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on Business, Economic and Financial History |
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Issue of 2019‒09‒02
37 papers chosen by |
| By: | Cormac Ó Gráda |
| Abstract: | This paper surveys publications in the fields of economic history and demography in the ESR since 1969. Numbering sixty in all, they cover a broad chronological and thematic range. Some of these papers never attracted much notice, but stand as useful sources for future historians. A few have become classics. |
| Keywords: | Ireland; Economic history; Demography; Economics; Sociology; Religion |
| JEL: | N J11 J12 J13 J61 Z12 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201916&r=all |
| By: | Raffaele Danna (University of Cambridge) |
| Abstract: | The paper contributes to the literature focusing on the role of ideas, practices and human capital in pre-modern European economic development. It argues that studying the spread of Hindu-Arabic numerals among European practitioners allows to open up a perspective on a progressive transmission of useful knowledge from the commercial revolution to the early modern period. The analysis is based on an original database recording detailed information on over 1200 texts, both manuscript and printed. This database provides the most detailed reconstruction available of the European tradition of practical arithmetic from the late 13th to the end of the 16th century. It can be argued that this is the tradition which drove the adoption of Hindu-Arabic numerals in Europe. The dataset is analysed with statistical and spatial tools. Since the spread of these texts is grounded on inland patterns, the evidence suggests that a continuous transmission of useful knowledge may have played a role during the shift of the core of European trade from the Mediterranean to the Atlantic. |
| Keywords: | Hindu-Arabic numerals, Useful Knowledge, Human capital, Numeracy, Commercial Revolution, Pre-modern European economic development, Bill of exchange, Capabilities and skills |
| JEL: | N33 N00 J24 |
| Date: | 2019–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:cmh:wpaper:35&r=all |
| By: | Cécile Bastidon; Michael Bordo; Antoine Parent; Marc Weidenmier |
| Abstract: | We examine equity market integration for 17 countries from 1913-2018. We use network analysis to measure the evolution of global stock market integration as well as stock market integration between and across countries. The empirical results suggest that long-run stock market integration looks like an unstable hook. Equity market integration first peaked in 1913 during the first era of globalization (1870-1913) when unfettered markets ruled the day. Integration declined over the next 60 years as countries experienced the Great Depression and shunned international capital markets. The end of the Bretton Woods system in the early 1970s ushered in the second period of globalization. Our empirical analysis suggests that stock market integration in the recent period of globalization has surpassed the first era of globalization in the last 10 years and currently has the highest level of equity market integration and network instability in world history. |
| JEL: | C38 F36 G15 N20 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26166&r=all |
| By: | Cirer Costa, Joan Carles |
| Abstract: | The ‘Golden Age’ refers to an era of rapid economic growth which led to dramatic changes within European society. The steady rise in income coupled with recently introduced paid holidays encouraged the new middle classes to emulate the lifestyle of the glamorous and privileged trendsetters of the Belle Époque and the 1920s. The outward trappings of this included the purchase of a car and annual holidays in the Mediterranean, amounting in the 1950s to a sort of yearly pilgrimage. In the Balearic Islands and the Costa Brava an ample tourist sector flourished against a political background that was essentially in opposition to it – the autarchic stage of the Franco regime. Tourism, in the end, became one of the determining factors which provoked radical changes to this regime, leading eventually to complete abandonment of its militant isolationism. |
| Keywords: | Golden Age, late development, tourism, Spain, francoism, autarchic period, social change |
| JEL: | L8 L83 N7 N74 O17 |
| Date: | 2019–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95578&r=all |
| By: | O'Sullivan, Mary |
| Abstract: | This paper contributes to our understanding of how the past is invoked in the present in the realm of economic policy. It focuses on the systemic financial reform envisaged by the Federal Reserve Act of 1913, which was supposed to displace the powerful New York call market with a new discount or acceptance market as the centrepiece of the U.S. money market. The paper shows that the past was remembered and ignored in ways that were crucial in generating “lessons” about the necessity and possibility of radical financial reform in the United States. It reveals the strong commitment to these lessons by prominent officials in the Federal Reserve Bank of New York in designing and implementing policies for reform. Their commitment proved to be unwavering even in the face of mounting criticism that their policies were failing to promote the development of an acceptance market. By focussing on the anaemic demand for acceptances as a key obstacle to reform, I suggest that policymakers were so fixated on the past that they overlooked the potential implications of unexpected changes in the US money market since the enactment of the Federal Reserve Act. Thus, they responded with frustration to the failure of their efforts to achieve the financial reform envisaged by that Act without contemplating any serious alternative to it. |
