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on Business, Economic and Financial History |
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Issue of 2020‒09‒21
37 papers chosen by |
| By: | Grytten, Ola Honningdal (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | The present paper discusses Norway’s way to prosperity during the two last centuries. The main reason for its wealth seems to have been the ability to meet international demand by utilizing its rich natural resources, adopting efficient technology, and draw on a skilled labor force in order to gain high productivity and profitability. Historical national accounts reveal that Norway’s wealth was close to the western European average in the early nineteenth century. From the 1840s to the mid 1870s, Norwegian growth rates were very high, due to significant growth in foreign trade. This period was followed by relative stagnation until the 1890s, from when the country saw rapid industrialization on the basis of hydroelectricity. After the two world wars Norway adopted a social democratic rule, with a high degree of economic planning, called the Nordic model. This has contributed to a large public sector and evenly distributed wealth and resources. The discovery of oil and gas on the Norwegian continental shelf marked a new era, when Norway experienced higher growth rates than most western economies. This has made it the country with the highest score in the United Nations Human Development Index (HDI) during the two first decades of the 21st century. |
| Keywords: | Economic history; economic growth; economic development; Norway |
| JEL: | N00 N13 N14 |
| Date: | 2020–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2020_017&r=all |
| By: | Teupe, Sebastian |
| Abstract: | This paper discusses whether John Maynard Keynes' "How to Pay for the War" provided prescriptions for the policies of "financial repression" that were implemented in England, and other countries, following World War II. It focuses on contemporary understandings of inflation which has been identified as a key factor for driving down public debt levels. Keynes has been widely acknowledged as influential in the management of public debt, and "How to Pay for the War" has been cited as proof for a widely held belief in "money illusion", suggesting the possibility of using inflation for driving down real interest rates of public bonds. It seems reasonable to suppose that Keynes' writings were instrumental in translating English monetary experiences of the 1920s and 1930s into expectations of policy makers during and after the Second World War, and thus provide an important explanation for the why and when of "financial repression". The paper argues that Keynes provided only partly ammunition for a policy of "financial repression", and none for using inflation as a "tax gatherer" to the detriment of domestic savers in general. Crediting him as a source for widespread "money illusion" is also out of line with the historical record. |
| JEL: | B20 E31 H63 N24 N44 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:pp1859:16&r=all |
| By: | Sriya Anbil; Mark A. Carlson; Christopher Hanes; David C. Wheelock |
| Abstract: | This article describes the origins and development of the federal funds market from its inception in the 1920s to the early 1950s. We present a newly digitized daily data series on the federal funds rate from April 1928 through June 1954. We compare the behavior of the funds rate with other money market interest rates and the Federal Reserve discount rate. Our federal funds rate series will enhance the ability of researchers to study an eventful period in U.S. financial history and to better understand how monetary policy was transmitted to banking and financial markets. For the 1920s and 1930s, our series is the best available measure of the overnight risk-free interest rate, better than the call money rate which many studies have used for that purpose. For the 1940s-1950s, our series provides new information about the transition away from wartime interest-rate pegs culminating in the 1951 Treasury-Federal Reserve Accord. |
| Keywords: | Federal funds rate; Call loan rate; Money market; Federal Reserve System; |
| JEL: | E43 E44 E52 G21 N22 |
| Date: | 2020–08–19 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2020-59&r=all |
| By: | Edwyna Harris (Monash University); Sumner La Croix (University of Hawai‘i) |
| Abstract: | Britain after the Napoleonic wars saw the rise of colonial reformers, such as Edward Wakefield, who had extensive influence on British colonial policy. A version of Wakefield’s “System of Colonization” became the basis for legislation establishing the South Australia colony in 1834 and the New Zealand colony in 1840. We use extended versions of Robert Lucas’s 1990 model of coordinated colonial investment to show how Wakefield’s institutions were designed to work. We also show that the critique of Wakefield’s system by Karl Marx in Das Kapital closely follows Lucas’s analysis of colonial institutions. |
