nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2020‒07‒20
37 papers chosen by

  1. Sir Oswald Mosley’s contribution to the Interwar Policy Debate and Fascist Economics By Emilio Ocampo
  2. A New Daily Federal Funds Rate Series and History of the Federal Funds Market, 1928-1954 By Sriya Anbil; Mark A. Carlson; Christopher Hanes; David C. Wheelock
  3. Estimates of Regional GDP in Great Britain in 1935 and 1938 By Frank Geary; Tom Stark
  4. Italy and the Little Divergence in Wages and Prices: New Data, New Results By Rota, Mauro; Weisdorf, Jacob
  5. Did Globalization Kill Contagion? By Accominotti, Olivier; Brière, Marie; Burietz, Aurore; Oosterlinck, Kim; Szafarz, Ariane
  6. USSR, education, work history, fertility choices, and later-life outcomes By Pronkina, Elizaveta; Perez Izquierdo, Telmo Juan
  7. Marx's Theory of Value: A Sympathetic Yet Critical Perspective. By Miguel D. Ramirez
  8. Bitter Sugar: Slavery and the Black Family By Bertocchi, Graziella; Dimico, Arcangelo
  9. Economic Crisis, General Laws, and the Mid-Nineteenth-Century Transformation of American Political Economy By Naomi R. Lamoreaux; John Joseph Wallis
  10. Interview with Emeritus Professor H.M. (Ted) Kolsen By Bruce Littleboy
  11. From Immigrants to Americans: Race and Assimilation during the Great Migration By Fouka, Vasiliki; Mazumder, Soumyajit; Tabellini, Marco
  12. Modeling Joint Lives within Families By Olivier Cabrignac; Arthur Charpentier; Ewen Gallic
  13. Historical Natural Experiments: Bridging Economics and Economic History By Cantoni, Davide; Yuchtman, Noam
  14. Racial Diversity, Electoral Preferences, and the Supply of Policy: the Great Migration and Civil Rights By Calderon, Alvaro; Fouka, Vasiliki; Tabellini, Marco
  15. Journal of the History of Economic Thought Preprints – Adam Smith and Economic Development in Theory and Practice: a rejection of stadial model? By Paganelli, Maria Pia
  16. Across the Sea to Ireland: Return Atlantic Migration before the First World War By Alan Fernihough
  17. Persistent legacy of the 1075-1919 Vietnamese imperial examinations in contemporary quantity and quality of education By Tien Manh Vu; Hiroyuki Yamada
  18. Hidden champions: A review of the literature & future research avenues By Schenkenhofer, Julian
  19. Predictable Financial Crises By Robin Greenwood; Samuel G. Hanson; Andrei Shleifer; Jakob Ahm Sørensen
  20. Globalization Cycles By Obstfeld, Maurice
  21. Debt and Financial Crises By Koh, Wee Chian; Kose, Ayhan; Nagle, Peter; Ohnsorge, Franziska; Sugawara, Naotaka
  22. Walter Euckens Weg zum Ordoliberalismus By Vanberg, Viktor
  23. Why is the Euro Punching Below its Weight By Ilzetzki, Ethan; Reinhart, Carmen M.; Rogoff, Kenneth
  24. Democratic Support for the Bolshevik Revolution: An Empirical Investigation of 1917 Constituent Assembly Elections By Dower, Castaneda; Markevich, Andrei
  25. The Origins of the Division of Labor in Pre-modern Times By Emilio Depetris-Chauvin; Ömer Özak
  26. The Political Economy of Status Competition: Sumptuary Laws in Preindustrial Europe By Desierto, Desiree; Koyama, Mark
  27. The Cultural Origin of Saving Behavior By Costa Font, Joan; Giuliano, Paola; Ozcan, Berkay
  28. Exploring the trade (policy) narratives in economic elite discourse By Matthias Aistleitner; Stephan Puehringer
  29. Global Recessions By E. Terrones, Marco; Kose, Ayhan; Sugawara, Naotaka
  30. The Rise and Fall of Import Substitution By Douglas A. Irwin
  31. Why do insurers fail? A comparison of life and non-life insolvencies using a new international database By George Overton; Olivier de Bandt
  32. What is a firm census in a developing country? An answer from Ghana By Andrew Keer; Bruce McDougall
  33. Sobre la Cultura, las Instituciones y la Prosperidad: In Memoriam José Ignacio García Hamilton By Emilio Ocampo
  34. Pandemics and protectionism: evidence from the "Spanish" flu By Sharp, Paul Richard; Pedersen, Maja Uhre; Lampe, Markus; Boberg-Fazlic, Nina
  35. Relying on longitudinal micro data from a Spanish rural region between 1750 and 1950 (almost 35,000 life courses), this article evidences that discriminatory practices affected sex-specific mortality during infancy and childhood. Although it is likely that families also discriminated girls during the first year of life, the female excess mortality was especially visible in the 1-5 age-group. In this regard, while breastfeeding seemed to have temporarily mitigated the effects of gender discrimination, sex-specific mortality rates behaved markedly different once children were weaned. Parents therefore prioritised boys during infancy and childhood in the allocation of food and/or care in order to enhance their survival chances. By Francisco J. Marco-Gracia; Francisco J. Beltr‡n Tapia
  36. The impact of Confucianism on gender inequality in Vietnam By Vu, Tien Manh; Yamada, Hiroyuki
  37. COVID-19, race and redlining By Bertocchi, Graziella; Dimico, Arcangelo

  1. By: Emilio Ocampo
