nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2020‒02‒10
thirteen papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Private Money Production without Banks By Gary B. Gorton
  2. Names and Behavior in a War By Jurajda, Štěpán; Kovač, Dejan
  3. Time-Varying Causality between Bond and Oil Markets of the United States: Evidence from Over One and Half Centuries of Data By Semei Coronado; Rangan Gupta; Saban Nazlioglu; Omar Rojas
  4. Tavern Revenues And Alcohol Consumption In The Muscovite State In Mid-Seventeenth Century By Dmitry Liseitsev
  5. How Will Emerging Computers Affect Older Workers by 2040? By Anek Belbase; Andrew D. Eschtruth
  6. The Second Industrial Revolution has Brought Modern Social and Economic Developments By Mohajan, Haradhan
  7. Responsabilité sociale de l’entreprise : revue de la littérature By Elyousfi, Boutaina
  8. Demand Shocks, Procurement Policies, and the Nature of Medical Innovation: Evidence from Wartime Prosthetic Device Patents By Jeffrey Clemens; Parker Rogers
  9. Financial Conditions in the U.S. Agricultural Sector: Historical Comparisons By Key, Nigel; Burns, Christopher; Lyons, Greg
  10. ON IDEAS AND ECONOMIC POLICY: A SURVEY OF MENA ECONOMISTS By Rana Hendy; Mahmoud Mohieldin; Joelle El Sawalhi; Rebecca Spriggs
  11. Path-Dependency of Economic Transition: An Analytical Review By Satoshi Mizobata; Norio Horie
  12. The mirror for (artificial) intelligence: Working in whose reflection? By Moore, Phoebe V.
  13. Structural transformation in the Spanish economy By Omar Rachedi

  1. By: Gary B. Gorton
    Abstract: I test the Dang, Gorton, and Holmström (2018) (DGH) theory that the optimal design of private money is debt backed by debt. I do this in the context of English inland bills of exchange (where all parties to the bill were in England), which were used as a medium of exchange during the Industrial Revolution in the north of England in the eighteenth and first half of the nineteenth centuries. These bills circulated via indorsements, committing each indorser’s personal wealth to back the bill. A sample of bills from the period 1762-1850 is studied to determine how frequently they changed hands (liquidity/velocity) and to determine how their credibility was established. Some bills were backed by banks and others by the joint liability of indorsers only. I test the DGH theory by asking: Were bank-backed bills more liquid than the joint liability-backed bills?
    JEL: E02 G21
    Date: 2020–01
  2. By: Jurajda, Štěpán; Kovač, Dejan
    Abstract: We implement a novel empirical strategy for measuring and studying a strong form of nationalism - the willingness to fight and die in a war for national independence - using name choices corresponding to previous war leaders. Based on data on almost half a million soldiers, we first show that having been given a first name that is synonymous with the leader(s) of the Croatian state during World War II predicts volunteering for service in the 1991-1995 Croatian war of independence and dying during the conflict. Next, we use the universe of Croatian birth certificates and the information about nationalism conveyed by first names to suggests that in ex-Yugoslav Croatia, nationalism was on a continuous rise starting in the 1970s and that its rise was curbed in areas where concentration camps were located during WWII. Our evidence on intergener- ational transmission of nationalism is consistent with nationalist fathers purposefully reflecting the trade-o¤ between within-family and society-wide transmission channels of political values. We also link the nationalist values we proxy using first name choices to right-wing voting behavior in 2015, 20 years after the war.
    Keywords: Nationalism,Names,Intergenerational Transmission
    JEL: D64 D74 Z1
    Date: 2020
  3. By: Semei Coronado (Departamento de Métodos Cuantitativos, Universidad de Guadalajara, Centro Universitario de Ciencias Económico Administrativas, Periférico Norte 799, Modulo M 201, Núcleo, Universitario los Belenes, Zapopan, Jalisco, 45100, México); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Saban Nazlioglu (Department of International Trade and Finance, Faculty of Economics and Administrative Sciences, Pamukkale University, Denizli, Turkey); Omar Rojas (Universidad Panamericana. Escuela de Ciencias Económicas y Empresariales. Álvaro del Portillo 49, Zapopan, Jalisco, 45010, México)
    Abstract: This paper analyzes time-varying causality between government bond and oil returns of the United States (US) over the monthly period of 1859:10 to 2019:03, i.e., the longest possible span of historical data, starting from the beginning of the modern era of the petroleum industry. While the standard constant parameter causality test fails to pick up any evidence of causality, the time-varying framework shows evidence of bi-directional spillovers over the entire sample period. The results are robust to inclusion of stock returns as a control variable in the model. We also detect evidence of time-varying causality-in-volatility between sovereign bond and oil markets, as well as spillovers in returns and volatility from the oil market to corporate bonds.