| Keywords: | Robert Lucas; Karl Marx; Edward Gibbon Wakefield; emigration; settler colonization; South Australia |
| JEL: | N47 N57 N97 R30 D44 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:202023&r=all |
| By: | Alain Alcouffe (UT1 - Université Toulouse 1 Capitole) |
| Abstract: | Among the references used by Marx when he wrote his Mathematical Manuscripts, the book of Jean-Louis Boucharlat on Calculus is remarkable by its multiple editions till 1926. It was also criticized by Herman Laurent, an actuary and one of the first disciple of Léon Walras. The paper shows that the genetic method (history of the concepts) and dialectic (Marx scrutinized the transformations of the various approaches used in the calculus) deserves attention and highlights the history of calculus till the XXth century. |
| Abstract: | Parmi les sources des Manuscrits mathématiques de Marx figure notamment le livre sur le calcul différentiel de Jean-Louis Boucharlat, qui connut de multiples éditions jusqu'en 1926. Ce livre fera aussi l'objet de remarques de la part de Herman Laurent, un actuaire et relation de Léon Walras. Le traitement L'article montre que la méthode génétique (histoire des concepts) et dialectique (Marx s'est intéressé aux transformations que provoquait le développement même des différentes approches du calcul différentiel) mérite de retenir l'attention et éclaire l'histoire du calcul différentiel jusqu'à ces développements du 20 e siècle. |
| Keywords: | Marx,Boucharlat,Laurent,calculus,methodology |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02881305&r=all |
| By: | Iyer, S. |
| Abstract: | Noel D. Johnson and Mark Koyama’s book examines the links between religion, state action and the development of liberalism in medieval Europe. It discusses a model of ‘conditional toleration’; how the interaction between religion and state influences persecution and discrimination against minorities; and how religious freedom eventually paved the way for scientific advances, liberalism and economic growth. It tackles issues such as fiscal capacity, anti-Semitism in Europe, plagues including the Black Death, heresy in the Spanish Inquisition, witchcraft trials, the Holocaust, climate shocks and the growth of cities with emergent religious minorities. It discusses these issues for a range of countries in medieval Europe, providing rich historical detail and interpretive depth for its main argument. This is a deeply evocative book, which makes an important contribution to the new economics of religion. Carefully researched and thoughtfully crafted, the themes it discusses and the ideas it raises have relevance not only for medieval European societies with which it is principally concerned, but also for contemporary economies everywhere. |
| JEL: | Z12 N13 N15 N33 P16 |
| Date: | 2020–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2084&r=all |
| By: | Eric C. Edwards; Martin Fiszbein; Gary D. Libecap |
| Abstract: | We examine the origins, persistence, and economic consequences of institutional structures of agricultural production. We compare farms in the Argentine Pampas and US Midwest, regions of similar potential input and output mixes. The focus is on 1910-1914, during the international grain trade boom and when census data are available. The Midwest was characterized by small farms and family labor. Land was a commercial asset and traded routinely. The Pampas was characterized by large landholdings and use of external labor. Land was a source of status and held across generations. Status attributes could not be easily monetized for trade, reducing market exchange, limiting entry, and hindering farm restructuring. Differing land property rights followed from English and Spanish colonial and post-independence policies. Geo-climatic factors cannot explain dissimilarities in farm sizes, tenancy, and output mixes, suggesting institutional constraints. Midwest farmers also were more responsive to exogenous signals. There is evidence of moral hazard on Pampas farms. Conjectures on long-term development are provided. |
| JEL: | K11 L1 L22 N2 N21 N22 N26 N5 N51 N52 N56 O13 Q12 Q15 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27750&r=all |
| By: | Isles, Patrick B |
