nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2019‒09‒23
27 papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. La distribución regional de la producción en Uruguay, 1908-1975: propuesta metodológica y fuentes By Julio Martinez-Galarraga; Adrián Rodríguez Miranda; Sabrina Siniscalchi; Henry Willebald
  2. Pluralism and political economy in interwar britain: G.D.H. Cole on economic planning By Carlos Eduardo Suprinyak
  3. Firm Dynamics and Productivity Growth during the Industrial Revolution By Reka Juhasz; Mara Squicciarini; Nico Voigtländer
  4. Reconsidering the Role of Farmer Politics in Swedish Democratization By Bengtsson, Erik
  5. Agregados económicos y demográficos regionales: Actualización de RegData hasta 2018 By Angel De la Fuente
  6. More Power to the People: Electricity Adoption, Technological Change and Social Conflict By Molinder, Jakob; Karlsson, Tobias; Enflo, Kerstin
  7. O desenvolvimento da economia política de Douglass North By Rafael Galvão de Almeida
  8. Changes in Family Structure and Welfare Participation Since the 1960s: The Role of Legal Services By Andrew Goodman-Bacon; Jamein P. Cunningham
  9. Job Vacancies, the Beveridge Curve, and Supply Shocks: The Frequency and Content of Help-Wanted Ads in Pre- and Post-Mariel Miami By Anastasopoulos, Jason; Borjas, George J.; Cook, Gavin G.; Lachanski, Michael
  10. The Political Economy of the Prussian Three-class Franchise By Becker, Sascha O.; Hornung, Erik
  11. DSGE Models and the Lucas Critique. A Historical Appraisal. By Francesco Sergi
  12. La dinámica territorial de la renta en España, 1955-2016: una primera aproximación By Angel De la Fuente
  13. Urban Development Theory: Review for the 21st Century By Patrice Derrington
  14. European Immigrants and the United States’ Rise to the Technological Frontier By Costas Arkolakis; Michael Peters; Sun Kyoung Lee
  15. Do we really know that U.S. monetary policy was destabilizing in the 1970s? By Haque, Qazi; Groshenny, Nicolas; Weder, Mark
  16. A Culture of Violence? Women in Twentieth Century Bengal By Senjuti Jash
  17. How economics became an interventionist science (and how it ceased to be) By Rafael Galvão de Almeida
  18. Dependence Structure between Business Cycles and CO2 Emissions in the U.S.: Evidence from the Time-Varying Markov-Switching Copula Models By Gozgor, Giray; Tiwari, Aviral; Khraief, Naceur; Shahbaz, Muhammad
  19. Innovation and Inequality from Stagnation to Growth By Chu, Angus C.; Peretto, Pietro
  20. Un héritage des Annales, la cliométrie à Strasbourg. By Claude DIEBOLT; Michel HAU
  21. Economic Geography Aspects of the Panama Canal By Ferdinand Rauch; Stephan Maurer
  22. Nonlinear Impact of Public Debt on Economic Growth: Evidence from Sub-Saharan African Countries By Koffi, Siméon
  23. Investment demand and structural change By Manuel García-Santana; Josep Pijoan-Mas; Lucciano Villacorta
  24. The changing opportunities and outcomes of non-college educated Americans By Margherita Borella; Fang Yang; Mariacristina De Nardi
  25. Long term trends across security and development in the Sahel By Daniel Eizenga
  26. Uneven and combined development as a methodological tool: a dynamic approach after a dialogue between Kondratiev and Trotsky By Eduardo da Motta e Albuquerque
  27. An analysis of asset pricing models using out of sample data from the NYSE: 1900-1925 By Miguel Cantillo Simon; Nick Wonder

  1. By: Julio Martinez-Galarraga (Universitat de València (España). Departamento de Análisis Económico); Adrián Rodríguez Miranda (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a); Sabrina Siniscalchi (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a); Henry Willebald (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a)
    Abstract: This paper aims to present the methodology and sources used in the construction of the historical estimates of the Gross Value Added (GVA) in Uruguay at the province level. Our period of analysis covers from the beginning of the 20th century to the 1970s, and we provide estimations corresponding to 1908, 1936, 1955 and 1975, which are complemented with available information for 1961 (BROU, 1965). In general, we follow the standard methodology of indirect approximation proposed in Geary & Stark (2002), which allows distributing the total sectoral GVA among the provinces considering the wage incomes as reference. However, and depending on the available statistical information for each year and economic activity, the methodology is adjusted, and we used alternative criteria of distribution. In some cases, the Geary-Stark method is modified, and we estimated the production (for instance, in agriculture) directly. This database provides new evidence to examine the regional economic performance of Uruguay quantitatively and to explain its evolution from the final stage of the First Globalization, the central years of the State-led industrialization with the increasing relevance of public policies, to the oil crisis of the 1970s.
