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on Business, Economic and Financial History |
|
Issue of 2020‒02‒17
thirty-two papers chosen by |
| By: | Bajo-Rubio, Oscar |
| Abstract: | We analyse in this paper the relationship between international trade and economic growth from the point of view of one of the most traditional hypotheses within this field, namely, the export-led growth hypothesis, for the case of Spain in a long-term perspective of almost 170 years. Exports seem to have played a positive, though modest, role in promoting economic growth in the Spanish economy over the whole period, mostly due to the higher productivity associated with the export sector. The contribution of exports to growth, however, seems to have been stronger in the final years of the 19th century, unlike the rest of the period, where it proved to be very small. |
| Keywords: | Exports,Economic growth,Spanish economy |
| JEL: | F41 F43 N10 O47 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:461&r=all |
| By: | Christoffer Koch; Gary Richardson; Patrick Van Horn |
| Abstract: | Countercyclical capital buffers (CCyBs) are an old idea recently resurrected. CCyBs compel banks at the core of financial systems to accumulate capital during expansions so that they are better able to sustain operations during downturns. To gauge the potential impact of modern CCyBs, we compare the behavior of large and highly-connected commercial banks during booms before the Great Depression and Great Recession. Before the former, core banks did not expect bailouts and were subject to regulations that incentivized capital accumulation during booms. Before the later, core banks expected bailouts and kept capital levels close to regulatory minima. Our analysis indicates that the pre-Depression regulatory regime induced money-center banks to build capital buffers between 3% and 5% of total assets during economic expansions, which is up to double the maximum modern CCyB. These buffers enabled those banks to continue operations without government assistance during severe crises. This historical analogy indicates that modern countercyclical buffers may achieve their immediate goals of protecting core banks during crises but raises questions about whether they will contribute to overall financial stability. |
| JEL: | E02 E42 G01 G2 G21 G3 N1 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26710&r=all |
| By: | Mar’a-Isabel Ayuda (Department of Economic Analysis, Universidad de Zaragoza, Spain); Hugo Ferrer-PŽrez (Agrifood and Natural Resources Economics Unit, Agrifood Research and Technology Center of Aragon (CITA), Spain); Vicente Pinilla (Universidad de Zaragoza and Instituto Agroalimentario de Aragón, Spain) |
| Abstract: | The objective of this article is to analyse the determinants of world wine exports in the first wave of globalisation, taking into account the principal exporting countries and using an extended version of the gravity model. Our results show that ordinary wine exports were not affected by the increase in the size of the markets of the consuming countries, as in most of them wine was an alcoholic beverage consumed by a very small minority of the population. The harvests of the producing countries, particularly in the preceding years, significantly and positively affected their exports. And inversely, the harvests of the importers harmed them as there was a home bias in consumption due to cultural, price or tariff protection reasons. Finally, in the inter-war period, the trade of wine was severely affected by a series of shocks such as the First World War, the Soviet revolution, the Prohibition and the 1930s depression. As was the case for trade as a whole, the fall in transaction costs favoured exports, at least those of lower priced and lower quality wine. However, the liberalisation of trade had a lesser impact on wine than on other products. |
| Keywords: | Wine history, wine trade, wine globalisation |
| JEL: | F14 N50 Q13 Q17 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:ahe:dtaehe:2002&r=all |
| By: | Jose Sanchez-Fung (University of Nottingham, Ningbo) |
| Abstract: | The paper examines the life-cycle artistic productivity of three leading Latin American photographers of the twentieth century: Manuel à lvarez Bravo (Mexico), Sergio Larraín (Chile), and Sebastião Salgado (Brazil). The analysis constructs narratives using art books and other sources of expert commentary, following the approach in earlier contributions to the economic literature on the subject (David W. Galenson, 2007, Old masters and young geniuses: The two life cycles of artistic creativity, Princeton University Press). The research identifies Manuel à lvarez Bravo as a ‘conceptual innovator’, a feature that caught the French surrealists’ attention early in his career. In contrast, Sergio Larraín and Sebastião Salgado accomplish their contributions to photography like ‘experimental innovators’. The investigation assembles and evaluates metrics from museum holdings and selected retrospectives to gauge the robustness of the conclusions emerging from the benchmark narratives. |
| Keywords: | life-cycle artistic productivity; conceptual and experimental innovators; age-output profiles; photographers; Latin America |
| JEL: | Z1 Z11 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cue:wpaper:awp-05-2019&r=all |
| By: | Elizabeth U. Cascio; Na’ama Shenhav |