| Abstract: | When scrutinizing historical events, and through examining fascist movements, we discover that the institution of the University has developed distinct characteristics of fascist states. It is imperative to ask: to what extremity does political correctness within university culture(s) conform with the distinctional (political) institutions that surrounded Western Europe during first half of the 20th century? I will argue and demonstrate that university is now reflective of the very things we fought against - totalitarianism. By examining Peter F. Drucker’s Political Correctness and Academe (1998) and George Orwell's 1984 (1949), a global perspective to why university is now, in the business of, protecting regressive leftists, which will be defined later, and advancing their “narratives” will be understood. Besides our abstract, and conclusion, our argument will be broken down into six separate sections. For argumentative purposes, section II will focus on our definitions of and understanding of each term. Thereafter, section III will be the foundational argument of University functioning. We will see how fascism coincides with the lack of diversity in education in section IV, and section V, the historical ideology of fascism in comparison to Islam will be examined. Sections VI and VII will center on the pragmatic nature of faith on campus, and Marxist theory. More specifically, the history. Our conclusion will focus on the broader unifying point of our paper: why faith is dangerous. |
| Keywords: | Arts and Humanities, Free Speech, History. |
| Date: | 2020–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:cuorpo:qt97q6p653&r=all |
| By: | Mario García-Zúñiga (University of the Basque Country UPV/EHU) |
| Abstract: | This paper provides the first estimates of the number of days worked per year in the construction sector in Madrid between 1740 and 1810. Using a database of 389,000 observations with over 2.15 million paid days, we demonstrate how the length of the working year in the second half of eighteenth century was very close to the modern standard of 300 days, and that, by the end of the century, building workers—both skilled and unskilled— actually worked around 280 days, a far higher number than suggested by the current estimates for Spain or the figures proposed recently for northern Europe. |
| Keywords: | Spain, pre-industrial labour market, 18th century, working year, construction history |
| JEL: | J3 J49 N33 N63 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:hes:wpaper:0195&r=all |
| By: | Philipp Ager; Francesco Cinnirella |
| Abstract: | Public educators and philanthropists in the late 19th century United States promoted the establishment of kindergartens in cities as a remedy for the social problems associated with industrialization and immigration. Between 1880 and 1910, more than seven thousand kindergartens opened their doors in the United States, serving both a social and educational function. We use newly collected city-level data on the roll-out of the first kindergartens to evaluate their impact on household outcomes. We find that in cities with a larger kindergarten exposure, families significantly reduced fertility, with the strongest decline appearing in families that were economically disadvantaged and with an immigrant background. Households reduced fertility because kindergarten attendance increased returns to education, but it also led to higher opportunity costs for raising children. Indeed, we show that children exposed to kindergartens were less likely to work during childhood and, instead, stayed longer in school, had more prestigious jobs, and earned higher wages as adults. Finally, we find that exposure to kindergartens particularly helped immigrant children from non-English-speaking countries to gain English proficiency. Their attendance also generated positive language spillover effects on their mothers, illustrating the importance of early childhood education for the integration of immigrant families. |
| Keywords: | kindergarten education, family size, fertility transition, returns to preschool education, quantity-quality trade-off |
| JEL: | N31 J13 I25 O15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8504&r=all |
| By: | Klump, Rainer; Pilz, Lars; Assistant, JHET |
| Abstract: | In 1564 Leonhard Fronsperger, a military expert and citizen of the Free Imperial City of Ulm in Upper Germany, publishes a booklet “On the Praise of Self-Interest” (“Von dem Lob deß Eigen Nutzen”). Using the form of a satirical poem, he demonstrates how the individual pursuit of self-interest can lead to the common good. Writing long before Bernard Mandeville and Adam Smith, Fronsperger presents a thorough analysis of all kinds of self-interested social, political and economic relations. His praise of self-interest demonstrates how over the sixteenth century the interplay of economic success (in particular in major trading cities), a more realistic conception of human behavior and some aspects of Humanism and the Reformation led to a new understanding of the origins of economic dynamics. This became the basis for what Weber (1904-05/2009) would later term “the spirit of capitalism”. |
| Date: | 2020–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:4ztvd&r=all |
| By: | Catherine Guirkinger; Gani Aldashev; Alisher Aldashev; Maté Fodor |