    Keywords: economic histoy, regional economy, departamental PIB, Uruguay
    JEL: N5 N6 N9 R12
    Date: 2019–06
  2. By: Carlos Eduardo Suprinyak (Cedeplar-UFMG)
    Abstract: The political philosophy of pluralism enjoyed great currency in Britain during the early decades of the 20th century, as an alternative to the extreme poles of individualism and collectivism. Positing the existence of multiple types of political allegiances in any society, pluralism questioned the notion of state sovereignty by advocating that other forms of associational life should be recognized as legitimate sources of political power. In an age of increasing state intervention in economic affairs, however, this fragmentation of power concerned political economy as well. The paper explores the interplay between political claims for a weaker state and economic claims for a stronger state through a case study of G.D.H. Cole, the foremost British advocate of guild socialism and a prolific writer on economic planning. While defending the cause of democratic industrial self-management, Cole envisioned stateled economic planning as a transitional device for developing the communal loyalties necessary for a well-functioning socialist economy.
    Keywords: pluralism, state sovereignty, economic planning, G.D.H. Cole, democracy.
    Date: 2019–09
  3. By: Reka Juhasz (Columbia University); Mara Squicciarini (Bocconi University); Nico Voigtländer
    Abstract: The transition from millennia of stagnating per-capita incomes to sustained economic growth constitutes the most important structural break in economic history. A key feature of the Industrial Revolution was the unprecedented growth in manufacturing productivity. So far, productivity growth during this period has been studied mostly at the country level, or – in some cases – at the aggregate sectoral level. However, theoretical and empirical research over the past decade has pointed to the importance of firm dynamics for understanding aggregate productivity. The dearth of firm-level data has thus far made it impossible to study this channel in the context of the Industrial Revolution. This paper uses a novel dataset of French firms across various industries to study the evolution of firm productivity before and during the onset of industrialization. First, we document a set of novel stylized facts about firms in innovative and traditional sectors during the Industrial Revolution in France. Second, we exploit regional variation to estimate the extent to which different firm dynamics account for different levels of industrialization across France in 1850. Third, we estimate the extent to which productivity gains were driven by firm entry relative to the intensive margin.
    Date: 2019
  4. By: Bengtsson, Erik (Department of Economic History, Lund University)
    Abstract: In discussions of Scandinavian democratization, it is commonplace to argue that long-standing farmer representation in parliament and a lack of feudalism encouraged a democratic-participatory civic culture within the peasant farmer class – or perhaps in the population as a whole. The present essay questions this interpretation in the Swedish case. It centers on a re-interpretation of farmer politics at the national level from a two-chamber system of representation after the 1866-67 reform to the alliance between the farmers’ party and Social Democracy in 1933 and offers a new analytical account of the way that one class’s attitude to democratic inclusion can change over time, owing to changed political and economic relationships to other classes. I show that Swedish farmers did not organize themselves independently of nobles and land-owners until the 1920s, and that they did not play the role of an independent pro-democratic force. On the contrary, the broad-based organizations of farmers in the 1920s and 1930s, with their democratic, participatory culture, appear to have been heavily influenced by the political culture of liberals and the labor movement, which in democratic society opened the door to a re-shaping of Swedish farmer politics that abandoned the old (subservient) alliance with estate owners. It was not democratic farmers who gave rise to Social Democracy – rather, it was Social Democracy that caused farmers to become democratic. Understanding farmer politics correctly also opens up a new understanding of the determinants of Swedish democratization.