| Abstract: | This year marks the centennial of the Nineteenth Amendment, which provided American women a constitutional guarantee to the franchise. We assemble data from a variety of sources to document and explore trends in women’s political participation, issue preferences, and partisanship since that time. We show that in the early years following enfranchisement, women voted at much lower rates than men and held distinct issue preferences, despite splitting their votes across parties similarly to men. But by the dawn of the 21st century, women not only voted more than men, but also voted differently, systematically favoring the Democratic party. We find that the rise in women’s relative voter turnout largely reflects cross-cohort changes in voter participation and coincided with increasing rates of high school completion. By contrast, women’s relative shift toward the Democratic party permeates all cohorts and appears to owe more to changes in how parties have defined themselves than to changes in issue preferences. The findings suggest that a confluence of factors have led to the unique place women currently occupy in the American electorate, one where they are arguably capable of exerting more political influence than ever before. |
| JEL: | I0 J16 N32 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26709&r=all |
| By: | Christian Breuer (Chemnitz University of Technology, Department of Economics, Junior Professorship for European Economics and ZBW - Leibniz Information Centre for Economics); Carsten Colombier (FiFo - Institute for Public Economics, University of Cologne, Germany; Federal Finance Department, Bern, Switzerland) |
| Abstract: | In this paper we examine the relationship between public debt and economic growth in a large historical panel dataset of 17 OECD economics over the period 1870 - 2016. We do not provide evidence for a statistically significant and robust relationship between government debt and growth. While our baseline regressions support the "conventional view" that government debt is negatively associated with economic growth, particularly in the aftermath of World War II, these results appear to be not robust to alternative specifications. |
| Keywords: | Goverment Debt, Economic Growth, Robustness |
| JEL: | E62 H56 H63 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:tch:wpaper:cep036&r=all |
| By: | Blaydes, Lisa; Paik, Christopher |
| Abstract: | The Silk Roads stretched across Eurasia, connecting East and West for centuries. At its height, the network of trade routes enabled merchants to travel from China to the Mediterranean Sea, carrying with them high-value commercial goods, the exchange of which encouraged urban growth and prosperity. We examine the extent to which urban centers thrived or withered as a function of shocks to trade routes, particularly political fragmentation along natural travel paths. We find that political fragmentation along the roads to Aleppo and historic Chang'an - major terminus locations for cross-regional trade - damaged city growth. These conclusions contribute to our understanding of how a pre-modern international system operated through an examination of exchange between the two most developed world regions of the medieval and early modern periods, China and the Muslim East. |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hitcei:2019-12&r=all |
| By: | Fenoaltea, Stefano |
| Abstract: | This paper summarizes the evolution of Italy’s historical national accounts, and presents an updated reconstruction of the production side, the expenditure side, and the composition of investment from Unification to the Great War. On the production side, the major improvements stem from the recovery of evidence on harvest fluctuations, which increases short-term volatility, and the removal of gross errors in the estimates for the services, which sharply reduces pre-War GDP. The expenditure-side disaggregation reaffirms the Kuznets- cycle path of fixed investment; the cut in GDP yields a cut in consumption, but does not imply a lower standard of living. |
| Keywords: | Italy, Production, Measurement, Historical National Accounts |
| JEL: | C13 E01 N01 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98350&r=all |
| By: | Rezvani, L. |
| Abstract: | This research paper investigates the articulation of agriculture, plant breeding science and capitalism through the lens of semences paysannes (peasant seed) in Brittany, France, using Anna Tsing’s concept of “scalability”. From the early to mid-19th century, the French state instituted an industrial, productivist agricultural paradigm, based in part on a system of seed standardization and certification which illegalized seed produced by farmers. Today, peasant farmers are pushing back, asserting their right to select and produce their own seed as part of the larger movement for peasant agriculture. Evolutive, heterogeneous, freely reproducible peasant seed is viewed as politically transformative, capable of rebuilding barriers to accumulation in agriculture that were broken down with the modernization process and the spread of hybrid seed. While challenging capitalist appropriation of the seed is central to the movement, the question of how and to whom to sell produce remains fraught. This paper focuses on a group of farmers who have entered into a contract with multinational supermarket chain Carrefour to sell their vegetables produced from semences paysannes at premium prices and with an exclusive label. Using ethnographic material based on 5 weeks of fieldwork with farmers in northern Brittany, this paper questions if the biological specificities of semences paysannes guarantee their resistance to capitalist appropriation and accumulation. By analysing Carrefour’s incorporation of vegetables from peasant seed, it is possible to understand how biological barriers to appropriation at the input stage of agriculture can produce value for supermarket capital. However, producing peasant seed reintroduces the unpredictability of plant life onto the farm, countering the way modern plant breeding has suppressed the liveliness of nature. In conjunction with organic practices, seed production help constitute farms as multispecies refugia, connecting farmers and plants in caring relationships and helping to address environmental harm wrought by industrial agriculture. Peasant seed production also necessitates collaboration between farmers, building a form of autonomy that is collective rather than individualistic. Thus, peasant seed production retains its subversive potential in the way it transforms farmer livelihoods and production practices, both materially and affectively. |
