nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2019‒12‒09
48 papers chosen by

  1. Produire un fait scientifique: Beveridge et le Comité international d'histoire des prix By Demade, Julien
  2. Towards an unstable hook : the evolution of stock market integration since 1913 By Antoine Parent; Cécile Bastidon; Michael D. Bordo; Marc Weidenmier
  3. Climate and the economy in India, 1850-2000 By Roy, Tirthankar
  4. ‘All little girls, the bad luck!’ Sex ratios and gender discrimination in 19th-century Greece By Francisco J. Beltrán Tapia; Michail Raftakis
  5. Journal of the History of Economic Thought Preprints - Eugenics and Socialist Thought in the Progressive Era: The Case of James Medbery Mackaye By Foresti, Tiziana
  6. Taming the gobal financial cycle: Central banks and the sterilization of capital flows in the first era of globalization By Bazot, Guillaume; Monnet, Eric; Morys, Matthias
  7. How The Legacy of Slavery Has Survived: A Mechanism through Labor Market Institutions and Human Capital By Jung, Yeonha
  8. Gender Gaps in Education By Bertocchi, Graziella; Bozzano, Monica
  9. Journal of the History of Economic Thought Preprints - The Environmental Turn in Natural Resource Economics: John Krutilla and "Conservation Reconsidered" By Banzhaf, H. Spencer
  10. Journal of the History of Economic Thought Preprints - Keynes, Mill, and Say’s Law: A Comment on Roy Grieve’s Mistaken Criticisms of Mill By Ahiakpor, James C.W.
  11. Journal of the History of Economic Thought Preprints - Limits to Arbitrage and Interest Rates: A Debate Between Keynes, Hawtrey and Hicks By BRILLANT, Lucy
  13. Across the sea to Ireland: Return Atlantic migration before the First World War By Fernihough, Alan; Ó Gráda, Cormac
  14. Journal of the History of Economic Thought Preprints - "Keynes, Mill and Say's Law: A Comment on Professor Ahiakpor's Mistaken Defence of Mill" By Grieve, Roy H
  15. Media competition, information provision and political participation:Evidence from French local newspapers and elections, 1944–2014 By Julia Cage
  16. Journal of the History of Economic Thought Preprints - Hawtrey, Austerity, and the "Treasury View," 1918-25 By mattei, clara
  17. A woman’s touch? Female migration and economic development in the United States By Berlepsch, Viola; Rodríguez-Pose, Andrés; Lee, Neil
  18. Journal of the History of Economic Thought Preprints - Review of ​Karl Polanyi: A Life on the Left​ By Schumacher, Reinhard
  19. The transformation of economic analysis at the Federal Reserve during the 1960s By Acosta, Juan; Cherrier, Beatrice
  20. Coping with Chronic Warfare. The Athenian Experience By Lyttkens, Carl Hampus; Gerding, Henrik
  21. Historical Replication Preserves Cultural Heritage By Bruno S. Frey; Andre Briviba
  22. Educación superior y crecimiento económico en Colombia (1971-2016): una relación de cointegración. By Baron Ortegon, Brayan Alexander
  23. Embedded cohesion: Social bases of urban public goods distribution By Bradlow, Benjamin H.
  24. Keynes Between the Classics and Sraffa: on the Issue of the Numéraire By M. Magnani
  25. Journal of the History of Economic Thought Preprints - Sir James Steuart on the Origins of Commercial Nations By Menudo, José M.
  26. “Journal of the History of Economic Thought Preprints - The Contribution of Robert Torrens to Ricardo’s Theory of Natural Wage” By Rosell, Olivier
  27. Journal of the History of Economic Thought Preprints - Keynes, Public Debt and the Complex of Interest Rates By Aspromourgos, Anthony
  28. Cointegration of Economic growth and External balance in Colombia: 1963-2016 By Baron Ortegon, Brayan Alexander
  29. St. Louis's "Urban Prairie": Vacant Land and the Potential for Revitalization By Prener, Chris; Braswell, Taylor; Monti, Daniel J.
  30. The Legacy of King Cotton: Agricultural Patterns and the Quality of Structural Change By Jung, Yeonha
  31. American geography of opportunity reveals European origins By Berger, Thor; Engzell, Per
  32. Social innovation in community energy in Europe: a review of the evidence By Hewitt, Richard J; Bradley, Nicholas; Compagnucci, Andrea Baggio; Barlagne, Carla; Ceglarz, Andrzej; Cremades, Roger; McKeen, Margaret; Otto, Ilona M.; Slee, Richard William
  33. Trade and Catching Up to the Industrial Leader By Juan Carlos Conesa; Matthew J. Delventhal; Pau S. Pujolas; Gajendran Raveendranathan
  34. Voting contagion: Modeling and analysis of a century of U.S. presidential elections By Braha, Dan; de Aguiar, Marcus A. M.