    Abstract: After being dormant for decades, in the last two decades, right-wing populism resurfaced strongly in Europe and the US channeling a reaction against globalization. This resurgence has prompted economists to pay increasing attention to populist economics. Current versions of right wing populism share many elements with early fascism, particularly the type that developed by the British Union of Fascists (BUF) in the UK under the leadership of Sir Oswald Mosley. Less aggressive and racist than its continental counterparts, one of its pillars was isolationism, which figures prominently in the platforms of modern populist parties in Europe and North America. Although more sophisticated in his economic thinking than Hitler and Mussolini, Mosley’s was less successful politically. His stubborn obnoxiousness and inability to acknowledge his mistakes cemented his status as a political pariah and contributed to the academic neglect of his 1930 program of radical economic reform which he later incorporated into the BUF’s platform. The study of Mosleynomics also has historical value. Mosley’s proposals not only contributed to the interwar policy debate but also anticipated many key elements of the economic policies of fascist and non-fascist regimes on both sides of the Atlantic, not only in the US, Germany and Italy in the 1930s but also in the UK under the Labor Party and Argentina under Perón in the immediate postwar. This essay seeks to contribute to fill a gap in the literature, by tracing the intellectual roots and evolution of Mosley’s economic policy proposals.
    Keywords: Peronism, Fascism, Economic Policy, Argentina
    JEL: B00 B29 E60 E65 N14 N16 O23 P40 P47
    Date: 2020–06
  2. By: Sriya Anbil; Mark A. Carlson; Christopher Hanes; David C. Wheelock
    Abstract: This article describes the origins and development of the federal funds market from its inception in the 1920s to the early 1950s. We present a newly digitized daily data series on the federal funds rate that covers the period from April 1928 through June 1954. We compare the behavior of the funds rate with other money market interest rates and the Federal Reserve discount rate. Our federal funds rate series will enhance the ability of researchers to study an eventful period in U.S. financial history and to better understand how monetary policy was transmitted to banking and financial markets. For the 1920s and 1930s, our series is the best available measure of the overnight risk-free interest rate, better than the call money rate which many studies have used for that purpose. For the 1940s-1950s, our series provides new information about the transition away from wartime interest-rate pegs culminating in the 1951 Treasury-Federal Reserve Accord.
    Keywords: federal funds rate; call loan rate; money market; Federal Reserve System
    JEL: E43 E44 E52 G21 N22
    Date: 2020–06–26
  3. By: Frank Geary; Tom Stark
    Abstract: Historical regional GDP series for the United Kingdom and for Great Britain for each of the census years between 1861 and 1961 are now largely complete though with no estimate for the wartime year, 1941. In the absence of data for this year, this note reports the data sources for and resulting estimates of regional GDP for the two years 1935 and 1938. Estimates are presented for both GB and the UK. They suggest that the worsening regional inequality observed between 1911 and 1931 continued to the mid-1930s with a reversal of this trend by 1938 that continued through to 1951. In addition we take the opportunity to consider two issues that arise from making long-term real terms estimates: first, what differences would emerge in the estimates had we used nominal data (where available); second what is the likely impact of base year on the long-term real estimates.
    Keywords: Economic History, Regional GDP, Real and Nominal Estimates
    JEL: E01 N13 O47
    Date: 2020–03
  4. By: Rota, Mauro; Weisdorf, Jacob
    Abstract: We present new and improved long-run wage indices for skilled and unskilled construction workers in Italy. Our data avoid multiple issues pestering earlier wage indices, including regional shifts and sub-contractor mark-ups, making our new indices the first consistent day-wage sequences for early-modern Italy. Our improved wages, obtained from the construction of the St Peter's Church in Rome, consolidate the traditional view that urban Italy began a prolonged economic downturn during the mid-17th century. The wages also offer sustenance to the idea that epidemics instigated the country's long decline. Comparison with newly downscaled construction wages for London show that Roman workers, despite Italy's downturn, out-earned their early-modern English counterparts. This suggests that high wages alone were not enough to trigger industrialisation.
    Keywords: Construction; Divergence; industrial revolution; living standards; prices; wages
    JEL: I3 J3 J4 J8 N33
    Date: 2020–01
  5. By: Accominotti, Olivier; Brière, Marie; Burietz, Aurore; Oosterlinck, Kim; Szafarz, Ariane
    Abstract: Does financial globalization lead to contagion? We scrutinize linkages between international stock markets in a long historical perspective (1880-2014). Our results highlight that without globalization, contagion cannot exist. However, if cross-market correlations are very high, globalization kills contagion. We show that financial contagion was absent from stock markets in both the period of deglobalization of 1918-1971 and the era of "extreme" globalization of 1972-2014 but was present in the period of "moderate" globalization of 1880-1914. Our results suggest that contagion could become a significant problem if financial markets return to a more moderate level of globalization.
