs can be affected, how they impact behavior, and how they are transmitted across generations. During the Cultural Revolution, China’s college admission system based on entrance exams was suspended for a decade until 1976, effectively depriving an entire generation of young people of the opportunity to access higher education (the “lost generation”). Using data from a nationally representative survey, we compare cohorts who graduated from high school just before and after the college entrance exam was resumed. We find that members of the “lost generation” who missed out on college because they were born just a year or two too early believe that effort pays off to a much lesser degree, even 40 years into their adulthood. However, they invested more in their children’s education, and transmitted less of their changed beliefs to the next generation, suggesting attempts to safeguard their children from sharing their misfortunes.
    JEL: Z1 I23 O53 P26 P48
    Date: 2019–07–04
  14. By: , Cemal; Ashraf, Quamrul; Galor, Oded; Klemp, Marc
    Abstract: This research advances the hypothesis and establishes empirically that interpersonal population diversity has contributed significantly to the emergence, prevalence, recurrence, and severity of intrasocietal conflicts. Exploiting an exogenous source of variations in population diversity across nations and ethnic groups, it demonstrates that population diversity, as determined predominantly during the exodus of humans from Africa tens of thousands of years ago, has contributed significantly to the risk and intensity of historical and contemporary civil conflicts. The findings arguably reflect the adverse effect of population diversity on interpersonal trust, its contribution to divergence in preferences for public goods and redistributive policies, and its impact on the degree of fractionalization and polarization across ethnic, linguistic, and religious groups.
    Keywords: ethnic fractionalization; ethnic polarization; interpersonal trust; Political Preferences; population diversity; Social conflict
    JEL: D74 N30 N40 O11 O43 Z13
    Date: 2019–06
  15. By: L. Basanti Devi
    Abstract: Education in the traditional sense means imparting knowledge and skill as well as controlling or disciplining the behaviour of an individual. The history and civilization of a nation is reflected by its education. It also tells the advancement of a race in the matter of experience, knowledge, wisdom, aptitude, skills, and other human values from time to time. The way of conservation of knowledge and skills and the methods of its transmission was regarded as the education of the native people of Manipur in the early period. The present paper is to focus a retrospective historical background of the growth of education in Manipur since 33 A.D. upto 1891. Key Words:Job Satisfaction, Women Employees, Women, Education, Education Policy
    Date: 2018–12
  16. By: Vincent Bodart (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Jean-François Carpantier (Aix-Marseille University, CERGAM)
    Abstract: This paper provides new empirical evidence on the relationship between currency collapses (i.e. large nominal depreciations or devaluations) and real output by paying a specific attention to commodity exporting countries. Using a dataset including 108 emerging and developing economies for the period 1970-2016, we document and estimate what happens to output growth during episodes of currency collapses for commodity-dependent and non commodity-dependent countries. One particular feature of our analysis is to control for war events. We find that currency crises occur more frequently in commodity-dependent countries (one crisis every 17 years versus 30 years for non commodity-dependent countries) and with a larger magnitude (median depreciation about 12 percent points larger for commodity-dependent countries). In both groups of countries, output growth declines in response to the currency collapse. It appears however that output growth starts to slowdown earlier in commodity-dependent countries while the impact is more persistent in non commodity-dependent countries. The magnitude of the output growth slowdown is very close between the two groups of countries. Finally, we find that the output growth-currency collapse relationship differs among commodity-dependent countries according to the category of their main exported commodity.
    Keywords: Currency crises, nominal depreciations, commodity currencies, exchange rates, output growth, recovery
    JEL: E32 F31 F32 F41 F43 Q02
    Date: 2019–06
  17. By: Nicolas Brisset (Université Côte d'Azur, France; GREDEG CNRS); Raphaël Fèvre (University of Cambridge; POLIS)
    Abstract: L’activité de l’économiste François Perroux au moment de l’occupation a été analysée sous différents angles. Dans le travail qui va suivre, nous tâcherons d’éclairer l’activité de Perroux sous l'État français non pas à partir des nombreux ouvrages et articles académiques qu'il publie entre 1940 et 1944, mais plutôt en se consacrant à ses prises de paroles en tant qu’intellectuel public. Pour se faire, nous utiliserons la notion bourdieusienne de "représentation"
    Keywords: Perroux, propagande, régime de Vichy, représentation, Bourdieu
    JEL: B29 B30
    Date: 2019–07
  18. By: Germán Gutiérrez; Thomas Philippon
    Abstract: We study the entry and exit of firms across U.S. industries over the past 40 years. The elasticity of entry with respect to Tobin’s Q was positive and significant until the late 1990s but declined to zero afterwards. Standard macroeconomic models suggest two potential explanations: rising entry costs or rising returns to scale. We find that neither returns to scale nor technological costs can explain the decline in the Q- elasticity of entry, but lobbying and regulations can. We reconcile conflicting results in the literature and show that regulations drive down the entry and growth of small firms relative to large ones, particularly in industries with high lobbying expenditures. We conclude that lobbying and regulations have caused free entry to fail.
