nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2020‒01‒27
twenty papers chosen by

  2. Antipathy for Heidelberg, sympathy for Freiburg? Vincent Ostrom on Max Weber, Walter Eucken, and the compound history of order By Kolev, Stefan
  3. The rise of coffee in the Brazilian southeast: tariffs and foreign market potential, 1827-40 By Christopher David Absell
  4. New paradigms and old promises: central banks and the market for sovereign debt in the interwar period By Flores Zendejas, Juan; Lopez Soto, David; Sanchez Amador, David
  5. Categorizing and Ranking Graphs in the American Economic Review Over the Last Century By Schwabish, Jonathan
  6. Textbooks in the Historiography of Recent Economics By Giraud, Yann
  7. Veblen's Evolutionary Methodology and Its Implications for Heterodox Economics in the Calculable Future By Jo, Tae-Hee
  8. The Missing Men: World War I and Female Labor Force Participation By Boehnke, Jörn; Gay, Victor
  9. Gender Equality as an Enforcer of Individuals’ Choice between Education and Fertility: Evidence from 19th Century France By Claude Diebolt; Tapas Mishra; Faustine Perrin
  10. Civil Service Models in Latin America By González-Bustamante, Bastián
  11. Schumpeter, the Banking System, and Innovation: Small versus Big Business By Lambert, Thomas; Velardo, Tristan
  12. Russia & Legal Harmonization: An Historical Inquiry into IP Reform as Global Convergence and Resistance By Mamlyuk, Boris N.; Library, Cornell
  13. Persistence of Prejudice: Estimating the Long Term Effects of Redlining By Krimmel, Jacob
  14. On the Political Economy of the European Union By Julia M. Puaschunder; Martin Gelter
  15. Le riforme dell’IRPEF: uno sguardo attraverso 45 anni di storia By Simone Pellegrino; Paolo M. Panteghini
  16. Book Review: Lying to Ourselves: Dishonesty in the Army Profession By Reed, David S.
  17. The Legacy of Industrial Pluralism: The Tension Between Individual Employment Rights and the New Deal Collective Bargaining System By Stone, Katherine V.W.; Library, Cornell
  18. Italian Industrial Production, 1861-1913: a Statistical Reconstruction. H. The Textile, Apparel, and Leather Industries By Stefano Fenoaltea
  19. Reconstructing The Past: The Measurement Of Aggregate Product By Fenoaltea, Stefano
  20. The economic effects of political disintegration: Lessons from Serbia and Montenegro By Vassilis Monastiriotis; Ivan Zilic

  1. By: Pal, Arkaprabha (IIT Kharagpur)
    Abstract: Bengal was one of the leading producers of high-quality textile during the early modern centuries and played a very nodal role in the intra-Asian and global trade. After 1500, with the descending of the European traders on its shores, the cotton textile industry boomed. It accounted for nearly two-fifths of all textile exports to Europe from Asia. I attempt, in this essay, to understand the ‘Global Divergence’ debate in South Asia with a focus on Bengal and its trade and production in cotton textiles. I situate Bengal as a central region of cotton production and trade in the early modern global economy with regards to not only Europe but also to other parts of Asia and within the sub-continent itself. I reiterate Prasannan Parthasarathi’s contribution to the ‘Great Divergence’ debate to argue that Bengal hosted a thriving cotton textile industry deep into the late eighteenth century. I echo that the destruction of the textile industry occurred in the high days of colonialism in the latter half of the nineteenth century. I attempt to substantiate this by trying to understand Om Prakash’s analysis of the methods of procurement of production before and after the ascendency of the Europeans as political administratorsin Bengal; when production by weavers was market driven and when it was driven by coercion and impunity, respectively. I finally conclude by commenting on the limitation of this analysis and the further research scope it holds.