| Abstract: | We study the long-run persistence of relative economic well-being in the face of highly adverse government policies using a combination of rich historical and contemporaneous data sources from Kyrgyzstan. Even after controlling for unobservable local effects, the economic well-being (measured by income, expenditures, or assets) of Kyrgyz households in the 2010s strongly correlates with the early 20th-century average wealth of the tribes from which these households descend. The degree of economic inequality at the tribe level in the 2010s correlates with the within-tribe wealth inequality in the early 20th century. In terms of channels of persistence, we find support for the inter-generational transmission of human capital, relative status, political power, and cultural traits. Transmission of material wealth, differences in natural endowments, or geographic sorting cannot explain the observed long-run persistence. |
| Keywords: | Wealth distribution; long-run persistence; inter-generational transmission; traditional institutions; tribe; clan; Kyrgyzstan |
| JEL: | D31 O15 O17 N35 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/312572&r=all |
| By: | Andrea Papadia; Claudio Schioppa |
| Abstract: | One of history's largest repatriations of sovereign and commercial debt occurred in Germany between 1931 and 1939. Our study of the episode finds that German authorities kept private initiatives of debt repatriation under increasingly strict control in order to avoid known detrimental macroeconomic effects, yet allowed the practice on a discretionary basis as a way to reap internal political benefits. The repatriated bonds exhibited a non-negligible and varying spread between their domestic prices and their respective prices on foreign stock markets. We analyze nine years of weekly spreads to argue that the crucial factor for the origination, variation and persistence of the spread was the impact of capital controls on the efficiency of secondary markets. Additionally, we model how internal redistribution motives in the form of elite capture affect socially optimal debt repatriations, merging established results in the literature on debt buybacks with recent research that links the efficiency of secondary markets to sovereign risk. Our analysis offers a comprehensive interpretation of the salient aspects of the historical episode as well as novel insights for several open debates in international macroeconomics. |
| Keywords: | Sovereign risk; Elite capture; Capital controls; Germany; Nazi regime; Foreign debt; Secondary markets |
| JEL: | E65 F38 H63 N24 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/312216&r=all |
| By: | Zappia, Carlo; Assistant, JHET |
| Abstract: | This paper explores archival material concerning the reception of Leonard J. Savage’s foundational work of rational choice theory in its subjective-Bayesian form. The focus is on the criticism raised in the early 1960s by Daniel Ellsberg, William Fellner and Cedric Smith, who were supporters of the newly developed subjective approach, but could not understand Savage’s insistence on the strict version he shared with Bruno de Finetti. The episode is well-known, thanks to the so-called Ellsberg Paradox and the extensive reference made to it in current decision theory. But Savage’s reaction to his critics has never been examined. Although Savage never really engaged with the issue in his published writings, the private exchange with Ellsberg and Fellner, and with de Finetti about how to deal with Smith, shows that Savage’s attention to the generalization advocated by his correspondents was substantive. In particular, Savage’s defence of the normative value of rational choice theory against counterexamples such as Ellsberg’s did not prevent him from admitting that he would give careful consideration to a more realistic axiomatic system, should the critics be able to provide one. |
| Date: | 2020–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:9bdqn&r=all |
| By: | Claude Diebolt (BETA - Bureau d'Économie Théorique et Appliquée - UL - Université de Lorraine - UNISTRA - Université de Strasbourg - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | On 16 September 2020 the 40th anniversary of the death of Jean Piaget (1896-1980) will be celebrated. This contribution pays tribute to the epistemologist, biologist and psychologist, to his systemic analysis, to his hierarchical classification of the different levels of regulation as an original source of inspiration for my own work in cliometrics of growth and economic cycles. |
| Abstract: | Le 16 septembre 2020 on célèbrera le 40ème anniversaire de la mort de Jean Piaget (1896-1980). Cette contribution rend hommage à l'épistémologue, biologiste et psychologue, à son analyse systémique, à sa classification hiérarchique des différents niveaux de régulation comme source d'inspiration originale pour mes propres travaux en cliométrie de la croissance et des cycles économiques. |
