nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2020‒03‒30
25 papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Sample selection biases and the historical growth pattern of children By Schneider, Eric B.
  2. The Rise of American Minimum Wages, 1912-1968 By Fishback, Price; Seltzer, Andrew
  3. A century old and still visionary: Fayol's innovative theory of management By Armand Hatchuel; Blanche Segrestin
  4. Great expectations, financialization and bank bailouts in democracies By Chwieroth, Jeffrey; Walter, Andrew
  5. The Separation and Reunification of Germany : Rethinking a Natural Experiment Interpretation of the Enduring Effects of Communism By Becker, Sascha O.; Mergele, Lukas; Woessmann, Ludger
  6. Les dépenses publiques dans l’Athènes démocratique : 200 ans après August Böckh By David Pritchard
  7. Mass Migration and Technological Change By Andersson, David; Karadja, Mounir; Prawitz, Erik
  8. L’idée de régulation dans les sciences : hommage à l’épistémologue Jean Piaget By Claude Diebolt
  9. Of mice and merchants: connectedness and the location of economic activity in the Iron Age By Bakker, Jan; Maurer, Stephan; Pischke, Jorn-Steffen; Rauch, Ferdinand
  10. Urban Form and Productivity : What Is the Shape of Latin American Cities ? By Duque,Juan Carlos; Lozano Gracia,Nancy; Patino,Jorge E.; Restrepo Cadavid,Paula
  11. The Menger-Mises Theory of the Origin of Money - Conjecture or Economic Law? By Kristoffer Hansen
  12. How the Nation Resolved Its First Debt Ceiling Crisis By Kenneth D. Garbade
  13. Education supply and economic growth in nineteenth-century France By Adrien Montalbo
  14. Capital Market Integration with Multiple Convergence Clubs: The Case of Prewar Japan By Tetsuji Okazaki; Koji Sakai
  15. The Direct Effect of Corporate Law on Entrepreneurship By Guzman, Jorge
  16. A Different Set of Rules? NLRB Proposed Rule Making and Student Worker Unionization Rights By Herbert, William A.; van der Naald, Joseph
  17. The struggle for sustainable waste management in Hong Kong: 1950s–2010s By Lou, Loretta Ieng Tak; Fabian, Nele
  18. Electricity Access and Structural Transformation : Evidence from Brazil's Electrification By Perez Sebastian,Fidel; Steinbuks,Jevgenijs; Feres,Jose Gustavo; Trotter,Ian Michael
  19. Complementarity between mechanization and human capital: How did machines and educated white-collar workers enhance labor productivity in prewar Japanese coal mines ? By Tetsuji OKAZAKI
  20. Approche historique et perspectives managériales : une conjugaison plurielle du fait religieux et du travail dans la France contemporaine. By Hugo Gaillard; Frédéric Lunel
  21. Long-Term Evolution of Inequality of Opportunity By Maurizio Bussolo; Daniele Checchi; Vito Peragine
  22. The first modern economist By Kristoffer Mousten Hansen
  23. Financial Innovation: The Origins of the Tri-Party Repo Market By Antoine Martin; Susan McLaughlin
  24. The impact of economic and political factors on popularity for France (1981- 2017) By Antoine Auberger
  25. A Long-Run Approach to Money, Unemployment and Equity Prices By Kuk Mo Jung; Ju Hyun Pyun

  1. By: Schneider, Eric B.
    Abstract: Bodenhorn et al. (2017) have sparked considerable controversy by arguing that the fall in adult stature observed in military samples in the United States and Britain during industrialisation was a figment of unobserved selection into the samples. While subsequent papers have questioned the extent of the bias (Komlos and A’Hearn 2016; Zimran 2017), there is renewed concern about selection bias in historical anthropometric datasets. Therefore, this paper extends Bodenhorn et al.’s discussion of selection bias on unobservables to sources of children’s growth, specifically focussing on biases that could distort the age pattern of growth. Understanding how the growth pattern of children has changed is important since these changes underpinned the secular increase in adult stature and are related to child stunting observed in developing countries today. However, there are significant sources of unobserved selection in historical datasets containing children and adolescents’ height and weight. This paper highlights, among others, three common sources of bias: 1) positive selection of children into secondary school in the late nineteenth and early twentieth centuries; 2) distorted height by age profiles created by age thresholds for enlistment in the military; and 3) changing institutional ecology which determines to which institutions children are sent. Accounting for these biases adjusts the literature in two ways: evidence of a strong pubertal growth spurt in the nineteenth century is weaker than formerly acknowledged and some long run analyses of changes in children’s growth are too biased to be informative, especially for Japan.