    Keywords: contagion; economic integration; Financial history; Globalization; market interdependence; Stock market
    JEL: E44 F36 F65 G15 N20
    Date: 2020–02
  6. By: Pronkina, Elizaveta; Perez Izquierdo, Telmo Juan
    Abstract: This paper investigates how living under the USSR affected the life decisions of East European individuals. We use the retrospective SHARELIFE data to analyze respondents' choices from 1950 to 1990. In particular, we compare the reported choices of individuals in Lithuania (former-USSR) and Poland (former-Soviet Bloc), exploiting the common history of both countries until the end of the Second World War. We find that Lithuanian women increased educational attainments and accumulated 2 plus years of working experience by age 50 relative to Polish women. Moreover, we describe the indirect effect that improved working opportunities have on female education. We can identify this effect by looking at differential outcomes for men and women in the two countries. Similar findings hold once we compare all Baltic countries (former-USSR) toall Soviet Bloc countries and East to West Germany. Finally, we also observe a higher number of marriages during life and selective abortion based on the future child's gender under the USSR. These findings suggest that policies implemented in Socialist countries varied, and regimes affected individuals differently.
    Keywords: Female Employment; Education; Central And Eastern Europe; Socialism; USSR
    JEL: P36 J24 J21 J16 J13 N34 I2
    Date: 2020–07–01
  7. By: Miguel D. Ramirez (Department of Economics, Trinity College)
    Abstract: This paper critically analyzes the important notion of value or exchange-value from a Marxian perspective as opposed to a neoclassical one. It is argued that the value of a commodity is a historically determined social relation between producers, rather than a subjective relation between man and commodities á la Eugen von Böhm-Bawerk and Stanley Jevons. Value, in the Marxian scheme, tends to assume certain specific forms more often than others depending on the particular stage of economic history, reaching its fullest expression under capitalist production–the highest form of commodity production based on private property. In turn, exchange value–a quantitative relation--is the manner in which value expresses its character of being the product of social (abstract) labor. The paper highlights the classical view of value as expounded by David Ricardo, and focuses on how Marx develops and attempts to resolve key problems in Ricardo’s labor theory of value. It is argued that Ricardo dealt not only with the problem of relative value, but, like Marx, also grappled with the concept of positive (absolute) value. The paper also reviews important challenges to Marx’s theory of value, ranging from the role of the composition of aggregate demand in determining “socially necessary labor†to the issue of whether the transformation of labor values into prices of production is an unnecessary and irrelevant exercise. Finally, the paper turns its attention to the economic role of time from a Marxian perspective as it relates to the determination of interest-bearing (loan) capital and Adam Smith’s important distinction between productive and unproductive labor–one whose clear comprehension rests on viewing value as a social relation.
    JEL: B10 B14 B24
    Date: 2020–07
  8. By: Bertocchi, Graziella (University of Modena and Reggio Emilia); Dimico, Arcangelo (Queen's University Belfast)
    Abstract: We empirically assess the effect of historical slavery on the African American family structure. Our hypothesis is that female single headship among blacks is more likely to emerge in association not with slavery per se, but with slavery in sugar plantations, since the extreme demographic and social conditions prevailing in the latter have persistently affected family formation patterns. By exploiting the exogenous variation in sugar suitability, we establish the following. In 1850, sugar suitability is indeed associated with extreme demographic outcomes within the slave population. Over the period 1880-1940, higher sugar suitability determines a higher likelihood of single female headship. The effect is driven by blacks and starts fading in 1920 in connection with the Great Migration. OLS estimates are complemented with a matching estimator and a fuzzy RDD. Over a linked sample between 1880 and 1930, we identify an even stronger intergenerational legacy of sugar planting for migrants. By 1990, the effect of sugar is replaced by that of slavery and the black share, consistent with the spread of its influence through migration and intermarriage, and black incarceration emerges as a powerful mediator. By matching slaves' ethnic origins with ethnographic data we rule out any influence of African cultural traditions.
    Keywords: black family, slavery, sugar, migration, culture
    JEL: J12 J47 N30 O13 Z10
    Date: 2020–05
  9. By: Naomi R. Lamoreaux; John Joseph Wallis
    Abstract: Before the middle of the nineteenth century most laws enacted in the United States were special bills that granted favors to specific individuals, groups, or localities. This fundamentally inegalitarian system provided political elites with important tools that they could use to reward supporters, and as a result, they were only willing to modify it under very special circumstances. In the early 1840s, however, a major fiscal crisis forced a number of states to default on their bonded debt, unleashing a political earthquake that swept this system away. Starting with Indiana in 1851, states revised their constitutions to ban the most common types of special legislation and, at the same time, mandate that all laws be general in their application. These provisions dramatically changed the way government and the economy worked and interacted, giving rise to the modern regulatory state, interest-group politics, and a more dynamic form of capitalism.