| Keywords: | Epistémologie,Jean Piaget,Régulation,Sciences,Systèmes complexes,Systèmes sociaux,Croissance,Cycles,Histoire économique,Cliométrie |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02920407&r=all |
| By: | Kerstenetzky, Celia Lessa |
| Abstract: | Motivated by a perceived lacuna in theoretical discussions on income inequality, this paper explores an approach based on the place in that inequality of economic rents. Although widely recognized as a subject to be considered in relation to inequality, rents are still failing to receive a conceptually and theoretically unified treatment. In fact, although accepted as an element in the distribution branch of economics, economic rents have been subject to a somewhat incomplete treatment, especially when it comes to understanding the origin in wealth ownership. This blind spot invites cross-disciplinary collaboration as a means of elucidation. So, in this paper, I review and systematize scattered conceptual and theoretical contributions on the subject drawn from the literatures of both economics and sociology. Briefly, while economics delineates the market phenomenon giving rise to rents, sociology sheds light on the influence of background social structure on both the supply and demand blades of the ‘market scissor’. This is to some extent reminiscent of Marx’s class struggle analysis; but Marx’s original view is amplified by the sociological perspectives I review here, as the latter identify and conceptualize rents earned by labour in addition to those earned by capital. Two ideas that sprang from my reading of the sociological perspectives should be placed at the very core of a rents-based approach to inequalities. The first is that the normal functioning of markets does not make economic rents disappear; the second is that all earnings are relative, so that rents, including negative rents, are a vital part of everyone’s remuneration in contemporary capitalist economies. An outline of a rents-based theory of inequality is proposed and normative and policy consequences of undertaking this move are hinted at. |
| Keywords: | inequality; economic rents; social structure; capital; social surplus |
| JEL: | J1 R14 J01 N0 |
| Date: | 2020–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:106533&r=all |
| By: | Vallois, Nicolas; Imhoff, Sarah |
| Abstract: | . “Luftmentsh”, literally “air-person”, is a Yiddish word which refers to beggars, petty traders, peddlers and various kinds of paupers. The word appeared for the first time in Yiddish literature in the 1860's and began to be used in political and economic discourse in the 1880's-1890's. This article proposes a rhetorical analysis of the word Luftmentsh, considered as an economic metaphor for Jewish poverty. Our study thus contributes to the existing literature on economic metaphors in the history of economic thought. We also show that the economic character of the Luftmentsh popularized an influential yet ambivalent image of Jewish masculinity at work. |
| Date: | 2020–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:ptxgf&r=all |
| By: | Kennedy, William; Delargy, Robert |
| Abstract: | These notes provide additional detail to the evidence and arguments presented in "Shorting the Future?: Capital Markets and the Launch of the British Electrical lndustry, 1882-1892" , Business History Review, Vol. 94, Summer 2020, pp.287-320, https://doi.org/10.1017/S0007680520000318, and should be read in conjunction with that article. |
| Date: | 2020–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:27552&r=all |
| By: | Angel de la Fuente |
| Abstract: | En esta nota se describe brevemente la última actualización de RegData, una base de datos que recoge los principales agregados económicos y demográficos de las regiones españolas durante las últimas seis décadas. En su mayoría, las series comienzan en 1950 o 1955 y se extienden hasta 2019. |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaeee:eee2020-25&r=all |
| By: | Herve Bercegol; Henri Benisty |
| Abstract: | Global historical series spanning the last two centuries became recently available for primary energy consumption (PEC) and Gross Domestic Product (GDP). Here through a thorough analysis of the data, we propose a new, simple macroeconomic model whereby physical power fuels economic power. From 1820 to 1920, the linearity between global PEC and world GDP justifies basic equations where, originally, PEC incorporates unskilled human labor that consumes and converts food energy. In a consistent model, both physical capital and human capital are fed by PEC and store energy. In the following century, 1920-2016, GDP grows quicker than PEC, displaying periods of linearity of the two variables, separated by distinct jumps interpreted as radical technology shifts. The GDP to PEC ratio accumulates game-changing innovation, at an average growth rate proportional to PEC. These results seed alternative strategies for modelling and political management of the climate crisis and energy transition. |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2008.10967&r=all |
