nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2020‒08‒10
fifty-four papers chosen by

  1. Religion in Economic History: A Survey By Sascha O. Becker; Jared Rubin; Ludger Woessmann
  2. The Wheels of Change: Human Capital, Millwrights, and Industrialization in Eighteenth-Century England By Sarid, Assaf; Mokyr, Joel; van der Beek, Karine
  3. Between Communism and Capitalism: Long-Term Inequality in Poland, 1892- 2015 By Pawel Bukowski; Filip Novokmet
  4. The Populist Economic Policy Paradigm: Early Peronism as an Archetype By Emilio Ocampo
  5. Who's Who and What's What at the LSE, Then and Now? A Review Essay of The Palgrave Companion to LSE Economics By Richard G. Lipsey
  6. What Determines the Capital Share over the Long Run of History? By Erik Bengtsson; Enrico Rubolino; Daniel Waldenström
  7. An "exceedingly delicate undertaking": Sino-American science diplomacy, 1966–78 By Millwood, Peter
  8. Création du FED : réunir la gestion de la monnaie et de la liquidité By Anne-Marie Rieu-Foucault
  9. The Missing Men. World War I and Female Labor Force Participation By Jörn Boehnke; Victor Gay
  10. ¿Keynes salvó al mundo de la Gran Depresión? By Emilio Ocampo
  11. Cognition, Culture, and State Capacity: Age-Heaping in XIX Century Italy By A'Hearn, Brian; Delfino, Alexia; Nuvolari, Alessandro
  12. Estimating Long-Run Incarceration Rates for Australia, Canada, England & Wales, New Zealand and the United States By Andrew Leigh
  13. A Framework for Studying the Monetary and Fiscal History of Latin America, 1960–2017 By Timothy J. Kehoe; Juan Pablo Nicolini; Thomas J. Sargent
  14. Political History, Fiscal Compliance and Cooperation: Medieval Social Contracts and their Legacy By Buonanno, Paolo; Cervellati, Matteo; Lazzaroni, Sara; Prarolo, Giovanni
  15. Accounting for Wealth Inequality Dynamics: Methods, Estimates and Simulations for France By Bertrand Garbinti; Jonathan Goupille-Lebret; Thomas Piketty
  16. Financing sanitation infrastructure in nineteenth-century England and Wales By Jonathan Chapman
  17. What Kind of Populism is Peronism? By Emilio Ocampo
  18. African institutions under colonial rule By Bolt, Jutta; Gardner, Leigh
  19. Peugeot en Gironde en juin 1940. La guerre économique en 40 comme en 14 ? By Hubert BONIN
  20. Classical versus Neoclassical Equilibrium Discovery Processes in Market Supply and Demand Theory By Sabiou M. Inoua; Vernon L. Smith
  21. Inequality in Pre-Industrial Europe (1260-1850): New Evidence from the Labour Share By Giovanni Federico; Alessandro Nuvolari; Michelangelo Vasta
  22. Simplified Distributional National Accounts By Thomas Piketty; Emmanuel Saez; Gabriel Zucman
  23. Community Origins of Industrial Entrepreneurship in Pre-Independence India By Gupta, Bishnupriya; Mookherjee, Dilip; Munshi, Kaivan; Sanclemente, Mario
  24. The Second Convict Age: Explaining the Return of Mass Imprisonment in Australia By Andrew Leigh
  25. Effects of credit restrictions in the Netherlands and lessons for macroprudential policy By Gabriele Galati; Jan Kakes; Richhild Moessner
  26. Sherwin Rosen By Kenneth J. McLaughlin
  27. Voting Up? The Effects of Democracy and Franchise Extension on Human Stature By Alberto Batinti; Joan Costa-Font; Timothy J. Hatton
  28. A Veblenian Critique of Nelson and Winter’s Evolutionary Theory By Jo, Tae-Hee
  29. Inequality in pre-industrial Europe (1260-1850): new evidence from the labour share By Giovanni Federico; Alessandro Nuvolari; Michelangelo Vasta
  30. Growing Cleavages in India? Evidence from the Changing Structure of Party Electorates, 1962-2014 By Abhijit Banerjee; Amory Gethin; Thomas Piketty
  31. The Failure of Free Entry By Gutierrez, German; Philippon, Thomas
  32. Analysis risk and commercial risk: the first treatment of usury in Thomas Aquinas's Commentary on the Sentences By Pierre Januard
  33. Chinese Entrepreneurship in Indonesia: A Business Demography Approach By Pierre van der Eng
  34. Settlement Location Shapes Refugee Integration: Evidence from Post-war Germany By Braun, Sebastian T.; Dwenger, Nadja
  35. Examining the Great Leveling: New Evidence on Midcentury American Inequality By Matthew Fisher-Post
  36. Populism and the First Wave of Globalization: Evidence from the 1892 US Presidential Election By Alexander Klein; Karl Gunnar Persson; Paul Sharp
  37. Governing Common-Property Assets: Theory and Evidence from Agriculture By Simon Cornée; Madeg Le Guernic; Damien Rousselière
  38. Factor Shares in the long run By Matthew Fisher-Post
  39. Islam and the State: Religious Education in the Age of Mass Schooling∗ By Samuel Bazzi; Masyhur Hilmy; Benjamin Marx
  40. Paying them to hate US: The effect of U.S. military aid on anti-American terrorism, 1968-2014 By Dimant, Eugen; Krieger, Tim; Meierrieks, Daniel
  41. Lessons from the Monetary and Fiscal History of Latin America By Carlos Esquivel; Timothy J. Kehoe; Juan Pablo Nicolini
  42. Rural Transformation, Inequality, and the Origins of Microfinance By Suesse, Marvin; Wolf, Nikolaus
  43. The Evolution of Female Labour Force Participation in Jordan By Alma Boustati
  44. Democracy, Redistribution, and Inequality: Evidence from the English Poor Law By Jonathan Chapman
  45. Celso Furtado as 'Romantic Economist' from Brazil's Sertão By Jonas Rama; John Hall
  46. Imagination und Bildlichkeit in der Geschichte der Wirtschaftstheorie: Von Adam Smith bis zur frühen Neoklassik By Ötsch, Walter
  47. The Effects of Immigration on the Economy: Lessons from the 1920s Border Closure By Abramitzky, Ran; Ager, Philipp; Boustan, Leah; Cohen, Elior David; Hansen, Casper Worm
