nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2019‒11‒25
twenty-one papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. "Too Bad to Be True". Swedish Economists on Keynes's 'The Economic Consequences of the Peace, 1919-1929' By Carlson, Benny; Jonung, Lars
  2. African Economic Growth 1900-50: Historical National Accounts for British Colonial Africa By Jerven, Morten
  3. Instruments of Debtstruction: Public Debt Management and Networks during the Interwar Period By Nicolas End; Marina Marinkov; Fedor Miryugin
  4. Education and economic development. The influence of primary schooling on municipalities in nineteenth-century France By Adrien Montalbo
  5. Patterns of Iberian economic growth in the early modern period By Santiago Caballero, Carlos; Palma, Nuno
  6. Long run relationship between biological well being, and economic development in Colombia By Adolfo Meisel-Roca; María Teresa Ramírez-Giraldo; Daniela Santos-Cárdenas
  7. Historical family systems and lasting developmental trajectories in Europe: the power of the family? By Szoltysek, Mikolaj; Poniat, Radosław
  8. Evolution of the Women's Movement in Contemporary Algeria Organization, Objectives and Prospects By Bouatta, Cherifa
  9. Does Electricity Drive Structural Transformation? Evidence from the United States By Paul Gaggl; Rowena Gray; Ioana Marinescu; Miguel Morin
  10. Medeltida mirakelberättelser som kulturhistorisk källa, med särskild hänsyn till långväga resor By Myrdal, Janken
  11. A Global Revolutionary Class will ride the Tiger of Alienation By Hanappi, Hardy
  12. Urban Growth Shadows By Cuberes, David; Desmet, Klaus; Rappaport, Jordan
  13. Economic Reform in the USSR By Skorov, Georgy
  14. Saving Rates in Latin America: A Neoclassical Perspective By Andrés Fernández; Ayse Imrohoroglu; Cesar Tamayo
  15. Inflation Targets in Latin America By José De Gregorio
  16. Trends in Household Portfolio Composition By Jesse Bricker; Kevin B. Moore; Jeffrey P. Thompson
  17. Does long-term proactive agency matter for regional development? By Grillitsch, Markus; Asheim, Bjørn; Nielsen, Hjalti
  18. The Financial Stability Board at 10 Years—Looking Back and Looking Ahead : a speech at the European Banking Federation's European Banking Summit, Brussels, Belgium, October 3, 2019. By Quarles, Randal K.
  19. Market Value of Patents: Evidence from the US, 1976-2017 By Jihong Lee; Hyunkyeong Lim
  20. Malthus Was Right: Explaining a Millennium of Stagnation By Jacob B. Madsen; Peter E. Robertson; Longfeng Ye
  21. Voting for Democracy: Chile's Plebiscito and the Electoral Participation of a Generation By Ethan Kaplan; Fernando Saltiel; Sergio S. Urzúa

  1. By: Carlson, Benny (Department of Economic History, Lund University); Jonung, Lars (Department of Economics, Lund University)
    Abstract: This paper examines the response of five prominent Swedish economists, David Davidson, Gustav Cassel, Eli Heckscher, Knut Wicksell and Bertil Ohlin, to John Maynard Keynes’s "The Economic Consequences of the Peace" and to the German reparations in the 1920s. When Keynes’s book appeared, Davidson and Cassel strongly endorsed it. Heckscher also agreed with Keynes – “a bright spot in a time of darkness” – in a long review entitled "Too bad to be true". Inspired by his Malthusian view, Wicksell found the reparations impossible to meet unless German population growth was arrested. Germany should settle for a stationary population in exchange for reduced reparations. The contacts between the Swedes and Keynes became close after Keynes’s book, in particular between Cassel and Keynes, competing for being the best-known economist in the world in the 1920s. The exchange of views took a new turn when Bertil Ohlin responded to an article by Keynes in The Economic Journal in 1929 on the transfer problem. In his comment, Ohlin summarized two previously overlooked articles from 1928 where he analyzed the transfer of the German reparations by using his theory of international trade. The famous Keynes-Ohlin discussion laid the foundation for the analysis of the transfer problem, bringing Ohlin international recognition. He emerged as the champion in this debate, which marked the end of academic interest in the German reparations in the interwar period. We also trace how Davidson, Cassel and Heckscher changed their appreciation of Keynes in the 1930s with the publication of the General Theory while Ohlin viewed the message of Keynes in the 1930s as consistent with the policy views of the Stockholm school of economics. We rely on newspaper and journal articles published by the Swedish economists, on half a dozen unpublished manuscripts by Wicksell as well as on the correspondence between Keynes and the Swedish economists.
