nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2019‒11‒11
nineteen papers chosen by

  1. Game of Thrones or Game of Class Struggle? Revisiting the Demise of Feudalism and the Dobb-Sweezy Debate By Lambert, Thomas
  2. Does railway accessibility boost population growth? Evidence from unfinished historical roadways in France By Kakpo, Eliakim; Le Gallo, Julie; Grivault, Camille; Breuillé, Marie
  3. The impact of AI on employment: a historical account of its evolution By Garcia-Murillo, Martha; MacInnes, Ian
  4. Value of Time in the Context of Communications Services By Kilkki, Kalevi; Hämmäinen, Heikki
  5. Gender Gaps in Education By Bertocchi, Graziella; Bozzano, Monica
  6. Keynesian Economics - Back from the Dead? The Godley-Tobin Lecture By Robert Rowthorn
  7. Resurrecting the UK Sector National Accounts after 1945 By Bill Martin
  8. Hacer y deshacer la ley: los intentos de reforma agraria en Colombia 1960-2014 By Didier Hermida Giraldo; Mishell Tatiana Naranjo Valenzuela
  9. Natural Resources in the Theory of Production: The Georgescu-Roegen/Daly versus Solow/Stiglitz Controversy By Quentin Couix
  10. Populism-What Next? A First Look at Populist Walking-Stick Economies By Christopher Ball; Andreas Freytag; Miriam Kautz
  11. Fiduciary - Asymmetrical Power, Asymmetrical Care By Helen Mussell
  13. A Consequence of Coerced Free Trade: Biological Living Standards of Korea during the Port-Opening Period, 1876-1910 By Kim, Duol; Park, Heejin
  14. Measuring Fifty Years of Trade Globalization By Nicole Palan; Nadia Simoes; Nuno Crespo
  15. Economic Complexity and Employment for Women and Youth: The Case of Ghana By William Baah-Boateng; Eric Twum
  16. Does experience of banking crises affect trust in banks? By Fungáčová, Zuzana; Kerola, Eeva; Weill, Laurent
  17. Instituciones Extractivas e Improductivas: el caso de Puerto Rico By Dahil Colón
  18. Fiscal Episodes in the EMU: Elasticities and Non-Keynesian Effects By António Afonso; Frederico Silva Leal
  19. Riders on the Storm By Jorda, Oscar; Taylor, Alan M.

  1. By: Lambert, Thomas
    Abstract: In 1947, the Marxist economist Maurice Dobb published a book that attempted to outline and explain how the feudalistic economic system of medieval times gave way to capitalism. Dobb’s Studies in the Development of Capitalism (1947) started a debate among economists and historians over the following decades that has continued until this day. One of his most prominent and earliest critics was Paul M. Sweezy who, although he commended Dobb on raising the question of why feudalism gave way to capitalism, disagreed with Dobb’s conclusions on why the transition from feudalism to capitalism occurred. In general, Dobb thought that feudalism went into decline and was replaced by capitalism because of endogenous causes rooted in the class struggles between serfs and noblemen. Sweezy and others, on the other hand, thought that the factors which led to the decline of feudalism and rise of capitalism were exogenous, and these factors included the development and growth of international trade, production for markets and money, the growth and importance of cities, and the need for European monarchies to finance their wars and overseas empires. Other economists and historians, both mainstream and Marxian, also joined the debate, and a long list of articles and books have been generated on the “transition debate” since the late 1940s. In doing research for this paper, no statistical work on the Dobb-Sweezy debate and its competing hypotheses was found, and so this paper attempts to do some empirical testing of these hypotheses using data from England from the middle ages up to the late nineteenth century. The findings of this note are informative in trying to better understand the transition and provide some food for thought on how capitalism may change in the future.