| Keywords: | peasant seed, peasant agriculture, plant breeding, scalability, appropriation, capitalism, industrial agriculture, human-plant relationships, vegetal political ecology |
| Date: | 2020–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:ems:euriss:124280&r=all |
| By: | Franses, Ph.H.B.F. |
| Abstract: | This paper introduces to the literature on Economic History a measure of persistence which is particularly useful if the data are irregularly spaced. An illustration to 10 historical unevenly spaced data series for Holland of 1738 to 1779 showed the merits of the methodology |
| Keywords: | Irregularly spaced time series, Economic history, First order autoregression, Persistence |
| JEL: | C32 N01 |
| Date: | 2019–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ems:eureir:124352&r=all |
| By: | Bertrand Garbinti (Centre de recherche de la Banque de France - Banque de France); Jonathan Goupille-Lebret (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Thomas Piketty (PSE - Paris School of Economics) |
| Abstract: | Measuring and understanding the evolution of wealth inequality is a key challenge for researchers, policy makers, and the general public. This paper breaks new ground on this topic by presenting a new method to estimate and study wealth inequality. This method combines fiscal data with household surveys and national accounts in order to provide annual wealth distribution series, with detailed breakdowns by percentiles, age and assets. Using the case of France as an illustration, we show that the resulting series can be used to better analyze the evolution and the determinants of wealth inequality dynamics over the 1970-2014 period. We show that the decline in wealth inequality ends in the early 1980s, marking the beginning of a rise in the top 1% wealth share, though with significant fluctuations due largely to asset price movements. Rising inequality in saving rates coupled with highly stratified rates of returns has led to rising wealth concentration in spite of the opposing effect of house price increases. We develop a simple simulation model highlighting how changes in the combination of unequal saving rates, rates of return and labor earnings that occurred in the early 1980s generated large multiplicative effects that led to radically different steady-state levels of wealth inequality. Taking advantage of the joint distribution of income and wealth, we show that top wealth holders are almost exclusively top capital earners, and less and less are made up of top labor earners; it has become increasingly difficult in recent decades to access top wealth groups with one's labor income only. |
| Keywords: | income inequality,wealth inequality,gender inequality |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02401488&r=all |
| By: | Wee Chian Koh (World Bank); M. Ayhan Kose (World Bank, Brookings Institution, CAMA); Peter S. Nagle (World Bank); Franziska L. Ohnsorge (World Bank, CAMA); Naotaka Sugawara (World Bank) |
| Abstract: | Emerging market and developing economies have experienced recurrent episodes of rapid debt accumulation over the past fifty years. This paper examines the consequences of debt accumulation using a three-pronged approach: an event study of debt accumulation episodes in 100 emerging market and developing economies since 1970; a series of econometric models examining the linkages between debt and the probability of financial crises; and a set of case studies of rapid debt buildup that ended in crises. The paper reports four main results. First, episodes of debt accumulation are common, with more than 500 episodes occurring since 1970. Second, around half of these episodes were associated with financial crises which typically had worse economic outcomes than those without crises— after 8 years output per capita was typically 6-10 percent lower and investment 15-22 percent weaker in crisis episodes. Third, a rapid buildup of debt, whether public or private, increased the likelihood of a financial crisis, as did a larger share of short-term external debt, higher debt service, and lower reserves cover. Fourth, countries that experienced financial crises frequently employed combinations of unsustainable fiscal, monetary and financial sector policies, and often suffered from structural and institutional weaknesses. |
| Keywords: | Financial crises, currency crises, debt crises, banking crises, public debt, private debt, external debt. |
| JEL: | E32 E61 G01 H12 H61 H63 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:koc:wpaper:2001&r=all |
| By: | Bertrand Garbinti (Centre de recherche de la Banque de France - Banque de France); Jonathan Goupille-Lebret (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Cet article propose un éclairage sur l'évolution de longue période des inégalités de revenu, de patrimoine et de leur lien en France. Après une forte baisse des inégalités qui avait commencé au début de la première guerre mondiale, une tendance inégalitaire est apparue (et se poursuit) depuis le milieu des années 1980. La perspective historique permet d'illustrer comment de faibles changements dans les inégalités de taux d'épargne, de rendement ou de revenu du travail peuvent avoir de forts effets de long terme sur la concentration du patrimoine. Deux autres grandes tendances s'observent depuis les années 1970. L'une est la baisse de l'écart des revenus du travail entre femmes et hommes-même s'il reste élevé. L'autre est la difficulté accrue, pour les détenteurs de seuls revenus du travail, d'accéder aux plus hauts patrimoines. Enfin, nos comparaisons entre la France et les États-Unis montrent que les inégalités de patrimoine et de revenu étaient comparables voire plus faibles aux États-Unis avant les années 1970. Ce pays est devenu nettement plus inégalitaire désormais. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02401482&r=all |