    Keywords: John Maynard Keynes; David Davidson; Gustav Cassel; Eli Heckscher; Knut Wicksell; Bertil Ohlin; Treaty of Versailles; reparations; the transfer problem; United Kingdom; Germany; Sweden; Malthusianism; World War I.
    JEL: B13 E12 E44 F21 F35 F55 J11 N24 N44
    Date: 2019–11–18
  2. By: Jerven, Morten (African Economic History Network)
    Abstract: The study of growth in African economies during the 20th Century is hampered by the lack of historical GDP estimates. There has been some backward projections, and country case studies, but despite the available data historical national accounts has not yet been assembled. This paper provides GDP estimates for some former British colonies between 1900 – 1950. The estimates indicate faster growth and economic expansion compared to the previous estimates that have been based on backward extrapolations. It further brings support to the argument that if we observe economic growth in many economies from the 1890s to the 1970s and then only interrupted from 1975s to 1995s, writing about the 20th century for Africa as a growth tragedy may be a mistake, caused by lack of data. New time series data on economic growth may foster a research agenda devoted to the study of different growth trajectories on the continent.
    Keywords: Africa; economic growth; national accounts; GDP
    JEL: C82 E01 N17 N37
    Date: 2019–11–19
  3. By: Nicolas End (International Monetary Fund (imf), Washington, D.C. & Aix-Marseille Univ, CNRS, EHESS, Ecole Centrale, AMSE, Marseille, France.); Marina Marinkov (International Monetary Fund (imf), Washington, D.C.); Fedor Miryugin (International Monetary Fund (imf), Washington, D.C.)
    Abstract: We construct a new, comprehensive instrument-level database of sovereign debt for 18 advanced and emerging countries during 1913–46, an eventful period characterized by notoriously high debt levels. This database is thus the first to provide public debt time series with such a high degree of comparability across countries and time. Documentation of qualitative instrument characteristics offers unique insights about the debt management policies that were implemented and the broader policies they helped finance. We document how interwar governments rolled over debts that were largely unsustainable and how the external public debt network contributed to the collapse of the international financial system in the early 1930s.
    Keywords: economic history, debt policy, public finance, macroeconomics
    JEL: E6 F5 H6 N10
    Date: 2019–11
  4. By: Adrien Montalbo (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The impact of education on growth or individual earnings has been vastly studied in economics. However, much remains to know about this association before the mid-20th century. In this article, I investigate the effect of primary schooling on the economic devel- opment of French municipalities during the 19th century and up to World War I. Before the Guizot Law of 1833, no national legislation on primary schooling existed in France. Therefore, I evaluate if the municipalities with higher educational achievements before this law grew more than their counterparts during the following years. To do so, I exploit first the fact that the Guizot Law forced municipalities over 500 inhabitants to open and fund a primary school for boys. I implement a regression discontinuity around this cut-off on municipalities with no primary school in 1833. Second, I instrument educational achieve- ment, namely enrolment rates and schooling years, by the proximity of municipalities to printing presses established before 1500. Each method returns a positive impact of edu- cation on development. Education quality also mattered in this perspective. A matching estimation on municipalities with a school in 1833 indicates a positive impact of better teaching conditions provided by public grants on the subsequent growth of municipalities. Primary schooling is therefore an important factor which favoured the development of French municipalities during the century of industrialisation and modernisation.
    Keywords: Primary instruction,Economic development,Nineteenth-century France
    Date: 2019–09
  5. By: Santiago Caballero, Carlos; Palma, Nuno
    Abstract: Around 1500 Spain and Portugal were among the most affluent nations in the world, and had income levels which were similar to those of other Western European countries. Three hundred years later the Iberian economies had lost their economic supremacy and fell behind all the main European powers. When did the first two global empires in history lose their hegemony to become secondary actors? What were the foundations of the collapse that explains the divergence from northwestern Europe? In this chapter we address these issues and describe what we now know about the long-term trends of Iberian economies between 1500 and 1800.