    Keywords: Bond and Oil Markets, Returns and Volatility Spillovers, Time-Varying Causality
    JEL: C32 G12 Q02
    Date: 2020–01
  4. By: Dmitry Liseitsev (National Research University Higher School of Economics)
    Abstract: The level of alcohol consumption and the role of alcohol taxes as a source of state revenue in pre-Petrine Russia have been the subject of much scholarly interest and political speculation, yet reliable data on the magnitude of trade in “grain wine” is still lacking. This article draws on the records of central government agencies from the 1620s - early 1650s to partially fill this gap. In the decades immediately following the Times of Trouble tavern revenues nearly doubled in absolute numbers and accounted for about a quarter of the total state revenues of Muscovy. The growth rate of tavern revenues was on par with the rate of population growth (between the 1620s and 1640s, urban population increased by 60 percent). The article discusses different methods of running the state alcohol monopoly and estimates the profitability of alcohol trade and the overall levels of alcohol consumption during the period under study.
    Keywords: alcohol, pre-Petrine Russia, alcohol monopoly, alcohol taxes
    JEL: Z
    Date: 2020
  5. By: Anek Belbase; Andrew D. Eschtruth
    Abstract: Technological change is not new, particularly to the United States. Founded during the dawn of the Industrial Revolution, the country has been a leader in new technologies – from the cotton gin and the lightbulb to the personal computer and the internet. These advances have enabled people to lead lifestyles today that would have been unimaginable a century ago. But progress has not been painless for workers, as each wave of innovation has created laborsaving machines that have disrupted jobs. Each time, workers replaced by machines have faced difficult short-term transitions, but, through retraining and career changes, have eventually found jobs in rising industries. Today, as computer-powered machines perform tasks that would have seemed impossible only a decade ago, policymakers and workers alike are beginning to wonder – will workers continue to be able to adapt or is this time fundamentally different? The effect of new machines on older workers is of particular concern, because older workers make up a growing share of the workforce and increasingly need to work until their late 60s to attain a secure retirement. This brief wraps up a three-part series on the effects of laborsaving machines on older workers. The first brief reviewed the impact of machines over the past two centuries, and the second brief examined how the recent rise of computers has affected older workers so far. The current brief turns to the near future and explores how emerging computers, with expanding capabilities that rely on artificial intelligence, might affect the job prospects of older workers over the next two decades. The brief proceeds as follows. The first section describes the unique features of emerging computer technology. The second section explains how the new computers might affect demand for workers based on occupation and education. The third section examines whether older workers might be uniquely affected. The final section concludes that age is unlikely to determine how workers will be impacted. Instead, workers’ education levels – which are now roughly similar by age group – and social skills – which tend to get better with age – will play important roles in how they fare.
    Date: 2020–01
  6. By: Mohajan, Haradhan
    Abstract: The American Industrial Revolution (IR) is considered as the Second IR (IR2) which creates rural to an urban society. Great inventions during the IR2 are electricity, internal combustion engine, the chemical industries, petroleum and other chemicals, alloys, electrical communication technologies, and running water with indoor plumbing. The development of steel and oil refining has affected US industry. Transportation and communications technology has changed business practices and daily life style of many people. Inventions of medicine and medical instruments have reduced the rates of infections and death from many diseases and public health has improved greatly. Global political, economic, and social systems have widely changed very rapidly. Between 1820 and 1920 about 33 million people, mainly labors, have migrated to the USA for seeking greater economic opportunity and cities become overcrowded. Low wage, dangerous working conditions, long working hours, child labor, discrimination in wages, etc. have created labor dissatisfaction. Moreover jobless and wage cut of labors railroad strike has broke out in many cities of the USA. An attempt has taken in this study to discuss aspects of the IR2.
