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on Business, Economic and Financial History |
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Issue of 2020‒07‒27
37 papers chosen by |
| By: | Bach, Maria |
| Abstract: | In this article, I argue that looking at lesser known intellectuals can help history of economics uncover news ways of seeing the world. My focus is the beginnings of “Indian Economics” and its conceptualization of development. The Indian economists, despite their elite status in India, were from an imperial context where they were never considered economists. Studies throughout the 20th century continued to treat them only as nationalists, rarely as contributors to economic knowledge. My research gives agency to these economists. I show how the position of Indian Economics from the margins of discursive space offered a unique perspective that enabled it to discursively innovate at the margins of development discourse. Indian Economics redefined the concept of universality in the existing 19th century idea of development by rejecting the widely accepted comparative advantage model and assertion that progress originated in Europe. Moreover, the economists pushed for universal industrialization, even for imperial territories, arguing that universal progress was beneficial to all. |
| Date: | 2020–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:gk8pw&r=all |
| By: | Ali Kabiri; Harold James; John Landon-Lane; David Tuckett; Rickard Nyman |
| Abstract: | John Maynard Keynes composed The General Theory as a response to the Great Crash and Great Depression with all their devastating consequences for the US macro economy and financial markets, as well as the rest of the world. The role of expectations his new theory set out has been widely accepted. The role of “animal spirits” he proscribed (i.e. the role of emotion in cognition) has remained much more controversial. We analyse over two million digitally stored news articles from The Wall St Journal to construct a sentiment series that we use to measure the role of emotion at the time Keynes wrote. An eight variable vector error correction model is then used to identify shocks to sentiment that are orthogonal to the fundamentals of the economy. We show that the identified “pure” sentiment shocks do have statistically and economically significant effects on output, money supply (M2), and the stock market for periods of the 1920s. |
| Keywords: | Great Depression, general theory, algorithmic text analysis, behavioural economics |
| JEL: | D89 E32 N10 N30 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8336&r=all |
| By: | Spitzer, Yannay |
| Abstract: | Jews are typically characterized as an urban minority. This paper challenges this view, while explaining the geographic distribution and variations in the occupational choices of Jews in the Pale of Settlement at the end of the nineteenth century. Viewing Jews as a rural service minority, with comparative advantage in countryside commerce, not in dense urban centers, a simple model of a regional labor market with inter-ethnic complementarities produces a series of empirical predictions. Using data from the 1897 Russian census, I show that the geographic dispersion of Jewish communities and the variation in their occupational distribution conform with these predictions and could be explained by this model. The mechanism at work was adverse effects of ethnic congestion in the niche of rural services: When the share of Jews in the population grew, Jews spilled across two margins - occupational, as manufacturing workers, and geographic, as frontier migrants to districts where Jews were scarce. There was little distinction between rural and urban Jewish labor markets, and no preference for large urban centers over small towns or for urban congestion effects. The patterns exhibited in the US after migration appear as a sharp break from, rather than a continuation of, old-country tradition. The case of Russian Jews exemplifies how inter-ethnic complementarities shape the long-run spatial distribution of an ethnic minority group, and in particular, that economic incentives can lead to cross-regional dispersion. |
| Keywords: | East European history; Inter-ethnic complementarities; Jewish history; Middleman minority; Pale of Settlement; Russian empire |
| JEL: | J15 J24 N33 N73 N93 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14262&r=all |
| By: | Philip Roessler; Yannick I. Pengl; Robert Marty; Kyle Sorlie Titlow; Nicolas van de Walle |
| Abstract: | We analyze the long-term effects of colonial cash crop extraction in Africa. Our conceptual framework focuses on the dynamic, interactive effects of geography, trade and colonialism in the context of Africa’s structural change from the slave trades to export agriculture. The adoption of cash crops shifted the loci of economic production to smallholder farmersin areas suitable for cultivation. Concurrently, the cash crop revolution—tied to European industrialization—led to the diffusion of economic imperialism beyond coastal Africa. Imperial extractive economies fueled infrastructural development in highly-suitable zones but dislocated production linkages to Europe and stymied the economic differentiation that otherwise might have occurred. The result was economic agglomeration at the site of production but with limited spillovers to nearby areas. Using agro-climatic suitability scores and historical data on the source location of more than 95 percent of all exports across 38 African states, we find that colonial cash crop production exhibited a large and positive long-run effect on local development in terms of urbanization, road infrastructure, nighttime luminosity and household wealth. These effects rival or surpass other geographic and historical forces frequently linked to subnational development in Africa. Exploring causal mechanisms, we show that path dependence due to colonial infrastructure investments is the more important channel than continued advantages in agricultural productivity. We also find that the positive local effects of colonial cash crop extraction came at the expense of surrounding areas and thereby entrenched deep spatial inequalities. |
