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on Business, Economic and Financial History |
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Issue of 2020‒04‒27
fourteen papers chosen by |
| By: | Ulrich Pfister |
| Abstract: | In situations where few data are available to document economic activity, the size of the urban population is a valuable indicator for economic development and the spatial pattern of an economy. This study improves the basis for investigations into the quantitative urban history of Germany by constructing a novel database of the population size of 412 cities that had at least 5000 inhabitants between 1500 and 1850. Compared with earlier databases it uses a considerably larger body of sources, and it improves the resolution of data by interpolating and extrapolating annual series. The resulting series of total urban population is consistent with recent work on aggregate demographic trends in Germany. The trajectory of the urbanization rate shows that Germany began its transition from stagnation to growth around 1800, several decades before the onset of industrialization. Regional urbanization rates converged (rather than diverged) in 1815/19–1858, that is, during the transition to the first stage of industrialization. Discussion of individual regional histories suggests state formation, (proto-)industrialization and regional population density as possibly relevant determinants of urban growth in the area and time period studied. |
| Keywords: | Urban growth, economic development, economic demography |
| JEL: | N13 N33 N93 O47 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:cqe:wpaper:9020&r=all |
| By: | Boberg-Fazlic, Nina (Department of Business and Economics); Jensen, Peter Sandholt (Department of Business and Economics); Lampe, Markus (Vienna University of Economics and Business, CEPR); Sharp, Paul (Department of Business and Economics); Skovsgaard, Christian Volmar (Department of Public Health - Health Economy) |
| Abstract: | We explore the role of elites for development and in particular for the spread of cooperative creameries in Denmark in the 1880s, which was a major factor behind that country’s rapid economic catch-up. We demonstrate empirically that the location of early proto-modern dairies, so-called hollænderier, introduced onto traditional landed estates by landowning elites from the Duchies of Schleswig and Holstein in the eighteenth century, can explain the location of cooperative creameries in 1890, more than a century later. We interpret this as evidence that areas close to estates which adopted the Holstein System witnessed a gradual spread of modern ideas from the estates to the peasantry. Moreover, we identify a causal relationship by utilizing the nature of the spread of the Holstein System around Denmark, and the distance to the first estate to introduce it, Sofiendal. Finally, we demonstrate that areas with cooperatives also enjoyed higher levels of income. |
| Keywords: | Institutions; technology; knowledge spillovers; landowning elites; cooperatives; Denmark |
| JEL: | N53 O13 Q13 |
| Date: | 2020–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2020_005&r=all |
| By: | Lepore, Amedeo |
| Abstract: | Abstract The current Covid-19 pandemic is rapidly calling into question the functioning models of both the economy and society at large that until recently were taken for granted. This challenge is urging scholars and research centres to ponder the perspectives of the globalization process which started at the end of the XXth Century. Such considerations are spurred by the scope of the impact that Coronavirus is having on the economy, which goes beyond the temporary interruption of commercial exchanges and the disruption to the mobility of people. The pandemic is creating a sense of insecurity which has few precedents in the current age, pervading wider and wider sectors of the population, whose future now appears confused. According to several authors, this crisis is momentous in scope and may have an effect comparable to, if not greater than, that of the 2008 and 1929 economic crises. This essay aims to set the current emergency phase within a historical perspective by analysing the concepts of risk and uncertainty as characterizing features of the economic processes, because of their connection to several endogenous and exogenous factors, to the production structure, and to the actions of the forces operating within society. The historical dimension of this phenomenon does not concern so much the permanence of these two concepts in different epochs, but rather the way they present themselves, their incidence on economy and development processes, their interpretation by scholars and operators, as well as the consequences they have on the organization of society and the life of individuals. |
| Keywords: | Economic history of Covid-19 pandemic, risk and uncertainty |
| JEL: | B00 F0 N0 P0 |
| Date: | 2020–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99645&r=all |
| By: | Villamizar-Villegas, Mauricio; Pinzón-Puerto, Freddy A.; Ruiz-Sánchez, María Alejandra |
| Abstract: | In this paper we detail the entire Regression Discontinuity Design (RDD) history, including its origins in the 1960's, and its two main waves of formalization in the 1970's and 2000's, both of which are rarely acknowledged in the literature. Also, we dissect the empirical work into fuzzy and sharp designs and provide some intuition as to why some rule-based criteria produce imperfect compliance. Finally, we break the literature down by economic field, highlighting the main outcomes, treatments, and running variables employed. Overall, we see some topics in economics gaining importance through time, like the cases of: health, finance, crime, environment, and political economy. In particular, we highlight applications in finance as the most novel. Nonetheless, we recognize that the field of education stands out as the uncontested RDD champion through time, with the greatest number of empirical applications. |