| By: | Samuel Bazzi (Boston University & NBER); Gabriel Koehler-Derrick; Benjamin Marx |
| Abstract: | This paper explores the foundations of religious influence in politics and society. We show that an important Islamic institution fostered the entrenchment of Islamism at a critical juncture in Indonesia, the world’s largest Muslim country. In the early 1960s, rural elites transferred large amounts of land into waqf—inalienable charitable trusts in Islamic law—to avoid expropriation by the state. Regions facing a greater threat of expropriation exhibit more prevalent waqf land and Islamic institutions endowed as such, including mosques and religious schools. These endowments provided conservative forces with the capital needed to promote Islamist ideology and mobilize against the secular state. We identify lasting effects of the transfers on the size of the religious sector, electoral support for Islamist parties, and the adoption of local sharia laws. These effects are shaped by greater demand for religion in government but not by greater piety among the electorate. Waqf assets also impose costs on the local economy, particularly in agriculture where these endowments are associated with lower productivity. Overall, our findings shed new light on the origins and consequences of Islamism. |
| Keywords: | : |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:bos:iedwpr:dp-330&r=all |
| By: | Edith Archambault (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02292824&r=all |
| By: | Kristoffer Mousten Hansen (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut National de l'Horticulture et du Paysage) |
| Abstract: | There have been many calls for reforming the gold standard since the end of the classical gold standard and especially since the end of Bretton Woods. While these calls have somewhat abated in recent years, in this article we will attempt to show that the gold standard is still a superior monetary system, and that the reform of the monetary system is still a desirable policy. We will proceed by first analyzing the shortcomings of the present fiat-money order, indicating how it distorts the market and society through inflation, redistribution, by artificially increasing the importance of financial markets and by hampering U. S. industrial production in international trade. Then we will show these problems would cease to exist under the gold standard, and we will indicate a possible reform for returning to gold in the U. S. Finally, we will argue that such a reform in order to be successful must become a popular crusade-i.e., it must become a populist issue. We do not pretend to any great originality with this proposal, rather it should be seen as an updated and slightly modified version of Mises's proposed reform from the 1950's. |
| Date: | 2020–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02458502&r=all |
| By: | Solimano Andrés; Zapata-Román Gabriela |
| Abstract: | This paper describes the structural transformations that Chile has experienced in the last 50 years and how they have contributedâ۠or notâ۠to inclusive growth and genuine economic modernization from a historical perspective. The empirical analysis of the paper shows a premature deindustrialization process since the 1970s, continuing to the present.We observe in the transition from the import-substitution industrialization strategy to the outward-oriented neoliberal model of high inequality, a decline in the value-added shares of manufacturing and agriculture and a rise in services (mainly financial services, insurance, and real estate) with ups and downs in mining shares.These trends are more emphasized in employment shares, with the decline in relative employment generation in agriculture and manufacturing going directly to the services sector that now accounts for two-thirds of total employment in the economy.The trend of persistent deindustrialization and high inequality is worrisome and could negatively affect Chile’s ability to achieve structural transformations towards higher and more sophisticated levels of productive development and technological advancement. |
| Keywords: | Chile,Inclusive growth,inequality of income,Inequality of opportunities,inequality of wealth,deindustrialization,Structural transformation |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2019-118&r=all |
| By: | Thierry Suchère (EDEHN - Equipe d'Economie Le Havre Normandie - ULH - Université Le Havre Normandie - NU - Normandie Université) |
| Abstract: | Contemporary of shareholder capitalism, the movie Wall-Street [1987] by Oliver Stone inaugurates a long list of recent movies which proposes a critical look to finance. We think of these other movies: The Wolf of Wall Street [2013] of Martin Scorsese, The Big Short [2015] of Adam McKay… In France, L'Outsider [2016] deals with a story largely told by the media: that of Jérôme Kerviel ex trader and a former employee of La Société Générale. Analyzing this movie, we shall show that it contains a good illustration of trader's work in the world of finance with several teachings. First of all, the movie questions speeches on the rationality of the actors. We see: i) traders who mobilize questionable means as technical analysis to help them in their decisions; ii) an activity on the market generating of stress evacuated by childish collective behaviors. We understand that there is a high risk for traders of switching into pathological behavior such as those observed in the case of gambling addicts. At a second level, the film speaks of a violation of the rules of good practices, deviation of behavior common among traders using illegal means to make more money.... Deviance is approached as a sociological theme. It is a collective activity considering the management systems implemented by the bank to push the traders to the performance at least as guilty as the traders themselves. |