| By: | Horn, Sebastian; Reinhart, Carmen M.; Trebesch, Christoph |
| Abstract: | Official (government-to-government) lending is much larger than commonly known, often surpassing total private cross-border capital flows, especially during disasters such as wars, financial crises and natural catastrophes. We assemble the first comprehensive long-run dataset of official international lending, covering 230,000 loans, grants and guarantees extended by governments, central banks, and multilateral institutions in the period 1790-2015. Historically, wars have been the main catalyst of government-to-government transfers. The scale of official credits granted in and around WW1 and WW2 was particularly large, easily surpassing the scale of total international bailout lending after the 2008 crash. During peacetime, development finance and financial crises are the main drivers of official crossborder finance, with official flows often stepping in when private flows retrench. In line with the predictions of recent theoretical contributions, we find that official lending increases with the degree of economic integration. In crises and disasters, governments help those countries to which they have greater trade and banking exposure, hoping to reduce the collateral damage to their own economies. Since the 2000s, official finance has made a sharp comeback, largely due to the rise of China as an international creditor and the return of central bank cross-border lending in times of stress, this time in the form of swap lines. |
| Keywords: | International capital flows,disaster response,global financial safety net,bail-outs |
| JEL: | E42 F33 F34 F35 F36 G01 G20 N1 N2 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:pp1859:18&r=all |
| By: | 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 for Advanced Studies in Toulouse) |
| Abstract: | What can history teach us about the potential long-term consequences of COVID-19? In this lecture, Victor Gay discusses how past pandemics impacted individuals and societies over the long run, and which of their aspects can and cannot be a guide to understand the implications of the current crisis. |
| Keywords: | Economic history,Pandemics |
| Date: | 2020–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02931899&r=all |
| By: | Hamermesh, Daniel S. (Barnard College) |
| Abstract: | H. Gregg Lewis did fundamental research outlining the economic effects of trade unions and considering how to measure them carefully. He also laid out the theory of the supply and demand for labor in careful detail that has underlain economists' thinking about these outcomes. Aside from innovating modern-style research in labor economics, his work provided an exemplar of care in thinking about and measuring economic phenomena. His study of labor markets foreshadowed numerous subsequent fundamental articles, including our theories of hedonic prices and of wage selectivity. Supervising numerous Chicago Ph.D. dissertations, all of which heavily bore his stamp and two of which were by future Nobel Prize winners, he contributed indirectly to the development of applied microeconomics through several later generations of researchers. |
| Keywords: | economics of unions, labor demand, labor supply, Chicago dissertations, general equilibrium, empirical methods |
| JEL: | B21 C29 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13551&r=all |
| By: | Acosta, Juan; Cherrier, Beatrice; Assistant, JHET |
| Abstract: | In this paper, we build on data on officials of the Federal Reserve System, oral history repositories, and hitherto under-researched archival sources to unpack the tortuous path toward crafting an institutional and intellectual space for postwar economic analysis within the Board of Governors. We show that growing attention to new macroeconomic research was a reaction to both mounting external criticisms against the Fed’s decision-making process, and to the spread of new macroeconomic theories and econometric techniques. We argue that the rise of the number of PhD economists working at the Fed is a symptom rather than a cause of this transformation. Key to our story are a handful of economists from the Board of Governors’ Division of Research and Statistics (DRS) who did not hold a PhD but envisioned their role as going beyond mere data accumulation and got involved in large-scale macroeconometric model building. We conclude that the divide between PhD and non-PhD economists may not be fully relevant to understand both the shift in the type of economics practiced at the Fed and the uses of this knowledge in the decision making-process. Equally important was the rift between different styles of economic analysis. |