| JEL: | F63 N57 O13 O18 Q17 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2020-12&r=all |
| By: | Ahsan, Reshad; Panza, Laura; Song, Yong |
| Abstract: | We use over 250 years of conflict and market integration data to provide the first evidence that Atlantic trade contributed to Europe's pacification between 1640 and 1896. While the decline in conflict in Europe during this period has been well documented, the role of Atlantic trade has not been previously explored due to a lack of historical trade data. We overcome this constraint by using wheat prices to calculate time-varying measures of market integration between Europe and the New World, which we use as a proxy for Atlantic trade. To identify the causal effects of Atlantic trade, we exploit exogenous changes in wind patterns and tropical cyclone activity over the Atlantic Ocean to instrument trade. Our results suggest that the growth in Atlantic trade between the mid-17th to the early 19th century lowered the probability of intra-European conflict onset by 14.90 percent. We find empirical support for two channels driving our results: first, Atlantic trade led to an increase in real wages and a reduction in both army and navy sizes in Europe. Second, we show that the possibility of forgone Atlantic trade acted as a deterrent to conflict. |
| Keywords: | Atlantic Trade; conflict; International Relations |
| JEL: | D74 F10 F51 N43 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14206&r=all |
| By: | Christophe Depoortère (LED - Laboratoire d'Economie Dionysien - UP8 - Université Paris 8 Vincennes-Saint-Denis); André Lapidus (PHARE - Philosophie, Histoire et Analyse des Représentations Économiques - UP1 - Université Panthéon-Sorbonne); Nathalie Sigot (PHARE - Philosophie, Histoire et Analyse des Représentations Economiques - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne) |
| Abstract: | This paper discusses the possibility, often alleged and widely accepted, that Bentham had an influence on the development of Ricardo's economics. Three possible points of contact have been mooted, the first mediated by the key figure of James Mill, the other two being unmediated reactions to their respective works, Bentham's Sur les prix and Ricardo's Essay on Profits. Yet, we argue, none of these claims for influence have firm foundations. Regarding the first proposed rendez vous, we show that (i) if Mill had an influence on Ricardo at the beginning of their friendship (say, around 1808), he was at this time Stewartian and not yet Benthamian; and (ii) if this influence is supposed to have been exerted later, it is clear from Ricardo's own comments that he was not convinced by a basic component of utilitarianism to which Mill made a major contribution-associationism. The second rendezvous manqué turns on Ricardo's reading of Bentham's manuscript Sur les prix: we show that (i) this reading could not have exerted an influence on Ricardo's monetary thought at an early stage-that is, before his first monetary writings-and (ii) that Ricardo expressed such disagreement with it that any influence from it on his views about money is inconceivable. The third rendez-vous was also manqué: commenting on Ricardo's Essay, Bentham accused him of confusing "cost" and "value": we examine this criticism by putting to the fore the different aims of both authors, related to their explanations of, respectively, inflation and the evolution of distribution, and their different conceptions of price. |
| Keywords: | Bentham,Ricardo,James Mill,utilitarianism,foundations of Ricardian economics |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02660437&r=all |
| By: | Samuel Bazzi (Boston University); Gabriel Koehler-Derrick (Harvard University); Benjamin Marx (Département d'économie) |
| Abstract: | Why do religious politics thrive in some societies but not others? This paper explores the institutional foundations of this process in Indonesia, the world’s largest Muslim democracy. We show that a major Islamic institution, the waqf, fostered the entrenchment of political Islam at a critical historical juncture. In the early 1960s, rural elites transferred large amounts of land into waqf —a type of inalienable charitable trust—to avoid expropriation by the government as part of a major land reform effort. Although the land reform was later undone, the waqf properties remained. We show that greater intensity of the planned reform led to more prevalent waqf land and Islamic institutions endowed as such, including religious schools, which are strongholds of the Islamist movement. We identify lasting effects of the reform on electoral support for Islamist parties, preferences for religious candidates, and the adoption of Islamic legal regulations (sharia). Overall, the land reform contributed to the resilience and eventual rise of political Islam by helping to spread religious institutions, thereby solidifying the alliance between local elites and Islamist groups. These findings shed new light on how religious institutions may shape politics in modern democracies. |
| Keywords: | Religion; Institutions; Land reform; Islam; Sharia Law |
| JEL: | D72 D74 P16 P26 Z12 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpecon:info:hdl:2441/68bdjcjoob8kh8nu5vcmetkbf3&r=all |
| By: | Daniel P. Gross; Bhaven N. Sampat |
| Abstract: | During World War II, the U.S. government launched an unprecedented effort to mobilize science for war: the newly-established Office of Scientific Research and Development (OSRD) entered thousands of R&D contracts with industrial and academic contractors, spending one to two orders of magnitude more than what the government was previously investing in science. In this paper, we study the long-run effects of the OSRD-supported research effort on U.S. invention. Using data on all OSRD contracts, we show that these investments had large effects on the direction and location of U.S. invention and high-tech industrial employment, setting in motion agglomeration forces which shaped the technology clusters of the postwar era. Our results demonstrate the effects of a large, mission-driven government R&D program on the growth of domestic technology clusters and long-run technological progress. |