| Keywords: | Financial history, Money markets, Call loans, Acceptances, Uses of the past, Monetary and financial reform, Federal Reserve Act. |
| JEL: | N00 N22 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:gnv:wpaper:unige:121790&r=all |
| By: | Monica Bozzano; Gabriele Cappelli |
| Abstract: | This paper shows how historical institutions, inherited from pre-unification regional states, cast a long shadow on the evolution of literacy across the provinces of Liberal Italy (1871-1911). Although increasing local inputs into public primary schooling were associated with higher literacy, pre-unification schooling is found to be a crucial predictor of literacy in the period under study. New provincial estimates of school efficiency based on Data Envelopment Analysis suggest that pre-unification education and parental literacy were also important determinants of the success in converting schooling into literacy |
| Keywords: | schooling, effectiveness, efficiency, human capital, education production function, economic history, institutions, reforms, Italy |
| JEL: | E02 H75 I25 N33 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:801&r=all |
| By: | Sussman, Nathan |
| Abstract: | We study an overlooked episode of financial development in England during the 17th century. We construct a novel, annual series of interest rates paid by the Corporation of London. We show that: interest rates declined by 350 basis points; Interest rates co-moved with Amsterdam: we attribute half of this decline to the integration of the capital markets of London and Amsterdam and half to the increase in London's financial market liquidity. The reduction of the usury rate lowered interest rates by 50 basis points in the 1650s. England's financial evolution and path towards modern growth date, therefore, to the 17th century. |
| Keywords: | England; Financial Development; Financial Intermediation; growth; interest rate; Usury |
| JEL: | G23 N2 N23 O16 O43 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13920&r=all |
| By: | Annalisa Frigo (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Eric Roca Fernandez (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE, Marseille, France) |
| Abstract: | This paper is concerned with the historical roots of gender equality. It proposes and empirically assesses a new determinant of gender equality: gender-specific outside options in the marriage market. In particular, enlarging women's options besides marriage - even if only temporarily - increases their bargaining power with respect to men, leading to a persistent improvement in gender equality. We illustrate this mechanism focusing on Belgium, and relate gender-equality levels in the 19th century to the presence of medieval, female-only communities called beguinages that allowed women to remain single amidst a society that traditionally advocated marriage. Combining geo-referenced data on beguinal communities with 19th-century census data, we document that the presence of beguinages was instrumental in decreasing the gender gap in literacy. The reduction is sizeable, amounting to a 5.3 % drop in gender educational inequality. |
| Keywords: | Economic Persistence, Culture, Institutions, Religion, Gender Gap |
| JEL: | I25 J16 N33 O15 O43 Z12 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2019013&r=all |
| By: | Horn, Karen |
| Abstract: | Ever since the global financial crisis of 2008, interpreted by some observers as a foreseeable failure of "unfettered" capitalism, the German intellectual tradition of ordoliberalism has been meeting with increased interest. Its emphasis on good government, appropriate rules and institutions makes it attractive. Welcome as this may be, however, that trend may impact the reception of the works of Adam Smith in a problematic way, since the key historical figures of ordoliberalism reject his theory vigorously, even though, from today's perspective, their concerns and policy recommendations look very parallel to his. Their common hope is human flourishing. Just like the Scot, the broad scope of their vision encompasses society as a whole, not just the market; they are concerned with ethics, not just economics. But what, then, can solve the puzzle of this implausible rejection, by which the ordoliberals contribute to a deep-rooted prejudice against Smith? In this paper, Karen Horn takes stock of their concrete criticisms, which turn out to be based on a narrow understanding of Smith's work. She suggests that it is religion that stands at the root of the explanation, though situational elements may also play a role. The essential contentious point seems to be what the ordoliberals take for the Scot's naïve belief in natural harmony, the sources of which they see in his stoicism and possible deism. The deeper problem for them with Smith is the pagan flavour and the systematic normative relativism of an essentially evolutionary approach to human values. |
| Keywords: | Ordoliberalism,Adam Smith,History of economic thought,Natural harmony |
| JEL: | B12 B3 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:aluord:1903&r=all |
| By: | Sergio Cesaratto |