| Abstract: | Contemporain du capitalisme actionnarial, le film Wall-Street [1987] d'Oliver Stone inaugure une longue liste de films récents porteurs d'un regard critique sur la finance. On pense à ces autres films que sont Le Loup de Wall Street [2013] de Martin Scorsese, The Big Short : le casse du siècle [2015] d'Adam McKay… En France, L'Outsider [2016] traite d'une histoire amplement relayée par les médias : celle de Jérôme Kerviel ex trader de la Société Générale. Analysant ce film, on montrera que nous disposons là d'une bonne illustration de ce qui fait le travail des traders dans l'univers de la finance avec plusieurs enseignements. En premier lieu, le film conteste le discours des économistes mainstream sur la rationalité des acteurs. On y voit (i) des traders qui mobilisent des techniques controversées du type analyse de graphe pour les aider dans leur décision ; (ii) une activité sur le marché génératrice du stress important et qu'on évacue par des comportements de groupe digne de potache. A l'extrême, on comprend que le trading comporte un risque non-nul de basculement vers des comportements pathologiques du type de ceux qui s'observent chez les addicts aux jeux d'argent. A un second niveau, le film parle de la violation des règles de bonne conduite, d'écart de comportement courant chez les traders toujours obligé de se surpasser… Les sociologues voient dans la déviance une activité collective ce qui nous amène à considérer des systèmes de management mis en place par la banque pour pousser les traders à la performance qui sont autant coupables que les traders eux-mêmes. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02411336&r=all |
| By: | M. Ayhan Kose (Prospects Group, World Bank; Brookings Institution; CEPR; CAMA); Naotaka Sugawara (Prospects Group, World Bank); Marco E. Terrones (Department of Economics and Finance, Universidad del Pacifico) |
| Abstract: | The world economy has experienced four global recessions over the past seven decades: in 1975, 1982, 1991, and 2009. During each of these episodes, annual real per capita global GDP contracted, and this contraction was accompanied by weakening of other key indicators of global economic activity. The global recessions were highly synchronized internationally, with severe economic and financial disruptions in many countries around the world. The 2009 global recession, set off by the global financial crisis, was by far the deepest and most synchronized of the four recessions. As the epicenter of the crisis, advanced economies felt the brunt of the recession. The subsequent expansion has been the weakest in the post-war period in advanced economies as many of them have struggled to overcome the legacies of the crisis. In contrast, most emerging market and developing economies weathered the 2009 global recession relatively well and delivered a stronger recovery than after previous global recessions. |
| Keywords: | Global economy; global expansion; global recession; global recovery; synchronization of cycles; financial markets; real activity. |
| JEL: | E32 F44 N10 O47 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:koc:wpaper:2002&r=all |
| By: | Thomas Delcey (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper investigates the polysemic character of the Efficient Market Hypothesis through a comparison of the contributions of the two authors who introduced this hypothesis in 1965, Eugene Fama and Paul Samuelson. While both had a normative approach, it is argued that the key point distinguishing the two contributions is the expertise developed by each author. Fama interpreted his model to make practical recommendations for investment strategy. Samuelson interpreted his model to discuss and promote a political expertise that would be useful for policymaking such as the Pareto optimality of speculative price or the social benefit of speculation. The second part investigates the context of paper writing. We suggest that two elements are central to explain Fama and Samuelson's stance: first, the contrasting viewpoints of their research institutions, respectively Chicago and MIT, and second, the position of each author in early financial economics. Finally, we show how their early contrasted stance is consistent with Fama and Samuelson's opposite reactions to the Efficient Market Hypothesis controversy in the 1980s. In conclusion, we suggest that this opposition between Fama and Samuelson is useful to discuss the early EMH controversy in the 1980s. |
| Abstract: | Cet article étudie le caractère polysémique de l'efficience des marchés financiers à travers une comparaison des contributions des deux auteurs qui ont introduit cette théorie, Eugene Fama et Paul Samuelson. Nous montrons que, si les deux auteurs avaient tous les deux une approche normative, l'élément principal qui les différencie est leur conception de l'expertise. Fama interprétait son modèle pour donner des recommandations pratiques en termes de stratégie d'investissement. Samuelson interprétait son modèle pour discuter et mettre en avant une expertise politique utile pour le décideur public comme l'optimalité parétienne des prix spéculatifs ou les bénéfices sociaux de la spéculation. La seconde partie de l'article étudie le contexte des deux contributions. On suggère que deux éléments sont centraux pour expliquer les positions normatives de Fama et Samuelson : premièrement, le point de vu contrasté de leurs institutions respectives de recherche, l'université de Chicago et le MIT, et deuxièmement, la place qu'occupent les deux auteurs dans le champ émergeant de l'économie financière. Nous montrons dans une dernière partie que ces positions sont cohérentes avec les réactions opposées de Fama et Samuelson à la controverse concernant l'efficience des marchés financiers dans les années 1980. L'article conclut en suggérant que cette comparaison peut être utile à l'analyse de cette controverse. |