| JEL: | H56 N42 N72 O31 O32 O33 O38 R11 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27375&r=all |
| By: | José García-Montalvo; Marta Reynal-Querol |
| Abstract: | In this paper, we document the long-run impact of the geographical heterogeneity in skills among the first settlers to Latin America. To this end, we compile administrative data on the early settlers in the Americas between 1492 and 1540 including, among others, name, city of origin, destination, and occupation. From a methodological perspective, a focus on the initial period of colonization in Latin America offers several advantages. First, differences in the geographical distribution of occupations among the first settlers are likely to be accidental. Second, a set-up that analyzes an area with a single colonizer (Spain) allows to hold constant formal institutions and legal origin. Our results show a relevant effect of the skills of first colonizers on long-run levels of development of the areas located around the original settlements. We find evidence of persistence in the form of market orientation and entrepreneurial spirit. |
| Keywords: | skills, early settlers, persistence, development |
| JEL: | O10 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1189&r=all |
| By: | Olivier Cabrignac; Arthur Charpentier; Ewen Gallic |
| 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. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2006.08446&r=all |
| By: | Vincent Delabastita (Department of Economics, KU Leuven); Sebastiaan Maes (Department of Economics, KU Leuven) |
| Abstract: | Does the prosperity of medieval manors depend on their position in the feudal system? How large are these effects? And what are the economic mechanisms behind it? To answer these questions, we estimate an econometric interactions model on data derived from the Domesday Book, a unique country-wide survey conducted by William the Conqueror two decades after the Battle of Hastings. Domesday Book presents researchers with a unique insight into the feudal structure of a medieval society and the functioning of manorial economies. Using this source, we reinterpret the 11th-century English feudal system as a network in which manors are linked to one another based on their common ownership structure. Our results reveal the existence of external economies of scale: manorial prosperity was closely intertwined with the fortune of their feudal peers, even after including rich agricultural and geographic controls. We decompose these significant, positive interaction effects into two mechanisms: scale and productivity spill-overs. The latter are interpreted as common management structures and knowledge transfers in an information-constrained feudal world. |
| Keywords: | Domesday Book, medieval economic history, network economics |
| JEL: | L14 N33 O33 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:hes:wpaper:0190&r=all |
| By: | Cioni, Martina; Federico, Giovanni; Vasta, Michelangelo |
| Abstract: | Economic history is back in fashion among economists, both in its traditional version, focusing on the economics of the past, and in a new version, dealing with the persistent effect of events in the past upon the present. Economic history is said to be increasingly integrated into economics. We systematically explore this issue with a comprehensive database of 3,286 economic history articles published from 2001 to 2018 in top economic history journals and in thirteen leading economics journals. We argue, however, that this integration is more limited than is widely assumed. The share of economic history articles in economics journals has increased very little, cross-citations are limited and only a small minority of authors publish in both economics and economic history journals. Furthermore, we show that many economists adopt a radically different approach, dealing with the persistent effect of events of the past up to the present rather than looking at the economic life in the past. In the second part of the paper, we measure the citational success of articles by publication outlet (economic history vs. economics journals) and by the nature of the work ("traditional" economic history vs. "persistence studies"). We show that publishing in the top five economics journals, when compared to publishing in economic history journals, substantially increases the number of citations, while the gap between the latter and other economics journals is much smaller. Finally, we speculate about the possible future evolution of the field. |
| Keywords: | economic history; economics journals |
| JEL: | N01 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14192&r=all |
| By: | Haelim Anderson; Jin-Wook Chang; Adam Copeland |
| Abstract: | The coronavirus outbreak raises the question of how central bank liquidity support affects financial stability and promotes economic recovery. Using newly assembled data on cross-county flu mortality rates and state-charter bank balance sheets in New York, we investigate the effects of the 1918 Influenza Pandemic on the banking system and the role of the Federal Reserve during the pandemic. We find that banks located in more severely affected areas experienced deposit withdrawals. Banks which were members of the Federal Reserve were able to access central bank liquidity and so continue or even expand lending. Banks which were not members, however, did not borrow on the interbank market but rather curtailed lending, suggesting there was little-to-no pass-through of central bank liquidity. Further, in the counties most affected by the 1918 Influenza, even banks with direct access to the discount window liquidated assets so as to meet large deposit withdrawals, suggesting limits to the effectiveness of the liquidity provision by the Federal Reserve. Finally, we show that the pandemic caused only a short-term disruption on the financial sector. Over the long-term, deposits returned and banks restored their asset portfolios. |