| Abstract: | This paper has been long ago inspired by Jared Diamond (1997) and, in particular, by his extensive use of the concept of economic surplus as the key to the development of civilization. Unfortunately, Diamond does not even mention the origin of the concept in classical and pre-classical economics. Moreover, Diamond does not pay any consideration to the long debates in economic anthropology on the role of economic analysis in studying primitive and ancient economic formations. These debates are instead the object of a more recent book by Cedrini & Marchionatti (2017), who context the neoclassical “imperialist” attempt to occupy the territory of economic anthropology. They rely, however, upon the frail institutionalist background provided by Karl Polanyi and his school and by other anthropologists of similar inspiration. In so doing, they fail to provide a robust economic basis to institutional change, by firmly anchoring it around the changing modes of generation and distribution of the economic surplus. These notes are explorative, as also shown by a post-scriptum. Comments welcome. |
| Keywords: | Surplus approach, Economic anthropology, Marx, Sraffa, Polanyi |
| JEL: | A12 B51 B52 Z13 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:807&r=all |
| By: | Cemal Eren Arbatli (National Research University Higher School of Economics); Quamrul H. Ashraf (Williams College); Oded Galor (Brown University); Marc Klemp (University of Copenhagen) |
| Abstract: | This research advances the hypothesis and establishes empirically that interpersonal population diversity, rather than fractionalization or polarization across ethnic groups, has been pivotal to the emergence, prevalence, recurrence, and severity of intrasocietal conflicts. Exploiting an exogenous source of variations in population diversity across nations and ethnic groups, as determined predominantly during the exodus of humans from Africa tens of thousands of years ago, the study demonstrates that population diversity, and its impact on the degree of diversity within ethnic groups, has contributed significantly to the risk and intensity of historical and contemporary civil conflicts. The findings arguably reflect the contribution of population diversity to the non-cohesivnesss of society, as reflected partly in the prevalence of mistrust, the divergence in preferences for public goods and redistributive policies, and the degree of fractionalization and polarization across ethnic, linguistic, and religious groups. |
| Keywords: | Social conflict, population diversity, ethnic fractionalization, ethnic polarization, interpersonal trust, political preferences |
| JEL: | D74 N30 N40 O11 O43 Z13 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2019-10&r=all |
| By: | Enrietti, Aldo; Geuna, Aldo; Nava, Consuelo R.; Patrucco, Pier Paolo (University of Turin) |
| Abstract: | By discussing the relation between the traditional Marshallian/Jacobian approach and Klepper’s concept of spinoffs and their role, this paper tries to explain the early genesis and later evolution of the Italian automotive industry, based on the for mation of the Torino’s car cluster from the late nineteenth century. Historical analysis and econometric models are integrated to identify key factors that enabled the creation and success of the automotive industry in Turin. Specifically, we investigate agglomeration economies, the role of spinoffs and institutional factors such as the level and importance of local education. Based on original archival research, we built a new database of all Italian automobile companies. Replication of Klepper’s (2007) and Boschma and Wenting’s (2007) models shows no particular influence of the Turin cluster and no early entry advantages. Our model, which integrates and extends previous contributions, confirms the existence of a spinoffs effect, and in particular the positive effect of inherited technical skills embedded in pilots. We find support also, for positive agglomeration effects at the regional level and inter industry externalities from aeronautics, a metropolitan cluster effect and the significance of metropolitan education. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201901&r=all |
| By: | Fukao, Kyoji; Paul, Saumik |
| Abstract: | This paper examines the drivers of the long-run structural transformation in Japan. We use a dynamic input-output framework that decomposes the reallocation of the total output across sectors into two components: the Engel effect (demand side) and the Baumol effect (supply side). To perform this task, we employ 13 seven-sector input-output tables spanning 100 years (1885 to 1985). The results show that the Engel effect was the key explanatory factor in more than 60% of the sector-period cases in the pre-WWII period, while the Baumol effect drove structural transformation in more than 75% of such cases in the post-WWII period. Detailed decomposition results suggest that in most of the sectors (agriculture, commerce and services, food, textiles and transport, communication and utilities), changes in private consumption were the dominant force behind the demand-side explanations. The Engel effect was found to be the strongest in the commerce and services sector, which contributed to the rapid growth of GDP in Japan throughout the 20th century. |
| Keywords: | long-run structural transformation, the Engel effect, Baumol's cost disease effect, sectoral productivity growth |
| JEL: | O40 O10 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hit:sspjdp:dp19-3&r=all |
| By: | Sebastian Edwards |