  35. The Gender Gap in Wages over the Life Course: Evidence from a British Cohort Born in 1958 By Joshi, Heather; Bryson, Alex; Wilkinson, David; Ward, Kelly
  36. Losing the thread: a response to Robert Allen By Humphries, Jane; Schneider, Benjamin
  37. Journal of History of Economic Thought Preprints- Ricardo and Ricardians on the Order of Culivation By , BIDARD
  38. Visualizing demographic evolution using geographically inconsistent census data By Dias, Fabio; Silver, Daniel
  39. Journal of the History of Economic Thought Preprints - Antonio De Viti De Marco, the principle of minimum means, and political competition By Fossati, Amedeo; Montefiori, Marcello
  40. A Happy Choice: Wellbeing as the Goal of Government By Frijters, Paul; Clark, Andrew E.; Krekel, Christian; Layard, Richard
  41. American Gothic: How Chicago Economics Distorts `Consumer Welfare` in Antitrust By Mark Glick
  42. The Origins of Common Identity: Evidence from Alsace-Lorraine By Sirus Dehdari; Kai Gehring
  43. The Hoabinhian of Southeast Asia and its Relationship to Regional Pleistocene Lithic Technologies By Marwick, Ben
  44. The long-term causal effect of U.S. bombing missions on economic development: Evidence from the Ho Chi Minh Trail and Xieng Khouang Province in Lao P.D.R. By Takahiro Yamada; Hiroyuki Yamada
  45. The ordinary business of macroeconometric modeling: working on the Fed-MIT-Penn model (1964-1974) By Cherrier, Beatrice; Backhouse, Roger
  46. The Opportunity Cost of the Islamic Revolution and War for Iran By Mohammad Reza Farzanegan
  47. Market-Based Financing for Small Corporations during Early Industrialisation: The Case of Salt Corporations in Japan, 1880s-1910s By Kiyotaka Maeda
  48. Corporate Scandals and Regulation By Luzi Hail; Ahmed Tahoun; Clare Wang

  1. By: Demade, Julien
    Abstract: This book tells the story of a largely forgotten enterprise: that of the International Scientific Committee on Price History. If this endeavour can nevertheless still be of interest today, it is not only because failures offer insights into social dynamics as well as successes do ; nor is it solely because we find, gathered around this failed enquiry, a slew of very famous names, and names indeed which one would not expect to stumble upon in this context – there is Beveridge and Kautsky, Bloch and Malinowski. First and foremost, it is because the object of this enquiry offers a rare opportunity to bridge the divide between national scientific traditions as well as between disciplines – such as history and economy, or epistemology and the sociology of scientific knowledge. Thus, the initially narrow scope of this study opens up to a vast field of enquiry, as the object of this study shifts to determining how a particular class of objects – those deemed scientific – are produced, and how epistemological, theoretical and institutional issues interact in this process. Indeed, the conversion of past prices (as they appear in the archives) into historical prices taken as scientific facts, raises diverse and crucial questions : on the respective standing of social and natural sciences, about monetarism, or on the transition from the academic field of the Humboldtian scholar to that of big science. Viewed through the prism of this particular case, these issues will appear in a new light for the simple reason that, in the case at hand, fields of enquiry which are ordinarily examined independently are found to be tightly interrelated.
    Keywords: history of prices;William Beveridge;international scientifique committee on price history;Thorold Rogers; Georges d'Avenel;
    JEL: B15 B16 B23 B25 B31 N01
    Date: 2018
  2. By: Antoine Parent (Observatoire français des conjonctures économiques); Cécile Bastidon (Université de Toulon et du Var (UTLN)); Michael D. Bordo (Rutgers Department of Economics (Rutgers University)); Marc Weidenmier (Chapman university)
    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.
    Keywords: Equity market ; Stock market; Market integration
    Date: 2019–08
  3. By: Roy, Tirthankar
    Abstract: This article says that climate shaped the long-term pattern of economic change in India and that the climatically conditioned economic change generated a distinct set of environmental consequences in the region. From the nineteenth century, political and economic processes that made scarce and controlled water resources more accessible to more people, enhanced welfare, enabled more food production and sustained urbanization. The same processes also raised water stress. These propositions carry lessons for comparative economic history and the conduct of discourses on sustainability in the present times.
    Keywords: caste; climate; environmental history; hydrology; India; inequality; monsoon; poverty; property rights; seasonality; South Asia
    JEL: N50 N55 O13 P48 Q00
    Date: 2019–11
  4. By: Francisco J. Beltrán Tapia (Norwegian University of Science and Technology); Michail Raftakis (Newcastle University)
    Abstract: Based on anecdotal evidence on girls’ inferior status and the analysis of sex ratios, this article argues that son preference resulted in gender discriminatory practices that unduly increased female mortality rates in infancy and childhood in Greece during the late-19th and early-20th century. The relative number of boys and girls was extremely high early in life and female under-registration alone is not likely to explain this result. Female infanticide and/or the mortal neglect of infant girls played therefore a more important role than previously acknowledged. Likewise, sex ratios increased as children grew older, thus suggesting that parents continued to treat boys and girls differently throughout childhood. Lastly, the analysis of province-level information shows that economic and social conditions influenced how the value of girls was perceived in different contexts, thus aggravating or mitigating female excess mortality.
    Keywords: Sex ratios, Infant and child mortality, Gender discrimination, Health
    JEL: I14 I15 J13 J16 N33
    Date: 2019–11
  5. By: Foresti, Tiziana
    Abstract: The article proposes an analysis of James MacKaye’s socialism and its relation to eugenics in the early years of the Progressive Era. In this respect, our work, showing as it does the pervasiveness of eugenics independently from traditional ideological boundaries, represents a further contribution to the Eugenics in the Progressive era debate inaugurated by Thomas Leonard’s Illiberal Reformers: Race, Eugenics, and American Economics in the Progressive Era (2016). At the same time, this paper contributes to the strand of literature that deals with the economic elaboration of the idea of differential capacities for happiness, of which the works of Levy and Peart represent the most recent examples. MacKaye is almost an unknown character today, but in his day he was quite influential and his peculiar brand of socialism deserves some critical attention.