  48. The Leverage Factor: Credit Cycles and Asset Returns By Davis, Josh; Taylor, Alan M.
  49. South Australia’s Employment Relief Program for Assisted Immigrants: Promises and Reality, 1838-1843 By Edwyna Harris; Sumner La Croix
  50. The Impact of Interwar Protection: Evidence from India By Vellore Arthi; Markus Lampe; Ashwin Nair; Kevin Hjortshøj O’Rourke
  51. Machine learning classification of entrepreneurs in British historical census data By Montebruno, Piero; Bennett, Robert; Smith, Harry; van Lieshout, Carry
  52. An Experiment on the Neolithic Agricultural Revolution. Causes and Impact on Equality By Antonio J. Morales; Ismael Rodriguez-Lara
  53. Energy Intensity and the Environmental Kuznets Curve By Grytten, Ola Honningdal; Lindmark, Magnus; Minde, Kjell Bjørn
  54. COVID-19, Race, and Redlining By Graziella Bertocchi; Arcangelo Dimico

  1. By: Sascha O. Becker (Monash University; University of Warwick); Jared Rubin (Chapman University); Ludger Woessmann (ifo Institute, University of Munich)
    Abstract: This chapter surveys the recent social science literature on religion in economic history, covering both socioeconomic causes and consequences of religion. Following the rapidly growing literature, it focuses on the three main monotheisms—Judaism, Christianity, and Islam—and on the period up to WWII. Works on Judaism address Jewish occupational specialization, human capital, emancipation, and the causes and consequences of Jewish persecution. One set of papers on Christianity studies the role of the Catholic Church in European economic history since the medieval period. Taking advantage of newly digitized data and advanced econometric techniques, the voluminous literature on the Protestant Reformation studies its socioeconomic causes as well as its consequences for human capital, secularization, political change, technology diffusion, and social outcomes. Works on missionaries show that early access to Christian missions still has political, educational, and economic consequences in present-day Africa, Asia, and Latin America. Much of the economics of Islam focuses on the role that Islam and Islamic institutions played in political-economy outcomes and in the “long divergence†between the Middle East and Western Europe. Finally, cross-country analyses seek to understand the broader determinants of religious practice and its various effects across the world. We highlight three general insights that emerge from this literature. First, the monotheistic character of the Abrahamic religions facilitated a close historical interconnection of religion with political power and conflict. Second, human capital often played a leading role in the interconnection between religion and economic history. Third, many socioeconomic factors matter in the historical development of religions.
    Keywords: Judaism; Christianity; Islam; Economic development; Education; Persecution;; Political Economy; Finance; Specialization; Trade
    JEL: Z12 N00 J15 I15 I25
    Date: 2020
  2. By: Sarid, Assaf; Mokyr, Joel; van der Beek, Karine
    Abstract: Measures of human capital correlate strongly with technological change and economic growth across regions. However, the endogeneity of these measures complicated this interpretation. This paper aims to identify the causal effect of human capital in the context of Britain's industrialization in the eighteenth century, by uncovering the geographical origins of its highly skilled mechanical labor. We achieve this by exploiting the persistent effect of the spatial location of early medieval watermills across England (as registered in Domesday Book in 1086) on the spatial distribution of a specific group of mechanical workmen known as wrights, who specialized in building watermills, and using the exogenous source of cross-district variation in geographical suitability for the construction of watermills in the early medieval period, to instrument for the availability of wrights in the first half of the eighteenth century (1710-50). In the case of England, the mechanical skills that evolved in response to the extensive adoption of watermills for grinding in the early middle ages, were complementary to technological change and turned out to be an important power behind England's leadership in the second half of the eighteenth century.
    Keywords: economic growth; England; Human Capital; Industrialization; mechanical skills; watermill
    JEL: N00 N13 N53 N73 N93 O14 O15 O33
    Date: 2019–11
  3. By: Pawel Bukowski (LSE - London School of Economics and Political Science); Filip Novokmet (PSE - Paris School of Economics, University of Bonn, WIL - World Inequality Lab)
    Abstract: How has Polish inequality evolved between communism and capitalism to reach one of the highest levels in Europe today? To address this question, we construct the first consistent series on the long-term distri-bution of income in Poland by combining tax, household survey and national accounts data. We document a U-shaped evolution of inequalities from the end of the 19th century until today: (i) inequality was high before WWII; (ii) abruptly fell after the introduction of communism in 1947 and stagnated at low levels during the whole communist period; (iii) experienced a sharp rise with the return to capitalism in 1989. Between 1989 and 2015 the top 10% income share increased from 23% to 35% and the top 1% income share from 4% to 13%. We find that official survey-based measures strongly under-estimate the rise of inequality since 1989. Our new estimates show that frequently quoted Poland's transition success has largely benefited top income groups. We find that inequality was high in the first half of the 20th century due to strong concentration of capital income at the top of the distribution. The secular fall after WW2 was largely to a combination of capital income shocks fromwar destructions with communist policies both eliminating private ownership and forc-ing wage compression. The rise of inequality after the return to capitalism in the early 1990s was induced both by the rise of top labour and capital incomes. However, the strong rise in inequality in the 2000s was driven solely by the increase in top capital incomes, which is likely related to current globalization forces. Yet overall, the unique Polish inequality history speaks about the central role of policies and institutions in shaping inequality in the long run.
    Keywords: Communism,Capitalism,Inequality,Poland,capital income,distribution,concentration,market liberalisation,privatisation,top incomes
    Date: 2019
  4. By: Emilio Ocampo
    Abstract: Before Hugo Chavez burst into the political scene in Venezuela, Argentina’s Juan Peron (1895- 1974) was considered the quintessential Latin American populist leader. He ruled Argentina from mid 1943 until September 1955 and between 1973 and 1974 and his political party has been in power two thirds of the time since the reestablishment of democracy in 1983. Perón’s economic policies between 1946 and 1949 are also considered archetypical. The Peronist economic policy paradigm (PEPP) emphasized income redistribution and a fiscally induced expansion of aggregate demand at the expense of productivity and allocative efficiency. Although the ideological roots of Peronism can be directly traced back to Fascism, when it came to his economic policies, Perón claimed to have been inspired by FDR’s New Deal and Keynes’s General Theory. However, in mosts respects, in their early stage, Peronist economic policies resemble more those proposed by Sir Oswald Mosley (1896-1980) in 1930. This paper describes the PEPP, its implementation and results and evaluates several hypothesis regarding its intellectual roots.
    Keywords: Peronism, Fascism, Economic Policy, Argentina
    JEL: B00 B29 E60 E65 N14 N16 O23 P40 B29 E60 E65 N14 N16 O23 P40 P47
    Date: 2020–06
  5. By: Richard G. Lipsey (Simon Fraser University)
    Abstract: This valuable discussion of LSE economics runs from the School’s inception in 1895 to the present. I review the whole, including where relevant, observations and criticisms based on personal knowledge from the my time as a graduate student, then a staff member of the LSE, from 1953 to 1963. Part I contains excellent essays on what the editor says are “…the contributions made by a centre [LSE in this case] where these contributions are considered to be especially important…†. These cover econometrics, economic history, accounting, business history, social policy, and the LSE’s house journal Economica. The notable absence is economic theory despite the LSE having had notable theorists throughout its entire history. For an early example, in the 1930s the School had Lionel Robbins, Friedrich Hayek, John Hicks, R. D. G. Allen, James Meade, Ronald Coase, Abba Lerner, and Nicky Kaldor. Also absent is an essay on methodology in spite of the LSE having had Carl Popper, Irme Lakatos and Joseph Agassi, all of whom had a major influence on economics at the LSE and worldwide. Part II presents essays on 29 economists who had been or still are on the School’s staff. It is organised in chronological order of birth dates, from 1861 for Canaan to 1948 for Pissarides. The coverage is quite comprehensive, although a few important staff members are omitted. The essays are excellent and mostly honour the important work of these staff members. The one exception is James Forder’s rather critical essay on Bill Phillips, on which I offer some criticisms.
    Keywords: LSE, Review Essay
    Date: 2020–07
  6. By: Erik Bengtsson (Lund University [Lund], GU - University of Gothenburg); Enrico Rubolino (University of Essex); Daniel Waldenström (IFN Stockholm, WIL - World Inequality Lab , CESifo - CESifo - Munich, CEPR - Center for Economic Policy Research - CEPR)
    Abstract: This paper analyzes the determinants of the labor-capital split in national income for 20 countries since the late 1800s. Our main identification strategy focuses on unique historical quasi-experimental events: i) the introduction of universal suffrage, ii) close election wins of left-wing governments, iii) decolonization, iv) unionization shocks, and v) wars. We also run instrumented panel regressions. Our findings show that the capital share decreased in response to radical institu- tional and political shifts, such as the introduction of universal suffrage in the early 1900s, the undoing of colonialism and the implementation of redistributive policies during the post-war period. By contrast, the capital share increased following the erosion of trade unionism since the 1980s. Wars, despite destroying the capital stock, generated windfall profits that increased the capital share.