| Keywords: | 1918 Spanish influenza; Pandemics; Financial stability; Bank lending; Economic recovery |
| JEL: | E32 G21 N22 |
| Date: | 2020–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2020-50&r=all |
| By: | Bertrand Garbinti (Centre de recherche de la Banque de France - Banque de France, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - CNRS - Centre National de la Recherche Scientifique - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique); Jonathan Goupille-Lebret (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon); Thomas Piketty (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, WIL - World Inequality Lab) |
| Abstract: | Measuring and understanding the evolution of wealth inequality is a key challenge for researchers, policy makers, and the general public. This paper breaks new ground on this topic by presenting a new method to estimate and study wealth inequality. This method combines fiscal data with household surveys and national accounts in order to provide annual wealth distribution series, with detailed breakdowns by percentiles, age and assets. Using the case of France as an illustration, we show that the resulting series can be used to better analyze the evolution and the determinants of wealth inequality dynamics over the 1970-2014 period. We show that the decline in wealth inequality ends in the early 1980s, marking the beginning of a rise in the top 1% wealth share, though with significant fluctuations due largely to asset price movements. Rising inequality in saving rates coupled with highly stratified rates of returns has led to rising wealth concentration in spite of the opposing effect of house price increases. We develop a simple simulation model highlighting how changes in the combination of unequal saving rates, rates of return and labor earnings that occurred in the early 1980s generated large multiplicative effects that led to radically different steady-state levels of wealth inequality. Taking advantage of the joint distribution of income and wealth, we show that top wealth holders are almost exclusively top capital earners, and less and less are made up of top labor earners; it has become increasingly difficult in recent decades to access top wealth groups with one's labor income only. |
| Keywords: | Wealth Inequality,Methods,measurement,France,Distributional National Accounts,DINA,wealth,capital share |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:hal-02876977&r=all |
| By: | George S. Tavlas (Bank of Greece) |
| Abstract: | The idea of 100 percent reserve requirements against demand deposits received a renewed impetus following the 2007-08 financial crisis. In 1933, a group of University of Chicago economists, led by Frank Knight and Henry Simons, circulated two memoranda that called for 100 percent reserve requirements. The idea became known as the Chicago Plan of Banking Reform. That same idea had been proposed in 1926 by Frederick Soddy, a Nobel Laureate in chemistry, in his book, Wealth, Virtual Wealth and Debt. Soddy claimed precedence, a claim that caught on. I provide evidence showing that Knight, and probably Simons, conceived the idea of 100 percent reserves prior to the publication of Soddy’s 1926 book. By 1934, however, Simons raised concerns that 100 percent reserves would not be sufficient in a world where financial markets could innovate around legal restrictions on banks. |
| Keywords: | 100 percent reserves; Chicago Plan; Frank Knight; Henry Simons; Frederick Soddy |
| JEL: | B22 E42 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:bog:wpaper:279&r=all |
| By: | Michael D. Bordo; Andrew T. Levin; Mickey D. Levy |
| Abstract: | The U.S. economy currently faces a truly extraordinary degree of uncertainty as a consequence of the COVID-19 pandemic. In these circumstances, the Federal Reserve could begin highlighting alternative scenarios to illustrate key risks to the economic outlook, and such scenarios could inform the Fed’s policy strategy and public communications. In this paper, we present a set of illustrative scenarios, including a baseline scenario with a rapid but incomplete recovery this year (an upward-tilting checkmark), a benign scenario in which an effective cure or vaccine becomes available and facilitates a nearly complete recovery by mid-2021, and a severely adverse scenario involving persistently high unemployment and disinflationary pressures. Insights into these scenarios can be drawn from key historical episodes, including the Spanish flu, the Great Depression, the end of World War II, and the global financial crisis. We conclude by identifying key challenges that the Federal Reserve might face in adjusting its monetary policy and emergency credit facilities under each of these alternative scenarios. |
| JEL: | E52 E58 N10 N11 N12 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27369&r=all |
| By: | Carlana, Michela; Tabellini, Marco |
| Abstract: | In this paper, we study the effects of immigration on natives' marriage, fertility, and family formation across U.S. cities between 1910 and 1930. Instrumenting immigrants' location decision by interacting national changes in migration flows across ethnic groups with pre-existing immigrants' enclaves across U.S. cities, we find that immigration raised marriage rates and the probability of having children for young native men and women. We show that these effects were driven by the large and positive impact of immigration on native men's employment and occupational standing, which increased the supply of "marriageable men." We explore alternative mechanisms-changes in sex ratios, natives' cultural responses, and displacement effects of immigrants on female employment-and provide evidence that none of them can account for a quantitatively relevant fraction of our results. |
| JEL: | J12 J13 J61 N32 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14316&r=all |
| By: | Tabellini, Marco |