| Keywords: | Regression Discontinuity Design; Fuzzy and Sharp Designs; Empirical Survey; RDD Formalization |
| JEL: | B23 C14 C21 C31 C52 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:rie:riecdt:38&r=all |
| By: | Òscar Jordà; Moritz Schularick; Alan M. Taylor |
| Abstract: | Business cycles are costlier and stabilization policies more beneficial than widely thought. This paper shows that all business cycles are asymmetric and resemble mini “disasters”. By this we mean that growth is pervasively fat-tailed and non-Gaussian. Using long-run historical data, we show empirically that this is true for all advanced economies since 1870. Focusing on the peacetime sample, we develop a tractable local projection framework to estimate consumption growth paths for normal and financial-crisis recessions. Using random coefficient local projections we get an easy and transparent mapping from the estimates to the calibrated simulation model. Simulations show that substantial welfare costs arise not just from the large rare disasters, but also from the smaller but more frequent mini-disasters in every cycle. In postwar America, households would sacrifice more than 10 percent of consumption to avoid such cyclical fluctuations. |
| Keywords: | local projections; macroprudential policy.; fluctuations; random coefficients; asymmetry |
| JEL: | E13 E21 E22 E32 |
| Date: | 2020–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:87712&r=all |
| By: | Brunori, Paolo; Neidhöfer, Guido |
| Abstract: | We show that measures of inequality of opportunity (IOP) fully consistent with Roemer (1998)'s IOP theory can be straightforwardly estimated by adopting a machine learning approach, and apply our novel method to analyse the development of IOP in Germany during the last three decades. Hereby, we take advantage of information contained in 25 waves of the Socio-Economic Panel. Our analysis shows that in Germany IOP declined immediately after reunification, increased in the first decade of the century, and slightly declined again after 2010. Over the entire period, at the top of the distribution we always find individuals that resided in West-Germany before the fall of the Berlin Wall, whose fathers had a high occupational position, and whose mothers had a high educational degree. East-German residents in 1989, with low educated parents, persistently qualify at the bottom. |
| Keywords: | Inequality,Opportunity,SOEP,Germany |
| JEL: | D63 D30 D31 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:20013&r=all |
| By: | Hu, Sijie |
| Abstract: | This paper uses the genealogical records of 35,691 men to test one of the fundamental assumptions of the Malthusian model. Did higher living standards result in increased net reproduction? An empirical investigation of China between 1400 and 1900 finds a positive relationship between social status and fertility. The gentry scholars, the Confucians, produced three times as many sons as the commoners, and this status effect on fertility was stronger in the post-1600 period than in the pre-1600 period. The effect disappears once I control for the number of marriages. Increased marriages among upper-class males drove reproductive success in Imperial China. The results add a demographic perspective to explain the lack of modern economic growth in Imperial China. |
| Keywords: | fertility; social status; marriages; reproductive success; Malthusian mechanism; China |
| JEL: | J13 J12 N35 |
| Date: | 2020–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:104040&r=all |
| By: | Francois R. Velde |
| Abstract: | Burns and Mitchell (1946, 109) found a recession of “exceptional brevity and moderate amplitude.” I confirm their judgment by examining a variety of high-frequency data. Industrial output fell sharply but rebounded within months. Retail seemed little affected and there is no evidence of increased business failures or stressed financial system. Cross-sectional data from the coal industry documents the short-lived impact of the epidemic on labor supply. The Armistice possibly prolonged the 1918 recession, short as it was, by injecting momentary uncertainty. Interventions to hinder the contagion were brief (typically a month) and there is some evidence that interventions made a difference for economic outcomes. |
| Keywords: | 1918 Flu Pandemic; Covid-19; Labor Supply |
| JEL: | E32 I10 I18 H1 J22 |
| Date: | 2020–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:87812&r=all |
| By: | Soyoung Han (Peterson Institute for International Economics); Marcus Noland (Peterson Institute for International Economics) |
| Abstract: | The Summer Olympic Games are the most globalized sporting event on earth. Until now, the Summer Games had been postponed only three times—in 1916, 1940, and 1944—all because of world wars. So, the announcement that in response to the COVID-19 pandemic, the 2020 Tokyo Games would be postponed by a year is significant, implicit testimony to the destructiveness of the pandemic. The Tokyo Games were expected to continue the evolution of the Games away from the aristocratic European milieu where the modern Olympic movement began. As poverty has declined and incomes across the global economy have converged, participation in the Games has broadened and the pattern of medaling has become more pluralistic, particularly in sports with low barriers to entry in terms of facilities and equipment. This Policy Brief presents forecasts of medal counts at the 2020 Tokyo Summer Games had they had gone on as scheduled, setting aside possible complications arising from the coronavirus pandemic. The forecasts are not just a depiction of what might have been. They establish a benchmark that can be used when the Games are eventually held, to examine the impact of the uneven incidence of the pandemic globally. |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb20-6&r=all |