    Keywords: democratization; agrarian politics; Sweden; class structure; farmers; Sonderweg
    JEL: H10 N53 N54 P16
    Date: 2019–08–21
  5. By: Angel De la Fuente
    Abstract: En esta nota se describe brevemente la última actualización de RegData, una base de datos que recoge los principales agregados económicos y demográficos de las regiones españolas durante las últimas seis décadas. En su mayoría, las series comienzan en 1950 o 1955 y se extienden hasta 2018. This note briefly describes the latest update of RegData, a database that collects the main economic and demographic aggregates of the Spanish regions over the last six decades. For the most part, the series begin in 1950 or 1955 and run until 2018.
    Keywords: Demographics, Demográfico, Population, Población, RegData, RegData, income, renta, Employment, Trabajo, Spain, España, Regional Analysis Spain, Análisis Regional España, Working Papers, Documento de Trabajo
    JEL: E01 R1
    Date: 2019–07
  6. By: Molinder, Jakob (Department of Economic History, Uppsala University); Karlsson, Tobias (Department of Economic History, Lund University); Enflo, Kerstin (Department of Economic History, Lund University)
    Abstract: There is a wide-spread concern that technical change may spur social conflicts, especially if workers are replaced with machines. To empirically analyze whether job destruction drives protests, we study a historical example of a revolutionary new technology: the adoption of electricity. Focusing on the gradual roll-out of the Swedish electricity grid between 1900 and 1920 enables us to analyze 2,487 Swedish parishes in a difference-in-differences framework. Proximity to large-scale water-powered electricity plants is used to instrument for electricity adoption. Our results confirm that the labor saving nature of electricity was followed by an increase of local conflicts in the form of strikes. But displaced workers were not likely to initiate conflicts. Instead, strikes were most common in sectors with employment growth. Similarly,we find that the strikes were of an offensive rather than a defensive nature. Thus, electrification did not result in rebellions driven by technological anxiety. It rather provided workers with a stronger bargaining position from which they could voice their claims through strikes.
    Keywords: technological change; electrification; labor demand; labor conflicts; strikes; infrastructure investments
    JEL: N14 N34 N74 O14
    Date: 2019–09–19
  7. By: Rafael Galvão de Almeida (Cedeplar-UFMG)
    Abstract: Este artigo explora o desenvolvimento intelectual de Douglass North como um economista político e um pesquisador interdisciplinar. Apesar de ele ter sido uma figura importante durante o auge da Nova História Econômica nos anos 1960, ele ficou insatisfeito com a abordagem e se dedicou a estudar as instituições, ajudando a estabelecer a Nova Economia Institucional. Sua teoria política evolui com influências do marxismo e da teoria da escolha pública e isto se reflete em seu trabalho na década de 1980. Seu mandato como diretor do Center in Political Economy na Universidade de Washington em St. Louis permitiu a ele trabalhar diretamente com outros cientistas sociais para o desenvolvimento de uma Nova Ciência Social Institucional.
    Keywords: nova economia institucional; economia política.; Douglass North; cliometria; nova história econômica; marxismo; escolha pública
    Date: 2019–09
  8. By: Andrew Goodman-Bacon; Jamein P. Cunningham
    Abstract: This paper evaluates the effects of the War on Poverty’s Legal Services Program (LSP) on family structure and welfare participation. LSPs provided subsidized legal assistance to poor communities, focusing on divorce and welfare access. We use a difference-in-differences research design based on the rollout of the program to 251 counties from 1965 to 1975. We find temporary increases in divorce and persistent increases in welfare participation and nonmarital birth rates. Nonmarital births rose because marriage rates fell, not because birth rates rose. Expanded access to legal institutions thus contributed, directly and indirectly, to changes in family structure in the 1960s.
    JEL: H0 I38 N32
    Date: 2019–09
  9. By: Anastasopoulos, Jason (University of Georgia); Borjas, George J. (Harvard University); Cook, Gavin G. (Princeton University); Lachanski, Michael (Princeton University)
    Abstract: Beginning in 1951, the Conference Board constructed a monthly job vacancy index by counting the number of help-wanted ads published in local newspapers in 51 metropolitan areas. We use the Help-Wanted Index (HWI) to document how immigration changes the number of job vacancies in the affected labor markets. Our analysis revisits the Mariel episode. The data reveal a marked drop in Miami's HWI relative to many alternative control groups in the first 4 or 5 years after Mariel, followed by recovery afterwards. The Miami evidence is consistent with the observed relation between immigration and the HWI across all metropolitan areas in the 1970- 2000 period: these spatial correlations suggest that more immigration reduces the number of job vacancies. We also explore some of the macro implications of the Mariel supply shock and show that Miami's Beveridge curve shifted inwards by the mid-1980s, suggesting a more efficient labor market, in contrast to the outward nationwide shift coincident with the onset of the 1980- 1982 recession. Finally, we examine the text of the help-wanted ads published in a number of newspapers and document a statistically and economically significant post-Mariel decline in the relative number of low-skill vacancies advertised in the Miami Herald.