| Abstract: | In this paper, I jointly investigate the political and the economic effects of immigration and study the causes of anti-immigrant sentiments. I exploit exogenous variation in European immigration to U.S. cities between 1910 and 1930 induced by World War I and the Immigration Acts of the 1920s as well as instrument immigrants' location decision relying on pre-existing settlement patterns. I find that immigration triggered hostile political reactions, such as the election of more conservative legislators, higher support for anti-immigration legislation, and lower redistribution. Exploring the causes of natives' backlash, I document that immigration increased natives' employment, spurred industrial production, and did not generate losses even among natives working in highly exposed sectors. These findings suggest that opposition to immigration was unlikely to have economic roots. Instead, I provide evidence that natives' political discontent was increasing in the cultural differences between immigrants and natives. Results in this paper indicate that, even when diversity is economically beneficial, it may nonetheless be socially hard to manage. |
| Keywords: | Age of Mass Migration; Cultural diversity; Immigration; Political Backlash |
| JEL: | J15 J24 N32 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14317&r=all |
| By: | Oriol Sabaté (Department of Political Science, Lund University, Sweden); Eduardo Sanz-Arcega (Department of Economic Structure, Economic History and Public Economics, University of Zaragoza, Spain) |
| Abstract: | Military might and political elites’ commercial mindset are two important preconditions that explain nations’ economic income differences. The combination of elites’ economic risk appetite and its bargain power at the national and international arenas sustained by its own military might lead to the array of economic outcomes achieved by nations over time. To the best of our knowledge, the proposed argument fits historical evidence but has not been properly developed by the previous literature. |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ays:ispwps:paper2012&r=all |
| By: | Tabellini, Marco |
| Abstract: | Between 1915 and 1930, during the First Great Migration, more than 1.5 million African Americans migrated from the South to the North of the United States, altering the racial profile of several northern cities for the first time in American history. I exploit this episode to study how an increase in racial heterogeneity affects the provision of public goods and city finances. I predict black in-migration by interacting 1900 settlements of southern born blacks across northern cities with variation in outmigration from the South after 1910. I find that black inflows had a strong, negative impact on both public spending and tax revenues in northern cities. The decline in tax revenues was not due to cities' decision to cut tax rates, but was entirely driven by a reduction in property values. These findings suggest that the housing market response to black arrivals imposed a negative fiscal externality to receiving cities that, unable or unwilling to raise taxes, were forced to cut spending. Consistent with this interpretation, cities did not change the allocation of spending across categories, while the negative effects of black in-migration were smaller when controlling for the (predicted) white outflows triggered by black arrivals. |
| JEL: | H41 J15 N32 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14319&r=all |
| By: | Mels de Zeeuw |
| Abstract: | From 19th-century workers smashing textile factory machines to John Maynard Keynes's musing on technological unemployment, worries and passions about machines replacing workers are hundreds of years old. More recently, robots and computers (through artificial intelligence) are replacing a growing number of human skills, and this has become an important topic of conversation in public policy. It is also increasingly on the minds of workers and students making decisions about their investments in skills and career preparation. |
| Keywords: | opportunity occupations |
| JEL: | J21 |
| Date: | 2020–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:fip:a00034:88184&r=all |
| By: | Aurélien Goutsmedt (Université du Québec à Montréal - CIRST); Matthieu Renault (Université de Côte d'Azur; CNRS, GREDEG); Francesco Sergi (Université Paris Est Créteil - LIPHA) |
| Abstract: | The International Seminar on Macroeconomics (ISoM) is an annual conference, which was co-sponsored during 15 years (1978-1993) by the French EHESS and the NBER. This article uncovers the scientific and institutional dynamics unrolling from this cooperation. We argue that the ISoM contributed greatly to the making of a European network of economists sharing similar professional and intellectual standards: indeed, the Seminar gathered macroeconomists who were leading the development of this European network. We illustrate how the ISoM stood at the crossroad of two types of ‘internationalisation' of economics: the integration of European national communities and the process of ‘Americanisation' of economics. While existing literature on ‘internationalisation' focuses on the national level, our contribution investigates the European level. Moreover, we unveil how two research programmes in macroeconomics (namely the disequilibrium theory and large-scale macroeconometric modelling) played a significant role in this process. |
| Keywords: | International Seminar on Macroeconomics; National Bureau of Economic Research (NBER); Ecole des hautes études en sciences sociales (EHESS); Disequilibrium Theory; Large-Scale Macroeconometric Modelling |
| JEL: | A11 A14 B22 B30 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2020-26&r=all |
| By: | Bitros, George C. |