    Keywords: Capital Share,wealth,wealth inequality,Inequality,Factor shares,Event study,Economic history,Institutions World Inequality Lab
    Date: 2020
  7. By: Millwood, Peter
    Abstract: In the first half of the twentieth century, China sought to modernize through opening to the world. Decades of what would become a century of humiliation had disabused the country of its previous self-perceived technological superiority, as famously expressed by Emperor Qianlong to the British envoy George Macartney in 1793. The Chinese had instead become convinced that they needed knowledge from outside to become strong enough to resist imperial aggression. No country encouraged this opening more than the United States. Americans threw money and expertise at the training of Chinese students and intellectuals. The Rockefeller Foundation’s first major overseas project was the creation of China’s finest medical college and other US institutions followed Rockefeller’s lead by establishing dozens of Chinese universities and technical schools to train a new generation of Chinese scientists. Meanwhile, Chinese students were gaining more PhDs from US universities than institutions in all other foreign countries combined. This deep, fruitful exchange and cooperation ended abruptly with the Chinese communist revolution of 1949: the new ruling Chinese Communist Party (CCP) soon cut off relations with Western governments, and with them their scientific and educational establishments.
    JEL: N0
    Date: 2020–07–03
  8. By: Anne-Marie Rieu-Foucault
    Abstract: The process of creating the Federal Reserve System (FED) was the result of a series of monetary and financial dysfunctions, which resulted in a succession of liquidity crises in the second half of the 19th century in the United States. This paper presents these dysfunctions and the means found by clearing houses to manage liquidity crises in the absence of a central bank. He discusses the reasons that ultimately led to the creation of the FED, putting into perspective the political and financial dimensions of this creation. It concludes, with regard to history, on the contributions of the FED and the shortcomings which the central bank faced, when the 2008 crisis broke out.
    Keywords: central banks, money, liquidity, financial crises
    JEL: E58 G01 N21
    Date: 2020
  9. By: Jörn Boehnke (UC Davis - University of California [Davis] - University of California); Victor Gay (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IAST - Institute of Advanced Studies in Toulouse)
    Abstract: Using spatial variation in World War I military fatalities in France, we show that the scarcity of men due to the war generated an upward shift in female labor force participation that persisted throughout the interwar period. Available data suggest that increased female labor supply accounts for this result. In particular, deteriorated marriage market conditions for single women and negative income shocks to war widows induced many of these women to enter the labor force after the war. In contrast, demand factors such as substitution toward female labor to compensate for the scarcity of male labor were of second-order importance.
    Keywords: Economic history,World War I,Economics,Female labor force participation,Sex ratio,Marriage market
    Date: 2020
  10. By: Emilio Ocampo
    Abstract: Desde hace décadas se debate que grado de influencia tuvo John Maynard Keynes sobre las políticas de expansión del gasto adoptadas por los gobiernos de los principales países industrializados para salir de la Gran Depresión, especialmente en Estados Unidos. El asincronismo de la publicación de la Teoría General (1936) y el lanzamiento del New Deal (1933) no permite descartar que la haya tenido, ya que venía abogando públicamente por esas políticas desde al menos 1924 para reducir el alto desempleo en Gran Bretaña. El presente trabajo tiene dos objetivos. Primero, describir la evolución de las ideas de Keynes respecto al problema del desempleo durante el período 1920-1935 en el contexto político y económico de Gran Bretaña. Segundo, demostrar que antes de 1930 tanto en Estados Unidos como en Alemania surgieron de manera independiente ideas y propuestas similares a las de Keynes. Por lo cual tampoco es posible confirmar su influencia.
    Keywords: Keynes, Gran Depresión, Austeridad, Déficit, Políticas Anti-cíclicas
    JEL: N14 E24 E32
    Date: 2020–07
  11. By: A'Hearn, Brian; Delfino, Alexia; Nuvolari, Alessandro
    Abstract: We re-examine the causes and interpretation of age-heaping in a case study of nineteenth century Italy. Italian census data allow us to calculate age-heaping measures by province, education, gender, and marital status. Our results validate the use of age-heaping as a proxy for human capital, but also reveal anomalies difficult to reconcile with a pure numeracy interpretation. Alongside individual cognitive ability, the census data clearly suggest a role for contextual factors in shaping age-heaping patterns. Direct evidence from Italian social and political history buttresses the case for culture and state capacity as determinants of age-heaping. Age-heaping and illiteracy are well correlated because both are reflections of an underlying process of modernisation, a process which, in nineteenth century Italy, was slow and incomplete.
    Keywords: Age-Heaping; Human Capital; Italy; Numeracy
    JEL: J24 N33
    Date: 2019–12
  12. By: Andrew Leigh
    Abstract: Compiling data from dozens of archival sources, I compile the most extensive series to date of the long-run imprisonment rate for five English-speaking nations: Australia, Canada, England and Wales, New Zealand and the United States. These series are constructed as a share of adults rather than the entire population, and I discuss why the latter can be misleading. In the late-nineteenth century, Australia had the highest incarceration rate of these nations. Today, the United States has the highest rate. With the exception of Canada, incarceration rates have risen markedly since the mid-1980s. These new series are made available in full, to allow other researchers to explore the consequences and causes of incarceration.
    Keywords: prison, jail, incarceration, crime
    JEL: I30 K14 N30
    Date: 2020–03
  13. By: Timothy J. Kehoe; Juan Pablo Nicolini; Thomas J. Sargent
    Abstract: We develop a conceptual framework for analyzing the interactions between aggregate fiscal policy and monetary policy. The framework draws on existing models that analyze sovereign debt crises and balance-of-payments crises. We intend this framework as a guide for analyzing the monetary and fiscal history of a set of eleven major Latin American countries—Argentina, Brazil, Bolivia, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela—from the 1960s until now.
    Keywords: Debt crisis; Monetary policy; Off-budget transfers; Banking crisis; Fiscal policy
    JEL: E52 E63 H63 N16
    Date: 2020–07–21
  14. By: Buonanno, Paolo; Cervellati, Matteo; Lazzaroni, Sara; Prarolo, Giovanni
    Abstract: We study the long-shadow of local political history for socio-economic outcomes and attitudes today. Following historical evidence on medieval communal and maritime republics, we conceptualize more inclusive and exploitative social contracts as resulting from the interplay between the different incentives of ruling elites and the behavior of the population at large. Tracking the emergence, territorial evolution and disappearance of each polity in pre-industrial Italy, we measure the intensity of exposure to different republics over time and the number of changes in the identity of rulers (i.e. political stability) in each municipality. Looking within territories ever ruled by the republics, we find that a longer exposure to communal polities increases fiscal compliance, while the forceful annexation to the rule of maritime republics and higher political instability reduce it. Contribution to public goods go hand-in-hand with fiscal policies and is positively associated to generalized morality (organ donations) but crowds-out private mutual help. Political history also shapes population diversity today in line with evidence on differently attractive historical legal regulations. The results are robust to extensive checks and are confirmed using local variation in distance to centers of power and to the changing network of polities in instrumental variable regressions. Findings suggest that historical political instability and selected migration are reinforcing mechanisms of historical persistence of multiple social contracts until today.