    Keywords: capitalism, feudalism, Dobb-Sweezy debate, econometrics, productivity, surplus value, and transition debate
    JEL: B20 B24 B25 N3 N33
    Date: 2019–10–29
  2. By: Kakpo, Eliakim; Le Gallo, Julie; Grivault, Camille; Breuillé, Marie
    Abstract: The railway revolution that swayed through Europe in the nineteenth century left a legacy of unexplored networks. In this paper, we observe a subset of unfinished railways to evaluate the impact of railroads on population growth. Using the random nature of the achieved portions, we compare municipalities located around the planned but not realized segment of the railways to those in the vicinity of the operated sections. Our results indicate that the railways boost population growth in the medium and long-run. However, the medium-run effects are only visible in municipalities with high pre-arrival population. The railroads also seem to have solved a coordination problem in the sense that treated municipalities were more likely to gain access to other transport infrastructures later.
    Keywords: Urbanization, population growth, development, railways, transport
    JEL: N44 O18 R11
    Date: 2019–10
  3. By: Garcia-Murillo, Martha; MacInnes, Ian
    Abstract: Artificial Intelligence (AI) is likely to have a significant impact on work. Examples from the past demonstrate that it has created jobs but also displaced workers. The primary question this study aims to answer is what have been the effects that previous revolutionary computing technologies have had and how have institutional values shaped the way workers were affected. The paper involves a historical analysis of the experiences that society in the United States has had with technological innovation. The research relies on academic, government, and trade publications of earlier periods in the development of computer technology. In this effort, we examine the literature on institutional economics to help us understand the way society has transitioned and the forces that have shaped the outcomes. Institutional economics has two main branches that explain change: the ceremonial and the instrumental. The ceremonial values perspective focuses on the customs and conventions that prevail in a community. The instrumental perspective focuses on a society's processes of inquiry, acquisition of knowledge, and use of scientific inquiry to solve problems Our analysis suggests that in all of these periods initial implementations suffered from installation problems, system bugs, and troubleshooting frustrations that generated employment; however, as the technology improves, it is likely to enhance productivity, but displace, workers. Up to this point, the U.S. government has not been able to respond adequately to the challenge. We attribute this to the ceremonial values that public officials and society entertain about personal responsibility and small government.
    Keywords: Artificial intelligence (AI),Technological displacement,Economic transition,Ceremonial values,Instrumental values,Public policy
    Date: 2019
  4. By: Kilkki, Kalevi; Hämmäinen, Heikki
    Abstract: There is a long tradition of studies using the concept of the value of time (VoT) to assess human behavior in diverse situations. The underlying assumption in most of the studies is that when different activities are available, a rational person selects the activity that provides the highest value or utility for her. However, two major restrictions affect the selection: time and money. Thus, the selection process needs to take into account the average value created over a period of time and the (possible) money spent during the activity. In practice, this selection process is complicated and arduous to model accurately. There is an obvious need in many fields to predict how people behave, how they appreciate different situations, and how they allocate their time, which has led to extensive scientific literature. For instance, Jacoby et al. (1976), Concas & Kolpakov (2009), Small (2012), and Jara-Díaz & Rosales-Salas (2017) offer valuable overviews on the history and terminology related to the value of time. Although some interesting VoT papers were published already in the 1940s, the first wide-ranging treatment of the value of time was Gary S. Becker's 'A Theory of the Allocation of Time' published in 1965. Becker's paper is still, by far, the most cited VoT paper. Other important, early VoT papers include Beesley (1965), DeSerpa (1971), and Evans (1972)...
    Date: 2019
  5. By: Bertocchi, Graziella; Bozzano, Monica
    Abstract: This chapter reviews the growing body of research in economics which concentrates on the education gender gap and its evolution, over time and across countries. The survey first focuses on gender differentials in the historical period that roughly goes from 1850 to the 1940s and documents the deep determinants of the early phase of female education expansion, including pre-industrial conditions, religion, and family and kinship patterns. Next, the survey describes the stylized facts of contemporaneous gender gaps in education, from the 1950s to the present day, accounting for several alternative measures of attainment and achievement and for geographic and temporal differentiations. The determinants of the gaps are then summarized, while keeping a strong emphasis on an historical perspective and disentangling factors related to the labor market, family formation, psychological elements, and societal cultural norms. A discussion follows of the implications of the education gender gap for multiple realms, from economic growth to family life, taking into account the potential for reverse causation. Special attention is devoted to the persistency of gender gaps in the STEM and economics fields.