    Keywords: job vacancies, immigration, Beveridge Curve
    JEL: J23 J6
    Date: 2019–08
  10. By: Becker, Sascha O. (Monash U and U Warwick, CAGE, CEPR, CESifo, Ifo, IZA and ROA); Hornung, Erik (University of Cologne, CAGE, CEPR, and CESifo)
    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 (1867–1903), with constituency characteristics, we analyze how local vote inequality, determined by tax payments, affected policymaking 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: Inequality ; Political Economy ; Three-class Franchise ; Elites ; Prussia
    JEL: D72 N43 N93 P26
    Date: 2019
  11. By: Francesco Sergi (University of the West of England, Bristol)
    Abstract: This contribution to the history of the economic thought aims at describing how “Econometric Policy Evaluation: A Critique” (Lucas, 1976) has been interpreted through four decades of debates. This historical appraisal clarifies how Lucas’s argument is currently understood and discussed within the dynamic stochastic general equilibrium (DSGE) approach. The article illustrates how two opposite interpretations of the Lucas Critique arose in the early 1980s. On the one hand, a “theoretical interpretation” has been championed by the real business cycle (RBC) approach; on the other hand, an “empirical interpretation” has been advocated by Keynesians. Both interpretations can be understood as addressing a common question: Do microfoundations imply parameters’ stability? Following the RBC theoretical interpretation, microfoundations do imply stability; conversely, for Keynesians, parameters’ stability (or instability) should be supported by econometric evidence rather than theoretical considerations. Furthermore, the article argues that the DSGE approach represent a fragile compromise between these two opposite interpretations of Lucas (1976). This is especially true for the recent literature criticizing the DSGE models for being vulnerable to the Lucas Critique.
    Date: 2018–01–06
  12. By: Angel De la Fuente
    Abstract: Con este trabajo comienza una serie en la que se analizará la evolución del PIB per cápita de las comunidades autónomas españolas y sus factores determinantes utilizando las series enlazadas de renta y empleo regionales que se recogen en la base de datos RegData descrita en de la Fuente (2017). This work marks the start of a series of projects that will analyse the evolution of GDP per capital in Spain\'s autonomous communities and its determining factors, using the related series of regional income and employment found in the RegData database described by De la Fuente (2017).
    Keywords: jobs, empleos, income, renta, Spain, España, Regional Analysis Spain, Análisis Regional España, Working Papers, Documento de Trabajo
    Date: 2019–05
  13. By: Patrice Derrington
    Abstract: As the world’s population trends towards being predominantly urban, the delivery of the needed habitation in those centers is largely undertaken by speculative private real estate development. This economic machine is prone to harsh cycles with extravagant wealth followed by widespread financial damage and, extending beyond the commercial impact, communities are protesting the dramatic changes to their neighborhoods and the rising social dislocation.And, yet, though much attention is given to decrying these outcomes, the property development process at the heart of this dynamic is barely subjected to critical analysis and scholarly investigation. In the aftermath of World War II, the recovering Western countries experienced a burst of real estate development – urban and suburban – and academic research and institutional formulations were commenced. A variety of models of the development process emerged, broadly clustered into four types: sequential, cyclical, agency and production or structural. Although initially attempting to encompass a mix of economic ideologies, by the dawn of the 21st century, analysis had largely bifurcated into either the neoclassical economic framework with its focus on the every-stronger capital flows and sophisticated investment structures, derived as corporate finance evolved along this route, or the Marxist-originating constructs that critically interpreted the urban form, and its socio-economic characteristics, that had resulted from the intense development activity.At that point, with the exception of some pragmatic descriptions, primarily for pedagogical use, scholarship about the real estate development process effectively ceased. The private sector business activity, despite the very vulnerable public context of the city, continues to be practiced as a trade, continuing much as it had done for centuries. But, we cannot neglect this activity - how do we revive the critical interrogation and advancement of the real estate development practice.This paper reviews the early scholarship and, with the benefit of hindsight from the urban environment approaching 2020, elucidates key steps, features, and model mechanisms that might be used to form a platform for re-launching intellectual investigation. Additionally, by referencing the compelling contribution from the few urban theorist who continued to address the activity, adding some recent new thoughts on the macroeconomic context, and also acknowledging the potential contribution of more incisive data gathering and analysis, a general direction for continuing this critical research is proposed. The hope it that the property development process can comprise a self-critical dimension and progress the activity for the improvement of its own commercial condition and its impact on urban communities.