    Date: 2018–03–25
  6. By: Bazot, Guillaume; Monnet, Eric; Morys, Matthias
    Abstract: Are central banks able to isolate their domestic economy by offsetting the effects of foreign capital flows? We provide an answer for the First Age of Globalization based on an exceptionally detailed and standardized database of monthly balance sheets of all central banks in the world (i.e. 21) over 1891-1913. Investigating the impact of a global interest rate shock on the exchange-rate, the interest rate and the central bank balance sheet, we find that not a single country played by the 'rules of the game.' Core countries fully sterilized capital flows, while peripheral countries also relied on convertibility restrictions to avoid reserve losses. In line with the predictions of the trilemma, the exchange rate absorbed the shock fully in countries off the gold standard (floating exchange rate): the central bank's ba - lance sheet and interest rate were not affected. In contrast, in the United States, a gold standard country without a central bank, the reaction of the money mar - ket rate was three times stronger than that of interest rates in countries with a central bank. Central banks' balance sheets stood as a buffer between domestic economy and global financial markets.
    JEL: N10 N20 E42 E50 F30 F44
    Date: 2019
  7. By: Jung, Yeonha
    Abstract: In spite of sizable qualitative literature on the long-run legacy of slavery, its robust evidence and convincing mechanism have not been established. This research evaluates the legacy of slavery on long-run development and its detailed mechanism which consists of two key factors, labor market institutions and human capital structure. Using county-level data of the U.S. South and exploiting exogenous variation in ecological conditions, I show that slavery has had persistent negative impact on economic development through the human capital structure. To explain the link between slavery and human capital, I find from complete count census data in 1940 that the legacy of slavery impeded integration of black workers into the competitive labor market which accordingly reduced the incentives of blacks to invest in human capital. In addition, evidence from the progressive Era along the border counties shows that the legacy of slavery on the labor market was operated through selective enforcement of labor market regulations. Lastly, I present the roles of racial wage discrimination and selective migration which reinforced persistence of the mechanism.
    Date: 2018–02–23
  8. By: Bertocchi, Graziella (University of Modena and Reggio Emilia); Bozzano, Monica (University of Pavia)
    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.
    Keywords: education, gender, gap
    JEL: J1 N3 O1
    Date: 2019–10
  9. By: Banzhaf, H. Spencer
    Abstract: Environmentalism in the United States historically has been divided into its utilitarian and preservationist impulses, represented by Gifford Pinchot and John Muir, respectively. Pinchot advocated conservation of natural resources to be used for human purposes; Muir advocated protection from humans, for nature's own sake. In the first half of the 20th century, natural re-source economics was firmly in Pinchot's side of that schism. That position began to change as the post-war environmental movement gained momentum. In particular, John Krutilla, an economist at Resources for the Future, pushed economics to the point that it could embrace Muir's vision as well as Pinchot's. Krutilla argued that if humans preferred a preserved state to a developed one, then such preferences were every bit as "economic." Either way, there were opportunity costs and an economic choice to be made.
    Date: 2018–05–21
  10. By: Ahiakpor, James C.W.
    Abstract: Employing different meanings of classical concepts of saving, capital, investment, and money, and incorrectly attributing the assumption of full employment of labor and a world of certainty to classical analysis, Keynes (1936) faulted Say’s Law as irrelevant to the real world. Roy Grieve (2016) ignores previous clarifications of Keynes’s misrepresentations and misunderstandings of Mill’s restatements of the law. He employs similar misrepresentations and misunderstandings of Mill’s explanations as Keynes. His model of Mill’s analysis is incapable of explaining how variations in relative prices, the value of money, and interest rates coordinate production, consumption and savings decisions in a monetary economy.
    Date: 2017–11–29
  11. By: BRILLANT, Lucy
    Abstract: This paper deals with a debate between Hawtrey, Hicks and Keynes concerning the capacity of the central bank to influence the short-term and the long-term rates of interest. Both Hawtrey and Keynes considered the central bank’s ability to influence short-term rates of interest. However, they do not put the same emphasis on the study of the long-term rates of interest. According to Keynes, long-term rates are influenced by future expected short-term rates (1930, 1936), whereas for Hawtrey (1932, 1937, 1938), long-term rates are more dependent on the business cycle. Short-term rates do not have much effect on long-term rates according to Hawtrey. In 1939, Hicks enters the controversy, giving credit to both Hawtrey’s and Keynes’s theories, and also introducing limits to the operations of arbitrage. He thus presented a nuanced view.
    Date: 2018–04–11
  12. By: Sutch, Richard
    Abstract: John Maynard Keynes’s analysis of the Great Depression has strong parallels to recent theorizing about the post-2008 Great Recession. There are also remarkable similarities between the two historical episodes: the collapse of demand for new fixed investment, the role of the zero-lower-bound liquidity trap in hampering conventional monetary policy, the multi-year period of near-zero short-term rates, and the protracted period of subnormal prosperity. A major difference between then and now that monetary authorities in the recent situation actively pursued an unconventional policy with massive purchases of long-term securities. Keynes couldn’t convince authorities of his era to pursue such a plan, but it was precisely the monetary policy he advocated for a depressed economy stuck at the zero lower bound of nominal interest rates.
    Date: 2018–03–13
  13. By: Fernihough, Alan; Ó Gráda, Cormac
    Abstract: Are return migrants 'losers' who fail to adapt to the challenges of the host economy, and thereby exacerbate the brain drain linked to emigration? Or are they 'winners' whose return enhances the human and physical capital of the home country? These questions are the subject of a burgeoning literature. This paper analyze a new database culled from the 1911 Irish population census to address these issues for returnees to Ireland from North America more than a century ago. The evidence suggests that those who returned had the edge over the population as a whole in terms of human capital, if not also over those who remained abroad.
    Keywords: migration,brain gain,economic history,Ireland
    JEL: N N33 J61
    Date: 2019
  14. By: Grieve, Roy H
    Abstract: This note is a reply to James Ahiakpor's critical blast against my 2016 paper on the subject of Keynes, Mill and Say's Law. Professor Ahiakpor has apparently missed the point I was trying to make: his slings and arrows hit no targets.