    JEL: K1 K2 N4 N41
    Date: 2020–06
  10. By: Bruce Littleboy (School of Economics, University of Queensland)
    Abstract: TThis interview is a partial biography of Ted Kolsen, who migrated to Australia after the Second World War. It is an oral history of an orphan boy sent to England to escape the Nazis. It touches on his time in a Barnado orphanage, his military service in post-War Germany, his work in Australia training as toolmaker, his undergraduate study, his time at the LSE doing a PhD, his work on transport economics, his ascent to a Chair at the University of Queensland, and his appointment onto the Interstate Commission to report to the Commonwealth government on transport policy. The interview illuminates both post-war social history and how economists strive to apply theory to complex practical problems.
    JEL: A11 H70 N77 R49
    Date: 2020–05–22
  11. By: Fouka, Vasiliki; Mazumder, Soumyajit; Tabellini, Marco
    Abstract: How does the appearance of a new immigrant group affect the integration of earlier generations of migrants? We study this question in the context of the first Great Migration (1915-1930), when 1.5 million African Americans moved from the US South to northern urban centers, where 30 million Europeans had arrived since 1850. We exploit plausibly exogenous variation induced by the interaction between 1900 settlements of southern-born blacks in northern cities and state-level out-migration from the US South after 1910. Black arrivals increased both the effort exerted by immigrants to assimilate and their eventual Americanization. These average effects mask substantial heterogeneity: while initially less integrated groups (i.e. Southern and Eastern Europeans) exerted more assimilation effort, assimilation success was larger for those culturally closer to native whites (i.e. Western and Northern Europeans). We show that these patterns cannot be entirely explained by economic forces. Our findings are instead more consistent with a framework in which changing perceptions of outgroup distance among the majority group lower the barriers to the assimilation of less distant minorities.
    Keywords: Assimilation; Great Migration; group identity; Immigration; race
    JEL: J11 J15 N32
    Date: 2020–02
  12. By: Olivier Cabrignac (SCOR Global Life); Arthur Charpentier (UQAM - Université du Québec à Montréal = University of Québec in Montréal); Ewen Gallic (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Family history is usually seen as a significant factor insurance companies look at when applying for a life insurance policy. Where it is used, family history of cardiovascular diseases, death by cancer, or family history of high blood pressure and diabetes could result in higher premiums or no coverage at all. In this article, we use massive (historical) data to study dependencies between life length within families. If joint life contracts (between a husband and a wife) have been long studied in actuarial literature, little is known about child and parents dependencies. We illustrate those dependencies using 19th century family trees in France, and quantify implications in annuities computations. For parents and children, we observe a modest but significant positive association between life lengths. It yields different estimates for remaining life expectancy, present values of annuities, or whole life insurance guarantee, given information about the parents (such as the number of parents alive). A similar but weaker pattern is observed when using information on grandparents.
    Keywords: annuities,collaborative data,dependence,family history,genealogy,grandparents-grandchildren,information,joint life insurance,parents-children,whole life insurance
    Date: 2020–06–17
  13. By: Cantoni, Davide; Yuchtman, Noam
    Abstract: The analysis of historical natural experiments has profoundly impacted economics research across fields. In this chapter we trace the development and increasing application of the methodology, both from the perspective of economic historians and from the perspective of economists in other subdisciplines. We argue that the historical natural experiment represents a methodological bridge between economic history and other fields: historians are able to use the cutting edge identification strategies emphasized by applied microeconomists; economists across subfields are able to scour history for useful identifying variation; development and growth economists are able to trace the historical roots of contemporary outcomes, and to identify the ultimate causes of economic growth. Differences in fields suggest differences in scholars' aims of studying historical natural experiments. We propose a taxonomy of three primary motives that reflect priorities in different fields: historians aim to understand causal processes within specific settings. Economists across fields aim to identify "clean" historical events (in whatever context) to test hypotheses of theoretical interest or estimate causal parameters. And, growth and development economists aim to identify past variation that can be causally linked to contemporary outcomes of interest. We summarize important contributions made by research in each category. Finally, we close with a brief discussion of challenges facing each category of work.
    Keywords: causal inference; Historical development; Natural Experiments; Persistence
    JEL: B00 N00 N01 N1 O10
    Date: 2020–02
  14. By: Calderon, Alvaro; Fouka, Vasiliki; Tabellini, Marco
    Abstract: How does the racial composition of local constituencies affect voters' preferences and politicians' behavior? We study the effects of one of the largest episodes of internal migration in US history, the 1940-1970 Great Migration of African Americans, on both demand for racial equality and supply of civil rights legislation. We predict black inflows by interacting historical settlements of southern born blacks across northern counties with differential emigration rates from different southern states after 1940. We find that black in-migration increased support for the Democratic Party and encouraged grassroots activism. Data on pro-civil rights demonstrations and historical surveys reveal that segments of the white electorate, such as Democrats and union members, supported blacks' struggle for racial equality. At the same time, backlash against civil rights erupted among Republicans and whites more exposed to racial mixing of their neighborhoods. Mirroring the responses of the electorate, Congress members representing areas more exposed to black in-migration became more supportive of civil rights legislation. Such average effects, however, mask substantial heterogeneity, as Democratic and Republican legislators became, respectively, more liberal and more conservative on racial issues. Taken together, our findings suggest that, under certain conditions, cross-race coalitions can emerge, but also that changes in the composition of the electorate can polarize both voters and politicians.