| Abstract: | In this paper I analyze the process leading to the abandonment of the gold standard in the U.S. in1933, and the devaluation of the dollar in 1934. I argue that most changes of monetary regime have an impact on contracts. In this specific case, contracts that were written in terms of gold, or “gold equivalent,” were rewritten in paper dollars. Congress did this on June 5 1933, when it abrogated the “gold clause” retroactively. The Supreme Court validated the move in February 1935. The result was a very large transfer of wealth from creditors to debtors. I use daily data on commodity prices to investigate the extent to which these policies contributed to ending deflation. I find that commodity prices reacted strongly to the announcement of policy changes, and to legal procedures involving contracts. These results are consistent with the “change in regime” hypothesis of Sargent. |
| JEL: | B22 F31 F33 N1 N82 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26085&r=all |
| By: | Kumo, Kazuhiro |
| Abstract: | Discourses over interregional migration at the time of the Soviet era have shown that the government control on population redistribution was effective at the early Soviet period, but in the late Soviet era the effects of incentive mechanisms including national investment became limited. This certainly can be expectable, but it is also undeniable that such assertion was inconsistent with the phenomenon. Indeed the population influx was continuously seen in Far East or Extreme North regions even at the very end of the Soviet period, suggesting the possibility of effective governmental management on geographical redistribution of population. This paper confirmed the effectiveness of the governmental control on population migration in the late Soviet era, using newly available data. It was suggested that the analytical unit utilized in previous studies (Economic Regions or cities) may involve problems, so that the effect of various factors could not be accurately grasped. This shows the necessity of further verification of the results that have been obtained during the Soviet era. |
| Keywords: | Russia, Interregional Migration, Soviet Union, Origin-to-Destination Matrix |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2019-2&r=all |
| By: | Takuro Hidaka (Graduate School of Economics, Osaka University) |
| Abstract: | With the passage of the Reclamation Act in 1902, the federal government launched the Reclamation Projects, which include large-scale irrigation in the West. In order to promote agricultural development, the Reclamation Bureau and the Department of Agriculture worked together to grasp the situation of agriculture in the region and provided agricultural training to settlers. In this paper, we examine the development of this cooperative work, and the constraints that influenced the work. Farm land reclamation did not go well in the early period of the Projects. Previous researches have argued that one of the main reasons why it had difficulties is due to initial conditions at the time of passage of the Reclamation Act. The conditions can be summarized into the following two points. First, the cost was erroneously estimated very low, and an unbearable number of projects were developed. Second, the staff of the Reclamation Bureau, which was in charge of the project, lacked knowledge of agriculture, did not consider the climate and soil of the project area, and had optimistic assumptions on farmer's agricultural knowledge. However, the Reclamation Bureau worked with the USDA to manage experimental farms and provide agricultural advisors in an attempt to alleviate agricultural problems. It is necessary to consider the reasons for the limited impact of this effort. While our analysis confirms the effects of the initial conditions proposed by the previous studies, we also find factors different from the initial conditions. It is argued that the budget shortfall of the USDA played a pivotal role in the malfunction of the projects. Although the USDA wanted to increase the budget, the agricultural committee of the Congress, which was in charge of the budgeting of agriculture, was reluctant to disburse the amount the USDA claimed for their promotive work. The period up to the 1920s was a period of effort to maintain the budget that had already been earned. |
| Keywords: | Water resource development, Irrigation, Bureau of Reclamation, Department of Agriculture |
| JEL: | N41 N42 N51 N52 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1732r&r=all |
| By: | Andersson, Martin (Department of Industrial Economics, Blekinge Institute of Technology (BTH), Karlskrona, and CIRCLE, Lund University); Johansson, Börje (Jönköping International Business School (JIBS) & Centre of Excellence for Science and Innovation Studies (CESIS)); Niedomysl, Thomas (Department of Human Geography, Lund University) |
| Abstract: | This paper analyses city system dynamics, based on a theoretical framework relating interaction potentials to agglomeration economies and density externalities. It employs new historical time series data on population size of cities in Sweden over two centuries (1810-2010) and introduces two schematic growth factors: (i) the intra-city potential and (ii) the extra-city potential located in in rings encircling each city. The first factor is measured by each city’s population size, while the second is a vector of distance discounted population size for each of a city’s urban rings. In this way we can explain a city’s growth as a function of its interaction potential inside the city, s well as inside the first, second hand third ring. A robust finding is that cities with large ring potentials follow different development paths than those with small ring potentials. We also find clear evidence of structural change between the two centuries (1810-1910 and 1910-2010. In the first period, city growth is positively impacted by the size of the intra-city potential, whereas the same potential dampens or reduces the growth in the second period. Moreover, the Ring I and Ring II potentials tend to switch from having negative growth stimulation in the first period to having positive stimulation in the second period. The regressions are checked for robustness by yielding consistent results when growth is measured as relative as well as absolute change. |