    Keywords: selection bias; child growth; anthropometrics; health history; ES/L010267/2
    JEL: I00 N30 O15 J13 C52 C81
    Date: 2019–05–14
  2. By: Fishback, Price (University of Arizona); Seltzer, Andrew (Royal Holloway, University of London)
    Abstract: Minimum wages have been among the most controversial government interventions in labor markets. There have been several waves of minimum wage activity over the past century, beginning with a 1912 Massachusetts law. Since 1938 minimum wages in the United States have been set by a complex array of federal and state laws, with state laws sometimes exceeding the national law and closing important coverage gaps. Between 1938 and 1968, the real value of the federal minimum wage was generally increasing. Coverage gaps continued to be closed by amendments to federal legislation into the 1970s. In the 1980s, the real minimum rate declined sharply, and has since this time never again reached the level of 1955-1980. In this paper we examine the political economy of early minimum wage laws, focussing on the role of interest groups, politicians, courts, economists, and the general public.
    Keywords: minimum wages, political economy
    JEL: N32 N42 J88
    Date: 2020–02
  3. By: Armand Hatchuel (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Blanche Segrestin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique, PSL - PSL Research University)
    Abstract: Based on historical data and a seminal text never translated into English, we present an original interpretation of Henri Fayol's (1841-1925) administrative theory. This interpretation, which is consistent with the comments that Fayol later presented about his 'General and industrial administration' treatise, brings out his pioneering contribution to management studies. Fayol made the 'unknown' introduced by science into industry the central tenet of modern administration. He foreshadowed major aspects of today's innovation management. More fundamentally, Fayol laid new foundations for the field of management sciences. He drew from the political and philosophical works of the Enlightenment to develop a series of original concepts (in French: prévoyance, perfectionnement, programme, inconnu, corps social) that were difficult to interpret and to translate. We maintain that Fayol's administrative science is a theory of a 'creative/political' rationality that still, today, offers better theoretical and explanatory support for management science than economic and bureaucratic theory.
    Keywords: innovation management,management history,Fayol,administrative theory,organization theory
    Date: 2019
  4. By: Chwieroth, Jeffrey; Walter, Andrew
    Abstract: Accelerating financialization and rising societal wealth have meant that democratic governments increasingly provide bailouts following banking crises. Using a new long-run data set, we show that despite frequent and virulent crises before World War II, bank bailouts to protect wealth were then exceptionally rare. In recent decades, by contrast, governments have increasingly opted for extensive bailouts—well before the major interventions of 2007–2009. We argue that this policy shift is the consequence of the “great expectations” of middle-class voters overlooked in existing accounts. Associated with the growing financialization of wealth, rising leverage, and accumulating ex ante financial stabilization commitments by governments, these expectations are suggestive of substantially altered policy preferences and political cleavages. Since the 1970s, when severe banking crises returned as an important threat to middle-class wealth, this “pressure from below” has led elected governments to provide increasingly costly bailouts with no historical precedent.
    Keywords: political economy; globalization; economic policy
    JEL: N0
    Date: 2020–01–23
  5. By: Becker, Sascha O. (Monash University, University of Warwick, CEPR, CESifo, IZA, CAGE, and ROA); Mergele, Lukas (ifo Institute at the University of Munich, CESifo); Woessmann, Ludger (University of Munich and ifo Institute, CESifo, IZA, CAGE, and ROA)
    Abstract: German separation in 1949 into a communist East and a capitalist West and their reunification in 1990 are commonly described as a natural experiment to study the enduring effects of communism. We show in three steps that the populations in East and West Germany were far from being randomly selected treatment and control groups. First, the later border is already visible in many socio-economic characteristics in pre-World War II data. Second, World War II and the subsequent occupying forces affected East and West differently. Third, a selective fifth of the population fled from East to West Germany before the building of the Wall in 1961. In light of our findings, we propose a more cautious interpretation of the extensive literature on the enduring effects of communist systems on economic outcomes, political preferences,cultural traits, and gender roles. JEL codes: D72 ; H11 ; P26 ; P36 ; N44
    Keywords: political systems ; communism ; preferences ; culture ; Germany
    Date: 2020
  6. By: David Pritchard (University of Queensland, Faculty of Humanities and Social Sciences, School of Historical and Philosophical Inquiry)
    Abstract: In 1817, August Böckh asserted in his book The Public Economy of Athens that ancient Athenians prefered spending their money to support theirs festivals to funding their military expenditures. Since, many new sources, mostly epigraphic, lead to reassess Böckh's thesis for the 430-350 BC period. The verdict is unambigous : the military expenditures were by far the main item of expenditure in classical Athens.