    Keywords: Fiscal Compliance; Medieval Republics; population diversity; Social Contracts
    Date: 2019–12
  15. 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
  16. By: Jonathan Chapman (Division of Social Science)
    Abstract: This paper investigates the role of high borrowing costs in deterring sanitation investment in late nineteenth-century Britain. Many councils were not providing public goods such as water supply and sewer systems even at the end of the century, despite having had access to government loans since the 1860s. Using an annual dataset of the financial accounts of almost seven hundred town councils, the paper identifies significant variation in the interest rates that towns had to pay when borrowing to fund investment. Panel regressions show that higher interest rates were associated with significantly lower levels of sanitation investment, with the relationship robust to controlling for town tax base, non-tax revenue sources, demographic characteristics, and town fixed effects. The regression estimates imply that providing loans at the government’s cost of borrowing would have increased the stock of sanitation infrastructure in 1903 by around 25%, and so potentially hastened Britain’s mortality decline.
    Date: 2020–06
  17. By: Emilio Ocampo
    Abstract: After being dormant for several decades, populism has resurfaced in Europe and North America. Since the beginning of the 21st century Europe’s populist parties have tripled their vote and were able to put their leaders into government posts in eleven countries, which has increased thirteen fold the population living under populist regimes. The virus has even contaminated Anglo-Saxon countries, which were considered immune. This new strain of populism seems different from the one that infected Latin America for most of the second half of the 20th century. Instead of fostering class struggle it appeals to racism, xenophobia and anti-globalization. In this regard, it has a closer resemblance to early 20th century European populist strains. Although much has been written about populism, a widely accepted definition remains elusive. Before Hugo Chavez burst into the political scene in Venezuela, Argentina’s Juan Perón (1895-1974) was considered the quintessential Latin American populist leader. Perón was undoubtedly one of the most successful politicians of the 20th century. Although he entered politics in 1943 Peronism still dominates Argentine politics. Even though it may seem harder to define than populism, its study offers valuable clues about populism’s nature and meaning that are relevant today in modern advanced democracies.
    Keywords: Peronism, Fascism, Populism, Argentina
    JEL: B00 N14 N16 P40 P47
    Date: 2020–06
  18. By: Bolt, Jutta; Gardner, Leigh
    Abstract: Colonial institutions in Africa are the subject of a substantial literature, but it neglects the local institutions which governed Africans in rural areas. This paper uses new data on local African governments, or "Native Authorities" in British Africa to present the first quantitative comparison of African institutions under indirect rule in the late colonial period. Using tax revenue as a measure of state capacity, the data show that the structure and capacity of Native Authorities varied between and within colonies, based not only on underlying economic inequalities but also on the relationships between African elites and colonial governments.
    Keywords: Africa; Colonialism; institutions
    JEL: N47 N97
    Date: 2019–12
  19. By: Hubert BONIN
    Abstract: Quand se déploie le plan de mobilisation économique en 1938-1940, plusieurs entreprises installent un établissement industriel en Gironde. Peugeot y installe même trois unités, orientées vers la mécanique destiné à l’aéronautique. Puis la guerre incite la firme à faire descendre de son pôle historique de Sochaux-Montbéliard des centaines de salariés et de machines afin de relancer sa production loin du front. Enfin, après l’armistice, ses établissements girondins vivotent, avec des prestations en faveur de l’armée allemande et des foyers de Résistance. Mais, à la paix, cette histoire n’offre aucun héritage car Peugeot abandonne l’idée de faire de Bordeaux l’un de ses pôles productifs en France.
    Keywords: Peugeot; Seconde Guerre mondiale; Mobilisation économique; Délocalisation industrielle en 1939-1940; Aéronautique de guerre; Histoire d'entreprise
    JEL: N44 N64 N84 N94 L64
    Date: 2020
  20. By: Sabiou M. Inoua (Economic Science Institute, Chapman University); Vernon L. Smith (Economic Science Institute, Chapman University)
    Abstract: "The 1870s marginal revolution in economics culminated a century later in a failure. The core utility maximization principle of this school of thought was shown to have no interesting implication for aggregate market behavior in general (Sonnenschein, 1972, 1973a, 1973b; Debreu, 1974; Mantel, 1974; Kirman, 1989; Shafer & Sonnenschein, 1993; Rizvi, 2006). We argue that neoclassical price theory was flawed from the beginning, owing to the more basic and more serious logical problem inherent to the axiom of price taking behavior, under which market price formation is left unexplained."
    Keywords: History of Economic Thought; Methodology of Economics; Microeconomic Theory; Experimental Economics
    JEL: B C D
    Date: 2020
  21. By: Giovanni Federico; Alessandro Nuvolari; Michelangelo Vasta (Division of Social Science)
    Abstract: The dynamics of economic inequality and its relation with economic growth in the preindustrial world is increasingly attracting the attention of both economic historians and economists. This paper introduces new estimates of the labour share in five major European countries (England, France, Holland, Spain and Portugal) for the period 1250-1850 constructed using an innovative method based on the conversion of real wages in 2011 PPP US$. We find a complex pattern of evolution of the labour share with major fluctuations. We also establish a negative correlation between variations of GDP and variations in the labour share. JEL Codes:N33, N01
    Date: 2020–07
  22. By: 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); Emmanuel Saez (University of California [Berkeley] - University of California); Gabriel Zucman (University of California [Berkeley] - University of California)
    Abstract: Piketty, Saez, and Zucman (2018) (hereafter PSZ) propose a method to distribute total national income across individual adults in the United States. The method has recently been applied to a number of countries as reviewed in the World Inequality Report 2018 (Alvaredo et al. 2018). The key advantage relative to earlier work using fiscal income such as Piketty and Saez (2003) or survey data is that the national income concept is comprehensive, homogeneous over time, and comparable across countries. In particular, distributional national income statistics can be used to study both growth and inequality in a consistent framework that aggregates cleanly to national income from national accounts. In contrast, fiscal income or survey income aggregates display growth levels that are quite different from national income growth both in the short-term year-to-year fluctuations and in the long-term growth rates averaged over decades (see PSZ for a detailed discussion).
    Keywords: Simplified Distributional National Accounts,DINA,distribution,national income,united States World Inequality Lab
    Date: 2019
  23. By: Gupta, Bishnupriya; Mookherjee, Dilip; Munshi, Kaivan; Sanclemente, Mario
    Abstract: We provide evidence of the role of community networks in emergence of Indian entrepreneurship in early stages of cotton and jute textile industries in the late 19th and early 20th century respectively, overcoming lack of market institutions and government support. From business registers, we construct a yearly panel dataset of entrepreneurs in these two industries. We fi nd no evidence that entry was related to prior upstream trading experience or price shocks. Firm directors exhibited a high degree of clustering of entrepreneurs by community. Entry flows were consistent with a model of network-based dynamics.
    Keywords: Industrialization; Social Networks
    Date: 2019–12
  24. By: Andrew Leigh
    Abstract: Constructing a new series of incarceration rates from 1860 to 2018, I find that Australia now incarcerates a greater share of the adult population than at any point since the late nineteenth century. Much of this increase has occurred since the mid-1980s. Since 1985, the Australian incarceration rate has risen by 130 percent, and now stands at 0.22 percent of adults (221 prisoners per 100,000 adults). Recalculating Indigenous incarceration rates so that they are comparable over a long time span, I find that incarceration rates for Indigenous Australians have risen dramatically. Fully 2.5 percent of Indigenous adults are incarcerated (2481 prisoners per 100,000 adults), a higher share than among African-Americans. The recent increase in the Australian prison population does not seem to be due to crime rates, which have mostly declined over the past generation. Instead, higher reporting rates, stricter policing practices, tougher sentencing laws, and more stringent bail laws appear to be the main drivers of Australia’s growing prison population.