| Keywords: | Fama (Eugene F),Samuelson (Paul A),efficient market hypothesis,polysemy,efficience des marchés financiers,expertise,polysémie,Samuelson (Paul A.),Fama (Eugene F.) |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01618347&r=all |
| By: | M. Ayhan Kose (Prospects Group, World Bank; Brookings Institution; CEPR; CAMA); Naotaka Sugawara (Prospects Group, World Bank); Marco E. Terrones (Department of Economics and Finance, Universidad del Pacifico) |
| Abstract: | The world economy has experienced four global recessions over the past seven decades: in 1975, 1982, 1991, and 2009. During each of these episodes, annual real per capita global GDP contracted, and this contraction was accompanied by weakening of other key indicators of global economic activity. The global recessions were highly synchronized internationally, with severe economic and financial disruptions in many countries around the world. The 2009 global recession, set off by the global financial crisis, was by far the deepest and most synchronized of the four recessions. As the epicenter of the crisis, advanced economies felt the brunt of the recession. The subsequent expansion has been the weakest in the post-war period in advanced economies as many of them have struggled to overcome the legacies of the crisis. In contrast, most emerging market and developing economies weathered the 2009 global recession relatively well and delivered a stronger recovery than after previous global recessions. |
| JEL: | E32 F44 N10 O47 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:apc:wpaper:162&r=all |
| By: | Cemal Eren Arbath; Quamral H. Ashraf; Oded Galor; Marc Klemp |
| Abstract: | This research advances the hypothesis and establishes empirically that interpersonal population diversity, rather than fractionalization or polarization across ethnic groups, has been pivotal to the emergence, prevalence, recurrence, and severity of intrasocietal conflicts. Exploiting an exogenous source of variations in population diversity across nations and ethnic groups, as determined predominantly during the exodus of humans from Africa tens of thousands of years ago, the study demonstrates that population diversity, and its impact on the degree of diversity within ethnic groups, has contributed significantly to the risk and intensity of historical and contemporary civil conflicts. The findings arguably reflect the contribution of population diversity to the non-cohesivnesss of society, as reflected partly in the prevalence of mistrust, the divergence in preferences for public goods and redistributive policies, and the degree of fractionalization and polarization across ethnic, linguistic, and religious groups. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2020-05&r=all |
| By: | Koh,Wee Chian; Kose,Ayhan; Nagle,Peter Stephen Oliver; Ohnsorge,Franziska Lieselotte; Sugawara,Naotaka |
| Abstract: | Emerging market and developing economies have experienced recurrent episodes of rapid debt accumulation over the past fifty years. This paper examines the consequences of debt accumulation using a three-pronged approach: an event study of debt accumulation episodes in 100 emerging market and developing economies since 1970; a series of econometric models examining the linkages between debt and the probability of financial crises; and a set of case studies of rapid debt buildup that ended in crises. The paper reports four main results. First, episodes of debt accumulation are common, with more than 500 episodes occurring since 1970. Second, around half of these episodes were associated with financial crises which typically had worse economic outcomes than those without crises -- after 8 years output per capita was typically 6-10 percent lower and investment 15-22 percent weaker in crisis episodes. Third, a rapid buildup of debt, whether public or private, increased the likelihood of a financial crisis, as did a larger share of short-term external debt, higher debt service cover, and lower reserves cover. Fourth, countries that experienced financial crises frequently employed combinations of unsustainable fiscal, monetary and financial sector policies, and often suffered from structural and institutional weaknesses. |
| Date: | 2020–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9116&r=all |
| By: | Zaveri,Esha Dilip; Russ,Jason Daniel; Desbureaux,Sebastien Gael; Damania,Richard; Rodella,Aude-Sophie; Ribeiro Paiva De Souza,Giovanna |
| Abstract: | The fallout of nitrogen pollution is considered one of the largest global externalities facing the world, impacting air, water, soil, and human health. This paper combines data from the Demographic and Health Survey data set across India, Vietnam, and 33 African countries to analyze the causal links between pollution exposure experienced during the very earliest stages of life and later-life health. The results show that pollution exposure experienced in the critical years of development?from birth until age three?is associated with decreased height as an adult, a well-known indicator of overall health and productivity, and is robust to several statistical checks. Because adult height is related to education, labor productivity, and income, this also implies a loss of earning potential. The analysis begins within an assessment in India, where the data are more available, and is then extended to geographic settings including Vietnam and 33 countries in Africa. The results are consistent and show that early-life exposure to nitrogen pollution in water can lower height-for-age scores during childhood in Vietnam and during infancy in Africa. These findings add to the evidence on the enduring consequences of water pollution and identify a critical area for policy intervention. |
| Date: | 2020–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9143&r=all |
| By: | Hallward-Driemeier,Mary C.; Kochanova,Anna; Rijkers,Bob |