    Keywords: Trade; Agriculture; Regional Dynamics; Early Modern Comparative Growth; Industry
    Date: 2019–11–18
  6. By: Adolfo Meisel-Roca; María Teresa Ramírez-Giraldo; Daniela Santos-Cárdenas
    Abstract: This paper explores the long run relationship between the physical stature of Colombians born during the twentieth century and several socio-economic development indicators using time series techniques. The econometric analysis is carried out considering four height measures: total height, female’s height, male’s height, and the gender height dimorphism. The database comprises height information from the national identification cards for nearly 13 million persons born between 1910 and 1989: 6.283.452 correspond to men and 6.383.023 to women. Results suggest the existence of a long-run relationship between all height measures and the economic variables included in the analysis. In general, the results indicate that improvements in the availability of better-quality food, and the reduction in food prices, measured by the degree of openness and by infrastructure developments, as well as improvements in the economic conditions lead to increases in height. Regarding the gender inequality of height, the results show that height dimorphism in absolute terms decreased during the twentieth century. However, the downward trend observed until the end of 1950s reversed at the beginning of the 1960s, despite the advances in the living conditions of women during this period. This result suggests that earlier improvements in the economic conditions benefited women more, given the considerable gender gap regarding education, health, income, among other dimensions, at the beginning of the twentieth century. On the contrary, the increments in GDP observed during the second half of the twentieth century seem to benefit men’s height more than women.
    Keywords: Anthropometrics, dimorphism, income, economic development, cointegration
    JEL: I10 I15 N36 C22
    Date: 2019–11
  7. By: Szoltysek, Mikolaj; Poniat, Radosław
    Abstract: Last years have witnessed a growing interest in economics and cross-cultural studies in the role of the historical family as the instigator of disparate developmental trajectories. This new emerging literature has already provoked a considerable amount of controversy, involving debates on the precise underlying mechanisms, the role of non-familial institutions and the possibility of reversed causality, as well as the quality of historical data. Using novel historical database of European family this paper reaffirms the hypothesis that historical family organization could be one of the intermediate factors associated with developmental and value disparities among European nations today pointed out in earlier scholarship. We show that countries starting out from more patriarchal family structures in the past exhibit more hierarchical gender relations, more collectivist mindsets, and lower levels of economic and human development in the present. These findings suggest that the criticism of the family role in comparative development may be premature, and that links between historical family organisation and developmental gradients merit further attention.
    Date: 2019–10–04
  8. By: Bouatta, Cherifa
    Abstract: The paper discusses some of the social and historical factors behind the evolution of contemporary women's organizations in Algeria. The paper states that the women question was never a priority. Yet, since the late 1980s, women became advocates of their own cause. After 1991, terrorism has also perturbed the activities of women organizations. However, amidst the turbulence, the women movement appears as the most forward looking among all other civic movements and as a necessary element to build up Algeria's democratic future.
    Keywords: International Development
  9. By: Paul Gaggl; Rowena Gray; Ioana Marinescu; Miguel Morin
    Abstract: Electricity is a general purpose technology and the catalyst for the second industrial revolution. Developing countries are currently making huge investments in electrification, with a view to achieving structural change. What does history say about its impact on the structure of employment? We use U.S. Census data from 1910 to 1940 and measure electrification with the length of higher-voltage electricity lines. Instrumenting for electrification using hydroelectric potential, we find that the average expansion of high-voltage transmission lines between 1910 and 1940 increased the share of operatives in a county by 3.3 percentage points and decreased the share of farmers by 2.1 percentage points. Electrification can explain 50.5% of the total increase in operatives, and 18.1% of the total decrease in farmers between 1910 and 1940. At the industry level, electrification drove 15.7% of the decline in the share of agricultural employment and 28.4% of the increase in the share of manufacturing employment between 1910 and 1940. Electrification was thus a key driver of structural transformation in the U.S. economy.
    Keywords: technological change, electrification, structural change
    JEL: E25 E22 J24 J31 N32 N72 O33
    Date: 2019
  10. By: Myrdal, Janken (Dept. of Economic History, Stockholm University)
    Abstract: Miracle stories form one of the most important sources for the study of every day life in the Middle Ages. They were written down all over Europe in thousands from the 11th century and onwards. In this report over 900 such miracles from the Nordic countries have been presented in a catalogue, and an introduction present how they can be used as a source for cultural history and everyday life. Expecially longer journey are discussed, but alo a number of other topics, such as work and children.