    Keywords: civil rights; diversity; Great Migration; race
    JEL: D72 J15 N92
    Date: 2020–01
  15. By: Paganelli, Maria Pia
    Abstract: Adam Smith allegedly offers a model of economic development both in his Lectures on Jurisprudence and in the Wealth of Nations—the so called four stages of development model. The model presents a linear unfolding view of economic development from primitive to advanced stages. But Smith´s own historical examples systematically contradict this model. I thus question whether Adam Smith actually endorses and uses the four stages model of development to illustrate development and suggest that if he does, he does it to discredit it instead. For Smith history teaches that development is more accidental than fitting deterministic models.
    Date: 2020–06–13
  16. By: Alan Fernihough
    Abstract: Are return migrants 'losers' who fail to adapt to the challenges of the host economy, and thereby exacerbate the brain drain linked to emigration? Or are they 'winners' whose return enhances the human and physical capital of the home country? These questions are the subject of a burgeoning literature. This paper analyzes a new database culled from the 1911 Irish population census to address these issues for returnees to Ireland from North America more than a century ago. The evidence suggests that those who returned had the edge over the population as a whole in terms of human capital, if not also over those who remained abroad.
    Keywords: Migration; Brain gain; Economic history; Ireland
    JEL: N N33 J61
    Date: 2019–11
  17. By: Tien Manh Vu (Asian Growth Research Institute); Hiroyuki Yamada (Faculty of Economics, Keio University)
    Abstract: We investigated the impact of individuals who passed the Vietnamese imperial examinations (1075-1919) on the present-day quantity and quality of education in their home districts. We layered the 2009 Population and Housing Census and the 2009 National Entrance Exams to University (NEEU) test scores on the geographical distribution of imperial test takers' home districts. We constructed a novel instrumental variable representing the average distance between the examinees' home districts and the corresponding imperial examination venues. We found a persistent legacy in the average years of schooling, literacy rate, school attendance rate, NEEU test scores, and primary school dropout rate.
    Keywords: Education, Human Capital, Imperial Examination, Historical Legacy, Vietnam
    JEL: I25 N35 O15
    Date: 2020–06–03
  18. By: Schenkenhofer, Julian
    Abstract: Substantial efforts have contributed to overcome the scarcity of hidden champions research. Nevertheless, literature has missed to compile a comprehensive review. Drawing on the insights of 94 publications, four strands of literature could be distinguished to unravel the essence of hidden champions. Research on hidden champions studies their 1) internationalization strategies, 2) R&D and innovation strategies, the 3) worldwide and regional geographic distribution of hidden champions and finally 4) other research that could not be assigned to one of the first three strands. A hand-collected sample of 1372 German hidden champions exemplifies the key insights from the reviewed research articles. Discussing the findings of the different literature strands aims at drawing a conclusion on their main results and analytical pitfalls to eventually unfold and motivate future research avenues.
    Keywords: Literature Review,Hidden Champions,Niche Strategy
    JEL: D4 L1 L22 O32
    Date: 2020
  19. By: Robin Greenwood; Samuel G. Hanson; Andrei Shleifer; Jakob Ahm Sørensen
    Abstract: Using historical data on post-war financial crises around the world, we show that crises are substantially predictable. The combination of rapid credit and asset price growth over the prior three years, whether in the nonfinancial business or the household sector, is associated with about a 40% probability of entering a financial crisis within the next three years. This compares with a roughly 7% probability in normal times, when neither credit nor asset price growth has been elevated. Our evidence cuts against the view that financial crises are unpredictable “bolts from the sky” and points toward the Kindleberger-Minsky view that crises are the byproduct of predictable, boom-bust credit cycles. The predictability we document favors macro-financial policies that “lean against the wind” of credit market booms.
    JEL: E44 G01
    Date: 2020–06
  20. By: Obstfeld, Maurice
    Abstract: Mark Twain is reputed to have remarked that history does not repeat itself, but it often rhymes. While the Global Financial Crisis of 2008-2009 was not a catastrophe on the order of World War I, there is a broad similarity in the sequelae to both of these events â?? a failed attempt to return to pre-trauma normalcy, followed by a process of international economic disintegration in the face of changed geopolitical realities. In this essay, I explore three questions that this similarity raises. Does globalization inherently foster domestic or international dynamics that eventually lead to political backlash? If so, are these dynamics inevitable, or can complementary economic policies nurture a stable globalization? And finally, since policies are endogenous, when are policy approaches and institutions that complement and support globalization likely to arise?