| Abstract: | Does democratization promote economic competition? This paper documents that the disruption of political connections associated with Suharto's fall had a modest pro-competitive effect on Indonesian manufacturing industries in which his family had extensive business interests. Firms with connections to Suharto lost substantial market share following his resignation. Industries in which Suharto family firms had larger market share during his tenure exhibited weak improvements in broader measures of competition in the post-Suharto era relative to industries in which Suharto firms had not been important players. |
| Keywords: | General Manufacturing,Construction Industry,Common Carriers Industry,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Plastics&Rubber Industry,Food&Beverage Industry,Business Cycles and Stabilization Policies,Finance and Development,Financial Economics,Health Care Services Industry,International Trade and Trade Rules,Energy and Mining |
| Date: | 2020–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9112&r=all |
| By: | Ivan Mendieta-Muñoz (University of Utah); Codrina Rada (University of Utah); Rudi von Arnim (University of Utah) |
| Abstract: | This paper provides novel insights on the changing functional distribution of income in the post–war US economy. We present a Divisia index decomposition of the US labor share (1948–2017) by fourteen sectors. The decomposition method furnishes exact contributions from four components towards aggregate changes of the labor share: sectoral real compensation, sectoral labor productivity, the structure of the economy as measured by employment shares, and the structure of markets as measured by relative prices. Results are presented for the entire period as well as the “golden age” (1948–1979) and a “neoliberal era” (1979–2017), painting a rich and detailed picture of structural changes in the US economy. The manufacturing sector plays a dominant role: despite its continuously falling employment share, growth of real compensation matches that of labor productivity in the early period but falls far behind during the neoliberal era. Further, employment shifts towards stagnant sectors with relatively low real wages and productivity. We discuss these results in the context of Baumol’s and Lewis’s seminal contributions on dual economies. While the cost disease is apparent—employment shifts towards stagnant sectors, their relative prices rise, and the aggregate growth rate (of productivity) decreases—the originally suggested mechanism of upward real wage convergence is muted. The observed changes are instead compatible with a “reverse-Lewis” shift, where stagnant sectors act as a labor surplus sink, and dynamic sector labor experiences slowing real wage growth. |
| Keywords: | Labor share, sectoral decomposition, stagnation, Baumol, Lewis |
| JEL: | D33 C43 O41 O5 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:105&r=all |
| By: | Michael Wyrwich (University of Groningen and FSU Jena) |
| Abstract: | Previous research suggests that entrepreneurs value autonomy more than non-entrepreneurs do across countries and institutional contexts. However, most evidence exists for contexts with more or less entrepreneurship-facilitating and stable institutional framework conditions while we do not know whether this connection also exists in situations, in which entrepreneurs operate under challenging institutional conditions. This paper exploits a historical episode to first analyze a context where entrepreneurs faced massive institutional barriers and, second, a context marked by significant changes of the institutional framework conditions for entrepreneurship. In both contexts, entrepreneurs are challenged either by external resistance toward their activity or by uncertainty regarding the future prospects of their endeavor. Our results show an above-average endorsement of autonomy as an important societal value among people that were entrepreneurs in the autocratic anti-entrepreneurial regime and those respondents that started or planned to start an own venture during institutional upheaval. The findings of our analysis suggest that the mark-up entrepreneurs reveal with respect to valuing autonomy found in the previous literature is not an artefact of stable entrepreneurship-facilitating institutional framework conditions. |
| Keywords: | Entrepreneurship, Value orientation, Autonomy, Institutions |
| JEL: | L26 P20 Z10 |
| Date: | 2020–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2020-001&r=all |
| By: | Lindgren, Erik (Department of Economics, Stockholm University); Pettersson-Lidbom, Per (Department of Economics, Stockholm University); Tyrefors, Björn (Research Institute of Industrial Economics (IFN)) |
| Abstract: | In this paper, we analyze how a weighted voting system introduced in 1862, which shifted the distribution of political power from landowners to industrialists at local town meetings, affected investments in local public education. We use an event study design based on a newly constructed panel data set with annual observations of nearly 2,200 Swedish local governments over 28 years, i.e., more than 60,000 observations. Most importantly, there is no pre-trend in educational spending in our event study but rather a sharp change in the dynamic treatment effects exactly at the date when the treatment occurs, i.e., when industrialists receive more political power at town meetings. The estimated cumulative treatment effect is also economically substantial. For example, per capita spending on education increased by approximately 37% within 6 years in local governments where industrialists came to political power. Our findings are therefore consistent with the idea that political institutions are a key determinant of human capital accumulation and long-run economic development. |
| Keywords: | Political Institutions; Education; Human Capital; Development |
| JEL: | H75 I25 N34 O15 O43 |