    Keywords: Second Industrial Revolution, innovation and invention, electricity, steel, oil and petroleum, economic development, railroad strike
    JEL: B3 L5
    Date: 2019–10–21
  7. By: Elyousfi, Boutaina
    Abstract: In recent years, CSR has seen growing interest in both the academic and managerial spheres. It is also at the center of several heated debates on the role of business in society. However, there is still no universal consensus today on the responsibilities that a company must assume. This state of affairs results in much confusion and controversy as to the meaning of the concept of CSR. In this research paper we will attempt to dispel these conceptual confusions by presenting a literature review which highlights the main definitions granted to CSR as well as its historical evolution. We also present a comparative analysis of the perceptions of the various theoretical approaches which are interested in this subject. The results of this confrontation have shown that the theoretical frameworks that underlie CSR focus on two central questions. The first tackles the nature of the relationship that the company must maintain with society while the second relates to the motivations which encourage firms to adopt responsible behavior.
    Keywords: Corporate social responsibility, Social development, Environmental development, Stakeholders
    JEL: M14
    Date: 2019–12–31
  8. By: Jeffrey Clemens; Parker Rogers
    Abstract: We analyze wartime prosthetic device patents to investigate how procurement policy affects the cost, quality, and quantity of medical innovation. Analyzing whether inventions emphasize cost and/or quality requires generating new data. We do this by first hand-coding the economic traits emphasized in 1,200 patent documents. We then train a machine learning algorithm and apply the trained models to a century's worth of medical and mechanical patents that form our analysis sample. In our analysis of these new data, we find that the relatively stingy, fixed-price contracts of the Civil War era led inventors to focus broadly on reducing costs, while the less cost-conscious procurement contracts of World War I did not. We provide a conceptual framework that highlights the economic forces that drive this key finding. We also find that inventors emphasized dimensions of product quality (e.g., a prosthetic's appearance or comfort) that aligned with differences in buyers' preferences across wars. Finally, we find that the Civil War and World War I procurement shocks led to substantial increases in the quantity of prosthetic device patenting relative to patenting in other medical and mechanical technology classes. We conclude that procurement environments can significantly shape the scientific problems with which inventors engage, including the choice to innovate on quality or cost.
    JEL: H57 I1 O31
    Date: 2020–01
  9. By: Key, Nigel; Burns, Christopher; Lyons, Greg
    Abstract: Recent economic conditions and the financial health of the U.S. farm sector have raised concerns among farm policy stakeholders. After peaking around 2012, farm sector income declined while farm debt continued to rise. Farm real estate stopped rapidly appreciating in value, and land prices declined in some regions. Between 2016 and early 2019, interest rates rose—increasing the cost of borrowing for some farmers. Lower commodity prices in the near future would make it more difficult for some farmers to meet their loan obligations and pay for production expenses. Farmers who made substantial investments in machinery or land when commodity prices and farm incomes were high could face elevated risks of financial insolvency. This study compares recent sectoral and farm-level measures of financial performance relative to historic levels to better understand the severity of the current downturn in the agricultural economy. Using data from USDA’s Agricultural Resource Management Survey, researchers disaggregate farm-level measures of financial health across farm types to identify the types of farms that are under the greatest financial stress. To provide additional perspective on the financial health of the sector, the study uses data from agricultural lenders to compare current agricultural loan delinquencies to levels in the recent past. Finally, model results on the effects of a hypothetical decline in gross farm income are used to evaluate the types of farm operations that would be most vulnerable to a further downturn in the agricultural economy.
    Keywords: Agricultural and Food Policy, Agricultural Finance, Farm Management, Financial Economics, Land Economics/Use, Production Economics
    Date: 2019–10–22
  10. By: Rana Hendy (American University in Cairo, School of Global Affairs and Public Policy, Department of Public Policy); Mahmoud Mohieldin (The World Bank Group, 2030 Development Agenda, UN Relations and Partnership, Washington); Joelle El Sawalhi; Rebecca Spriggs
    Abstract: This paper examines how economic ideas have been shaped throughout history and the influence of these on the formulation of economic policy. We collect both quantitative and qualitative data from economists who are originally from the Middle East and North Africa region or working on the region. We find that economists and their ideas are more likely to be influenced by multiple schools of thought than adhere to one school. This multiplicity spills over into the type of solutions proposed to economic problems and thus policy implications. One of the main recommendations of this study is that there is a need for the development of economics and economists to recognize the impact of political and social issues that are not easy to grasp through modeling. This recommendation aligns with appreciation of the power of ideas rather than the influence of one school of economic thought.