| Abstract: | Credible analyses and evidence submitted by experts from universities, international organizations and independent think tanks show that the trends which led to the 2008 worldwide financial crisis remain intact. As a result, central for responsible leaderships should be the concern how to forestall the next big one which might prove uncontrollable. Given the world dominance of the U.S. dollar, in a 2015 paper I discussed two paths of possible reforms: One bold but gradual, which would entail altering the present institutional setup of the U.S. Federal Open Market Committee (“the Fed”), provided that it maintains control over the Federal Funds Rate (FFR); and, if not, a radical one, which would entail replacing the Fed with a monetary regime based on free banking. In this paper I go a step further in the latter direction by drawing on the model of free banking that emerged in Athens in classical times and enabled the Athenian “empire” to turn the Attic drachma into the dollar of today, throughout the eastern Mediterranean and beyond, without causing major financial crises for over two centuries. More specifically, I argue that, even if the said model had not proved its potential as a highly successful historical precedent, as banker of the world, the U.S. ought to consider it as a benchmark for reference and adaptation, before an unexpected international financial crisis and/or the revolutionary technological developments in the front of gold-like digital currencies, precipitate a monetary regime change. |
| Keywords: | Classical Athens, Democracy, Central banks, Free banking, Athenian model of money and banking. |
| JEL: | D7 E4 E5 E6 G2 N4 |
| Date: | 2020–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101217&r=all |
| By: | Abhijit Banerjee (MIT - Massachusetts Institute of Technology); Amory Gethin (PSE - Paris School of Economics, WIL - World Inequality Lab); Thomas Piketty (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique, WIL - World Inequality Lab) |
| Abstract: | This paper combines surveys, election results and social spending data to document the long-run evolution of political cleavages in India. From a dominantparty system featuring the Indian National Congress as the main actor of the mediation of political conflicts, Indian politics have gradually come to include a number of smaller regionalist parties and, more recently, the Bharatiya Janata Party (BJP). These changes coincide with the rise of religious divisions and the persistence of strong caste-based cleavages, while education, income and occupation play little role (controlling for caste) in determining voters' choices. We find no evidence that India's new party system has been associated with changes in social policy. While BJP-led states are generally characterized by a smaller social sector, switching to a party representing upper castes or upper classes has no significant effect on social spending. We interpret this as evidence that voters seem to be less driven by straightforward economic interests than by sectarian interests and cultural priorities. In India, as in many Western democracies, political conflicts have become increasingly focused on identity and religious-ethnic conflicts rather than on tangible material benefits and class-based redistribution. |
| Keywords: | India,political cleavages,economic cleavage,social spending |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:hal-02877001&r=all |
| By: | Manoel Bittencourt; Matthew Clance; Yoseph Y. Getachew |
| Abstract: | We study the effect of trade openness on fertility rates in fifty African countries during the1962 - 2010 period. By disaggregating the trade openness data in novel ways, and allowing for country and time fixed effects, our results indicate that trade openness and imports of manufactured goods are significantly related to lower fertility. Furthermore, trade with the former colonial powers and imports of high-skilled manufactured goods, which include television receivers and telecommunications equipment, are significantly related to lower fertility too. Given that Africa export mostly agricultural products and raw materials, the results contrast with the comparative-advantages prediction. Our results, however, suggest that the knowledge, new information, beliefs, attitudes and gender norms emanating from imported high-skilled manufactured goods such as television receivers are affecting fertility choices and, ultimately, having a reinforcing effect on Africa's ongoing demographic transition. |
| Keywords: | Openness, Fertility, Africa |
| JEL: | F6 J10 N37 O55 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:807&r=all |
| By: | Daniel de Kadt (Department of Political Science, University of California, Merced); Johan Fourie (Department of Economics, Stellenbosch University); Jan Greyling (Department of Agricultural Economics, Stellenbosch University); Elie Murard (Department of Economics, Stellenbosch University); Johannes Norling (Department of Economics, Mount Holyoke College) |
| Keywords: | Spanish flu, influenza, pandemic, epidemic, health, mortality, South Africa, Covid-19 |
| JEL: | N37 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers347&r=all |
| By: | Samir El Ouaamari (AgroParisTech – UFR Agriculture comparée et développement agricole); Pascal Tillie (European Commission – JRC); Fatouma-Lucie Sanou; Viviane Treves; Constantin Girard; Sergio Gomez-Y-Paloma (European Commission – JRC); Hubert Cochet (AgroParisTech – UFR Agriculture comparée et développement agricole) |
| Abstract: | L'agriculture en Côte d'Ivoire est le fait de différents types de systèmes de production, qui différent grandement les uns et les autres, en termes de taille, d'accès aux ressources de production (travail, capital) ou encore de droits fonciers. Certaines régions combinent sur un même espace des systèmes de production familiaux, patronaux et d'entreprises, chacune de ces catégories pouvant d'ailleurs renfermer une grande diversité de systèmes. Par ailleurs, ces différentes exploitations n'évoluent pas en vase clos, loin de là , et elles interagissent et échangent connaissances, ressources et produits finis. Leur trajectoire de différenciation – en constante évolution – ne peut se comprendre que par une étude fine de leurs caractéristiques et de leurs relations les unes aux autres. Il en va de même pour l'étude de leurs performances économiques. L'objectif de ce projet de recherche, dont les principaux résultats sont rassemblés dans ce rapport, était donc d'analyser le fonctionnement économique de ces différents systèmes de production, et