    Keywords: deglobalization; Globalization
    JEL: F52 F53 F60 N20 N40
    Date: 2020–02
  21. By: Koh, Wee Chian; Kose, Ayhan; Nagle, Peter; Ohnsorge, Franziska; 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, 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: banking crises; Currency Crises; Debt crises; External Debt; financial crises; private debt; public debt
    JEL: E32 E61 G01 H12 H61 H63
    Date: 2020–02
  22. By: Vanberg, Viktor
    Abstract: Die in diesem Band versammelten Beiträge überbrücken eine Zeitspanne von drei Jahrzehnten im wissenschaftlichen Wirken Walter Euckens, von seiner 1921 gehaltenen Antrittsvorlesung "Zur Würdigung Saint Simons" bis zum letzten von ihm verfassten Beitrag "Unser Zeitalter der Misserfolge", den er für seine Gastvorlesungen im März 1950 an der London School of Economics vorbereitetet hatte. Die fünfzehn hier wieder abgedruckten Beiträge sind über die dazwischen liegenden Jahre nicht nur recht ungleichmäßig verteilt, sie unterscheiden sich auch deutlich in ihrem Charakter. Elf von ihnen erschienen zwischen 1925 und 1932 in der Zeitschrift des - sich an der Philosophie von Rudolf Eucken, Walter Euckens Vater, ausrichtenden - Euckenbundes, die zunächst unter dem Namen Der Euckenbund, ab 1925 als Die Tatwelt erschien. Dem Charakter der Zeitschrift entsprechend, richteten sich diese Beiträge an ein allgemein gebildetes Publikum. Die übrigen vier richten sich an ein Fachpublikum, wie die beiden bereits genannten Beiträge, der 1932 erschienene Aufsatz "Staatliche Strukturwandlungen und die Krise des Kapitalismus", der gemeinhin als Gründungsdokument der Freiburger Schule gilt, und der 1948 in der Zeitschrift Economica veröffentlichte Aufsatz "On the Theory of he Centrally Planned Economy", der sich mit den planwirtschaftlichen Erfahrungen im Nationalsozialismus befasst. Das Thema, das die in diesen Band aufgenommenen Beiträge verbindet, ist die Wahrnehmung der Gegenwart als Krisenzeit und die Frage danach, worin die Ursachen der Krise zu sehen sind und auf welchem Wege ihre Lösung gefunden werden kann. Einen Schwerpunkt bildet dabei die Auseinandersetzung mit dem Anspruch des Sozialismus, einen solchen Weg aufzeigen zu können. Von Bedeutung für die Einordnung der Beiträge in Euckens Gesamtwerk ist der Umstand, dass sich in seiner Antwort auf die Frage der Krisenursache und Krisentherapie und in seiner Sozialismus-Kritik im Verlauf der 1920er Jahre eine charakteristische Akzentverschiebung zeigt. In dieser Einleitung wird es darum gehen, die Veränderung in Euckens Krisenanalyse aufzuzeigen und die Bedeutung deutlich zu machen, die ihr für die Herausbildung des von ihm maßgeblich initiierten ordoliberalen Forschungsprogramms zukommt.
    Date: 2020
  23. By: Ilzetzki, Ethan; Reinhart, Carmen M.; Rogoff, Kenneth
    Abstract: On the twentieth anniversary of its inception, the euro has yet to expand its role as an international currency. We document this fact with a wide range of indicators including its role as an anchor or reference in exchange rate arrangements-which we argue is a portmanteau measure-and as a currency for the denomination of trade and assets. On all these dimensions, the euro comprises a far smaller share than that of the US dollar. Furthermore, that share has been roughly constant since 1999. By some measures, the euro plays no larger a role than the Deutschemark and French franc that it replaced. We explore the reasons for this underperformance. While the leading anchor currency may have a natural monopoly, a number of additional factors have limited the euro's reach, including lack of financial center, limited geopolitical reach, and US and Chinese dominance in technology research. Most important, in our view, is the comparatively scarce supply of (safe) euro-denominated assets, which we document. The European Central Bank' lack of policy clarity may have also played a role. We show that the euro era can be divided into a "Bundesbank-plus" period and a "Whatever it Takes" period. The first shows a smooth transition from the European Exchange Rate Mechanism and continued to stabilize German inflation. The second period is characterised by an expanding ECB arsenal of credit facilities to European banks and sovereigns.
    JEL: E5 F3 F4 N2
    Date: 2020–01
  24. By: Dower, Castaneda; Markevich, Andrei
    Abstract: Scholars have long-debated the causes of the Russian Revolution. We systematically investigate the role of key factors in these debates by exploiting cross-district variation in Bolsheviks' popular support in 1917. We analyze voting outcomes of the Constituent Assembly elections, which occurred right after the Bolsheviks seized power. We find that the Bolsheviks mobilized greater support in districts with a larger share of industrial workers, a greater presence of historically private land, which the Bolsheviks redistributed to peasants, and in districts with garrisons and military hospitals. We also provide evidence that the underpinnings of this support conflicted with the Bolsheviks' development strategy, forewarning the autocratic command economy to come.
    Keywords: Communism; elections; Regime Change; Revolution; Russia
    JEL: D72 H7 N44 P26
    Date: 2020–02
  25. By: Emilio Depetris-Chauvin (Pontificia Universidad Católica de Chile); Ömer Özak (Southern Methodist University)
    Abstract: This research explores the historical roots of the division of labor in pre-industrial societies. Exploiting a variety of identification strategies and a novel ethnic level dataset combining geocoded ethnographic, linguistic and genetic data, it shows that higher levels of intra-ethnic diversity were conducive to economic specialization in the pre-industrial era. The findings are robust to a host of geographical, institutional, cultural and historical confounders, and suggest that variation in intra-ethnic diversity is a key predictor of the division of labor in pre-industrial times.