    Keywords: miracle stories; history of everyday life; cultural history; Middle Ages; travelling
    JEL: N31
    Date: 2019–11–20
  11. By: Hanappi, Hardy
    Abstract: This paper investigates how the global class of organic intellectuals will emerge. It thus updates Marx view on class struggle dynamics of the 19th century by taking the quantum leap of productive forces during the last 200 years serious. The most striking new element is the tremendous increase of the force of information power brought about by ICT. The emergence of Fascism and Stalinism in the first half of the 20th century was just a frightening first symptom of the coming age of alienation. Today, basing class membership – including the emergence of class consciousness - only on the (physical) local position in industrial production units is insufficient, even misleading. Global production is by its inbuilt complexity blurring the visibility of a specific worker’s exploitation status. There is necessary alienation, but then class struggle managed disinformation and manipulation is added. For the progressive classes this implies that they are split along the lines of their respective education status – how far the fog can be dissolved. This is where the concept of the global class of organic intellectuals, of an avant-garde, enters. The paper shows that already in the emergence of this new socialist agent the structures, in particular the information structures, of the next mode of production have to be present. It turns out that features, which are evil for capitalist thought are often the most important ingredients for the constitution of the forerunners of a socialist global society: persistent contradictions and diversity, exploding oscillations, deep and time consuming dialogues, irrational solidarity, aesthetic stubbornness. The new intellectuals can remain rooted in local circumstances, can be organic, because they share many of these features with the exploited classes within which they act as catalyst, as avant-garde. In the end global socialism, organized by a revolving class of organic intellectuals, has to master alienation. This is the challenge.
    Keywords: Political Economy, Alienation, Socialism, Oraganic Intellectuals
    JEL: B51 P00 P16 P40
    Date: 2019–11–05
  12. By: Cuberes, David; Desmet, Klaus; Rappaport, Jordan (Federal Reserve Bank of Kansas City)
    Abstract: Does a location's growth benefit or suffer from being geographically close to large economic centers? Spatial proximity may lead to competition and hurt growth, but it may also generate positive spillovers and enhance growth. Using data on U.S. counties and metro areas for the period 1840–2017, we document this tradeoff between urban shadows and urban spillovers. Proximity to large urban centers was negatively associated with growth from 1840 to 1920, and positively associated with growth after 1920. Using a two-city spatial equilibrium model with intra-city and inter-city commuting, we show that the secular evolution of commuting costs can account for this and other observed patterns in the data.
    Keywords: Urban Shadows; Agglomeration Economies; Spatial Economics; Urban Systems; City Growth; United States 1840-2017
    JEL: N93 R12
    Date: 2019–11–18
  13. By: Skorov, Georgy
    Abstract: The subject of economic reform is probably as large as the problems with which it has to deal. In order to understand why such a reform became necessary after 70 years of socialist development, it is essential to see it in historical perspective.
    Keywords: International Development
  14. By: Andrés Fernández; Ayse Imrohoroglu; Cesar Tamayo
    Abstract: This paper examines the time path of saving rates between 1970 and 2010 in Chile, Colombia, and Mexico through the lens of the neoclassical growth model. The findings indicate that two factors, the growth rate of TFP and fiscal policy, are able to account for some of the major fluctuations in saving rates observed during this period. In particular, we find that the model accounts for the low saving rates in Chile compared to Colombia until the late 1980s and the reversal in the saving rates thereafter. Also, a combination of high TFP growth and tax reforms that substantially reduced capital taxation seems to be responsible for the impressive increase in Chile's saving rate in mid 1980s.
    Date: 2019–11
  15. By: José De Gregorio (Peterson Institute for International Economics)
    Abstract: Many emerging-market economies have adopted inflation targeting regimes since they were introduced by New Zealand in 1990. Latin America has not been the exception. Currently eight Latin American countries conduct monetary policy through inflation targeting regimes: Brazil, Chile, Colombia, Guatemala, Mexico, Paraguay, Peru, and Uruguay. This paper reviews the history of chronic inflation in Latin America and describes these countries’ experience with inflation targets and their performance during the global financial crisis.