    Date: 2018–03–14
  2. By: Kolev, Stefan
    Abstract: Vincent Ostrom's legacy is revisited in this paper along three dimensions: Ostrom's contributions as a historian of politico-economic thought, as a complexity theorist, and as an epistemologist. All three dimensions are captured from a perspective which has seldom been studied systematically before: The paper reconstructs Ostrom as a reader and interpreter of German politico-economic thought, especially of Max Weber's theory of bureaucracy and of Walter Eucken's theory of social and epistemic orders. The systems of these two German social scientists embody for Ostrom the two types of social order central to his own typology. The paper incorporates archival sources from the Elinor and Vincent Ostrom Papers, including unpublished papers and correspondence with German social scientists he met during the Ostroms' 1981/1982 stay at Bielefeld University's Center for Interdisciplinary Research (ZiF). Overall, this narrative focuses on what Ostrom called in his reception of the Freiburg School "Eucken's challenge": A set of inquiries about the relevance of political economy for the study of polycentric orders.
    Keywords: Bloomington School,Freiburg School,political theory,history of economics,economic sociology,polycentricity,epistemology
    JEL: A12 B25 B41 D73 H11 H41 Z13
    Date: 2019
  3. By: Christopher David Absell (Departamento de Ciencias Sociales, Universidad Carlos III de Madrid)
    Abstract: During the period spanning independence in 1822 to mid-century, Brazil’s southeast shifted from specialising in the export of cane sugar to coffee. This paper explores the mechanism underlying this shift by exploiting a wealth of new monthly data on the Brazilian and international coffee and cane sugar markets during the period 1827-40. I argue that the timing of the coffee boom was driven by a rapid increase in foreign market potential associated with the abolition of the tariff on coffee in the United States. I estimate that American tariff reform served to increase coffee exports and African slave imports by around one-fifth. American firms, with indirect links to the slave trade, rapidly became major players in the export market in Rio de Janeiro, while non-American firms, traditionally specialised in Continental European destinations, turned their sights on the American market.
    Keywords: Coffee, Brazil, slavery, tariffs, market potential
    JEL: N56 N76
    Date: 2020–01
  4. By: Flores Zendejas, Juan; Lopez Soto, David; Sanchez Amador, David
    Abstract: This paper analyses the motives behind the establishment of central banks during the interwar period. We argue that most governments with difficulties in accessing financial markets established central banks, as this was a general recommendation provided by contemporary money doctors. However, even if central banks served to facilitate the issue of foreign loans on the New York financial market, we find that governments with central banks did not obtain more favorable terms for those loans. Our analysis further demonstrates that investors concentrated on macroeconomic achievements such as inflation and monetary stability, and whether a lender-of-last resort facility existed, regardless of whether or not this was pursued by a central bank.
    Keywords: Money doctors, Central banking, Great depression, Sovereign debt
    JEL: N00 N1 N20 E50 H63
    Date: 2020
  5. By: Schwabish, Jonathan
    Abstract: The American Economic Review (AER) is one of the most prestigious journals in the field of economics. First published in 1911, the journal has published articles covering every aspect and topic in the field. AER articles are not just in-depth prose; they might also include tables, diagrams, and graphs. In this paper I ask two primary questions: First, do most graphs in the AER use data or are they somc kind of diagram or illustration of a theory or concept? Second, what kinds of graphs—lines, bars, pies, etc.—do economists use to help visualize their arguments in the AER? And third, are those graphs of generally high quality? To help shed some light on those questions, I collect, catalog, and—using Amazon’s Mechanical Turk platform—rate every graph in the first volume of the AER from 1911 to 2017. I find that the share of graphs that use data fell over the first half of the century and then increased from about the early 1980s to today. I also find that economists use a lot of line charts—of the more than 2,600 graphs in total, more than 80% are line charts. Finally, I find a U-shaped curve in perceived graph quality, falling to a low in the early-1960s and rising over the past several decades, on average reaching a level only slightly higher than in the first issues. This research is the first step in understanding how economists use data visualization to communicate their work and can help provide a basis for effective strategies that will enable better communication of that work.