par conséquent leurs performances économiques comparées, à partir de trois études de cas en Côte d'Ivoire, concernant plus particulièrement la culture de l'hévéa, du palmier à huile et de la canne à sucre. Les résultats montrent l'importance de la prise en compte de tous les aspects des exploitations dans la réalisation de telles analyses : les performances "au champs" (rendement, marge brute) s'avérant de mauvais indicateurs de la performance finale. Nos résultats montrent la capacité de l'agriculture familiale à générer des revenus important alors même qu'elle reste très peu dotée en capital. Dans les trois régions étudiées de Côte d'Ivoire, les exploitations familiales sont parfaitement capables de rivaliser avec les exploitations patronales et industrielles voisines. Grâce à des systèmes de culture complexe, associant cultures pérennes et cultures vivrières, elles créent bien souvent plus de richesse par unité de surface ou de travail que les plus grandes exploitations. Ces dernières pâtissent de déséconomies d'échelles liées leur taille et aux coûts d'organisation du travail, ainsi que, dans le cas des plantations industrielles, de la poursuite d'une logique industrielle au détriment de la logique agricole. Les conclusions de ce travail ont d'importantes implications pour les bailleurs de fond ou les agences de développement. |
| Keywords: | Food chain, Agricultural policy, Agricultural sector, Africa, Côte d'Ivoire |
| JEL: | D13 Q11 Q12 Q13 Q15 Q18 N57 O13 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc116258&r=all |
| By: | Indra de Soysa; Tim Krieger; Daniel Meierrieks |
| Abstract: | We empirically examine the impact of oil wealth on property rights protection for a sample of 156 countries between 1960 and 2014. We find that higher levels of oil wealth result in weaker private property rights. This result is robust to different instrumental-variable approaches and operationalizations of oil wealth and economic institutions. We argue that oil wealth creates an oil elite that wields disproportionate economic and political power over society. The elite uses this power to buy support for weak property rights from their supporters (the selectorate), while also punishing the opposition (i.e., the non-selectorate). Indeed, we also provide evidence that oil wealth leads to more clientelistic policies (benefitting the selectorate) but also more punitive measures (e.g., in the form of exclusion from state jobs) likely administered to the non-selectorate. We argue that the elite favors weak property rights because this blocks potential economic challengers, allowing for the consolidation and perpetuation of the economic and political status quo. |
| Keywords: | oil wealth, economic institutions, property rights, resource curse, selectorate theory |
| JEL: | D72 D73 O13 O17 Q34 Q38 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8319&r=all |
| By: | Panza, Laura; Swee, Eik |
| Abstract: | We examine the effect of inter-ethnic income inequality on conflict intensification in Mandate Palestine, using a novel panel dataset comprising district-level characteristics and conflict intensity across 18 districts during 1926-1945. We instrument Jewish-Arab income inequality by combining annual variation in rainfall with cross-sectional variation in pre-Mandate crop intensity, to extract exogenous variation in inequality between non-agrarian Jews and agrarian Arabs. We find a substantial e ect of inequality on conflict intensification, especially during periods where the relationship between Arabs and Jews were particularly strained. Our estimates are driven by Arab-initiated attacks, reflecting local average treatment effects of Arab farmers who move from agrarian work to violence in response to adverse rainfall shocks, suggesting that economic shocks coupled with existing economic segregation facilitate the transition into violence when opposing groups are economic substitutes. Further investigations reveal that inequality-driven violence was not the result of opportunity costs or appropriation, but rather an expression of resentment. |
| JEL: | N35 N45 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14366&r=all |
| By: | Paganelli, Maria Pia |
| Abstract: | Book Review: The Birth of Economic Rhetoric: communication, arts and economic stimulus in David Hume and Adam Smith. By Estrella Trincado |
| Date: | 2020–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:znsb3&r=all |
| By: | Francisco J. Marco-Gracia; Johan Fourie |
| Abstract: | At the beginning of the twentieth century the sex ratio for South Africans differed markedly according to racial group. Those for white South Africans remained almost invariable, with more boys than girls, while black South Africans had a clear majority of girls, a situation that the literature has almost completely overlooked. This high proportion of black girls was also present in most sub-Saharan countries. The reasons are still not completely clear. Sex ratios at birth show more births of boys than girls. Boys’ mortality was higher than girls’ mortality. But that does not explain why the twentieth-century black sex ratio was much lower than the sex ratios of pre-industrial European countries. We test several possible complementary explanations. The anomaly was caused, we argue, by a combination of higher mortality of boys and a preference for girls. |
| Keywords: | Sex ratio, racial difference, Gender Discrimination, gender preferences |
| JEL: | J11 J12 J13 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:804&r=all |
| By: | Christos Argyropoulos (Lancaster University); Bertrand Candelon (Université Catholique de Louvain); Jean-Baptiste Hasse (Aix-Marseille University); Ekaterini Panopoulou (University of Essex) |
| Abstract: | This paper highlights the procyclical and unstable behaviour of mutual fund returns. It proposes a novel factor model that allows for regime changes associated with macroeconomic variables. Estimated on a panel covering 825 US equity mutual funds over a period of 30 years, it appears that the yield curve, the dividend yield and the industrial production coincide with regimes switches in the Fama-French factors. Furthermore, the estimated regimes perfectly match financial crises and economic downturns, thus confirming the procyclical behaviour of mutual funds' returns. These findings, coupled with the emerging systemic role of mutual funds, promote the consideration for a specific macroprudential regulatory framework. |