    Date: 2019
  6. By: Robert Rowthorn
    Abstract: This paper surveys some the main developments in macroeconomics since the anti-Keynesian counter-revolution 40 years ago. It covers both mainstream and heterodox economics. Amongst the topics discussed are: New Keynesian economics, Modern Monetary Theory (MMT), expansionary fiscal contraction, unconventional monetary policy, the Phillips curve, and hysteresis. The conclusion is that Keynesian economics is alive and well, and that there has been a degree of convergence between heterodox and mainstream economics.
    Keywords: Macroeconomics, Keynesian economics, Keynes
    JEL: E60 E10 E31 B22
    Date: 2019–06
  7. By: Bill Martin
    Abstract: Building on the methodology explained in Martin (2009), this paper sets itself the task of backcasting the UK national sectoral accounts before 1987, the date prior to which fully comprehensive data are not provided by the Office for National Statistics. Backcast data cover the private, government and overseas sectors. Innovations compared with the earlier paper include the extension of the dataset to begin in 1946 rather than 1948, and, more importantly, an attempt to backcast financial balances for the household and corporate sectors. This attempt involves the backcasting of pension saving before 1963 and of major components of the household and corporate capital account before 1987. The household and corporate sector data are likely subject to greater measurement error than estimates for more aggregate sector balances, as shown in Martin (2009) and provisionally upheld in this paper by simple tests of stability across different data vintages. Subject to further verification and improvements, now in prospect, in official historic data, the derived postwar sectoral estimates may nevertheless enable more robust testing of a variety of long-run macroeconomic hypotheses.
    Keywords: National accounts, financial balances, macroeconomics, UK
    JEL: C82 E01 N1
    Date: 2019–06
  8. By: Didier Hermida Giraldo; Mishell Tatiana Naranjo Valenzuela
    Abstract: En Colombia la tierra históricamente ha sido un elemento en disputa, por lo que su uso como factor de producción no se puede tomar como dado, sino que se debe tener en cuenta, entre otros aspectos, las formas de concentración de la misma. Este trabajo se pregunta por las construcciones normativas que han devenido en el estado actual de la cuestión agraria, para lo cual se transita por los principales hitos del espíritu reformista gubernamental y se plantea un paralelo histórico entre la situación de concentración de la tierra de los años 60 y la actualidad, a la luz de los datos recolectados por el Tercer Censo Nacional Agropecuario. ****** In Colombia the land historically has been a disputed element, hence its use as a factor of production can’t be taken as given, but must take into account, among other aspects, the forms of concentration of it. This paper asks about normative forms that have shaped the current state of the agrarian question, for which the main milestones of the governmental reformist spirit are covered, additionally we present a historical parallel between the situation of the concentration of land in the 60s and the present in light of the data collected by the Third National Agricultural Census.
    Keywords: reforma agraria, concentración de la tierra, certeza de la ley, campesinos, economía agrícola, datos censales
    JEL: B53 Q15 Q18
    Date: 2019–09–30
  9. By: Quentin Couix (UP1 UFR02 - Université Panthéon-Sorbonne - UFR d'Économie - UP1 - Université Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper provides a theoretical and methodological account of an important controversy between neoclassical resources economics and ecological economics, from the early 1970s to the end of the 1990s. It shows that the assumption of unbounded resources productivity in the work of Solow and Stiglitz, and the related concepts of substitution and technical progress, rest on a model-based methodology. On the other hand, Georgescu-Roegen's assumption of thermodynamic limits to production, later revived by Daly, comes from a methodology of interdisciplinary consistency. I conclude that neither side provided a definitive proof of its own claim because both face important conceptual issues.