    Date: 2018–08–22
  6. By: Giraud, Yann (Université de Cergy-Pontoise)
    Abstract: Textbooks are both neglected and at times overused as objects in the history of economics. They are neglected because most historians, borrowing from Kuhn, tend to regard them as passive receptacles of past knowledge, yet they are also overused as shortcuts to study the state of economic doctrine at a certain point in time. Looking at the existing historical literature that studies or uses textbooks, this chapter shows how a better understanding of the specific pedagogical and institutional environments in which textbooks operate can help build thicker and more accurate histories of the role they have played, not just in disseminating, but also in creating and transforming economic knowledge.
    Date: 2018–02–26
  7. By: Jo, Tae-Hee
    Abstract: Critics have repeatedly claimed that heterodox economics has failed in that it has limited acceptance by the mainstream of the economics profession and little influence on other approaches and policies. They blame heterodox economists for their own failure. I subject this claim to critical examination from the perspective of Veblen’s evolutionary methodology. Veblen’s theory of the business enterprise will be used as an example, which exemplifies the case that a ‘blasphemous’ theory is ignored and marginalized even though it provides rich insights into economy and society. Heterodox economics has shown a similar path. It is also argued that social science does not follow the biological principle of natural selection. What survives does not necessarily mean the fittest in the social realm. The history of science is replete with paradoxical incidents that an incoherent, irrelevant, or even wrong theory becomes dominant and widely accepted because it is one that serves the vested interests in academia and society. Economics is no exception.
    Keywords: Thorstein Veblen, Evolution, Business Enterprise, Heterodox Economics
    JEL: B15 B25 B50 D21
    Date: 2019–12–18
  8. By: Boehnke, Jörn; Gay, Victor
    Abstract: Using spatial variation in World War I military fatalities in France, we show that the scarcity of men due to the war generated an upward shift in female labor force participation that persisted throughout the interwar period. Available data suggest that increased female labor supply accounts for this result. In particular, deteriorated marriage market conditions for single women and negative income shocks to war widows induced many of these women to enter the labor force after the war. In contrast, demand factors such as substitution toward female labor to compensate for the scarcity of male labor were of second-order importance.
    Keywords: Female labor, World War I, Sex ratio, Marriage market, Labor supply
    JEL: J12 J16 J22 N34
    Date: 2020–01
  9. By: Claude Diebolt (University of Strasbourg, Strasbourg, France); Tapas Mishra (University of Southampton, Highfield Campus, UK); Faustine Perrin (University of Strasbourg, Strasbourg, France)
    Date: 2019
  10. By: González-Bustamante, Bastián (Universidad de Santiago de Chile)
    Abstract: This chapter examines the concept of public service models with special emphasis on the Latin American reality. The following section deals with the subject from an historical perspective, its ties to the patronage systems, and the main milestones which have shaped the evolution of the civil services. Subsequently, the next section deals with the chief characteristics and changes in the civil services and presents an evaluation of the models in Latin America. Finally, the last section sets out some brief conclusions and summarises the main ideas of this entry.
    Date: 2018–06–16
  11. By: Lambert, Thomas; Velardo, Tristan
    Abstract: Joseph Schumpeter’s writings on entrepreneurship and innovation have had a profound impact on economic theory and economic thought. Schumpeter initially saw the small entrepreneur as the source of innovation and economic growth within an economic system but later saw large corporations as the source of much innovation. Because large corporations, and in modern times many governments and universities as well, play such a large role in funding research and development and new innovations, much of the bank financing of innovation is done by smaller banks for small entrepreneurs and their ideas. Venture capitalists and self-financing are the other two major forms of small entrepreneur/small business financing. Meanwhile, the financial markets (stocks and bond markets) only indirectly play a role in funding the innovation of large corporations via changes in these firms’ stock prices. Changes in stock prices reflect an estimate of the large firms’ research and development efforts and their prospects for profitable, future innovation. Much corporate research and development is financed internally within the organization as an expense of doing business. Meanwhile, government and university funding through tax dollars and non-profit sources indirectly subsidize corporate innovation because governmental entities and universities take on risks that the private sector will often not tolerate. Yet, large corporations are often the beneficiaries of such governmental and university financing of research and development efforts. In today’s times, Schumpeter would be impressed with the success of large firms regarding innovation but probably would be disappointed about the marginalization of the small entrepreneurial firm and the banking system and their diminished roles in innovation. This paper summarizes Schumpeter’s views on how the banking system and financial markets could play a role in innovation and explains how a modern day monopoly capital system (Baran and Sweezy 1966) and its financial system have transformed entrepreneurship and innovation away from small business and innovation by the small entrepreneur. Baran, Paul A, and Paul M Sweezy. 1966. Monopoly Capital: An Essay on the American Economic and Social Order. New York: Monthly Review Press.