    Abstract: En 1817, dans son ouvrage consacré à l'économie politique d'Athènes, August Böckh affirmait que les Athéniens de l'époque classique avait préféré gaspiller leurs ressources pour financer des festivals au lieu des les utiliser pour les dépenses militaires. Depuis cette date, de nombreuses sources nouvelles, notamment épigraphiques, permettent d'apprécier cette thèse pour la période 430-350 a.C. La conclusion est sans appel : les dépenses militaires étaient de très loin le premier poste de dépenses pour Athènes. Cet article est une traduction du chapitre 4 de l'ouvrage de David M. Pritchard, Athenian Democracy at War, Cambridge 2019. © David M. Pritchard. Il est reproduit avec l'autorisation de Cambridge University Press.
    Keywords: public expenditures,August Böckh,military expenditures,finances publiques,festivals,dépenses militaires,Mots-clés -August Böckh
    Date: 2018–12
  7. By: Andersson, David; Karadja, Mounir; Prawitz, Erik (Research Institute of Industrial Economics)
    Abstract: This paper studies the effect of emigration on technological change in sending locations after one of the largest migration events in human history, the mass migration from Europe to the United States in the 19th century. To establish causality, we adopt an instrumental variable strategy that combines local growing-season frost shocks with proximity to emigration ports. We document two sets of results. First, using novel data on technological patents, we find that emigration led to an increase in innovative activity in sending municipalities. Moreover, the increase in innovation is coupled with an increased adoption of new technologies in both the agricultural and industrial sectors. Second, in terms of local economic development, we find that emigration led to higher unskilled wages in agriculture, a shift towards employment in the nascent industrial sector, a larger presence of incorporated firms, as well as higher tax revenues.
    Date: 2020–03–20
  8. By: Claude Diebolt
    Abstract: Le 16 septembre 2020 on célèbrera le 40ème anniversaire de la mort de Jean Piaget (1896-1980). Cette contribution rend hommage à l’épistémologue, à son analyse systémique, à sa classification hiérarchique des différents niveaux de régulation comme source d’inspiration unique pour mes propres travaux en cliométrie de la croissance et des cycles économiques.
    Keywords: Epistémologie, Jean Piaget, régulation, sciences, systèmes complexes, systèmes sociaux, croissance, cycles, histoire économique, cliométrie..
    JEL: A12 B25 B31 B41 N00
    Date: 2020
  9. By: Bakker, Jan; Maurer, Stephan; Pischke, Jorn-Steffen; Rauch, Ferdinand
    Abstract: We study the causal relationship between geographic connectedness and development using one of the earliest massive trade expansions: the first systematic crossing of open seas in the Mediterranean during the time of the Phoenicians. We construct a geography based measure of connectedness along the shores of the sea. We relate connectedness to economic activity, which we measure using the presence of archaeological sites. We find an association between better connected locations and archaeological sites during the Iron Age, at a time when sailors began to cross open water routinely on a big scale. We corroborate these findings at world level.
    Keywords: urbanization; locational fundamentals; trade; ES/M010341/1
    JEL: F14 O47
    Date: 2020–01–23
  10. By: Duque,Juan Carlos; Lozano Gracia,Nancy; Patino,Jorge E.; Restrepo Cadavid,Paula
    Abstract: This paper examines the linkages between urban form and city productivity, using alternative metrics for urban form and applying them to a comprehensive sample of Latin American cities. Although most of the literature has concentrated on the effects of population density (compact versus sprawling urban development), this paper seeks to assess whether different dimensions of a city's urban form, such as shape, structure, and land-use, affect its economic performance. The paper finds that the shape of the urban extent, the inner-city connectedness, and fullness have a statistically significant influence on the productivity level of the city.