    Date: 2018–01–03
  15. By: Julia Cage (Département d'économie)
    Abstract: This paper investigates the impact of increased media competition on the quantity and quality of news provided and, ultimately, on political participation. I build a new county-level panel dataset of local newspaper presence, newspapers' number of journalists, costs and revenues and political turnout in France, from 1944 to 2014. I estimate the effect of newspaper entry by comparing counties that experience entry to similar counties in the same years that do not. Both sets of counties exhibit similar trends prior to entry, but those with entry experience substantial declines in the average number of journalists. An increased number of newspapers is also associated with fewer articles and less hard news provision. Newspaper entry, and the associated decline in information provision, is ultimately found to decrease voter turnout at local elections. Exploiting the long time span covered by my data, I discuss a number of mechanisms that may drive these empirical findings. First, I examine the relationship between increased competition and media capture in the aftermath of WW2, when newspapers were biased and the advertising market was underdeveloped. I then show that in the recent period the effects are stronger in counties with more homogeneous populations, as predicted by a vertical product differentiation framework, whereas there is little impact in counties with more heterogeneous populations.
    Keywords: Media Competition; Newspaper Content; Size of the newsroom; Hard News; Soft News; Political Participation; Media Capture; Governance
    JEL: D72 L11 L13 L82
    Date: 2019–11
  16. By: mattei, clara
    Abstract: R. G. Hawtrey was not a man of the backwaters. Through the parallel study of Treasury files and Hawtrey's scholarly publications, this work reveals his direct influence upon the most commanding minds of the Treasury and the Bank of England, the two institutions that, after WWI, shared primary responsibility over the British austerity agenda. After the war, Hawtrey advocated drastic budgetary and monetary rigor in the name of price stabilization. From 1922, Hawtrey admitted the need to decrease the bank rate; yet he remained an adamant supporter of the Gold Standard, insisting on its maintenance even if it required further monetary revaluation. Hawtrey's policy prescriptions stemmed directly from his economic model. The "crowding out argument," the centrality of credit and of savings, together with the operational priority of technocratic institutions, were essential theoretical underpinnings of Hawtrey's agenda: implementing the so-called "Treasury view."
    Date: 2018–07–13
  17. By: Berlepsch, Viola; Rodríguez-Pose, Andrés; Lee, Neil
    Abstract: Does the economic effect of immigrant women differ from that of immigrants in general? This paper examines if gender has influenced the short- and long-term economic impact of mass migration to the US, using Census microdata from 1880 and 1910. By means of ordinary least squares and instrumental variable estimations, the analysis shows that a greater concentration of immigrant women is significantly associated with lower levels of economic development in US counties. However, immigrant women also shaped economic development positively, albeit indirectly via their children. Communities with more children born to foreign mothers and that successfully managed to integrate female immigrants experienced greater economic growth than those dominated by children of foreign-born fathers or American-born parents.
    Keywords: gender; migration; economic growth; development; counties; US
    JEL: F22 J16 J61 O15 R23
    Date: 2018–05–21
  18. By: Schumacher, Reinhard
    Abstract: A review of Gareth Dale's "Karl Polanyi: A Life on the Left​"
    Date: 2017–11–21
  19. By: Acosta, Juan; Cherrier, Beatrice
    Abstract: In this paper, we build on data on Fed officials, oral history repositories and hitherto under-researched archival sources to unpack the torturous path toward crafting an institutional and intellectual space for postwar economic analysis within the Fed. We show that growing attention to new macroeconomic research was a reaction to both mounting external criticisms against the Fed’s decision-making process and a process internal to the discipline whereby institutionalism was displaced by neoclassical theory and econometrics. We argue that the rise of the number of PhD economists working at the Fed is a symptom rather than a cause of this transformation. Key to our story are a handful of economists from the Board of Governor’s Division of Research and Statistics (DRS) who paradoxically did not always held a PhD, but envisioned their role as going beyond mere data accumulation and got involved into large-scale macroeconometric model building. We conclude that the divide between PhD and non-PhD economists may not be fully relevant to understand both the shift in the type of economics practiced at the Fed and the uses of this knowledge in the decision making-process. Equally important was the rift between different styles of economic analysis.
    Date: 2018–09–30
  20. By: Lyttkens, Carl Hampus (Department of Economics, Lund University); Gerding, Henrik (Department of Archaeology and Ancient History, Lund University, Sweden)
    Abstract: In Classical Athens, being at war was much more common than peace. The military expenditures were correspondingly large. The real enigmatic issue, however, is not financial but where they found the manpower needed for this policy. The number of warships (triremes) was so great that there is no way that the citizen could have dominated in the crews. The main source is likely the non-citizen, free population of Attica. Slaves, one the other hand, would have been very popular as rowers during the final phase of the Peloponnesian war, but not necessarily before. The manpower losses in connection with naval conflicts must have had a significant impact on Athenian society in several ways. We discuss three examples: the switch from ostracism to the graphe paranomon, the new law on citizenship under Perikles, and why the Athenian Assembly put the victorious generals on trial after the victory at Arginoussai.
    Keywords: Ancient Athens; slaves; rowers; war; demographic change
    JEL: N13 N43 N93
    Date: 2019–11–26
  21. By: Bruno S. Frey; Andre Briviba
    Abstract: We propose a radically new approach to deal with major negative effects resulting from overtourism. The major attractions of heavily visited historical sites are to be identically replicated in a new location emphasizing a vivid historical experience supported by modern technology. In the near future, an enormous increase in the number of tourists is predicted due to low flight prices and a great increase of cruise ship passengers. The local populations will be exposed to strong negative external effects, the cultural site will be damaged, and the environment polluted. Under our proposal, tourists will no longer visit the historical sites but will be exposed to Historical Replicas (HIRE) with more intense historical experience achieved through modern technology (such as holograms). Our proposal provides an alternative to today’s overcrowded historical sites doomed to destruction by overtourism.