| Date: | 2020–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1315&r=all |
| By: | Pamfili Antipa (Sciences Po and Banque de France); Christophe Chamley (Boston University and Paris School of Economics) |
| Abstract: | The French Wars (1793-1815) forced unprecedented coordination between fiscal and monetary authorities and a revolution in the role of the Bank of England. Using hand-collected data, this analysis of the fiscal and monetary policies at that time, and of their impacts on the price of the pound in the internal and the external markets, highlights how the steady overarching commitment to fiscal balance led to the extraordinary success of a flexible implementation of this principle in four sharply defined regimes between 1793 and 1821, “tax-smoothing as usual†(1793-1797), “Real Bills and war tax†(1797-1810), “whatever it takes†(1810-1810), “exit†(1815-1821). |
| Keywords: | : Interactions between monetary and fiscal policies, central bank balance sheet, policy commitment, Fiscal Theory of the Price Level. |
| JEL: | N13 H63 E58 E62 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:bos:iedwpr:dp-327&r=all |
| By: | Pino, Francisco J. (University of Chile); Vidal-Robert, Jordi (University of Sydney) |
| Abstract: | We study the effect of divisions within the elite on the probability of internal conflict in the Papal States between 1295 and 1846. We assemble a new database using information on cardinals that participated in conclaves during this period, and construct measures of polarization and fractionalization based on the cardinals' birthplaces. The deaths of popes and cardinals provide plausible exogenous variation in the timing of the conclave and the composition of the College of Cardinals at the time of the election. We exploit this variation to analyze the causal effect of a divided conclave on conflict. We find that an increase of one standard deviation in our measure of polarization raised the likelihood of internal conflict by between 3 and 4 percentage points in a given year and by up to 19 percentage points in a given papacy. Consistent with the interpretation of an irresolute leader learning throughout his papacy, the effect is largest in the initial years after the conclave, to gradually vanish over time. |
| Keywords: | conflict, polarization, papal states, conclave |
| JEL: | D72 D74 N33 N43 Z12 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12911&r=all |
| By: | Kevin L. Kliesen |
| Abstract: | Deciding to undertake a series of tightening actions present unique challenges for Federal Reserve policymakers. These challenges are both political and economic. Using a variety of economic and financial market metrics, this article examines how the economy and financial markets evolved in response to the five tightening episodes enacted by the FOMC since 1983. The primary aim is to compare the most-recent episode, from December 2015 to December 2018, with the previous four episodes. The findings in this article indicate that the current episode bears some resemblance to previous Fed tightening episodes, but also differs in several key dimensions. For example, in the first four episodes, the data show the FOMC was generally tightening into a strengthening economy with building price pressures. In contrast, in the fifth episode the FOMC began its tightening regime during a deceleration in economic activity and with headline and core inflation remaining well below the FOMC’s 2 percent inflation target. Moreover, both short- and long-term inflation expectations were drifting lower. These developments helped explain why there was a one-year gap between the first and second increases in the federal funds target rate in the most-recent episode. Another key difference is that in three of the first four episodes, the FOMC continued to tighten after the yield curve inverted; a recession then followed shortly thereafter. However, in the final episode, the FOMC ended its tightening policy about eight months before the yield curve inverted. It remains to be seen if a recession follows this inversion. |
| Keywords: | Federal Open Market Committee; monetary policy; macroeconomy; inflation; yield curve; recession |
| JEL: | E3 E4 E5 N1 |
| Date: | 2020–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:87418&r=all |
| By: | Rashid, Muhammad Mustafa |
| Abstract: | In 2001 soon after the Asian Crises of 1997-1998, the Dotcom Bubble, 9/11, the Enron crises triggered a fraud crisis in Wall Street that impacted the market to the core. Since then scandals such as the Lehman Brothers and WorldCom in 2007-2008 and the Great Recession have surpassed it, Enron still remains one of the most important cases of fraudulent accounting. In 2000’s even though the financial industry had become highly regulated, deregulation of the energy industry allowed companies to place bets on future prices. At the peak of the dotcom bubble Enron was named as a star innovator but when the dotcom bubble burst, Enron’s plan to build high speed internet did not flourish and investors started to realize losses. Furthermore, the financial losses of the operations were hid using the market to market accounting technique instead of book value and using special purpose entities to hide debt. The root cause that was identified as a company with a toxic corporate culture focused on officer compensation rather than social responsibility and hence faulty leadership. Is it possible then that; ethical accounting practices, social responsibility and ethics all become inferior goods as income rises in an ‘irrationally exuberant’ era? |
| Keywords: | Keywords: Enron (ENE, ENRN), Dotcom Bubble, Accounting Fraud, Deregulation, Speculation, Corporate Culture, Social Responsibility, Government Intervention, Risk Management, Consumer Behavior, Energy Markets |
| JEL: | G32 H12 K32 K4 M1 M12 M14 M4 N0 |
| Date: | 2020–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98441&r=all |