    Keywords: Hydrology,City to City Alliances,Urban Economics,Urban Economic Development,National Urban Development Policies&Strategies,Urban Communities,Regional Urban Development,Transport Services,Economic Growth,Economic Theory&Research,Industrial Economics
    Date: 2019–01–10
  11. By: Kristoffer Hansen (GRANEM - Groupe de Recherche Angevin en Economie et Management - Institut National de l'Horticulture et du Paysage - AGROCAMPUS OUEST - UA - Université d'Angers)
    Abstract: In recent years some economists have begun to doubt the scientific standing of the standard Austrian theory of the origin of money. They seem to think that it is only one possible solution to the problem of accounting for money's value. Of these economists, Gary North (North 2012b) has presented the most cogent count-er-interpretation to how we should understand the theory of the origin of money as elaborated by Carl Menger and Ludwig von Mises. Unlike the rest of economic theory, the origin of money and Mises's regression theorem do not partake of the character of a scientific law deduced from the basic principles of the science, but is rather, and is presented as such in the writings of Menger and Mises, what North terms "conjectural history." In this essay we will respond to North's challenge and to the economists who agree with him.
    Date: 2019
  12. By: Kenneth D. Garbade (Federal Reserve Bank; Bankers Trust Company)
    Abstract: In the second half of 1953, the United States, for the first time, risked exceeding the statutory limit on Treasury debt. How did Congress, the White House, and Treasury officials deal with the looming crisis? As related in this post, they responded by deferring and reducing expenditures, by monetizing ?free? gold that remained from the devaluation of the dollar in 1934, and ultimately by raising the debt ceiling.
    Keywords: debt ceiling; gold monetization
    JEL: G1
  13. By: Adrien Montalbo (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Keywords: primary instruction,economic development,nineteenth-century France
    Date: 2020–02
  14. By: Tetsuji Okazaki (Faculty of Economics, The University of Tokyo); Koji Sakai (Division of Economics, Kyoto Sangyo University)
    Abstract: This paper examines capital market integration in prewar Japan, using a methodology that allows for multiple equilibria in convergence. Specifically, we apply the method of log t regression and the club convergence test proposed by Phillips and Sul (2007) to examine the convergence of prefectural loan rates and detect the convergence clubs that followed heterogeneous transition paths. Whereas prefectural loan rates were converging towards two equilibria from 1888–1900, all the prefectural loan rates converged towards a unique equilibrium from 1901–1926. From 1927, however, the prefectural loan rates diverged again, and four different convergence clubs emerged. Restrictive regulation imposed by the Bank Law of 1928 reduced competition in local markets, increased barriers to interregional capital mobility, and, thereby, reversed capital market integration.
    Date: 2020–03
  15. By: Guzman, Jorge
    Abstract: I study the impact of better law on regional entrepreneurship. To do so, I take advantage of the introduction of new corporate acts modeled after the Model Business Corporation Act (MBCA), a compendium of best practices created by the American Bar Association, and new data measuring new business registrations by state in the post-war era. From the 1950's to 1970's, nineteen U.S. states introduced new corporate law following the MBCA. While the introduction is endogenous, an approach comparing out of state expansions to local registrations allows me to recover the direct effect of law on entrepreneurship (i.e., the effect on firm formation conditional on general ecosystem improvements). The are no pre-trends using this approach. I estimate better law increases the rate of new local corporations by 5% per year, which is confirmed in robustness tests and two instrumental variables approaches that account for state-level confounders. Of the new corporations, one tenth are substitutions from other firm types, and the rest net-new firms. Consistent with a mechanism whereby better law increases investor protection and entrepreneurship, states with more rudimentary institutions benefited more, and states that only did partial adoption of the MBCA saw no benefit.