| Keywords: | city systems; evolution; urban growth; size distribution; spatial interaction; spatial interdependence; city networks |
| JEL: | C21 L84 R11 R12 R30 |
| Date: | 2019–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0479&r=all |
| By: | Christina Christou (School of Economics and Management, Open University of Cyprus, 2252, Latsia, Cyprus); David Gabauer (Institute of Applied Statistics, Johannes Kepler University, Altenbergerstraße 69, 4040 Linz, Austria. Department of Business and Management, Webster Vienna Private University, Praterstraße 23, 1020 Vienna, Austria); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa) |
| Abstract: | In this paper, we analyse the impact of uncertainty (corporate bond spread) shock on inflation rate, unemployment rate, monetary policy rate, and the nominal exchange rate returns of the United Kingdom over the monthly period of 1855:01 to 2016:12. Given that we use data spanning over one and a half century, we use a time-varying parameter vector autoregressive (TVP-VAR) model. We find that a positive uncertainty shock reflects a negative demand shock as suggested by theory, and results in declines in the inflation, interest rate and dollar-pound exchange rate returns, and an increase in unemployment rate. However, this impact varies over time, with the strongest effect observed for the period after World War II until the start of the Great Moderation, and during the recent global crisis. Our results are in general robust to an alternative econometric framework (breaks-based VAR) and a metric of uncertainty (stock market volatility). |
| Keywords: | Uncertainty, Macroeconomic Effects, Time-Varying Vector Autoregression, United Kingdom |
| JEL: | C32 E30 E40 F31 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201962&r=all |
| By: | Luisa Fernanda Tovar |
| Abstract: | A partir de una revisión general de la literatura, el documento busca reflexionar sobre la necesidad de incluir en la historia y el pensamiento económico los aportes del feminismo. Para ello, se esbozan las principales críticas que el feminismo hace a la ciencia económica y se identifican dos enfoques de economía feminista: integracionista y de ruptura. Luego, se plantean tres ejemplos de cómo el pensamiento económico ha intentado enfrentar las críticas provenientes del feminismo, para posteriormente nombrar tres pistas proporcionadas por las perspectivas feministas para el desarrollo tanto de la ciencia económica como de sus metodologías de trabajo. Finalmente, la revisión concluye con algunas posibilidades de reflexión a partir de las economías feministas, no solo en el ámbito académico, sino también político. *** From a general literature survey, the document seeks to reflect on the need to include the contributions of feminism in history and economic thought. To achieve this objective, the main criticisms that feminism target to economic science are outlined and two approaches to feminist economics are identified: integrationist and rupture. Next, three examples of how economic thinking has tried to face the criticism of feminism are raised. Then, three indications are provided from feminist perspectives for the development of both economic science and its working methodologies. Finally, the survey concludes with some possibilities for reflection from feminist economics, not only in academia but also in politics. |
| Keywords: | economía feminista, género, feminismos, producción y reproducción social |
| JEL: | A13 B5 B54 N0 |
| Date: | 2019–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:col:000430:017391&r=all |
| By: | Becker, Sascha O.; Hornung, Erik |
| Abstract: | Did the Prussian three-class franchise, which politically over-represented the economic elite, affect policy-making? Combining MP-level political orientation, derived from all roll call votes in the Prussian parliament (1867â??1903), with constituency characteristics, we analyze how local vote inequality, determined by tax payments, affected policy-making during Prussia's period of rapid industrialization. Contrary to the predominant view that the franchise system produced a conservative parliament, higher vote inequality is associated with more liberal voting, especially in regions with large-scale industry. We argue that industrialists preferred self-serving liberal policies and were able to coordinate on suitable MPs when vote inequality was high. |
| Keywords: | Elites; inequality; political economy; Prussia; Three-class Franchise |
| JEL: | D72 N43 N93 P26 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13930&r=all |
| By: | David A. Keiser; Joseph S. Shapiro |