    Keywords: banking, innovation, small business, big business
    JEL: B26 B31 B51
    Date: 2019–12
  12. By: Mamlyuk, Boris N.; Library, Cornell
    Abstract: 10 Washington University Global Studies Law Review, (2011) This Article examines several waves of intellectual property (IP) regulation reform in Russia, starting with an examination into early Soviet attempts to regulate intellectual property. Historical analysis is useful to illustrate areas of theoretical convergence, divergence, and tension between state ideology, positive law, and "law in action." The relevance of these tensions for post-Soviet legal reform may appear tenuous. However, insofar as IP enforcement has emerged as one of the largest hurdles for Russia's prolonged accession to the World Trade Organization (WTO), these historical precedents may help explain Russia's apparent theoretical and political disconnect from the WTO. If Russian policymakers and many Western analysts agree that Russia has complied with all necessary structural adjustment reforms for WTO accession (including reforming its IP legislation), then deeper points of contention between Russia and the West must be identified. One point of departure, the Article posits, is Russia's lingering inability to convey adherence to general international law. Thus, this Article re-conceptualizes the link between domestic and international legal orders by connecting the IP debate to broader debates over the nature of international law in the Soviet and post-Soviet space. Specifically, Part I examines how Soviet theorists attempted to reconcile IP regulation with Marxist ideology and socialist international law. Part II surveys the main IP law reform projects in post-Soviet Russia from 1992 to 2006, with particular emphasis on harmonization with global legal standards. The second part also provides a brief comparative analysis of Russia's latest IP law (effective 2008) and copyright protections in U.S. law as well as the 1971 Berne Convention. The Article concludes with an overview of doctrinal debates within Russia over harmonization, WTO accession, and international law. These debates shed light on the development of local resistance to further legal harmonization efforts, an issue of immediate relevance not just for policymakers working with Russia, but for broader law and development debates.
    Date: 2018–04–15
  13. By: Krimmel, Jacob (University of Pennsylvania)
    Abstract: As part of a New Deal initiative to minimize home foreclosure, federal government officials and local real estate professionals graded each neighborhood in America’s largest cities on its perceived credit risk. Using recently digitized maps that precisely show neighborhoods marked with red ink (highest risk) or yellow ink (slightly lower risk), I document that surveyors disproportionately assigned the most restrictive credit rating to neighborhoods with black residents. Nearly 90 percent of African Americans in 1940 lived in a census tract marked for credit redlining. Comparing credit-restricted "redlined" census tracts to adjacent "yellow-lined" tracts, I estimate the long-run effects of redlining on housing and neighborhood outcomes. Between 1940 and 1970, redlining was associated with large differential declines in housing supply and population density; homeownership rates and racial composition did not change differentially from their 1940 baseline though. Once discriminatory lending was outlawed during the mid-1970s, there was moderate convergence in homeownership rates and racial composition. However, housing supply and population density remain persistently lower in formerly credit-restricted census tracts relative to their credit-favored neighbors.