    Date: 2020–03–18
  16. By: Herbert, William A.; van der Naald, Joseph (School of Labor and Urban Studies, CUNY)
    Abstract: This article presents data, precedent, and empirical evidence relevant to the National Labor Relations Board (NLRB) proposal to issue a new rule to exclude graduate assistants and other student employees from coverage under the National Labor Relations Act (NLRA). The analysis in three parts. First, the authors show through an analysis of information from other federal agencies that the adoption of the proposed NLRB rule would exclude over 81,000 graduate assistants on private campuses from the right to unionize and engage in collective bargaining. Second, the article presents a legal history from the past half-century about unionization of student employees at private and public sector institutions of higher education, including the NLRB’s oscillation on the question of whether student employees are protected under the NLRA. The inconsistencies of the NLRB is in stark contrast to state and Canadian provincial precedent during the same period. Lastly, the authors analyze the terms of 42 current collective bargaining agreements covering student workers, including 10 at the private sector institutions. The empirical evidence from five decades of relevant collective bargaining history, precedent, and contracts demonstrates consistent economic relationships between student employees and their institutions.
    Date: 2020–03–16
  17. By: Lou, Loretta Ieng Tak; Fabian, Nele
    Abstract: As Hong Kong’s landfills are expected to reach saturated conditions by 2020, the city can no longer rely on landfilling alone as the sole solution for waste treatment in the long term. Drawing on five months of archival research at the University of Hong Kong and the Hong Kong Public Records Office (PRO) in 2016 as well as 17 months of fieldwork conducted between 2012, 2013 and 2016, this article provides a much-needed overview of why sustainable waste management has always been such a challenge for Hong Kong. Focusing on the city’s dependence on landfills and its failure to integrate alternative waste management technologies, namely incineration, into its current waste management regime, we explicate Hong Kong’s waste management predicaments from the 1950s to the present day. Through a historical lens, we argue that Hong Kong’s waste problems have a historical root and that they are unlikely to be resolved unless the government is willing to learn from its past mistakes and adopt a much more proactive approach in the near future.
    Keywords: waste management; landfills; land reclamation; incineration; recycling; sustainability; Hong Kong
    JEL: R14 J01
    Date: 2019–11–06
  18. By: Perez Sebastian,Fidel; Steinbuks,Jevgenijs; Feres,Jose Gustavo; Trotter,Ian Michael
    Abstract: This study proposes a novel supply-side mechanism driving economic structural transformation: grid electrification. Increasing electricity availability affects the reallocation of inputs to more productive activities through generating higher returns and lowering entry costs in sectors with greater infrastructure intensity. The results of modeling and econometric analysis based on Brazil's historical data over the period 1970-2006 confirm that the manufacturing sector benefits the most in these two dimensions, followed by services and agriculture. The expansion of electricity infrastructure explains about 17 percent of this process and 32 percent of the observed increase in GDP per capita. Simulations of a multisector neoclassical growth model with heterogeneous firms help assessing the effectiveness of different electrification policies.
    Keywords: Energy Policies&Economics,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Food&Beverage Industry,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing,Plastics&Rubber Industry,Food Security,Electric Power,Economic Theory&Research,Industrial Economics,Economic Growth
    Date: 2020–03–13
  19. By: Tetsuji OKAZAKI
    Abstract: This paper investigates how mechanization, white-collar human capital, and the complementarity between them led to an improvement in the labor productivity of bluecollar workers. We estimated production functions that included interaction terms between variables representing the intensity of physical capital and white-collar human capital, using detailed mine-level panel data from the coal mining industry in prewar Japan. We found that mechanization and white-collar human capital were indeed complementary. That is, in the mines where mechanization proceeded, and only in those mines, the higher the education level of white-collar workers was, the larger was the impact on the labor productivity of blue-collar workers.
    Date: 2020–01
  20. By: Hugo Gaillard (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université); Frédéric Lunel
    Abstract: Le cheminement français de prise en compte et de régulation de l'exercice du culte au travail n'est pas linéaire. L'actualité récente a montré un intérêt prononcé pour les questions de démonstration du fait religieux au travail. L'accommodement entre l'exercice rituel et la vie professionnelle relève pourtant de revendications anciennes. Ce sont les réponses qui leur sont apportées qui, elles, évoluent au gré des conjonctures (sociale, économique, politique) et des constructions législatives et jurisprudentielles. En partant des premiers cas recensés de manifestation religieuse au travail dans les années 1930 puis en passant par les lois Auroux pour arriver à la récente loi travail dite «loi El Khomri», nous retraçons la naissance d'un contexte législatif particulier en matière de pratiques cultuelles au travail dans les entreprises et administrations françaises.Afin de saisir avec plus de précision les causes qui conduisent les individus à exprimer leur foi dans le contexte a priori profane qu'est celui du travail, une perspective managériale appuie l'approche historique. Les politiques contemporaines de promotion de la diversité au travail et les pratiques d'individualisation et de personnalisation des pratiques de Gestion des Ressources Humaines sont présentées comme couronnant le mouvement juridique et actant la religion au travail comme une question centrale au sein des entreprises françaises.Les éléments développés puisés en démographie, en histoire ou en management témoignent de la nécessité de discussions, d'aller-retour et d'échanges interdisciplinaires entre les divers départements de recherche des universités. Cet essai de dialogue entre la gestion et l'histoire est notre contribution à ce besoin.