    JEL: D4 D6 E22 E23 K2 L0 O3 O4
    Date: 2019–06
  19. By: Stuart, Bryan (George Washington University)
    Abstract: This paper examines the long-run effects of the 1980-1982 recession on education and income. Using confidential Census data, I estimate difference-in-differences regressions that exploit variation across counties in recession severity and across cohorts in age at the time of the recession. For individuals age 0-10 in 1979, a 10 percent decrease in earnings per capita in their county of birth reduces four-year college degree attainment by 10 percent and income in adulthood by 3 percent. Simple calculations suggest that, in aggregate, the 1980-1982 recession led to 0.8-1.8 million fewer college graduates and $42-$87 billion less earned income per year.
    Keywords: human capital, education, income, recessions
    JEL: E32 I20 I30 J13 J24
    Date: 2019–06
  20. By: Tisdell, Clement A.; Svizzero, Serge
    Abstract: Patterns are explored of the evolutionary stages in the management of economic exchange as economic activity grows and becomes more diverse and complex. These patterns are related to the economic development and external trade of Phoenician city-states. In addition, attention is given to how well economic theories explain the evolution of Phoenician external trading, with particular attention being given to the Heckscher-Ohlin theory of international trade. Also explored is the role of ‘new’ (evolving) media of exchange in facilitating interactive trade, especially that of Phoenicia. The possible methods that Phoenician rulers (and some other ancient rulers) adopted to extract a portion of the economic surplus from trade are outlined, and the policy issues they faced are discussed. It is concluded that media of exchange such as gold, silver and other treasures which initially fostered the growth of international trade, subsequently resulted in stifling this growth. This is because these items came to be regarded as a measure of real material wealth and led to policies being adopted by states which were intended to increase each state’s stock of these treasures. The seeds of mercantilism were sown. This system had several negative economic consequences and it actually tended to reduce international trade and decrease the economic prosperity of nations.
    Keywords: Financial Economics, International Relations/Trade
    Date: 2019–07–11
  21. By: Vivekanand Jha
    Abstract: Jayanta Mahapatra is the most prolific poet in the history of Indian English Poetry, he belongs to poor and middle class family, despite being a scholar from science background he established himself in the arena of English literature, he is the first poet to receive Sahitya Akademi Award in the Indian English Poetry, he is a poet who commands more respect overseas than at home, and last but not least, profundity of images and symbols in his poetry. This paper attempts to present the themes of myth, temple & stone in the poetry of JayantaMahapatra Key Words:myth, temple, stone, mahapatra, jayantamahapatra Policy
    Date: 2018–06
  22. By: Mariolis, Theodore; Konstantakis, Konstantinos N.; Michaelides, Panayotis G.; Tsionas, Efthymios G.
    Abstract: This paper incorporates the so-called Bhaduri-Marglin accumulation function in Goodwin's original growth cycle model and econometrically estimates the proposed model for the case of the US economy in the time period 1960-2012, using a modern Bayesian sequential Monte Carlo method. Based on our findings, the US economy follows an exhilarationist regime throughout our investigation period with the sole exception of an underconsumption regime for the time period 1974-1978. In general, the results suggest that the proposed approach is an appropriate vehicle for expanding and improving traditional Goodwin-type models.
    Keywords: Bayesian sequential Monte Carlo methods; Bhaduri-Marglin accumulation function; Goodwin type models; US economy
    JEL: B51 C11 C62 E32
    Date: 2019–02–01
  23. By: Stephan Heblich; Marlon Seror; Hao Xu; 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: industrial clusters, agglomeration economies, specialization
    JEL: R11 R53 J24 N95
    Date: 2019
  24. By: Deng, Kent; Shen, Jim Huangnan
    Abstract: This paper provides a full picture of how Maoist economy actually performed. We argue that Mao’s China neither undertook a structural change towards industrialisation nor generated a sustainable growth from 1949 to 1978.2 With fatal shortcomings of a planned economic system imported from the Soviet Union – the ‘principle-agent’ problem and information asymmetry for the bureaucracy, and disincentives for producers – China’s economy remained not only deliberately unbalanced but also predominantly rural until the 1980s. More importantly, the Maoist economy was not designed to enrich and empower the masses in society. Instead, all key consumer goods including food, clothing and housing were strictly rationed. The material life of ordinary citizens in China saw no improvement. This paper aims to reveal the harsh reality of the Maoist economy with solid evidence and theoretical explanation.
    Keywords: Maoist economy; structural change; disincentives; information asymmetry; price distortion; material life
    JEL: N00 N55 O40 O53
    Date: 2019–07
  25. By: Bi, Huixin (Federal Reserve Bank of Kansas City); Traum, Nora
    Abstract: This paper examines how newspaper reporting affects government bond prices during the U.S. state default of the 1840s. Using unsupervised machine learning algorithms, the paper first constructs novel ``fiscal information indices'' for state governments based on U.S. newspapers at the time. The impact of the indices on government bond prices varied over time. Before the crisis, the entry of new western states into the bond market spurred competition: more state-specific fiscal news imposed downward pressure on bond prices for established states in the market. During the crisis, more state-specific fiscal information increased (lowered) bond prices for states with sound (unsound) fiscal policy.
    Keywords: Sovereign Default; Information; Fiscal Policy
    JEL: E62 H30 N41
    Date: 2019–06–01

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