    Keywords: prison, jail, incarceration, crime
    JEL: I30 K14 N30
    Date: 2020–03
  25. By: Gabriele Galati; Jan Kakes; Richhild Moessner
    Abstract: Credit restrictions were used as a monetary policy instrument in the Netherlands from the 1960s to the early 1990s. We study the effects of credit restrictions being active on the balance sheet structure of banks and other financial institutions. We find that banks mainly responded to credit restrictions by making adjustments to the liability side of their balance sheets, particularly by increasing the proportion of long-term funding. Responses on the asset side were limited, while part of the banking sector even increased lending after the installment of a restriction. These results suggest that banks and financial institutions responded by switching to long-term funding to meet the restriction and shield their lending business. Arguably, the credit restrictions were therefore still effective in reaching their main goal, i.e. containing money growth.
    Keywords: credit restrictions, monetary policy, macroprudential policy
    JEL: E42 E51 E52 E58 G28
    Date: 2020–07
  26. By: Kenneth J. McLaughlin (Hunter College and the Graduate Center, CUNY)
    Abstract: This paper provides a critical survey of Sherwin Rosen’s contributions to economics. I identify the ideas that influenced him and the themes—diversity and inequality—that connect his papers. The model of compensating price differentials (Rosen 1974) is his greatest hit. The more general “equalizing differences” approach was a signature feature of his research in labor economics and other fields. I also evaluate the merits of Rosen (1979), through which he receives credit for the influential Roback-Rosen model in urban economics. And several of his most influential papers substantiate my claim that Rosen was an inequality economist.
    Keywords: Compensating Differentials, Labor Economics, Equalizing differences, inequality
    JEL: B2 J3
    Date: 2020
  27. By: Alberto Batinti; Joan Costa-Font; Timothy J. Hatton
    Abstract: We study the welfare effects of the spread of democratic institutions and the extension of voting rights in 15 European countries since the middle of the nineteenth century. We exploit within-country variation in average height by birth cohort in conjunction with a new instrumental variable strategy, alongside an event study. We find robust evidence of an effect of the expansion in the quality of democracy on human stature. We estimate that the transition to democracy increased average male heights by 0.7 to 1 cm, equivalent to a one-decade average increase in stature across cohorts. Including the extension of the franchise to women, increases the effect on average stature to about 1.7 cm. The effect is driven by the influence of political participation and contestation on equality and access to health services. Our results are robust to a range of additional statistical tests.
    Keywords: height, democracy, transition, voting rights expansions, franchise, inequality, political contestation
    JEL: H1 J18
    Date: 2020–04
  28. By: Jo, Tae-Hee
    Abstract: It is often argued that Richard Nelson and Sydney Winter’s evolutionary theory is an alternative to neoclassical economics and is compatible with or complementary to Veblenian evolutionary economics. This paper subjects such arguments to critical examination. I argue that while Nelson and Winter’s theory provides a more realistic account of the firm behavior than Marshallian-neoclassical theory does, it is a neoclassical evolutionary theory in much the same sense as Marshall’s economics is quasi-evolutionary, ‘neo-classical’ economics according to Veblen. Therefore, Nelson and Winter’s evolutionary theory is in fact a protective modification of neoclassical economics and is antithetical to Veblen’s evolutionary economics.
    Keywords: Thorstein Veblen, Richard Nelson, Sydney Winter, Evolutionary Theory, Institution
    JEL: B15 B25 B52
    Date: 2020–06–26
  29. By: Giovanni Federico; Alessandro Nuvolari; Michelangelo Vasta
    Abstract: The dynamics of economic inequality and its relation with economic growth in the preindustrial world is increasingly attracting the attention of both economic historians and economists. This paper introduces new estimates of the labour share in five major European countries (England, France, Holland, Spain and Portugal) for the period 1250-1850 constructed using an innovative method based on the conversion of real wages in 2011 PPP US$. We find a complex pattern of evolution of the labour share with major fluctuations. We also establish a negative correlation between variations of GDP and variations in the labour share
    JEL: N33 N01
    Date: 2020–07
  30. 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
  31. By: Gutierrez, German; Philippon, Thomas
    Abstract: We study the entry and exit of firms across U.S. industries over the past 40 years. The elasticity of entry with respect to Tobin's Q was positive and significant until the late 1990s but declined to zero afterwards. Standard macroeconomic models suggest two potential explanations: rising entry costs or rising returns to scale. We find that neither returns to scale nor technological costs can explain the decline in the Q elasticity of entry, but lobbying and regulations can. We reconcile conflicting results in the literature and show that regulations drive down the entry and growth of small firms relative to large ones, particularly in industries with high lobbying expenditures. We conclude that lobbying and regulations have caused free entry to fail.
    Date: 2019–12
  32. By: Pierre Januard (PHARE - Philosophie, Histoire et Analyse des Représentations Économiques - UP1 - Université Panthéon-Sorbonne)
    Abstract: Whereas literature on Thomas Aquinas's doctrine of usury has tended to focus on the Summa Theologiae, this paper highlights the contribution of his early work the Commentary on the Sentences. In this work, Aquinas distances himself from the Roman law mutuum and the assumption of a borrower's state of necessity, and he introduces preliminary monetary elements. He thereby paves the way for a future understanding of surplus in intertemporal exchange. The monetary loan is presented as a commercial exchange involving not only commercial risk but also the risk of analytical errors in understanding the nature of the operation.
    Abstract: Tandis que la littérature sur la doctrine de Thomas d'Aquin sur l'usure se concentre habituellement sur la Somme de théologie, cet article met en lumière l'apport de son œuvre de jeunesse, le Commentaire des Sentences. L'Aquinate prend ses distances avec le mutuum du droit romain et avec la considération d'un état de nécessité de l'emprunteur, et il introduit de premiers éléments monétaires. Il ouvre à la voie à une future compréhension d'un surplus dans un échange intertemporel. Le prêt se présente comme un échange commercial impliquant non seulement des risques commerciaux, mais aussi le risque d'une erreur d'analyse dans la compréhension de la nature de l'opération.
    Keywords: risk,interest loan,usury,just price,mutuum,scholastic,Thomas Aquinas,risque,prêt à intérêt,usure,juste prix,scolastique,Thomas d'Aquin
    Date: 2020–06
  33. By: Pierre van der Eng
    Abstract: This paper analyses the demography of 1,600 registered firms owned and/or operated by ethnic Chinese businessmen in Indonesia during 1890-1940 in search of generalizable indications of Schumpeterian entrepreneurship. The population of firms increased significantly since 1890, before many went out of business in the 1920s and a new generation of firms and entrepreneurs emerged. By 1910 most firms were active in trade, but this categorisation takes insufficient account of their diverse business activities. During 1910-1940 the share of firms in other industries increased. Several were active in finance, taking deposits and financing business ventures. In the 1930s, the average equity value of the enterprises more than doubled, reflecting diversification into more capital-intensive operations, particularly manufacturing. These changes in the population of firms refute the perception that ethnic Chinese businessmen were not Schumpeterian entrepreneurs.