    Keywords: Economic Comparative Development, Division of Labor, Economic Specialization, Intra-Ethnic Diversity, Cultural Diversity, Population Diversity, Genetic Diversity, Linguistic Diversity, Serial Founder Effect
    JEL: D74 F10 F14 J24 N10 O10 O11 O12 O40 O43 O44 Z10 Z13
    Date: 2020–07
  26. By: Desierto, Desiree; Koyama, Mark
    Abstract: Sumptuary laws that regulated clothing based on social status were an important part of the political economy of premodern states. We introduce a model that rationalizes the use of sumptuary laws by elites to regulate status competition from below. Our model predicts a non-monotonic effect of income - sumptuary legislation initially increases with income, but then falls as income increases further. The initial rise is more likely for states with less extractive institutions, whose ruling elites face greater status threat from the rising commercial class. We test these predictions using a newly collected dataset of country and city-level sumptuary laws.
    Keywords: political economy; regulation; rent-seeking; Status competition
    JEL: D91 K42 N4 N43 Z10
    Date: 2020–02
  27. By: Costa Font, Joan; Giuliano, Paola; Ozcan, Berkay
    Abstract: Traditional economic interpretations have not been successful in explaining differences in saving rates across countries. One hypothesis is that savings respond to cultural specific social norms. A seminal paper in economics (1) however did not find any effect of culture on savings. We revisit this evidence using a novel dataset, which allows us to study the saving behavior of up to three generations of immigrants in the United Kingdom. Against the backdrop of existing evidence, we find that cultural preferences are an important explanation for cross-country differences in saving behavior, and their relevance persists up to three generations.
    Keywords: Culture; Saving
    JEL: D0 Z1
    Date: 2020–02
  28. By: Matthias Aistleitner (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria); Stephan Puehringer (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria)
    Abstract: Trade liberalization during the neoliberal era since the 1980s has been on the political agenda of many countries. However, in recent years and especially in the course of rising populist movements, protectionist measures seem to be gaining importance again. Nationalist economic policies challenge the overly positive view on economic integration and the reduction of trade barriers established by standard economic theory. In contrast to politicians, for quite a long time the great majority of economists explicitly publicly supported trade liberalization policies. In this paper, we show how trade and trade related policies are addressed and framed in professional economic discourses. Thus, we follow a mixed-method-approach and combine quantitative textual analysis with critical discourse analysis to highlight dominant narratives and imaginaries present in these debates. By analyzing more than 400 trade-related research articles published in high-impact economic journals we highlight three core trade narratives which constitute the elite economists trade discourse: First, “free trade cheerleading†describes a clear link between the alleged lopsidedness of economists in favoring free trade (policies) in the public and academic debate. Second, “Ignorance in a world full of nails†relates to particular methodological and conceptual leanings in the profession, which seem to deepen the dominance of an overall positive evaluation of trade. And third, “success breeds exporting breeds success†postulates a positive causal relation between a firm’s economic performance and its export orientation. We conclude that the narrow perspective in economic elite debates prevents a more comprehensive understanding of the multifaceted challenges related to international integration.
    Keywords: trade narratives, trade policies, discourse analysis, sociology of economics, textual analysis, top economic journals
    Date: 2020–06
  29. By: E. Terrones, Marco; Kose, Ayhan; Sugawara, Naotaka
    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: financial markets; global economy; global expansion; global recovery; Real activity; synchronization of cycles
    JEL: E32 F44 N10 O47
    Date: 2020–02
  30. By: Douglas A. Irwin (Peterson Institute for International Economics)
    Abstract: In the 1950s, many economists believed that import substitution—policies to restrict imports of manufactured goods—was the best trade strategy to promote industrialization and economic growth in developing countries. By the mid-1960s, however, there was widespread disenchantment with the results of such a policy, even among its proponents. This paper traces the rise and fall of import substitution as a development idea. Perhaps surprisingly, early advocates of import substitution were quite cautious in their support for the policy and were also among the first to question it based on evidence derived from country experiences.
    Keywords: import substitution, industrialization, export promotion
    JEL: F13 O24
    Date: 2020–07
  31. By: George Overton; Olivier de Bandt
    Abstract: Plantin & Rocher (2016) document how insurers often engage in risk-shifting years before the materialization of a failure. This paper empirically examines this claim by testing the mechanisms of insurance insolvency, using a first-of-its-kind international database assembled by the authors which merges data on balance sheet and income statements together with information on impairments over the last 30 years. Employing different fixed effects logistic specifications and parametric survival models, the paper presents evidence, on top of the role of profitability as a leading indicator of failures, of the intrinsic asymmetries between the life and non-life insurance sectors. In the life sector, asset mix is highly significant in predicting an impairment, while operating efficiency plays no role. In the non-life sector, the opposite proves true.