    Keywords: Framework for Critical Analysis; Practice; Real Estate Development Process; Review of Scholarship; Urban Theory
    JEL: R3
    Date: 2019–01–01
  14. By: Costas Arkolakis (Yale University); Michael Peters (Yale University); Sun Kyoung Lee (Columbia University)
    Abstract: What is the role of immigrants on (American) Growth? To answer this perplex question, we undertake a massive effort of collecting, digitizing, and harmonizing micro and macro economic data from the 19th and early 20th century. The data originate from the historical manufacturing and demographic census of the United States, immigration records datasets and the universe of US patents. To analyze the counterfactual implications of alternative allocations of immigrants, we develop a dynamical trade model where heterogenous firms make innovation and exporting decisions across space and time. The model predicts that the timing and the spatial allocation of immigrant arrivals affect the path of growth outcomes for each location and the aggregate US economy. We use the structural equations arising from the model to interpret empirical findings from the difference-in-difference analysis for the importance of the influx of skilled immigrants on the differential growth of US counties. Counterfactual scenarios of alternative allocation of skilled immigrants from different countries across space and time reveal the economic impact of barriers to migration to the United States economy.
    Date: 2019
  15. By: Haque, Qazi; Groshenny, Nicolas; Weder, Mark
    Abstract: The paper re-examines whether the Federal Reserve’s monetary policy was a source of instability during the Great Inflation by estimating a sticky-price model with positive trend inflation, commodity price shocks and sluggish real wages. Our estimation provides empirical evidence for substantial wage-rigidity and finds that the Federal Reserve responded aggressively to inflation but negligibly to the output gap. In the presence of non-trivial real imperfections and well-identified commodity price-shocks, U.S. data prefers a determinate version of the New Keynesian model: monetary policy-induced indeterminacy and sunspots were not causes of macroeconomic instability during the pre-Volcker era.
    JEL: E32 E52 E58
    Date: 2019–09–11
  16. By: Senjuti Jash (Independent Researcher, Kolkata, India)
    Abstract: Violence is one of the primeval instincts of human kind. It is not restricted by spatio-temporal frontiers and majority of human beings, irrespective of their gender, age, nationality, orientation, etc. are subjected to some form of violence during their lives. However, as the societal conditions have always enabled the subjugation of the “weak†by the “powerful†, violence against women has been identified globally as one of the most systematic and widespread human rights violations. Using three short stories authored by Jagadish Gupta, Tarashankar Bandyopadhyay, and Mahasweta Devi in twentieth century Bengal as case studies, this paper seeks to examine the diverse trajectories of violence perpetrated against women in the aforesaid period. Analysing particular modes of violence like dowry-based homicide, witch-hunting, and rape as political instrument of oppression, this study intends to qualify Michael Taussig’s thesis on “culture of terror†by situating it against the wider backdrop of the “culture of violence†and the discourses of resistance that simultaneously emerged in twentieth century Bengal.
    Keywords: women, patriarchy, superstition, caste, class, culture, violence, resistance, twentieth century, literature, Bengal
    Date: 2019–04
  17. By: Rafael Galvão de Almeida (Cedeplar-UFMG)
    Abstract: The relationship between economics and State has been intimate ever since classical political economy. However, perceptions about the role and size of the State have changed according to the epoch. In other words, economic theory assigned a bigger or a smaller role to the State depending on the political situation. This article analyses the change in economists and economic theory’s perception of the role of the State in the economy, from favoring an interventionist approach from the 1930s to the 1960s, and a liberal approach from 1970s, in order to understand the factors behind this change.