| Date: | 2020–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:4zujh&r=all |
| By: | Elen Riot (HEC Paris - Recherche - Hors Laboratoire - HEC Paris - Ecole des Hautes Etudes Commerciales, URCA - Université de Reims Champagne-Ardenne) |
| Abstract: | Presented here is an analysis of Schumpeter's interest in political economy , as it relates to his use of history to investigate economic change and capitalism. This aspect of Schumpeter's work-referring to style and involving a range of moral and aesthetic considerations-is largely neglected in entrepreneurship studies despite his influence on the discipline. This paper argues these considerations are essential to understand Schumpeter's entrepreneur and the role of creative destruction in rejuvenating capitalism. However, his theory also involves political inclinations and choices, such as elitism and a fear of declinism, both of which are more typical to conservative not destructive worldviews. To illustrate my argument I examine and describe two cases, those of Oberkampf and Knoll, the latter a rough contemporary of Schumpeter. The findings point to the central role of political economy in past and present debates about the political role of entrepreneurship in society, suggesting a need for further attention to the zeitgeist (spirit of the time) in future research. � � |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02883082&r=all |
| By: | Assistant, JHET; Dimand, Robert; Saffu, Kojo |
| Abstract: | Polly Hill spent her long, productive and at times controversial career crossing and contesting disciplinary boundaries. She graduated in economics at Cambridge, but her doctorate was in social anthropology – with economist Joan Robinson as dissertation supervisor. Her thirteen years at the University of Ghana were initially in Economics, then in African Studies, and her readership at Cambridge was in Commonwealth Studies. As a woman in several male-dominated academic disciplines without a secure base in any (and with distinctive, unorthodox opinions in each), she never obtained a tenure-track appointment despite ten books and fifty scholarly articles. Her books drew attention to the underrecognized agency of indigenous entrepreneurs while her Development Economics on Trial: The Anthropological Case for the Prosecution (1986) critiqued a discipline, of disciplinary boundaries, and of outside experts, both mainstream and radical. |
| Date: | 2020–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:htp9r&r=all |
| By: | Meyer, Josefin; Reinhart, Carmen M.; Trebesch, Christoph |
| Abstract: | This paper studies external sovereign bonds as an asset class. We compile a new database of 220,000 monthly prices of foreign-currency government bonds traded in London and New York between 1815 (the Battle of Waterloo) and 2016, covering 91 countries. Our main insight is that, as in equity markets, the returns on external sovereign bonds have been sufficiently high to compensate for risk. Real ex-post returns averaged 7% annually across two centuries, including default episodes, major wars, and global crises. This represents an excess return of around 4% above US or UK government bonds, which is comparable to stocks and outperforms corporate bonds. The observed returns are hard to reconcile with canonical theoretical models and with the degree of credit risk in this market, as measured by historical default and recovery rates. Based on our archive of more than 300 sovereign debt restructurings since 1815, we show that full repudiation is rare; the median haircut is below 50%. |
| Keywords: | sovereign debt,default,risk premiums,investor returns,interest rates,portfolio,yields,coupons,recovery |
| JEL: | F30 F34 G12 G15 N10 N20 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:pp1859:12&r=all |
| By: | Qian Chen; Christoffer Koch; Padma Sharma; Gary Richardson |
| Abstract: | Banking-system shutdowns during contractions scar economies. Four times in the last forty years, governors suspended payments from state-insured depository institutions. Suspensions of payments in Nebraska (1983), Ohio (1985), and Maryland (1985), which were short and occurred during expansions, had little measurable impact on macroeconomic aggregates. Rhode Island’s payments crisis (1991), which was prolonged and occurred during a recession, lengthened and deepened the downturn. Unemployment increased. Output declined, possibly permanently relative to what might have been. We document these effects using a novel Bayesian method for synthetic control that characterizes the principal types of uncertainty in this form of analysis. Our findings suggest policies that ensure banks continue to process payments during contractions – including the bailouts of financial institutions in 2008 and the unprecedented support of the financial system during the COVID crisis – have substantial value. |