    Keywords: Insurance, insolvency prediction, leading indicators, financial crises
    JEL: G22 G01 G11
    Date: 2020
  32. By: Andrew Keer; Bruce McDougall
    Abstract: A burgeoning literature in economics uses firm census data to provide explanations for the very large differences in income per capita across countries. Much of this literature takes for grantedthat the coverage of firm censuses across and within countries is similar. In this paper we use data from four Ghanaian firm censuses conducted between 1962 and 2014 to show that the coverage of each census was very different. Treated as is, the four censuses show dramatic and unbelievable changes in the scale of manufacturing production in Ghana over this period. As a result, we examine and document important changes in what undertaking a “firm census” has meant over 50 years in Ghana, as well as documenting variation in the coverage of firm censuses from several other African countries. We show that it is possible to obtain a believable evolution of the firm size distribution in Ghana over the period for which we have firm microdata, but that this requires substantial work to understand how the coverage of each firm census has varied over time. Our paper shows that the coverage of firm censuses both within and across countries can differ quite dramatically, and that this can impact research that uses firm census data.
    Date: 2020
  33. By: Emilio Ocampo
    Abstract: En dos de sus libros –El autoritarismo y la improductividad y Por qué crecen los países– José Ignacio García Hamilton (1943-2009) resaltó la influencia que la cultura y las creencias predominantes de la sociedad argentina tuvieron sobre su evolución institucional en el siglo XX y su decadencia económica. Desde hace décadas los académicos de las ciencias sociales debaten sobre la importancia relativa de la cultura y las instituciones como factores determinantes de la prosperidad (o decadencia) de un país. En este ensayo analizaré y criticaré de manera somera las principales posturas en ese debate, resaltando especialmente las de Juan Bautista Alberdi y García Hamilton y luego indagaré sobre algunos aspectos de la cultura argentina que influyeron sobre la evolución institucional del país en las últimas ocho décadas.
    Date: 2020–06
  34. By: Sharp, Paul Richard; Pedersen, Maja Uhre; Lampe, Markus; Boberg-Fazlic, Nina
    Abstract: The impact of COVID-19 on recent tendencies towards international isolationism has been much speculated on but remains to be seen. We suggest that valuable evidence can be gleaned from the "Spanish" flu of 1918-20. It is well-known that the world fell into a protectionist spiral following the First World War, but scholars have almost exclusively ignored the impact of the pandemic. We employ a difference-in-differences strategy on data for Europe and find that excess deaths had a significant impact on trade policy, independent of the war. A one standard deviation increase in excess deaths during the outbreak implied 0.022 percentage points higher tariffs subsequently, corresponding to an increase of one third of a standard deviation in tariffs. Health policy should aim to avoid the experience of the interwar period and consider the international macroeconomic impact of measures (not) taken.
    Keywords: Trade; Protectionism; Pandemics
    JEL: N74 I19 F13
    Date: 2020–07–03
  35. By: Francisco J. Marco-Gracia (Universidad de Zaragoza, Spain); Francisco J. Beltr‡n Tapia (Norwegian University of Science and Technology, Norway)
    Keywords: Infant and child mortality, Gender discrimination, Female excess mortality, Health.
    JEL: I14 I15 J13 J16 N33
    Date: 2020–07
  36. By: Vu, Tien Manh; Yamada, Hiroyuki
    Abstract: We quantified influences of Confucianism on gender inequality in present-day Vietnam. We used the number (or density) of the most successful test takers in the Vietnamese imperial examinations (1075–1919) in a given district as a proxy for mastering the subject of Confucianism. Using an instrumental variable approach, we considered possible impacts on sex ratio and educational attainment of women relative to men, based on test score and population census data. We found that Confucianism has a long lasting impact on gender inequality. The results also suggested that women tended to try harder, perhaps as a countermeasure against discrimination.
    Keywords: Confucianism, Gender inequality, Sex ratio, Education, Vietnam, J16, N35, Z1, I14, I24
    Date: 2020–07
  37. By: Bertocchi, Graziella; Dimico, Arcangelo
    Abstract: Discussion on the disproportionate impact of COVID-19 on African Americans has been at center stage since the outbreak of the epidemic in the United States. To present day, however, lack of race-disaggregated individual data has prevented a rigorous assessment of the extent of this phenomenon and the reasons why blacks may be particularly vulnerable to the disease. Using individual and georeferenced death data collected daily by the Cook County Medical Examiner, we provide first evidence that race does affect COVID-19 outcomes. The data confirm that in Cook County blacks are overrepresented in terms of COVID-19 related deaths since-as of June 16, 2020-they constitute 35 percent of the dead, so that they are dying at a rate 1.3 times higher that their population share. Furthermore, by combining the spatial distribution of mortality with the 1930s redlining maps for the Chicago area, we obtain a block group level panel dataset of weekly deaths over the period January 1, 2020-June 16, 2020, over which we establish that, after the outbreak of the epidemic, historically lower-graded neighborhoods display a sharper increase in mortality, driven by blacks, while no pre-treatment differences are detected. Thus, we uncover a persistence influence of the racial segregation induced by the discriminatory lending practices of the 1930s, by way of a diminished resilience of the black population to the shock represented by the COVID-19 outbreak. A heterogeneity analysis reveals that the main channels of transmission are socioeconomic status and household composition, whose influence is magnified in combination with a higher black share.
    Keywords: COVID-19,deaths,blacks,redlining,vulnerability,Cook County,Chicago
    JEL: I14 J15 N32 N92 R38
    Date: 2020

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