    Keywords: Historical Replication; overtourism; overcrowding; cities of culture; impacts of tourism
    Date: 2019–12
  22. By: Baron Ortegon, Brayan Alexander
    Abstract: This article analyzes the relation between GDP per capita (CPIBpc) and access to tertiary education, seen from the perspective of growth rate of the number of enrollments (TCMes) in higher education in Colombia for the period (1971-2016). By using a VEC model and assuming everything else constant, it is concluded that TCMes Granger caused the Colombian GDP per capita and vice-versa, therefore, the existence of a long run relation between both variables is verified. This result helps to explain the dynamics of Colombian economic growth per capita of the last forty-five years and the impact of the accumulation of human capital on it.
    Date: 2018–08–07
  23. By: Bradlow, Benjamin H.
    Abstract: Theories of urban political economy under globalization predict convergence across cities: growing inequalities of income, wealth, and access to public goods, and the political dominance of business elites. However, São Paulo, Brazil, witnessed surprisingly effective redistribution of residential public goods — housing and sanitation — between 1989 and 2016. I use original interviews and archival research for a comparative-historical analysis of institutional changes in São Paulo’s governance of housing and sanitation. I argue that sequential configurations of a) “embeddedness” of the local state in civil society and b) the “cohesion” of the institutional sphere of the local state, explain why and when cities generate the coordinating capacity to distribute public goods. I further illustrate how these configurations can explain variation in urban governing regimes across the world.
    Date: 2018–08–24
  24. By: M. Magnani
    Abstract: The paper sketches a coherent history of the choice of the measure standard from Adam Smith’s Wealth of Nations to Sraffa’s Production of Commodities. As neither the Smithian labour commanded unit nor the Ricardian-Marxian labour embodied one provide a general solution to the dilemma concerning the finding of an invariable standard, the author shows the shortcomings of both methods in an analytically rigorous way. Several years later, the largely unacknowledged fourth chapter of the General Theory once again tackles the matter of measuring aggregate values adopting a net approach and introducing an ad hoc unit. Concerned by the inherent difficulties of the operation, Keynes starts from an harsh criticism towards Pigou’s notion of national dividend to end up asking himself a number of questions that makes him partially lean towards the later Sraffian approach as presented in Production of Commodities, though his stance is not fully compliant either with the premises or the aims of Piero Sraffa’s theoretical framework. In the final part, a general solution based on net labour productivity is considered.
    JEL: B12 B14 B24 B51
    Date: 2019–11
  25. By: Menudo, José M.
    Abstract: This paper examines James Steuart’s explanation of the emergence of commercial nations. Unlike other Scottish thinkers of the time, Steuart argues that artifice is necessary for the rise of commercial societies. He uses the term “artificial” to refer to a devised process, one that is an alternative to the supposedly natural process arising from innate propensities. The system of trade and commerce is an “artifice” created by merchants to obtain benefits, and established by the sovereign, for his ostentation and personal prestige, until it became generalized as a commercial nation. Steuart's explanation of the emergence of commercial nations accounts for how individuals become dependent on and subordinate to the public market. Finally, this paper concludes that Steuart’s Political Œconomy promotes a science of the artificial that seeks to understand the functioning of non-natural mechanisms and to create instruments that the statesman adapts to the needs and objectives of individuals
    Date: 2018–02–09
  26. By: Rosell, Olivier
    Abstract: This paper reconsiders the anteriority of Torrens’ theory of natural wage to that of Ricardo. Ricardo was influenced by Torrens’ thinking when writing the chapter on “Wages” of the Principles. For many historians of economic thought, this influence is limited to Torrens’ focus on the sociocultural aspect of necessity goods, which determine the natural price of labor. While this interpretation is consistent with that of Ricardo, we argue that the anteriority of Torrens to Ricardo more generally focuses on the method used by the latter to justify the indexation of money wages on the money price of subsistence goods. Finally, this paper shows that the tribute paid to Torrens by Ricardo paradoxically explains the misunderstanding of his theory by posterity.
    Date: 2018–01–03
  27. By: Aspromourgos, Anthony
    Abstract: John Maynard Keynes consistently offered qualified endorsement of Abba Lerner’s “functional finance” doctrine – the qualifications particularly turning on Keynes’s attentiveness to policy management of the psychology of the debt market. This article examines Keynes’s understanding of the possible influence of public debt on interest rates, from 1930 forward. With the multiplier a mechanism whereby debt-financed public investment generates matching private saving (net of private investment) plus public saving, it becomes possible for Keynes to conclude that increasing public debt need not place upward pressure on the level of interest rates, so long as policy can successfully manage the psychology of the debt market. This particularly concerns long interest rates and hence, the term structure of rates. His theory of the term structure enables Keynes’s conviction that policy can manage and shape long rates. The conclusion considers also whether Keynes’s caution concerning public debt and interest rates retains relevance today.
    Date: 2018–04–04
  28. By: Baron Ortegon, Brayan Alexander
    Abstract: In this paper is analyzed the relation between GDP growth and External balance in Colombia for the study period (1963-2016) by using a VECM. Supposing everything else unchanged, we conclude that Colombian external balance granger caused GDP growth and there was indeed a long run relation between both variables. This outcome helps to explain the Colombian GDP growth dynamics over the last fifty years and the impact of trade policy on economic growth.