    Keywords: Business demography, entrepreneurship, Chinese, Indonesia, Southeast Asia
    JEL: L10 L20 N85
    Date: 2020–07
  34. By: Braun, Sebastian T.; Dwenger, Nadja
    Abstract: Following one of the largest displacements in human history, almost eight million forced migrants arrived in West Germany after WWII. We study empirically how the settlement location of migrants affected their economic, social and political integration in West Germany. We first document large differences in integration outcomes across West German counties. We then show that high inflows of migrants and a large agrarian base hampered integration. Religious differences between migrants and natives had no effect on economic integration. Yet, they decreased intermarriage rates and strengthened anti-migrant parties. Based on our estimates, we simulate the regional distribution of migrants that maximizes their labor force participation. Inner-German migration in the 1950s brought the actual distribution closer to its optimum.
    Keywords: Forced Migration; Post-War Germany; Regional Integration
    JEL: J15 J61 N34
    Date: 2019–12
  35. By: Matthew Fisher-Post (PSE - Paris School of Economics, WIL - World Inequality Lab , PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Keywords: wage inequality,income inequality,Inequality,Economic history,United States
    Date: 2020
  36. By: Alexander Klein (University of Kent, CAGE, CEPR); Karl Gunnar Persson (University of Copenhagen); Paul Sharp (University of Southern Denmark, CAGE, CEPR)
    Abstract: The reasons for the famous agrarian unrest in the United States between 1870 and 1900 remain debated. We argue that they are, at least in part, consistent with a simple economic explanation. Falling transportation costs allowed for the extension of the frontier, where farmers received the world price minus the transaction costs involved in getting their produce to market. Many perceived these costs to be unfairly large, owing to the perceived market power of rail firms and the discriminatory practices of middlemen, with farmers closer to the frontier most affected. Consistent with this, we find that the protest, as measured by vote shares for the Populists in the 1892 Presidential elections, is negatively related to wheat prices, transportation costs, and rail network density.
    Keywords: Agriculture, globalization, Grain Invasion, populism, United States
    JEL: F6 N51 N71
    Date: 2020–07
  37. By: Simon Cornée (Univ Rennes, CNRS, CREM - UMR 6211, and CERMi, F-35000 Rennes, France); Madeg Le Guernic (Univ Rennes, CNRS, CREM - UMR 6211, F-35000 Rennes, France); Damien Rousselière (Agrocampus Ouest, UMR Smart-Lereco, CRISES, Université du Québec à Montréal)
    Abstract: This paper introduces a refined approach to conceptualising the commons in order to shed new light on cooperative practices. Specifically, it proposes the novel concept of Common-Property Assets (CPAs). CPAs are exclusively human-made resources owned under common-property ownership regimes. Our CPA model combines quantity (the flow of resource units available to members) and quality (the impact produced on the community by the members’ appropriation of the resource flow). While these two dimensions are largely pre-existing in the conventional case of natural common-pool resources, they directly depend on members’ collective action in CPAs. We apply this theoretical framework to farm machinery sharing agreements—a widespread grassroots cooperative phenomenon in agriculture—using a systematic literature review to generalise the findings from a sample of 54 studies published from 1950 to 2018. Our findings show that in successful CPAs, members endorse and do not deviate from a quantity-quality equilibrium that is collectively agreed upon. Despite the existence of thresholds for both quantity and quality due to (axiological) membership heterogeneity, qualitative changes in respect of the common good are possible in CPAs that promote democratic practices. Our study has potentially strong implications for developing ethics in cooperatives and the sustainable development of communities worldwide.
    Keywords: Governance of the Commons; Farm Machinery Sharing Cooperative Arrangements; Ethical Aspects
    JEL: G3 M00 O17 P32 Q13
    Date: 2020–07
  38. By: Matthew Fisher-Post (PSE - Paris School of Economics, WIL - World Inequality Lab , Harvard Kennedy School - Harvard Kennedy School)
    Abstract: The purpose of this study is to construct and then analyze a new dataset that systematically documents the labor share of national income for more than 200 countries over the past 70 years. Using new archival data on national accounts, we measure the long-run evolution of national income between factor shares (labor and capital). In addition to its implicit impor- tance in the study of inequality, the data naturally lends itself to novel empirical analysis of international patterns in tax progressivity, trade integration, technology, and labor force com- position.
    Keywords: labor share,national income,factor shares,labor,capital
    Date: 2020
  39. By: Samuel Bazzi (Boston University, CEPR, NBER); Masyhur Hilmy (Boston University); Benjamin Marx (Sciences Po and CEPR)
    Abstract: Public schooling systems are an essential feature of modern states. These systems often developed at the expense of religious schools, which undertook the bulk of education historically and still cater to large student populations worldwide. This paper examines how Indonesia’s long-standing Islamic school system responded to the construction of 61,000 public elementary schools in the mid-1970s. The policy was designed in part to foster nation building and to curb religious influence in society. We are the first to study the market response to these ideological objectives. Using novel data on Islamic school construction and curriculum, we identify both short-run effects on exposed cohorts as well as dynamic, long-run effects on education markets. While primary enrollment shifted towards state schools, religious education increased on net as Islamic secondary schools absorbed the increased demand for continued education. The Islamic sector not only entered new markets to compete with the state but also increased religious curriculum at newly created schools. Our results suggest that the Islamic sector response increased religiosity at the expense of a secular national identity. Overall, this ideological competition in education undermined the nation-building impacts of mass schooling.
    Keywords: Religion, Education, Nation Building, Islam, School Competition
    JEL: H52 I25 N45 P16 Z12
    Date: 2020–04
  40. By: Dimant, Eugen; Krieger, Tim; Meierrieks, Daniel
    Abstract: Does U.S. military aid make the United States safer? To answer this question, we collect data on 173 countries between 1968 and 2014. Exploiting quasi-random variation in the global patterns of U.S. military aid, our paper is the first to provide causal estimates of the effect of U.S. military aid on anti-American terrorism. We find that higher levels of military aid led to an increased likelihood of the recipient country to produce anti-American terrorism. For our preferred instrumental-variable specification, doubling U.S. military aid increases the risk of anti-American terrorism by 4.4 percentage points. Examining potential transmission channels, we find that more U.S. military aid leads to more corruption and exclusionary policies in recipient countries. Consistent with a theoretical argument developed in this paper, these results indicate that the inflow of military aid induces rent-seeking behavior, which in turn encourages terrorism by groups that suffer from reduced economic and political participation as a consequence of rent-seeking. These groups direct their dissatisfaction against the United States as the perceived linchpin of an unfavorable status quo in the recipient country.
    Keywords: U.S. military aid,anti-American terrorism,transnational terrorism,instrumental variable estimation
    JEL: D74 F35
    Date: 2020
  41. By: Carlos Esquivel; Timothy J. Kehoe; Juan Pablo Nicolini
    Abstract: Studying the modern economic histories of eleven of the largest countries in Latin America teaches us that a lack of fiscal discipline has been at the root of most of the region's macroeconomic instability. The lack of fiscal discipline, however, takes various forms, not all of them measured in the primary deficit. Especially important have been implicit or explicit guarantees to the banking system; denomination of the debt in US dollars and short maturity of the debt; and transfers to some agents in the private sector, which are large in times of crisis and are not part of the budget approved by the national congresses. Comparing the histories of our eleven countries, we see that rather than leading to an economic contraction, fiscal stabilization generally leads to growth. On the other hand, rising commodity prices are no guarantee of economic growth, nor are falling commodity prices a guarantee of economic contraction.