    Keywords: Nicholas Georgescu-Roegen,Robert Solow,Joseph Stiglitz,natural resources,theory of production
    Date: 2019–10–24
  10. By: Christopher Ball; Andreas Freytag; Miriam Kautz
    Abstract: The recent rise in populist governments has led to much work on the question “why now?”. Our work takes the next logical step by asking “what next?”. That is, given populists in power, what should we expect to be the economic consequences of populist regimes. To answer this, we characterize populist economic policies and argue that they generate an inverted J-curve effect, which we term a “walking stick” effect, in macro-level data, specifically GDP and inflation. To test this claim, we construct a unique data set on 13 Latin American countries from 1976 to 2012 and incorporate more modern and nuanced definitions of populism. Our contribution is both to test the walking stick claim and to present a novel dataset for studying the economic effects of populism. We find compelling evidence for our walking stick hypothesis in both GDP per capita and inflation, suggesting that the answer to “what next” is that we will see on average short-run booms followed by declines under populist regimes.
    Keywords: populism, Latin America, business cycle, political economy
    JEL: E39 E60 H11 N16
    Date: 2019
  11. By: Helen Mussell
    Abstract: The legal concept of fiduciary plays a fundamental role in all financial and business organisations. It acts as a moral safeguard of the relationship between trustee and beneficiary, ensuring that the beneficiaries’ best interests are met. It is often referred to as a duty of care. Originally formulated within familial law to protect property put into Trust, beneficiaries were women and children, allocated passive and subordinated roles. This paper investigates two aspects of the asymmetrical power relations central to the fiduciary. Firstly it reveals the gendered presuppositions regarding male and female agential capabilities on which the fiduciary is premised, drawing out the origins of the authority differential in the trustee-beneficiary relationship. Secondly, the paper engages with the ethical nature of the fiduciary relationship, arguing that Care Ethics offers a robust framework for explicating the history of the relationship, alongside delivering a morally-enhanced and future-fit fiduciary free of damaging gendered stereotypes.
    Keywords: Fiduciary; economic agency; care ethics; gender relations; gender politics;trustee; beneficiary; tort law; essentialism; history of finance; share-holder activism; history of economic thought; feminist economics
    JEL: A12 B40 B54 K1 N2
    Date: 2019–03
  12. By: Andrei A. Ilin (National Research University Higher School of Economics)
    Abstract: The article examines views of A.I. Herzen on emotions and their role in politics. Herzen’s position on the issue of emotions traced back to the early socialist and romantic influences and interpreted in terms of “sentimentalist emotional regime” (W. Reddy). Two discussions that involved Herzen are scrutinized. The first one was a debate of the 1840s around rationality and morals in family life where Herzen advocated middle position between unrestricted capricious emotionality and moralistic rationalism represented by Hegelian T. Rotscher. It is argued that this debate noticeably influenced Herzen’s later conceptions of politics and the public sphere that came to prominence during the reforms of Alexander II. The article shows that Herzen repeated some of his previous arguments against excessive rationalism and emotional restrictions attacking Russian Hegelian B.N. Chicherin. Herzen backed sincerity in the expression of one’s emotions both in private life and in politics, challenging prevalent notions of rationality. Chicherin, on the contrary, was a strong proponent of the neutral and rationalized political sphere since he thought emotions would lead to disturbances and revolutions Concluding remarks concern ambiguous heritage of Herzen’s views on emotions that seem to be closer to his opponents than may be immediately apparent
    Keywords: A. Herzen, Russian Empire, emotional regimes, Great Reforms, B. Chicherin
    JEL: Z
    Date: 2019
  13. By: Kim, Duol; Park, Heejin
    Abstract: After several hundred years of closed-door policy, Korea finally opened its ports in 1876. Historians have traditionally claimed that the port-opening was coerced by foreign countries, deteriorated the Korean economy, and made Korea become a colony. We examined this traditional view by measuring biological living standards and found the opposite. The height of the Hangryu Deceased, who died on the street but no one claimed their body, increased by 0.82 cm in this period. This finding implies that the colonization of Korea originated from political impotence that could not realize the benefit of foreign trade. This result also proposed that economic growth during the colonial period could be more related to free trade than colonial policies or new institutions