    Date: 2018–04–07
  29. By: Prener, Chris; Braswell, Taylor; Monti, Daniel J.
    Abstract: As part of a larger project to understand the relative health and disorder of St. Louis City neighborhoods, this paper presents estimates of the number of vacant parcels in the city. These estimates, which are considerably higher than previously published ones, are heavily concentrated in the city's disinvested and segregated North side. We term this heavy concentration of vacancy as "urban prairie". After accounting for other factors as well as possible sources of statistical error, we identify both long-term population loss since 1970 and the proportion of African American residents as significant covariates associated with the amount of urban prairie land per neighborhood. These high levels of concentrated vacancy lead us to critique the City's existing approaches as being too limited in scope, and to suggest a range of possibilities for revitalizing portions of North St. Louis while allowing prairie land to continue to exist in others.
    Date: 2018–05–04
  30. By: Jung, Yeonha
    Abstract: Agricultural patterns could have diverse impact on long-run economic development. In the context of the US South, this paper examines the legacy of cotton on economic development focusing on a novel channel of structural change. Exploiting variation in cotton production along with agro-climatic conditions, I show that the legacy of cotton has impeded local economic development exclusively as of the mid-twentieth century. The structural break is found to be a consequence of cotton mechanization. Evidence from exogenous variation in the boll weevil infestation shows that cotton farming was strongly dependent on tenant farmers with little human capital. Following cotton mechanization, cotton tenants were largely displaced and absorbed by the manufacturing sector. I then find that the inflow of cotton tenants has reduced labor productivity in the manufacturing sector. Beyond the composition effect, the negative impact on manufacturing productivity has persisted in the long-run through demand-side. Employing an index of state-level policy environment, I exploit within-state variation to show that the legacy of cotton has induced unskill-biased technical change in manufacturing.
    Date: 2018–05–11
  31. By: Berger, Thor; Engzell, Per
    Abstract: A large literature documents how intergenerational mobility—the degree to which (dis)advantage is passed on from parents to children—varies across and within countries. Less is known about the origin or persistence of such differences. We show that U.S. areas populated by descendants to European immigrants have similar levels of income equality and mobility as the countries their forebears came from: highest in areas dominated by descendants to Scandinavian and German immigrants, lower in places with French or Italian heritage, and lower still in areas with British roots. Similar variation in mobility is found for the black population and when analyzing causal place effects, suggesting that mobility differences arise at the community level and extend beyond descendants of European immigrant groups. Our findings indicate that the geography of U.S. opportunity may have deeper historical roots than previously recognized.
    Date: 2018–06–12
  32. By: Hewitt, Richard J; Bradley, Nicholas; Compagnucci, Andrea Baggio; Barlagne, Carla; Ceglarz, Andrzej; Cremades, Roger; McKeen, Margaret; Otto, Ilona M.; Slee, Richard William
    Abstract: Citizen-driven Renewable Energy (RE) projects of various kinds, known collectively as community energy (CE), have an important part to play in the worldwide transition to cleaner energy systems. On the basis of evidence from literature review and an exploratory survey of 8 European countries, we investigate European CE through the lens of Social Innovation (SI). Broadly, three main phases of SI in CE can be identified. The environmental movements of the 1960s and the “oil shocks” of the 1970s provided the catalyst for a series of innovative societal responses around energy and self-sufficiency. These first wave CE innovations included cooperatives (e.g. in Sweden and Germany) who financed and managed risks for RE developments in the absence of support from governments and banks. A second wave of SI relates to the mainstreaming of RE and associated government support mechanisms. In this phase, with some important exceptions, successful CE initiatives were mainly confined to those countries where they were already embedded as innovators in the previous phase. In former communist countries of central and eastern Europe (Poland, former East Germany) CE development was hindered by societal mistrust of cooperative movements for their association with the state socialism of the past. In Scotland, UK, strong public support was given to CE, and a new form, the Community Development Trust, emerged and was later replicated elsewhere in the UK. The third phase of CE innovation relates to the societal response to the Great Recession that began in 2007-8 and lasted most of the subsequent decade. Though climate change had become a pressing concern, CE initiatives formed around this time were also strongly focused around democratization of energy and citizen empowerment in the context of rising energy prices, a weak economy, and a production and supply system dominated by excessively powerful multinational energy firms. CE initiatives today are more diverse than at any time previously, and though seriously constrained by mainstream energy policy in most countries, are likely to continue to act as incubators for pioneering initiatives addressing virtually all aspects of energy.
    Date: 2018–10–07
  33. By: Juan Carlos Conesa; Matthew J. Delventhal; Pau S. Pujolas; Gajendran Raveendranathan
    Abstract: We study the impact of trade on a country catching up to the industrial leader. We calibrate our dynamic, two-country model to Spain and UK from 1850 to 2000, accounting for the inter-war trade collapse (IWTC) and the subsequent catch up by Spain. In our model, the effects of trade disruptions are stronger with more distance to the leader and more openness. A collapse today (less distance, more openness) similar to the IWTC (more distance, less openness) decreases the capital stock thrice as much (12% instead of 4%). Importantly, traded varieties would fall today but increased during the IWTC.
    Keywords: Structural Transformation; International Trade
    JEL: F11 F12 N10 N60
    Date: 2019–10
  34. By: Braha, Dan; de Aguiar, Marcus A. M.
    Abstract: Social influence plays an important role in human behavior and decisions. Sources of influence can be divided as external, which are independent of social context, or as originating from peers, such as family and friends. An important question is how to disentangle the social contagion by peers from external influences. While a variety of experimental and observational studies provided insight into this problem, identifying the extent of contagion based on large-scale observational data with an unknown network structure remains largely unexplored. By bridging the gap between the large-scale complex systems perspective of collective human dynamics and the detailed approach of social sciences, we present a parsimonious model of social influence, and apply it to a central topic in political science--elections and voting behavior. We provide an analytical expression of the county vote-share distribution, which is in excellent agreement with almost a century of observed U.S. presidential election data. Analyzing the social influence topography over this period reveals an abrupt phase transition from low to high levels of social contagion, and robust differences among regions. These results suggest that social contagion effects are becoming more instrumental in shaping large-scale collective political behavior, with implications on democratic electoral processes and policies.