    Date: 2019–09–20
  11. By: Satoshi Mizobata (Kyoto University); Norio Horie (University of Toyama)
    Abstract: The concept “path dependency” helps understanding the institutional changes and has given a logical basis which explains not convergence of the evolutionary path of transition economies but their diversified path. Based on “the base simplified literature”, in short random sampling papers from the EconLit database through a keyword search that examine the transition economies from the angle of path dependency, this paper empirically investigates the development trends with regard to path dependency arguments in economics of transition, the theoretical trends on which the economics of transition has been discussed and others. As a consequence, the theoretical and empirical characteristics of path dependency arguments in the economics of transition can be elucidated and the paper clarifies that the papers of David Stark has occupied the important position as a source of path dependency approach’s development, through an analysis of encoding a series of literature attributes the degree of support for path dependency, the relevant reasoning factors and other influential factors based on our own methodology. A systematic / analytical review clarifies the following points: support for path dependency has declined in 2000s; while path dependency approach covers all the transition economies, South-East European countries and Russia have comparatively been stronger supporters of path dependency influence than other EU joining East European countries; researches on institutions, regions and local identities have relatively strongly support path dependency arguments
    Keywords: path dependency, institution, transition, legacy, economics
    JEL: P26 B25 O17
    Date: 2019–11
  12. By: Moore, Phoebe V.
    Abstract: The mirror for (artificial) intelligence: In whose reflection?' sets out the parameters for caution in considering as-yet relatively un-debated issues in artificial intelligence (AI) research, which is the concept itself of 'intelligence'. After the AI 'winters' ending in the late 1990s, during which AI development met substantive obstacles, a new AI summer commences. What is still missing is a careful consideration of the historical significance of the weighting that has been placed on particular aspects of consciousness and surrounding seemingly human-like workplace behaviour which takes increasing significance given the interest in machinic autonomous intelligence. The discussion paper argues that a series of machinic and technological invention and related experiments show how machines facilitate not only the processes of normalization of what are considered intelligent behaviours, via both human and machinic intelligence, but also facilitate and enable the integration of autonomous machines into everyday work and life. Today, ideas of autonomous machinic intelligence, seen in the ways AI-augmented tools and applications in human resources, robotics, and gig work are incorporated into workplaces, facilitate workplace relations via machinic intelligent behaviours, that are explicitly assistive, prescriptive, descriptive, collaborative, predictive and affective. The question is, given these now autonomous forms of intelligence attributed to machines, who/what is looking in the mirror at whose/which reflection?
    Keywords: Cybernetics,Artificial Intelligence,Robotics,Autonomous Machines,Workplace Relations,Human-Machine interaction,History of Technology,Kybernetik,Künstliche Intelligenz,Robotik,Autonome Maschinen,Beziehungen am Arbeitsplatz,Mensch-Maschine-Interaktion,Innovationsgeschichte
    JEL: O30 J81 L00 I15
    Date: 2019
  13. By: Omar Rachedi (Banco de España)
    Abstract: This paper studies how the variation in sectoral productivities shapes the sectoral composition of the Spanish economy from 1980 to 2015. I first document an asymmetric behavior of sectoral productivities: the productivity of services declines over time, whereas the productivity of manufacturing increases until the 1990s, before slowing down. I feed the path of sectoral productivities observed in the data into a model of structural transformation with two sectors (services and manufacturing) which are connected by an Input-Output matrix. The model reproduces the variation of the gross output services share of the Spanish economy between 1980 and 2015. The model implies that – even absent changes in the trends of sectoral productivities – the annual growth rate of GDP between 2015 and 2050 shrinks by 0.6 percentage points with respect to the average growth rate between 1980 and 2015. Hence, annual GDP growth would decline from 2.3% to 1.7%. If sectoral productivities were to equal the levels observed in the Euro Area between 1980 and 2015, the average growth rate of Spanish GDP between 2015 and 2050 would be 2.1%.
    Keywords: sectoral analysis, Input-Output matrix, Spanish economy
    JEL: O11 O14 O4
    Date: 2020–01

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