    Keywords: Inflation, Inflation Targets, Latin America, Monetary Policy
    JEL: E52 E58
    Date: 2019–11
  16. By: Jesse Bricker; Kevin B. Moore; Jeffrey P. Thompson
    Abstract: We use data from the Survey of Consumer Finances (SCF) to explore how household asset portfolios in the United States have evolved from 1989 to 2016. Throughout this period, two key assets—housing and financial market assets—have driven the aggregate household balance sheet evolution. However, aggregates mask great heterogeneity in balance sheet composition across the wealth distribution, and most families hold a relatively small share of assets in financial markets and larger shares in housing and other nonfinancial assets. We also describe the typical life cycle asset accumulation processes among low, middle, and high-income families which—though varying dramatically by level—are quite similar. Finally, we use household balance sheets to describe how financial vulnerability has changed over time.
    Keywords: Distribution of wealth ; Household finance ; Household wealth
    Date: 2019–09–20
  17. By: Grillitsch, Markus (Lund University); Asheim, Bjørn (University of Stavanger); Nielsen, Hjalti (Lund University)
    Abstract: Agency is concerned with the ways and the extent to which individuals, groups of individuals and organisations shape regional development within and beyond the corset of historically developed pathways. Linking the time horizon of agency to the exploration-exploitation trade-off in regional development and the recent literature on industrial path development, we argue that agency becomes more powerful with a long-term perspective. In the long-run knowledge, networks, and institutions can be moulded in a strategic manner, whereas in the short-term these are highly rigid. We illustrate our arguments with an in-depth case study of a labour market in Western Norway, which, over the past 20 years, was subject to two crises and one remarkable growth phase. We show that long-term agency with a focus on innovation shaped the development opportunities and identity of the region. Conversely, short-term agency was mainly about exploiting existing opportunities, often associated with entrepreneurship. The unintended consequence of short-term agency was an increasing vulnerability of the regional economy to changes in demand. This has far-reaching policy implications because short-term pressures and policy cycles often undermine long-term perspectives.
    Keywords: Change agency; exploration exploitation; new industrial path development; regional development; innovation
    JEL: O18 O30 P48 R11 R58
    Date: 2019–11–13
  18. By: Quarles, Randal K. (Board of Governors of the Federal Reserve System (U.S.))
    Date: 2019–10–03
  19. By: Jihong Lee; Hyunkyeong Lim
    Abstract: Since the 1980s, the US has experienced a surge in patenting and R&D. To better understand the phenomena, we explore the evolution of the mar- ket value of knowledge capital with a novel firm-level dataset. While the importance of R&D has steadily declined, the market value of patents made a large and sustained gain in the new millennium. An additional patent per million dollars of R&D improves firm value by 11% in the latest decade compared to 3% three decades ago. The increased patent rents are driven largely by young firms, suggesting a positive role of the US patent system.
    Keywords: Innovation; ?rm value; patent; R&D
    JEL: O31 O34 O38 G30
    Date: 2019–01
  20. By: Jacob B. Madsen (Business School, University of Western Australia); Peter E. Robertson (Business School, University of Western Australia); Longfeng Ye (RMIT University)
    Keywords: Economic Growth, Economic Development, Convergence, Technological Progress, Malthusian Trap
    JEL: O4 O47 O1 N00
    Date: 2019
  21. By: Ethan Kaplan; Fernando Saltiel; Sergio S. Urzúa
    Abstract: This paper assesses if voting for democracy affects long-term electoral participation. We study the effects of participating in Chile's 1988 plebiscite, which determined whether democracy would be reinstated after a 15-year long military dictatorship. Taking advantage of individual-level voting data for upwards of 13 million Chileans, we implement an age-based RD design comparing long run registration and turnout rates across marginally eligible and ineligible individuals. We find that Plebiscite eligibility (participation) significantly increased electoral turnout three decades later, reaching 1.8 (3.3) percentage points in the 2017 Presidential election. These effects are robust to different specifications and distinctive to the 1988 referendum. We discuss potential mechanisms concluding that the scale of initial mobilization explains the estimated effects. We find that plebiscite eligibility induced a sizable share of less educated voters to register to vote compared to eligibles in other upstream elections. Since less educated voters tended to support Chile's governing left-wing coalition, we argue that the plebiscite contributed to the emergence of one party rule the twenty years following democratization.
    JEL: C21 D72 N46
    Date: 2019–11

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