    Date: 2018–01–02
  35. By: Joshi, Heather (University College London); Bryson, Alex (University College London); Wilkinson, David (University College London); Ward, Kelly (University College London)
    Abstract: Using data tracking all those born in a single week in Great Britain in 1958 through to their mid-50s we observe an inverse U-shaped gender wage gap (GWG) over their life- course: an initial gap in early adulthood widened substantially during childrearing years, affecting earnings in full-time and part-time jobs. In our descriptive approach, education related differences are minor. Gender differences in work experience are the biggest contributor to that part of the gender wage gap we can explain in our models. Family formation primarily affects the GWG through its impact on work experience. Family composition is similar for male and female workers but attracts opposite wage premia. Not all of the GWG however is linked to family formation. There was a sizeable GWG on labour market entry and there are some otherwise unexplained gaps between the pay of men and women who do not become parents.
    Keywords: family formation, gender wage gap, work experience, life course, NCDS birth cohort
    JEL: J16 J31
    Date: 2019–10
  36. By: Humphries, Jane; Schneider, Benjamin
    JEL: N0
    Date: 2019–11–06
  37. By: , BIDARD
    Abstract: The Ricardian dynamics are based on the study of the order of cultivation when demand increases. Sraffa criticized Ricardo for having assumed that the incoming method is defined by a natural order and stressed that the law of succession of methods is based on a profitability criterion. Then, in the case of intensive cultivation, the question is whether the incoming method is indeed more productive than the one it replaces. Sraffa’s argument relies on the positivity of rent. However, there is a flaw in his reasoning and a failure of the Ricardian dynamics is possible. Post-Sraffian scholars have misunderstood that construction and have substituted a static approach for it. The critiques they address to Sraffa are better understood by returning to Ricardo and Sraffa's own methodology. Fifty years ago, mathematicians rediscovered Ricardo's approach independently and worked out a powerful algorithm inspired by it.
    Date: 2018–03–14
  38. By: Dias, Fabio; Silver, Daniel
    Abstract: Video Abstract: Census measurements provide reliable demographic data going back centuries. However, their analysis is often hampered by the lack of geographical consistency across time. We propose a visual analytics system that enables the exploration of geographically inconsistent data. Our method also includes incremental developments in the representation, clustering, and visual exploration of census data, allowing an easier understanding of the demographic groups present in a city and their evolution over time. We present the feedback of experts in urban sciences and sociology, along with illustrative scenarios in the USA and Canada.
    Date: 2018–04–01
  39. By: Fossati, Amedeo; Montefiori, Marcello
    Abstract: In contrast to the common maxims for good taxation, De Viti de Marco revolutionized public finance studies by placing collective economic activity within a theoretical framework, and trying to explain concrete fiscal phenomena, such as tax incidence or public debt. The polar cases of cooperative and monopolistic states and the state-factor of production are usually considered a characteristic of such a framework. Here, we remark that De Viti’s theory of the cooperative state appears grounded only on the principles of minimum means and of political competition, and on the assumption that individual income is a proxy of individual consumption of general public services. Thus, it appears that the characteristics might be unessential to the real core of his theoretical framework. Moreover, we claim that his theoretical framework was not actually applied in his explanation of concrete fiscal phenomena. Finally, we remark that he seldom employed marginal tools in his Principî.
    Date: 2018–10–03
  40. By: Frijters, Paul (London School of Economics); Clark, Andrew E. (Paris School of Economics); Krekel, Christian (London School of Economics); Layard, Richard (London School of Economics)
    Abstract: In this article, we lay out the basic case for wellbeing as the goal of government. We briefly review the history of this idea, which goes back to the ancient Greeks and was the acknowledged ideal of the Enlightenment. We then discuss possible measures on which a wellbeing orientation could be based, emphasising the importance of acknowledging the political agency of citizens and thus their own evaluations of their life. We then turn to practicalities and consequences: how would one actually set up wellbeing-oriented decision-making and what difference should we expect from current practice? We end by discussing the current barriers to the adoption of wellbeing as the goal of government, both in terms of what we need to know more about and where the ideological barriers lay.
    Keywords: subjective wellbeing, life satisfaction, public policy, political economy, social welfare
    JEL: I3 A10 H10 H83
    Date: 2019–10
  41. By: Mark Glick (University of Utah)
    Abstract: Since the publication of Robert Bork`s The Antitrust Paradox, lawyers, judges, and many economists have defended `Consumer welfare` (CW) as a standard for decisions about antitrust goals and enforcement priorities. This paper argues that the CW is actually an empty concept and is an inappropriate goal for antitrust. Welfare economists concede that there is no credible measurable link between price and output and human well-being. This means that the concept of CW does not legitimate limited antitrust enforcement, nor does it justify the exclusion of other antitrust goals that require more active enforcement practices. This paper contends that antitrust policy is not welfare based at all, and that if it were, antitrust policy and enforcement would differ significantly from the Chicago School vision. Without the fiction that economists can establish that in the short run lower price and higher output measurably increases welfare more than other goals, recent defenses of the CW standard resolve down to arguments based on unsupported assumptions.
    Keywords: U.S. Consumer Welfare, Goal of Antitrust Law, New Brandeis School, Chicago School of Economics.
    JEL: K21 L40 N12
  42. By: Sirus Dehdari; Kai Gehring
    Abstract: The quasi-exogenous division of the French regions Alsace and Lorraine after the Franco-Prussian War allows us to provide evidence about group identity formation within historically homogeneous regions. We use several measures of stated and revealed preferences at the municipal-level in a geographical regression discontinuity design. More nation-state repression is associated with a strengthening of regional identity in the short, medium, and long run. We explain this in a model and document that the establishment of regionalist organizations is a key mechanism to strengthen identity. A relatively stronger regional compared to national identity is associated with preferences for more regional decision-making.