    Keywords: theory of economic policy; economic planning; liberalism; neoliberalism
    Date: 2019–09
  18. By: Gozgor, Giray; Tiwari, Aviral; Khraief, Naceur; Shahbaz, Muhammad
    Abstract: The relationship between CO2 emissions and economic growth is well-examined. However, there is a gap in the literature to examine the nexus by regime-switching models. For this purpose, this paper examines the interdependence relations between CO2 emissions and the industrial production index as a measure of business cycles at the monthly frequency in the United States. We use a new approach to modeling dependence between the underlying variables over time, combining the time-varying copula and the Markov switching models. We find that there is a significant dependence structure between business cycles and CO2 emissions, which has a regime-switching feature, for the period from January 1973 to January 2017. Specifically, during the recession episodes, we deduce that until 1982, the high dependence regime with the Gaussian copula is valid. Since the beginning of 1983, the low dependence structure regime becomes prominent.
    Keywords: carbon dioxide emissions; business cycles; Markov-switching models; copula models; regime-dependency
    JEL: Q5
    Date: 2019–09–02
  19. By: Chu, Angus C.; Peretto, Pietro
    Abstract: This study explores the evolution of income inequality in an economy featuring an endogenous transition from stagnation to growth. We incorporate heterogenous households into a Schumpeterian model of endogenous takeoff. In the pre-industrial era, the economy is in stagnation, and income inequality is determined by an unequal distribution of land ownership and remains stationary. When takeoff occurs, the economy experiences innovation and economic growth. In this industrial era, income inequality gradually rises until the economy reaches the balanced growth path. Finally, we calibrate the model for a quantitative analysis and compare the simulation results to historical data in the UK.
    Keywords: income inequality; innovation; economic growth; endogenous takeoff
    JEL: D3 O3 O4
    Date: 2019–09
  20. By: Claude DIEBOLT; Michel HAU
    Abstract: C’est par sa volonté de combiner la rigueur des modèles théoriques et mathématiques avec la prise en compte, de la façon la plus exhaustive possible, de la complexité de toutes les données (qualitatives et quantitatives) que l’Ecole cliométrique strasbourgeoise reste fidèle à l’esprit des Annales et prolonge le mouvement initié en 1929 par Marc Bloch et Lucien Febvre.
    Keywords: Cliométrie, Ecole des Annales, Economie, Epistémologie, Histoire, Histoire économique, Histoire de la pensée économique.
    JEL: A12 A22 A23 B20 B41 C18 C81 C82 N01
    Date: 2019
  21. By: Ferdinand Rauch; Stephan Maurer
    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.
    Keywords: Market access; Panama Canal; trade shock; gravity
    JEL: F1 R1 O1 N72
    Date: 2019–08–06
  22. By: Koffi, Siméon
    Abstract: This paper empirically explores the impact of public debt on economic growth in Sub-Saharan African (SSA) countries over the period 1960 to 2015 by using a system Generalized Methods of Moments (s-GMM). Specifically, this work studies the nonlinear relationship between public debt and economic growth. To do so, we perform the Sasabuchi-Lind-Mehlum’s test (or U-test) to check if the required and sufficient conditions are met for an inverted U-shape. The results strongly suggest the presence of a nonlinear relationship between public debt and economic growth. By applying the Delta method, this threshold is evaluated at about 36.18 percent ratio debt-to-GDP with its confidence interval associated (13, 59). The public debt boosts the economic growth when its level is less than this turning point. Above this threshold, an increase in public debt would lower the economic growth. Accordingly, a re-examination of the public debt level of some convergence policies which set this level (debt-to-GDP ratio) to 70 per cent (cf. Boxes 1 and 2) is proposed.
    Keywords: s-GMM, U-test, Delta method.