| By: | Commander, Simon (IE Business School, Altura Partners); Poupakis, Stavros (University of Oxford) |
| Abstract: | Political networks are an important feature of the political and economic landscape of countries. Despite their ubiquity and significance, information on such networks has proven hard to collect due to a pervasive lack of transparency. However, with the advent of big data and artificial intelligence, major financial services institutions are now actively collating publicly available information on politically exposed persons and their networks. In this study, we use one such data set to show how network characteristics vary across political systems. We provide results from more than 150 countries and show how the format of the network tends to reflect the extent of democratisation of each country. We also outline further avenues for research using such data. |
| Keywords: | political networks, rent-seeking, democratic consolidation |
| JEL: | D72 H11 P26 P36 N44 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13103&r=all |
| By: | Morgan, Mary S. |
| Abstract: | This paper provides an account of the 'use-value' of case-based research by showing how social scientists exploit cases, and case studies, in a variety of practices of inference and extension. The critical basis for making such extensions relies on the power of a case, or the account given of a case (the case-study account), to exemplify certain features of the social world in ways which prove valuable for further analysis: either of the same case, or in many domains beyond the original case study. Framing use-values in terms of exemplification compares favourably with understanding reasoning beyond the case either as a form of analogical reasoning or in taking cases as experimentable objects. |
| Keywords: | Case studies; Cases; Exemplification; Inference practices; Use-values |
| JEL: | N0 |
| Date: | 2019–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:104057&r=all |
| By: | Sondermann, David; Lehtimäki, Jonne |
| Abstract: | The European Single Market created a common market for millions of Europeans. However, thirty years after its introduction, it appears that the benefits of the common European project are occasionally being questioned at least by some parts of the population. Others, by contrast, strive for deeper integration. Against this background, we empirically gauge the growth effect that arose from the Single Market. Using the Synthetic Control Method, we establish the growth premium for the Single Market overall and for its founding members. Broadly in line with the predictions made by Baldwin (1989) at the onset of the Single Market project, we find significantly higher real GDP per capita for the overall Single Market area of around 12-22%. In comparison, smaller EU Member States seem to have benefited somewhat more compared to larger countries. The estimated growth effects underline the case for further deepening and broadening the Single Market where possible. JEL Classification: F13, F14, F15, N14 |
| Keywords: | economic growth, Single Market, synthetic control method |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20202392&r=all |
| By: | Ari, Anil; Ratnovski, Lev; Chen, Sophia |
| Abstract: | This paper presents a new dataset on the dynamics of non-performing loans (NPLs) during 88 banking crises since 1990. The data show similarities across crises during NPL build-ups but less so during NPL resolutions. We find a close relationship between NPL problems—elevated and unresolved NPLs—and the severity of post-crisis recessions. A machine learning approach identifies a set of pre-crisis predictors of NPL problems related to weak macroeconomic, institutional, corporate, and banking sector conditions. Our findings suggest that reducing pre-crisis vulnerabilities and promptly addressing NPL problems during a crisis are important for post-crisis output recovery. JEL Classification: E32, E44, G21, N10, N20 |
| Keywords: | banking crises, crisis resolution, debt, non-performing loans, recessions |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20202395&r=all |
| By: | Brodeur, Abel (University of Ottawa); Mabeu, Marie Christelle (University of Ottawa); Pongou, Roland (University of Ottawa) |
| Abstract: | A large literature documents persistent impacts of formal historical institutions. However, very little is known about how these institutions interact with ancestral traditions to determine long-term economic and social outcomes. This paper addresses this question by studying the persistent effect of legal origins on female economic empowerment in sub-Saharan Africa, and how ancestral cultural norms of gender roles may attenuate or exacerbate this effect. Taking advantage of the arbitrary division of ancestral ethnic homelands across countries with different legal origins, we directly compare women among the same ethnic group living in civil law countries and common law countries. We find that, on average, women in common law countries are signicantly more educated, are more likely to work in the professional sector, and are less likely to marry at young age. However, these effects are either absent or significantly lower in settings where ancestral cultural norms do not promote women’s rights and empowerment. In particular, we find little effect in bride price societies, patrilocal societies, and societies where women were not involved in agriculture in the past. Our findings imply that to be optimal, the design of formal institutions should account for ancestral traditions. |
| Keywords: | legal origins, ancestral norms, women's empowerment, gender roles |
| JEL: | D03 I25 J16 N37 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13105&r=all |