    Date: 2018–10–03
  21. By: Maurizio Bussolo (World Bank); Daniele Checchi (University of Milan); Vito Peragine (Unversity of Bari "Aldo Moro")
    Abstract: The main goal of this paper is to document and analyze the long-term evolution of inequality of opportunity (IOp) in the four largest European economies (France, Germany, Great Britain and Italy). Relative IOp represents an important portion of total income inequality, with values ranging from 30 to 50 percent according to the standard deviation of logs. For all the countries, relative IOp shows a stable or declining time trend. In addition to these descriptive findings, the paper proposes a theoretical framework identifying channels of transmission which may affect IOp. Using this framework, a decomposition focuses on the role of three variables: a) intergenerational persistence in educational attainment, b) return of education, and c) networking activity of parents. While the first two variables exhibit a declining trend in all countries, which as predicted by the model should produce a decline in IOp, the third one appears to be rising in some countries, counteracting the effects of the first twoKeywords: Inequality of Opportunity, Decomposition methods, Education mobility, Returns to Education, Family Networking, Cohort Analysis
    JEL: D31 D63 E24 I24 J62
    Date: 2020–03
  22. By: Kristoffer Mousten Hansen (GRANEM - Groupe de Recherche Angevin en Economie et Management - Institut National de l'Horticulture et du Paysage - AGROCAMPUS OUEST - UA - Université d'Angers)
    Date: 2019
  23. By: Antoine Martin; Susan McLaughlin
    Abstract: The conventional wisdom about financial innovation is that it is typically undertaken as a way to increase profits. However, financial innovation can also occur as a response to the need to reduce risk. Tri-party repo is an example of such innovation. While tri-party repo ultimately evolved in ways that created and amplified systemic risk (as we describe in the second post in this series), its origin was as a solution to inefficiencies and risks associated with the repo settlement arrangements prevailing at the time.
    Keywords: Tri-party repo
    JEL: G1
  24. By: Antoine Auberger (IRGEI - Institut de Recherche sur la Gouvernance et l'Economie des Institutions - UP2 - Université Panthéon-Assas)
    Abstract: In this article, we study a popularity function for the popularity of the French political parties (1981Q2-2017Q1). At first, we suppose that voters have a retrospective behaviour according to reward-punishment model in a closed economy. We show that the unemployment rate has a significant influence on the popularity of the French political parties. We find unfavourable results for the partisan hypothesis. We also show that the economic openness has an influence on popularity. We also find a partly expected result for the asymmetry hypothesis: punishment without reward. For the political variables, we show the significant influence of the honeymoon effect, the second order elections (regional or European), and the congresses of the Socialist party.
    Keywords: popularity functions,voters' behaviour,economic situation,political variables,econometric models
    Date: 2020–03–07
  25. By: Kuk Mo Jung (Department of Economics, Sogang University, Seoul); Ju Hyun Pyun (Korea University Business School,)
    Abstract: A long-run relationship between money (inflation or interest rates), unemployment, and equity prices are studied. We first document robust empirical evidence that a statistically significant joint relationship between the long term trends of three variables exists in the post-WWII U.S. data: (i) a positive relationship between inflation (or interest rates) and unemployment; (ii) a negative relationship between unemployment and equity prices; and (iii) a negative relationship between inflation (or interest rates) and equity prices. Then, we provide a unified framework that incorporates money, unemployment, and equity prices with microfoundation and empirical relevance. The model predicts the empirically found joint relationship in the long run. The calibration exercises also show that the model results driven solely by US monetary policy can account for 62.9% and 29.8% of variations of the long-term trends of US unemployment rate and real equity prices, respectively
    Keywords: Inflation, Unemployment, Equity Prices, SearchModels
    JEL: E4 E5
    Date: 2020

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