    Date: 2019–10
  14. By: Nicole Palan (Graz Schumpeter Center, University of Graz, Austria); Nadia Simoes (Instituto Universitário de Lisboa (ISCTE - IUL), ISCTE Business School Economics Department; BRU - IUL (Business Research Unit), Lisboa, Portugal); Nuno Crespo (Instituto Universitário de Lisboa (ISCTE - IUL), ISCTE Business School Economics Department; BRU - IUL (Business Research Unit), Lisboa, Portugal)
    Abstract: Although trade globalization is a multi-faceted phenomenon, researchers often capture its magnitude by trade volume alone. In order to gain a deeper understanding of the phenomenon we propose measures that also account for the interconnectedness of countries, for geographical distance, and for the role of individual sectors in bilateral trade. We also improve upon existing indices by moving from a country-level analysis (internationalization) to a truly global perspective (globalization). We measure trade globalization using data from CHELEM (CEPII) over a period of 50 years, covering 72 countries for the sub-period 1967–1990 and 84 countries for 1994-2016. The results show substantial increases in all dimensions of globalization, despite substantial differences between the measures, highlighting the need to analyze globalization with a comprehensive set of indicators. Regarding the number of positive bilateral trade flows, globalization was almost completed by 2016. The importance of distance also diminished throughout the period analyzed, but neighboring countries still share stronger trade relations. Results indicate that trade globalization for high-tech sectors varies significantly from the evolution seen in other sectors, especially large, low-tech sectors. The latter tend to show the highest level of trade globalization over the whole period, but the former group could catch up considerably.
    Keywords: Globalization; trade interdependencies; multidimensional; measures; distance; sectors
    JEL: F10 F14
    Date: 2019–11
  15. By: William Baah-Boateng; Eric Twum (University of Ghana; Associate Professor)
    Abstract: Ghana’s growth performance can appropriately be analysed within three distinct periods: 1960-1983, 1984-2006, and 2007-2017. The country’s growth performance prior to 1984 can best be described as erratic with negative growth in six out of 24 turbulent years. Most of the years of negative growth coincided with a period of intense political instability and external shocks (Alagidede et al., 2013). After experiencing its first coup d’état in 1966, the country recorded four1 other successful military takeovers prior to 1983, and each of these regimes witnessed abandonment of policies and projects pursued by their predecessors. Agriculture was the country’s major economic activity, accounting for over 60% of GDP and constituted the main foreign exchange earner through cocoa exports. The major thrust of the country’s policies, particularly within the first decade after independence and in most part of the 1970s, was inward looking and public sector led economic strategy.
    Keywords: Economic Complexity, Ghana, Employment, Women, Youth
    Date: 2019–05
  16. By: Fungáčová, Zuzana; Kerola, Eeva; Weill, Laurent
    Abstract: This paper investigates how past experience with banking crises influences an individual’s trust in banks. We combine data on banking crises for the period 1970–2014 with individual data on trust in banks for 52 countries. We find that experiencing a banking crisis diminishes a person’s trust in banks, and that high exposure to banking crises is negatively related to trust in banks. An individual’s age at the time of the crisis is important, and significant for individuals between 41 and 60 years of age at the time of the banking crisis. Both severe and mild crises diminish trust in banks, but a severe banking crisis hits also young people’s trust, while less severe banking crises mainly degrade trust of more mature people. The detrimental effect for trust in banks seems to be connected specifically to systemic banking crises. Other types of financial crises incur a less significant effect. Overall, our results indicate that banking crises generate previously unrecognized costs for the economy in the form of a lasting reduction of trust in banks.