    JEL: E6 F3 F4 N4
    Date: 2019–09–13
  23. By: Manuel García-Santana; Josep Pijoan-Mas; Lucciano Villacorta
    Abstract: In this paper we study the joint evolution of the investment rate and the sectoral composition of developing economies. Using panel data for several countries in different stages of development we document three novel facts: (a) both the investment rate and the industrial weight in the economy are strongly correlated and follow a hump-shaped profile with development, (b) investment goods contain more domestic value added from industry and less from services than consumption goods do, and (c) the evolution of the sectoral composition of investment and consumption goods differs from the one of GDP. We build and estimate a multi-sector growth model to fit these patterns. Our results highlight a novel mechanism of structural change: the evolution of the investment rate driven by the standard income and substitution effect of transitional dynamics explains half of the hump in industry with development, while the standard income and relative price effects explain the rest. We also find that the evolution of investment demand is quantitatively important to understand the industrialization of several countries since 1950 and the deindustrialization of many Western economies since 1970.
    Keywords: Structural change; investment; growth; transitional dynamics
    JEL: E23 E21 O41
    Date: 2019–08
  24. By: Margherita Borella (Unversity of Torino and and CeRP-Collegio Carlo Alberto); Fang Yang (Louisiana State University); Mariacristina De Nardi (Minneapolis Fed, UCL, CEPR, and NBER)
    Abstract: We show that white, non-college-educated Americans born in the 1960s face lower life expectancies and higher medical expenses compared to those born in the 1940s. In addition, men's wages for each unit of human capital declined much more than women's across these cohorts. We calibrate a life-cycle model of couples and singles to match the labor market and savings outcomes of the white, non-college-educated 1960s cohort and use it to evaluate the effects of these changes. The changes in wages depressed the labor supply of men and increased that of women, especially in married couples. The decrease in life expectancy reduced retirement savings but the increase in out-of-pocket medical expenses increased them by more. Single men experienced the largest welfare losses, requiring a one-time asset compensation corresponding to 12.5% of the present discounted value of their earnings. Single women experienced a 7.2% welfare loss. Couples had a welfare loss of 8%. Lower wages explain 47-58% of these losses, shorter life expectancies explain 25-34%, and higher medical expenses account for the rest.
    Date: 2019
  25. By: Daniel Eizenga
    Abstract: Following the 2013 French military intervention in Mali, significant attention has been paid to issues of security and development in the Sahel. The stability of Sahelian countries and the capacity of their governments to manage social change and resulting tensions have major security implications for migration flows, economic development, and health concerns both for local people and for the broader international community. The rise of violent religious extremism in the region and the varied efforts to curtail its spread have raised international alarm and prompted important resources to be invested by both domestic governments and foreign partners. This paper offers a broad overview of the current situation in the Sahel paying attention to the intersecting and overlapping issues of security and development. The paper then interrogates three central themes—poverty, migration, and conflict—adopting a historical perspective to examine long-term trends in the region. In doing so, it aims to contribute to contemporary policy discussions by offering evidence of how these dynamics have either changed or persisted across this centrally important region during the last several decades.
    Keywords: development, migration, Sahel, violent extremism
    JEL: D74 F51 N47
    Date: 2019–09–17
  26. By: Eduardo da Motta e Albuquerque (Cedeplar-UFMG)
    Abstract: This paper suggests that Trotsky's elaboration on uneven and combined development can be a methodological tool to understand contemporary capitalism. A dialogue with Kondratiev is a starting point, as each new technological revolution creates a new level of unevenness. Technological revolutions also transform channels through which combination takes place. As both unevenness and combination change over time, it is possible to have a dynamic approach to the process of uneven and combined development. This dynamic approach is a methodology to investigate how new amalgams between modern and archaic forms shape varieties of capitalism at the periphery and transform the global dynamic of capitalism.
    Keywords: technological revolutions; center-periphery divide; varieties of capitalism; expansion of global capitalism
    Date: 2019–09
  27. By: Miguel Cantillo Simon (Universidad de Costa Rica); Nick Wonder (University of Wyoming)
    Abstract: This paper uses financial data from 1900 to 1925 to run out of sample tests of different asset pricing models. We find that we cannot reject the strong predictions of Sharpe’s (1964) CAPM, but that there are portfolios with significant alphas that violate Sharpe’s CAPM weak predictions. The Black (1972) version of the CAPM performs worse than Sharpe’s counterpart. We also test the Fama French Carhart framework, and find that only the market and size factors work as with modern data. The value factor is statistically insignificant, and the momentum factor, while significant, has the opposite sign of the modern momentum factor.
    Date: 2019–07

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