| Abstract: | In the half century since the founding of the U.S. Environmental Protection Agency, public and private U.S. sources have spent nearly $5 trillion ($2017) to provide clean rivers, lakes, and drinking water, or annual spending of 0.8 percent of U.S. GDP in most years. Yet over half of rivers and substantial shares of drinking water systems violate standards, and polls for decades have listed water pollution as Americans’ number one environmental concern. We assess the history, effectiveness, and efficiency of the Clean Water Act and Safe Drinking Water Act, and obtain four main conclusions. First, water pollution has fallen since these laws, in part due to their interventions. Second, investments made under these laws could be more cost-effective. Third, most recent studies estimate benefits of cleaning up pollution in rivers and lakes which are less than their costs, though these studies may under-count several potentially important types of benefits. Analysis finds more positive net benefits of drinking water quality investments. Fourth, economic research and teaching on water pollution is relatively uncommon, as measured by samples of publications, conference presentations, and textbooks. |
| JEL: | H23 K32 Q5 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26077&r=all |
| By: | Hsieh, Chang-Tai; Rossi-Hansberg, Esteban |
| Abstract: | The rise in national industry concentration in the US between 1977 and 2013 is driven by a new industrial revolution in three broad non-traded sectors: services, retail, and wholesale. Sectors where national concentration is rising have increased their share of employment, and the expansion is entirely driven by the number of local markets served by firms. Firm employment per market has either increased slightly at the MSA level, or decreased substantially at the county or establishment levels. In industries with increasing concentration, the expansion into more markets is more pronounced for the top 10\% firms, but is present for the bottom 90\% as well. These trends have not been accompanied by economy-wide concentration. Top U.S. firms are increasingly specialized in sectors with rising industry concentration, but their aggregate employment share has remained roughly stable. We argue that these facts are consistent with the availability of a new set of fixed-cost technologies that enable adopters to produce at lower marginal costs in all markets. We present a simple model of firm size and market entry to describe the menu of new technologies and trace its implications. |
| JEL: | E23 E24 L16 L22 R12 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13797&r=all |
| By: | Santiago Pérez |
| Abstract: | I study the selection and economic outcomes of Italians in Argentina and the US, the two largest destinations during the age of mass migration. Prior cross-sectional work finds that Italians had faster assimilation in Argentina, but it is inconclusive on whether this was due to differences in selection or host-country conditions. I assemble data following Italians from passenger lists to censuses, enabling me to compare migrants with similar pre-migration characteristics. Italians had better economic outcomes in Argentina, and this advantage was unlikely to be due to selection. Migration path dependence can rationalize these differences in an era of open borders. |
| JEL: | J15 J61 N30 N31 N36 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26127&r=all |
| By: | Koddenbrock, Kai; Sylla, Ndongo Samba |
| Abstract: | This paper focuses on the most neglected case of monetary dependency: the CFA franc. This currency arrangement was born in 1945, during the colonial era, but it still operates in the same ways more than 70 years later in fourteen countries in Africa, mostly former French colonies. Engaging with the seminal African scholarship by Joseph Pouemi on internal and external monetary repression and the emergent literature on "financial subordination," we introduce the notion of the "chain of monetary dependency," consisting of an external and an internal part. We argue that the CFA franc provides an extreme but paradigmatic example of this chain. The CFA franc is paradigmatic because of the very strong external repression of monetary and financial policy through US dollar and euro dependence. Internally, the CFA franc arrangement radicalizes the constraints imposed on all central bank policies and bank-firm relations in the Global South and makes it more difficult to pursue growth strategies geared towards the well-being of the broader population. |
| Keywords: | CFA franc,colonialism,dependency,monetary sovereignty,money,West Africa |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:maxpod:192&r=all |
| By: | Chilosi, David; Federico, Giovanni |
| Abstract: | This paper measures the effects of international market integration on world trade and welfare during the first globalization (1815-1913). The analysis is carried out with a multi-market partial equilibrium model, which takes into account the interactions between route-specific changes in trade costs. We consider world trade in the two principal traded commodities, cotton and wheat. The collapse in trade costs accounted for 60% of the increase in trade in cotton and 40% of the increase in trade of wheat. Both producers and consumers gained, but welfare gains were inversely related to the size of the country and positively to the level of openness to trade. We infer that welfare gains from international market integration were equivalent to substantial shares of economic growth in the 'long 19th century'. |
| Keywords: | Globalization; market integration; Trade; welfare gains |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13818&r=all |
| By: | Ash, Elliott; Morelli, Massimo; Vannoni, Matia |