    Keywords: Monetary policy; Fiscal policy; Debt crisis; Banking crisis; Off-budget transfers
    JEL: E52 E63 H63 N16
    Date: 2020–07–27
  42. By: Suesse, Marvin; Wolf, Nikolaus
    Abstract: What determines the development of rural financial markets? Starting from a simple theoretical framework, we derive the factors shaping the market entry of rural microfinance institutions across time and space. We provide empirical evidence for these determinants using the expansion of credit cooperatives in the 236 eastern counties of Prussia between 1852 and 1913. This setting is attractive as it provides a free market benchmark scenario without public ownership, subsidization, or direct regulatory intervention. Furthermore, we exploit features of our historical set-up to identify causal effects. The results show that declining agricultural staple prices, as a feature of structural transformation, leads to the emergence of credit cooperatives. Similarly, declining bank lending rates contribute to their rise. Low asset sizes and land inequality inhibit the regional spread of cooperatives, while ethnic heterogeneity has ambiguous effects. We also offer empirical evidence suggesting that credit cooperatives accelerated rural transformation by diversifying farm outputs.
    Keywords: credit cooperatives; Land Inequality; Microfinance; Prussia; rural transformation
    JEL: G21 N23 O16 Q15
    Date: 2019–12
  43. By: Alma Boustati (Department of Economics, SOAS University of London)
    Abstract: The purpose of this paper is to analyse the evolution of female labour force participation in Jordan vis-Ã -vis institutional and economic development. When it comes to institutions, the primary focus willbe on family law and labour law. Within the economic developmentframework, the focus will be on how the social contract motivated the structuring of the economy, labour market, and approach to welfare during three stages of Jordan’s economic development, namely the industrialisation period (1967-1982), the economic bust period (1983-1992), and the economic adjustment period (post-1993). Within each period, the implications of these factors on the composition and size of the female labour force participation is discussed.The findings indicate that a patriarchal approach to welfare, and consequently the low female labour force participation,was sustainable through economic policy which relied on high male wages and high non-wage income achieved through a combination of aid, remittances, and cheap foreign labour.
    Keywords: Labour; Women; Jordan
    JEL: J16 J21 N35
    Date: 2020–07
  44. By: Jonathan Chapman (Division of Social Science)
    Abstract: This paper tests whether inequality mediates the effect of democratization on government redistribution. An 1894 democratic reform to councils that provided social insurance in Britain is used as the treatment event in a difference-in-difference analysis. The reform removed institutional features- a graduated franchise, property qualifications, the absence of a secret ballot, and the participation of unelected magistrates- that helped landowners seize control of spending on poor relief after the 1832 Great Reform Act. The results support theories arguing that inequality strengthens elite opposition to democratization: more unequal districts experienced greater increases in government expenditure following the democratic reform.
    Date: 2020–06
  45. By: Jonas Rama (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 UFR02 - Université Panthéon-Sorbonne - UFR d'Économie - UP1 - Université Panthéon-Sorbonne); John Hall (PSU - Portland State University [Portland])
    Abstract: In The Romantic Economist (2009), Richard Bronk laments that Enlightenment thinking dominated Economics during its formation as a science. As counterpoint, the 'Romantic Movement' had much to offer but remained peripheral. Consequently Economics embraced the centrality of rationality and other Enlightenment precepts, leading to a 'socialphysics'. Meanwhile human characteristics such; as sentiments, imagination and creativity were eschewed. While Bronk fails to identify an in-the-flesh 'Romantic Economist', our inquiry seeks to establish that indeed Celso Furtado qualifies. Profoundly influenced by his sensitivities and attachment to place, Furtado relies upon an organic metaphor - o sertão nordestino - for insights into complex developmental processes.
    Abstract: Em The Romantic Economist (2009), Richard Bronk lamenta que o pensamento iluminista tenha dominado a economia durante sua formação como ciência. O "Movimen-to Romântico" seria um contraponto, mas foi mantido distante. A economia abraçou a cen-tralidade da racionalidade e preceitos iluministas, tornando-se uma "física-social". Desde então, as características humanas como sentimento, imaginação e criatividade são evitadas. Embora Bronk não identifique um economista "romântico" de carne e osso, nossa pesquisa busca estabelecer Celso Furtado como um. Profundamente influenciado por sua sensibili-dade e raízes, Furtado fez uso de uma metáfora orgânica-o sertão nordestino-em seu entendimento de complexos processos de desenvolvimento. PALAVRAS-CHAVE: Brasil; Celso Furtado; Richard Bronk; movimento romântico; sertão.
    Keywords: Brazil,Celso Furtado,Richard Bronk,romantic movement
    Date: 2019
  46. By: Ötsch, Walter
    Abstract: Adam Smith hat in seinem Bild des Menschen der Rolle der Imagination einen so großen Stellenwert eingeräumt, dass es berechtigt ist, ihn als Bildanthropologen zu bezeichnen. Der Aspekt des Bildvermögens von Menschen geriet im Laufe des 19. Jahrhunderts in der Geschichte der Wirtschaftstheorie (zumindest in ihrem Hauptstrang, der in die Neoklassik mündete) weitgehend in Vergessenheit. Ein Grund lag auch darin, dass die Imaginationskraft des Menschen nach der Französischen Revolution als gefährlich erachtet worden ist. Im Verlust der Bildhaftigkeit wurden viele Räume, die die ökonomische Theorie beschreibt, grundlegend verändert bzw. nicht mehr beachtet, wie der physikalische Raum der Natur, der Innen-Raum des Menschen, der Raum der Moral, der soziale Raum und der Raum der Gesellschaft. Der Aufsatz will auch den inneren Zusammenhang in der Entwicklung dieser Räume in der Theoriegeschichte aufzeigen.
    Keywords: Adam Smith,Bild,Bildvermögen,Bildlichkeit,Imagination,David Hume,Léon Walras,William St. Jevons,Neoklassik,Lionel Robbins,Natur,Moral,Innen-Raum,Gesellschaft
    JEL: A12 B12 B13 B21 B31 B41
    Date: 2020
  47. By: Abramitzky, Ran; Ager, Philipp; Boustan, Leah; Cohen, Elior David; Hansen, Casper Worm
    Abstract: In the 1920s, the United States substantially reduced immigrant entry by imposing country-specific quotas. We compare local labor markets with more or less exposure to the national quotas due to differences in initial immigrant settlement. A puzzle emerges: the earnings of existing US-born workers decline after the border closure, despite the loss of immigrant labor supply. We find that more skilled US-born workers - along with unrestricted immigrants from Mexico and Canada - move into affected urban areas, completely replacing European immigrants. By contrast, the loss of immigrant workers encouraged farmers to shift toward capital-intensive agriculture and discourage entry from unrestricted workers.
    Keywords: Immigration Restrictions; labor mobility; Local Labor Markets
    JEL: J61 J70 N32
    Date: 2019–12
  48. By: Davis, Josh; Taylor, Alan M.
    Abstract: Research finds strong links between credit booms and macroeconomic outcomes like financial crises and output growth. Are impacts also seen in financial asset prices? We document this robust and significant connection for the first time using a large sample of historical data for many countries. Credit boom periods tend to be followed by unusually low returns to equities, in absolute terms and relative to bonds. Return predictability due to this leverage factor is distinct from that of established factors like momentum and value and generates trading strategies with meaningful excess profits out-of-sample. These findings pose a challenge to conventional macro-finance theories.