    Keywords: group identity, nation-building, repression, assimilation, regional identity, border regions, Alsace-Lorraine
    JEL: D91 H70 N40 Z19
    Date: 2019
  43. By: Marwick, Ben
    Abstract: The Hoabinhian is a distinctive Pleistocene stone artefact technology of mainland and island Southeast Asia. Its relationships to key patterns of technological change both at a global scale and in adjacent regions such as East Asia, South Asia and Australia are currently poorly understood. These key patterns are important indicators of evolutionary and demographic change in human prehistory so our understanding of the Hoabinhian may be substantially enhanced by examining these relationships. In this paper I present new evidence of ancient Hoabinhian technology from Northwest Thailand and examine connections between Hoabinhian technology and the innovation of other important Pleistocene technological processes such as radial core geometry. I present some claims about the evolutionary significance of the Hoabinhian and recommend future research priorities.
    Date: 2018–01–05
  44. By: Takahiro Yamada (Policy Research Institute, Ministry of Finance); Hiroyuki Yamada (Faculty of Economics, Keio University)
    Abstract: This study investigates the long-term causal effect of heavy U.S. bombing missions during the Vietnam War on later economic development in Lao P.D.R. The empirical strategy relies on an instrumental variables approach. We exploit the distance between the centroid of village-level administrative boundaries and heavily bombed targets-the Ho Chi Minh Trail in the case of southern Laos and Xieng Khouang province in the case of northern Laos-as an instrument for the intensity of U.S. bombing missions. We use the three rounds of average nightlight strength data (1992, 2005, and 2013), and two rounds of population density data (1990 and 2005) as the outcome variables. The estimation results show no robust effect of U.S. bombing missions on economic development in the long term. Meanwhile, we find that the results do not necessarily support the conditional convergence hypothesis within a country, although this result could be Lao-specific.
    Keywords: Conflict Damage, Economic Development, Conditional Convergence Hypothesis, Lao P.D.R
    JEL: O1 P5 H7
    Date: 2019–11–11
  45. By: Cherrier, Beatrice; Backhouse, Roger
    Abstract: The FMP model exemplifies the Keynesian models later criticized by Lucas, Sargent and others as conceptually flawed. For economists in the 1960s such models were “big science”, posing organizational as well as theoretical and empirical problems. It was part of an even larger industry in which the messiness for which such models were later criticized was endorsed as providing enabling modelers to be guided by data and as offering the flexibility needed to undertake policy analysis and to analyze the consequences of events. Practices that critics considered fatal weaknesses, such as intercept adjustments or fudging, were what clients were what clients paid for as the macroeconometric modeling industry went private.
    Date: 2018–10–15
  46. By: Mohammad Reza Farzanegan (Philipps-Universitaet Marburg)
    Abstract: We estimate the opportunity cost for Iran due to the Islamic revolution and eight years’ war with Iraq (1978/79-1988). We apply the synthetic control method in order to compare Iran with a synthetic Iran and answer this counterfactual question. Our results show that, in total, an average Iranian has lost $34,660 (in constant 2010 US$) from 1978 to 1988. This loss is equivalent to 40% of income per capita, which an Iranian could reach at the absence of revolution and war.
    Keywords: synthetic control method, treatment effect, Iran, war, revolution
    JEL: C23 H56 F51 D74 Q34
    Date: 2019
  47. By: Kiyotaka Maeda (Department of Japanese History, Faculty of Letters, Keio University)
    Abstract: This study investigates how small corporations in rural areas arranged funds and reassesses the role of market-based financing for Japanese small and medium-sized enterprises from the 1880s through the 1910s. Whereas previous studies have focused on the financing of large corporations in urban areas, this paper argues that corporations of various sizes, including small ones in rural areas, arranged their funds from the stock market during Japan's industrialisation. By applying this style of financial arrangement, these corporations expanded their production scales, accelerating the local formation of specialised producing regions and boosting the regional economy.
    Keywords: market-based financing, industrialisation, small and medium-sized enterprises (SMEs), over-the-counter market, salt industry
    JEL: N15 N25 N85
    Date: 2019–10–29
  48. By: Luzi Hail (The Wharton School, University of Pennsylvania); Ahmed Tahoun (London Business School); Clare Wang (Tippie College of Business, University of Iowa)
    Abstract: Are regulatory interventions delayed reactions to market failures or can regulators proactively pre-empt corporate misbehavior? From a public interest view, we would expect `effective` regulation to ex ante mitigate agency conflicts between corporate insiders and outsiders, and prevent corporate misbehavior from occurring or quickly rectify transgressions. However, regulators are also self-interested and may be captured, uninformed, or ideological, and become less effective as a result. In this registered report, we develop a historical time series of corporate (accounting) scandals and (accounting) regulations for a panel of 26 countries from 1800 to 2015. An analysis of the lead-lag relations at both the global and individual country level yields the following insights: (i) Corporate scandals are an antecedent to regulation over long stretches of time, suggesting that regulators are typically less flexible and informed than firms. (ii) Regulation is positively related to the incidence of future scandals, suggesting that regulators are not fully effective, that explicit rules are required to identify scandalous corporate actions, or that new regulations have unintended consequences. (iii) There exist systematic differences in these lead-lag relations across countries and over time suggesting that the effectiveness of regulation is shaped by fundamental country characteristics like market development and legal tradition.
    Keywords: Accounting fraud, Corporate scandals, Capital market regulation, Economics of regulation, Law and finance, International accounting
    JEL: F30 G18 G38 K22 L51 M48 N20
    Date: 2017–12

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.