| Abstract: | This paper sheds new light on the drivers of civil service reform in U.S. states. We first demonstrate theoretically that divided government is a key trigger of civil service reform, providing nuanced predictions for specific configurations of divided government. We then show empirical evidence for these predictions using data from the second half of the 20th century: states tended to introduce these reforms under divided government, and in particular when legislative chambers (rather than legislature and governor) were divided. |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13878&r=all |
| By: | Tetsuji Okazaki (Graduate School of Economics, The University of Tokyo) |
| Abstract: | This paper analyzes fund management by the two largest zaibatsu holding companies in prewar Japan, Mitsubishi Limited Partnership and Mitsui Unlimited Partnership. We decompose the difference between the average rate of returns on the portfolios of Mitsubishi, Mitsui and the market, into the factor representing within industry difference in rate of returns (“rate of return factor†) and the factor representing difference in distributions of investment across industries (“portfolio factor†). It is found that Mitsubishi and Mitsui consistently outperformed the market in terms of the rate of return factor from the 1920s to the 1930s. In terms of the portfolio factor, whereas Mitsubishi and Mitsui underperformed the market in the 1920s, they came to outperform the market in the middle of 1930s, which suggests the investment policy of zaibatsu from long-term perspectives. |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:tky:jseres:2019cj297&r=all |
| By: | Maurer, Stephan E; Rauch, Ferdinand |
| Abstract: | This paper studies how the opening of the Panama Canal in 1914 changed market access and influenced the economic geography of the United States. We compute shipment distances with and without the canal from each US county to each other US county and to key international ports and compute the resulting change in market access. We relate this change to population changes in 20-year intervals from 1880 to 2000. We find that a 1 percent increase in market access led to a total increase of population by around 6 percent. We compute similar elasticities for wages, land values and immigration from out of state. When we decompose the effect by industry, we find that tradable (manufacturing) industries react faster than non-tradable (services), with a fairly similar aggregate effect. |
| JEL: | F1 N72 O1 R1 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13820&r=all |
| By: | Gabriele Cappelli; michelangelo.vasta@unisi.it |
| Abstract: | This paper shows that a shift towards a more centralized school system can benefit countries characterized by poor levels of human capital and large regional disparities in education. In 1911, Italy moved from a fully decentralized primary-school system towards centralisation through the Daneo-Credaro Reform. The Reform design allows us to compare treated municipalities with provincial and district capitals, which retained school autonomy. Our quasi-experiment, based on Propensity Score Matching (PSM), shows that centralisation substantially increased the pace of human capital accumulation. Treated municipalities were characterized by a 0.43 percentage-point premium on the average annual growth of literacy between 1911 and 1921. We discuss some of the channels through which the new legislation affected primary schooling and literacy, with important implications for long-term economic growth. |
| Keywords: | Human capital, school management, public policy, decentralisation, centralisation, Italy |
| JEL: | N33 N34 I21 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:802&r=all |
| By: | Klodiana Istrefi |
| Abstract: | I construct a novel measure of policy preferences of the Federal Open Market Committee (FOMC) as perceived in public. This measure is based on newspaper and financial media coverage of 130 FOMC members serving during 1960-2015. Narratives reveal that about 70percent of these FOMC members are perceived to have had persistent policy preferences over time, as either inflation-fighting hawks or growth-promoting doves. The rest are perceived as swingers, switching between types, or remained an unknown quantity to markets. Hawk and Dove perceptions capture "true" tendencies as expressed in preferred rates, forecasts and dissents of these FOMC members well. At the FOMC level the composition of hawks and doves varies significantly, featuring slow- and fast-switching hawkish and dovish regimes, due to the rotation of voting rights each year, members’ turnover and swings in preferences. |
| Keywords: | Monetary Policy, Federal Reserve, FOMC, Policy Preferences, Inflation. |
| JEL: | E43 E47 E63 G12 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:725&r=all |
| By: | Bakari, Sayef; Tiba, Sofien; Fakraoui, Nissar |
| Abstract: | The fundamental role of domestic investment to provide economic prosperity is very well recognized by the economic theory since the Mercantilist theory. Hence, we investigate the impact of domestic investment on economic growth for the case of the Uruguayan economy over the period 1960-2017. For this aim, we employ the Vector Error Correction Model (VECM). Our highlights reveal the absence of a significant impact of domestic investment on growth in the short- and long-run. Due to the marginal role of domestic investment played in the Uruguayan economy, the weak saving rate couldn’t significantly help the economy and creating wealth. Therefore, a strong saving policy is required to encourage domestic investors and reevaluate their crucial role in the economic process of Uruguay. |