    JEL: G21 O16
    Date: 2019–10–25
  17. By: Dahil Colón (Instituto Complutense de Estudios Internacionales (ICEI), Universidad Complutense de Madrid.)
    Abstract: El siguiente trabajo examina el papel de las instituciones en la isla de Puerto Rico; colonia y región económica estadounidense. En él, se explora las principales fuentes que definen a las instituciones como inclusivas o extractivas, determinantes para el desarrollo económico. Los datos analizados sugieren que Puerto Rico padece de unas instituciones extractivas, condición que sumerge al estancamiento económico y social que a su vez lo ha llevado a su peor crisis. Su destrucción, no es la de una destrucción creativa, sino de una destrucción improductiva, destrucción que invita a la suspensión de la innovación, que conlleva al descenso poblacional de la isla. El desarrollo industrial que se promovió fue la de un enclave económico que ha llevado a los puertorriqueños en una especie de encapsulamiento ceremonial. Teniendo esto en cuenta, se reflexiona y se sugiere cuáles son las riendas que debería optar el autogobierno, pero sobre todo como los isleños pueden superar estas instituciones.
    Abstract: This essay examines the role of institutions in the island of Puerto Rico; a colony and an economic region of the United States. It studies the main sources that define institutions as inclusive or extractive, fundamental for economic development. The analyzed data suggests that Puerto Rico suffers from extractive institutions, a condition that fosters economic and social stagnation, which in turn have led the island to its worst crisis yet. This destructive process is not one of creative destruction, but of unproductive destruction. A destruction which provokes the suspension of innovation and leads to the decline of the island’s population. The industrial promotion sponsored was of an economic enclave, steering Puerto Ricans into a kind of ceremonial encapsulation. Taking all this into consideration, the essay suggests some of the steps that a self-government should take, but above all, how Puerto Ricans can overcome the effects of these institutions.
    Keywords: Instituciones extractivas; Destrucción improductiva; Puerto Rico; Estados Unidos; Emigración.; Extractive institutions; Unproductive destruction; Puerto Rico; United State; Migration.
    Date: 2019
  18. By: António Afonso; Frederico Silva Leal
    Abstract: We estimate short- and long-run elasticities of private consumption for fiscal instruments, using a Fixed Effects model for the 19-euro area countries during the period of 1960-2017, to assess how fiscal elasticities vary during fiscal episodes. According to the results, positive “tax revenue” elasticities indicate that consumers have a Ricardian behaviour, whereby they perceive an increase in taxation to be a sign of future government spending. “Social benefits” appear to have a non-keynesian effect on private consumption. In addition, using a narrative approach to identify fiscal consolidations, it is seen that private consumption continues to exhibit a non-keynesian response to tax increases, both in the short and long-run, and “other expenditures” have a recessive impact during “normal times”. Furthermore, “social benefits” are more contractionary in consolidations than in both expansions and “normal times”. Additionally, after the launch of the EMU, expansionary fiscal consolidations became harder to observe, and “other expenditure” and “investment” lost their non-keynesian role.
    Date: 2019
  19. By: Jorda, Oscar (Federal Reserve Bank of San Francisco); Taylor, Alan M. (University of California, Davis)
    Abstract: Interest rates in major advanced economies have drifted down and in greater unison over the past few decades. A country’s rate of interest can be thought of as reflecting movements in the global neutral rate of interest, the domestic neutral rate, and the stance of monetary policy. Only the latter is controlled by the central bank. Estimates from a state space New Keynesian model show that central bank policy explains less than half of the variation in interest rates. The rest of the time, the central bank is catching up to trends dictated by productivity growth, demography, and other factors outside of its control.
    JEL: E43 E44 E52 E58 F36 N10
    Date: 2019–09–06

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