    Date: 2018–03–02
  14. By: Julia M. Puaschunder (The New School, Department of Economic, USA); Martin Gelter (Fordham University School of Law and Center on European Union Law)
    Abstract: Political economy concerns historical, legal and heterodox economics analysis of complex systems. This article attempts to analyze the current state of the European Union from historical, legal and interdisciplinary economics perspectives. Historically, the ancient Athenian democracy, the Holy Roman Empire and the early formation of the United States serve as examples of early innovative legal constructs of their times that were sui generis and share key features with the current European Union. Regarding legal developments, this paper discusses the bicameral parliamentary structure, electoral processes and populist pressures. The future of the European Union economy is likely to see an AI (r)evolution shaping markets and rising big data revenues. This develop necessitates the creation of a fifth fundamental freedom of data transfer within the European Union, as well as taxation of growth generated by big data. Heterodox economic growth theories will increasingly have to account for this growth.
    Keywords: Ancient Athenian democracy, Artificial Intelligence, Bicameral parliament, Big data, Electoral system, European Union, Holy Roman empire, market disruption, political economy, Populist pressures, Taxation, United States
    Date: 2019–11
  15. By: Simone Pellegrino (Università di Torino); Paolo M. Panteghini (Università di Brescia e CESifo)
    Abstract: Il saggio ripercorre le tappe fondamentali dell’imposta personale e progressiva sul reddito (IRPEF) dalla sua istituzione nel 1974 fino ad oggi. Si evidenziano i principali cambiamenti della struttura impositiva, affrontando separatamente le modifiche avvenute nella definizione del reddito e nella disciplina di deduzioni, scala delle aliquote e detrazioni. Si esaminano, altresì, i principali punti critici dell’attuale sistema, soffermandosi anche sull’andamento del gettito e sugli aspetti di equità.
    Keywords: Imposta personale e progressiva, riforme fiscali
    JEL: H23 H24
    Date: 2020–01
  16. By: Reed, David S. (Center for Public Administrators)
    Abstract: Wong and Gerras present their research about the pressure on one type of public sector manager—U.S. Army officers—to prevaricate and lie. This is the version submitted to the journal. The published version is: Reed, D. S. (2018), Lying to Ourselves: Dishonesty in the Army Profession. Leonard Wong and Stephen J. Gerras. U.S. Army War College Press, Carlisle Barracks, PA, 2015. 53 pp. Open Access (PDF). Governance, 31: 409–410. doi:10.1111/gove.12337
    Date: 2018–03–08
  17. By: Stone, Katherine V.W.; Library, Cornell
    Abstract: 59 University of Chicago Law Review, (1992)
    Date: 2018–04–19
  18. By: Stefano Fenoaltea
    Keywords: post-Unification Italy, industry, extiles/apparel/leather
    JEL: C80 N63 Y10
    Date: 2019
  19. By: Fenoaltea, Stefano
    Abstract: This paper summarizes the author’s considerations on the measurement of a national economy’s historical aggregate product. Given the sources from which we can start, and the objective we wish to reach, the proper path follows logically; the extant corpus of historical national accounts seems to follow a very different path, uninformed by due reflection.
    Keywords: measurement, historical national accounts
    JEL: C13 E01 N01
    Date: 2020–01
  20. By: Vassilis Monastiriotis (The London School of Economics and Political Science); Ivan Zilic (The Institute of Economics, Zagreb)
    Abstract: Is there an economic premium from state independence? We shed light on this question by analysing the unique historical case of the peaceful separation of Serbia and Montenegro in 2006-the last fully recognised internationally state-disintegration on European soil. Using the synthetic control approach, we find that independence for the seceding country (Montenegro) had a sizeable but transitory positive effect, boosting GDP per capita in the period immediately following independence, but with gains slowly evaporating in the longer period-which we attribute to increased vulnerability of the newly independent state to fluctuations in the international economic environment. In contrast, for Serbia, we find no evidence of an independence dividend. While these results are context-specific, the resemblance of Serbia and Montenegro’s case with the contemporaneous independence movements in Europe, namely in the realm of policy autonomy pre-separation, provide insights on possible economic outcomes of secessions on the national and supra-national level in Europe.
    Keywords: secession; independence; political disintegration; synthetic control; Western Balkans
    JEL: F15 O52 N14
    Date: 2019–06

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