    Keywords: asset allocation; Asset Pricing; Cycles; debt; leverage; return predictability
    JEL: E17 E20 E21 E32 E44 G01 G11 G12 G17 G21 N10
    Date: 2019–11
  49. By: Edwyna Harris; Sumner La Croix
    Abstract: Great Britain established the new colony of South Australia (SA) in 1834. The immigration contract signed by assisted migrants required the SA government to provide those who could not find private sector work with employment on public works. We use new data on the compensation of unemployed and private-sector workers to examine how the SA unemployment system functioned before and after the onset of a major economic crisis in August 1840. We conclude that the unemployment system provided highly compensated relief employment to a small number of migrants prior to the crisis but as migrant numbers claiming relief employment soared between August 1840 and October 1841, the government drastically cut compensation for relief employment. The cuts occurred in tandem with the government’s release of newly surveyed rural lands, which together provided incentives and opportunities for workers to move to rural areas to seek work on newly opened farms. A comparison of the SA employment relief program with the 1843 temporary employment relief program established in the neighboring colony of New South Wales (NSW) shows that the NSW program neither established guarantees of jobs for assisted migrants unable to find work nor provided jobs for all assisted migrants without work during the 1843-1845 period.
    Keywords: relief, unemployed, South Australia, migrants, public works
    JEL: J65 N37 J38
    Date: 2020–04
  50. By: Vellore Arthi; Markus Lampe; Ashwin Nair; Kevin Hjortshøj O’Rourke (Division of Social Science)
    Abstract: Research on the quantitative impact of interwar protection on trade flows remains scarce, and much of it has concluded that the impact was surprisingly small. In this paper we ask: Did Indian interwar protection hurt UK manufacturers, by raising tariffs on manufactured imports? Or did it favour UK interests, by discriminating against “foreign” (i.e. non-British) producers? We answer this question by quantifying the impact of trade policy on the value and composition of Indian imports, using novel disaggregated data on both trade policies and imports for 114 commodity categories coming from 42 countries. Indian trade elasticities were generally larger than those in the United Kingdom at the same time. We find that even though Indian protection lowered total imports, it substantially boosted imports from the UK. Trade policy had a big impact on trade flows.
    Date: 2020–05
  51. By: Montebruno, Piero; Bennett, Robert; Smith, Harry; van Lieshout, Carry
    Abstract: This paper presents a binary classification of entrepreneurs in British historical data based on the recent availability of big data from the I-CeM dataset. The main task of the paper is to attribute an employment status to individuals that did not fully report entrepreneur status in earlier censuses (1851-1881). The paper assesses the accuracy of different classifiers and machine learning algorithms, including Deep Learning, for this classification problem. We first adopt a ground-truth dataset from the later censuses to train the computer with a Logistic Regression (which is standard in the literature for this kind of binary classification) to recognize entrepreneurs distinct from non-entrepreneurs (i.e. workers). Our initial accuracy for this base-line method is 0.74. We compare the Logistic Regression with ten optimized machine learning algorithms: Nearest Neighbors, Linear and Radial Support Vector Machine, Gaussian Process, Decision Tree, Random Forest, Neural Network, AdaBoost, Naive Bayes, and Quadratic Discriminant Analysis. The best results are boosting and ensemble methods. AdaBoost achieves an accuracy of 0.95. Deep-Learning, as a standalone category of algorithms, further improves accuracy to 0.96 without using the rich text-data that characterizes the OccString feature, a string of up to 500 characters with the full occupational statement of each individual collected in the earlier censuses. Finally, and now using this OccString feature, we implement both shallow (bag-of-words algorithm) learning and Deep Learning (Recurrent Neural Network with a Long Short-Term Memory layer) algorithms. These methods all achieve accuracies above 0.99 with Deep Learning Recurrent Neural Network as the best model with an accuracy of 0.9978. The results show that standard algorithms for classification can be outperformed by machine learning algorithms. This confirms the value of extending the techniques traditionally used in the literature for this type of classification problem.
    Keywords: machine learning; deep learning; logistic regression; classification; big data; census
    JEL: M13 N83
    Date: 2019–08–02
  52. By: Antonio J. Morales (Universidad de Málaga); Ismael Rodriguez-Lara (Universidad de Granada; Economic Science Institute, Chapman University)
    Abstract: Testing causal relationships expressed by mathematical models on facts about human behaviour across history is challenging. A prominent example is the Neolithic agricultural revolution [1]. Many theoretical models of the adoption of agriculture has been put forward [2] but none has been tested. The only exception is [3], that uses a computational approach with agent-based simulations of evolutionary games. Here, we propose two games that resemble the conditions of human societies before and after the agricultural revolution. The agricultural revolution is modelled as an exogenous shock in the lab (n=180, 60 independent groups), and the transition from foraging to farming results from an equilibrium selection process decided by experimental subjects. The experimental data replicate the known facts that foragers organized themselves around division of labour [4] and were more egalitarian than farmers [5]. There is also evidence of bi-modal distribution along the foraging-farming axis with many in-between groups [6, 7, 8]. These results provide direct evidence that the modes of production determine the system of values of societies (inequality) and lend support for the idea that human moved in a widespread manner from foraging to farming societies. We also find that cultural and institutional preconditions were crucial for farming [9], as more egalitarian foraging groups adopted earlier agricultural techniques, but inequality raises in farming societies as agriculture settles [10], with the long run success of agriculture being determined by the land-owner’s legitimacy. These results enrich our understanding of the Neolithic agricultural revolution and highlight the relevance of experimental methodology to generate a rich dataset that complements the fragmented evidence from archaeological sites.
    Keywords: Inequality; Agricultural Revolution; Foragers Societies; Farming Societies; Property Rights; Land-owner; Human Values; Experimental Economics
    JEL: C72 C92 D02 D31 D70 N00 N50 O33 P14 Z13
    Date: 2020
  53. By: Grytten, Ola Honningdal (Dept. of Economics, Norwegian School of Economics and Business Administration); Lindmark, Magnus (Umeå University); Minde, Kjell Bjørn (Western Norway University of Applied Sciences)
    Abstract: During the last decades several scholars have argued that environmental degradation first increases in initial phases of economic growth, and thereafter declines as economic growth enters a certain level in developed economies. This makes environmental degradation form an inverse U-shaped curve, called the environmental Kuznets curve (EKC). Environmental degradation can be measured by different proxies. This paper deals with two, i.e. energy consumption and energy intensity (EI), which again is measured as the ratio between energy consumption and GDP. The relationship of energy consumption and energy intensity to economic growth can thus, serve as tools to examine whether an EKC exists. Hence, this paper presents continuous series of energy consumption, energy intensity and gross domestic product for the Norwegian mainland economy 1835-2019. These are thereafter utilized in order to examine the possible existence of relative and absolute environmental Kuznets curves (EKC). The time series are established by drawing on available data, and annual figures for the period 1835-2019 are presented for the first time. They depict a development which reflect that EKCs exist. The paper also offers a polynomial regression model to investigate into the relationship between environmental degradation, measured by energy consumption, energy intensity and economic growth expressed as GDP per capita. It concludes there is clear evidence of both relative and an absolute EKC-relations between environmental degradation and economic growth, with 1975 as relative and 2002 as absolute turning points.
    Keywords: Environmental Kuznets curve; energy intensity; energy consumption; economic growth
    JEL: N53 N54 O11 O13 O44 Q01 Q34
    Date: 2020–07–07
  54. By: Graziella Bertocchi; Arcangelo Dimico
    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 ï¬ rst evidence that race does affect COVID-19 outcomes. The data conï¬ rm 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 than 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 pretreatment 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 magniï¬ ed in combination with a higher black share.
    Keywords: COVID-19, deaths, blacks, redlining, vulnerability, Cook County, Chicago.
    JEL: I14 J15 N32 N92 R38
    Date: 2020–07

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.