| Keywords: | Financial Stability; MutualFundIndustry; Regulation; Macroprudential Framework |
| JEL: | G18 G23 G28 |
| Date: | 2020–04–29 |
| URL: | http://d.repec.org/n?u=RePEc:cth:wpaper:gru_2020_008&r=all |
| By: | Ran Abramitzky; Leah Platt Boustan; Dylan Connor |
| Abstract: | We study a program that funded 39,000 Jewish households in New York City to leave enclave neighborhoods circa 1910. Compared to their neighbors with the same occupation and income score at baseline, program participants earned 4 percent more ten years after removal, and these gains persisted to the next generation. Men who left enclaves also married spouses with less Jewish names, but they did not choose less Jewish names for their children. Gains were largest for men who spent more years outside of an enclave. Our results suggest that leaving ethnic neighborhoods could facilitate economic advancement and assimilation into the broader society, but might make it more difficult to retain cultural identity. |
| JEL: | J15 N12 R23 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27372&r=all |
| By: | Bertrand GARBINTI (Banque de France and CREST); Frédérique SAVIGNAC (Banque de France) |
| Abstract: | We propose a new and simple method to study intergenerational wealth correlation between two generations, which is easy to implement in wealth (and housing) surveys and aims at overcoming the strong data limitation faced in most of the countries. We show that the ownership of housing assets can be used to proxy for three wealth groups for all cohorts. Misclassification induces a low and downward bias in the estimate of the intergenerational correlation. Using France as an example, we estimate intergenerational wealth correlation for cohorts covering the 20th century and focusing on the wealth positions measured at the midlife cycle of both children and parents. First, we find increasing probabilities to belong to top wealth groups with the wealth of the parents. Moreover, these probabilities have increased over time for most of the top wealth groups. Second, the higher we move up along the children's wealth distribution, the larger the role of parental wealth: the persistence in the top 50% is 38% higher than under perfect mobility, and the deviations from perfect mobility are larger in higher top wealth groups. Third, about 50% to 60% of the intergenerational correlation is accounted for by a mix of direct intergenerational wealth transfers, fathers' occupation and children's education. Fourth, gifts and bequests explain a larger share of the link between parental wealth and the probability to belong to the top 10% compared to larger top wealth groups. We also find evidence of persistence of the effect of parental wealth over the life-cycle. |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2020-16&r=all |
| By: | Pierre van der Eng |
| Abstract: | This paper asks why it took 10 years since a major famine in Indonesia in 1957 for Australia’s food aid to increase in greater amounts, and why food aid was so significant In Australia’s foreign aid to Indonesia during the late 1960s and 1970s. Indonesia’s reluctance to apply for food aid under the Colombo Plan is the reason for the delay. A combination of humanitarian, commercial and international relations interests converged to shape Australia’s rapidly growing food aid to Indonesia after 1966. Food aid contributed to alleviating food shortages and famines in Indonesia. It also supported Australian firms in regaining their share in the growing market for wheat-based products in Indonesia, and in building market share for Australian rice exports, in competition with US producers and the US PL480 food aid program. Food aid also allowed Australia to expand its foreign aid program to Indonesia rapidly after 1966, in support of the government of new President Soeharto and improved bilateral relations. |
| Keywords: | Australia, Indonesia, international relations, food supply, food aid |
| JEL: | F14 F35 N55 N57 O19 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:auu:hpaper:087&r=all |
| By: | Anil Ari (IMF); Sophia Chen (IMF); Lev Ratnovski (ECB) |
| 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. |
| Keywords: | non-performing loans, debt, banking crises, recessions, crisis resolution |
| JEL: | E32 E44 G21 N10 N20 |
| Date: | 2020–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:cth:wpaper:gru_2020_011&r=all |
| By: | Asahi Noguchi |
| Abstract: | The coronavirus disease (COVID-19) has caused one of the most serious social and economic losses to countries around the world since the Spanish influenza pandemic of 1918 (during World War I). It has resulted in enormous economic as well as social costs, such as increased deaths from the spread of infection in a region. This is because public regulations imposed by national and local governments to deter the spread of infection inevitably involves a deliberate suppression of the level of economic activity. Given this trade-off between economic activity and epidemic prevention, governments should execute public interventions to minimize social and economic losses from the pandemic. A major problem regarding the resultant economic losses is that it unequally impacts certain strata of the society. This raises an important question on how such economic losses should be shared equally across the society. At the same time, there is some antipathy towards economic compensation by means of public debt, which is likely to increase economic burden in the future. However, as Paul Samuelson once argued, much of the burden, whether due to public debt or otherwise, can only be borne by the present generation, and not by future generations. |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2006.11750&r=all |