| Keywords: | Domestic investment, Economic growth, VECM, Uruguay |
| JEL: | E2 E22 O4 O47 O54 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95594&r=all |
| By: | Bago, Jean-Louis; Souratié, Wamadini M.; Ouédraogo, Moussa; Ouédraogo, Ernest; Dembélé, Alou |
| Abstract: | We provide new empirical evidence of bubbles timing in the stock market of South Africa. We apply the generalized sup ADF (GSADF) unit root test of Phillips et al. (2015) to monthly share prices from January 1960 to July 2019, to detect explosive behaviors. Results indicate that, overall, South Africa’s stock market has been exuberant during the period 1960-2019. We find strong evidence of three bubble episodes during the periods of April 1968 to July 1969, December 1979 to November 1980 and April 2006 to May 2008 in the stock market of South Africa. The last two bubbles correspond to the 1979 international oil crisis and the 2008 financial crisis suggesting that the south african stock market is still vulnerable to exogenous shocks. |
| Keywords: | Bubble, Stock market, GSADF test, South Africa |
| JEL: | G12 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95685&r=all |
| By: | Bakari, Sayef; Tiba, Sofien; Fakraoui, Nissar |
| Abstract: | The fundamental role of domestic investment to provide economic prosperity is very well recognized by the economic theory since the Mercantilist theory. Hence, we investigate the impact of domestic investment on economic growth for the case of the Uruguayan economy over the period 1960-2017. For this aim, we employ the Vector Error Correction Model (VECM). Our highlights reveal the absence of a significant impact of domestic investment on growth in the short- and long-run. Due to the marginal role of domestic investment played in the Uruguayan economy, the weak saving rate couldn’t significantly help the economy and creating wealth. Therefore, a strong saving policy is required to encourage domestic investors and reevaluate their crucial role in the economic process of Uruguay. |
| Keywords: | Domestic investment, Economic growth, VECM, Uruguay. |
| JEL: | E2 E22 E23 O4 O40 O47 O54 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95526&r=all |
| By: | Kawamoto, Kazuko |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rrcwps:82&r=all |
| By: | Leah Platt Boustan; Robert A. Margo; Matthew M. Miller; James M. Reeves; Justin P. Steil |
| Abstract: | The condominium structure, which facilitates ownership of units in multi-family buildings, was only introduced to the US during the 1960s. We ask whether the subsequent development of condominiums encouraged high-income households to move to central cities. Although we document a strong positive correlation between condominium density and resident income, this association is entirely driven by endogenous development of condos in areas otherwise attractive to high-income households. When we instrument for condo density using the passage of municipal regulations limiting condo conversions, we find little association between condo development and resident income, education or race. |
| JEL: | N92 R28 R31 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26170&r=all |
| By: | Martin Guzi (Masaryk University); Peter Huber (Austrian Institute for Economic Research); Stepan Mikula (Masaryk University) |
| Abstract: | We analyze the long-term impact of the resettlement of the Sudetenland after World War~II on residential migration. This event involved expulsion of ethnic Germans and almost complete depopulation of an area of a country and its rapid resettlement by 2 million Czech inhabitants. Results based on nearest neighbor matching and regression discontinuity design show a higher population churn in resettled areas that continues today. The populations in resettled areas and in the remainder of the country share similar values and do not differ statistically in terms of their propensity to give donations, attend social events, and participate in voluntary work. However, we observe that resettled settlements have fewer local club memberships, lower turnout in municipal elections, and less frequently organized social events. This finding indicates substantially lower local social capital in the resettled settlements that is likely to have caused higher residential migration. This explanation is consistent with theoretical models of the impact of social capital on migration decisions. |
| Keywords: | Migration, Social Capital, Sudetenland |
| JEL: | N44 Z10 R23 J15 |
| Date: | 2019–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:mub:wpaper:2019-07&r=all |
| By: | Ahlfeldt, Gabriel; Nitsch, Volker; Wendland, Nicolai |
| Abstract: | For a complete cost-benefit analysis of durable infrastructures, it is important to understand how the value of non-market goods such as transit time and environmental quality changes as incomes rise in the long-run. We use difference-in-differences and spatial differencing to estimate the land price capitalization effects of metro rail in Berlin, Germany today and a century ago. Over this period, the negative effect of rail noise tripled in percentage terms. Our results imply long-run income elasticities of the value of noise reduction and transport access of 2.2 and 1.4, substantially exceeding cross-sectional contingent valuation estimates. |
| Keywords: | accessibility; Difference-in-Differences; income elasticity; land price; noise; Spatial differencing |
| JEL: | N73 N74 R12 R14 R41 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13811&r=all |