| JEL: | C01 C11 E02 E32 E44 E58 G01 G2 G21 G28 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27733&r=all |
| By: | Hernán D. Seoane |
| Abstract: | This paper reviews the main theories of interest rate determination and studies the dynamics of the real interest rate in US. Using cointegration techniques we search for equilibrium relationships between the real interest rate, monetary factors and real factors and we study how these relationships change with the policy regimes. We analyze monthly US data since early 20th century and find equilibrium relationships between a measure of the real interest rate, the policy interest rate and industrial production growth only after the end of the Bretton Woods. Moreover, we find that the equilibrium relationships between these variables are not invariant to changes in the monetary policy regime. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:econpr:_22&r=all |
| By: | José Pedro Pontes; Armando J. Garcia Pires |
| Abstract: | In the Von Thunen (1826)'s economy, manufacturing decentralization is viewed as the refining of an agricultural commodity near the cultivation site, which substitutes for its transport to an industrial mill located in the Town. As Friedrich List (1841) added, this substitution is economically feasible only if the savings in transport costs following from in site refining cover the increase in fixed costs associated with a second industrial plant. In market equilibrium terms, this happens when the decentralized machine is provided collectively by the landowners, who fund it through the proceeds of the rise in total land rent following from the industrial investment. This condition will be satisfied more likely in a large economy with high average transport costs and where manufacturing specializes in relatively weight losing activities. If industrial decentralization is feasible, then the new factories will prefer to locate outside the Town, in formely rural areas endowed with an intermediate degree of centrality. Their distance to the Town will be directly related with the intensity of input refining that they are able to carry out. This model appears to account for main stylized trends of manufacturing relocation nowadays, which are jointly labeled as "(de)industrialization". |
| Keywords: | Von Thunen, Manufacturing Location, Industrialization, External Economies of Scale |
| JEL: | O12 O14 R12 B20 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp01422020&r=all |
| By: | Lambert, Thomas |
| Abstract: | There is a great deal of literature on the role of capital investment in the economic transition from feudalism to capitalism. Investment in capital and new technology and agricultural techniques has not been considered worthwhile in a medieval economy because of a lack of strong peasant property rights and no incentive on the part of lords and barons to lend money to peasant farmers. Therefore, the medieval economy and standards of living at that time have been characterized as non-dynamic and static due to insufficient investment in innovative techniques and technology. The capital investment undertaken typically would have been in livestock, homes, or public investment in canals, bridges, and roads, although investment in the latter would have been hindered by a fragmented political system of fiefdoms and lack of a unified national government. This paper attempts to demonstrate empirically that a productive and sufficient level of investment out of accumulated capital income, taxation, and rents does not have a real impact on economic per capita growth until the 1600s in Britain perhaps due to the beginning of a strong, central government as well as to the level of capital, tax, and land income achieving an adequate threshold amount and providing some type of investment multiplier effect. A high wage share as a portion of national income also appears to be associated with higher investment levels. The types of investment, threshold amounts of investment out of profits and rents, and the price of labor seem to matter when it comes to raising GDP per capita to higher levels. |
| Keywords: | Baran Ratio, Brenner Debate, capitalism, Dobb-Sweezy Debate, feudalism, socialism, technology |
| JEL: | B51 E11 E12 N13 |
| Date: | 2020–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101396&r=all |
| By: | Cheolbeom Park (Department of Economics, Korea University, 145 Anamro, Seongbukgu, Seoul, Korea 02841); Sookyung Park (Institute of Economic Research, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul, 08826, Republic of Korea) |
| Abstract: | We examine the role of the Fed's preference in the understanding of inflation rate and unemployment rate evolution using US data over the period of 1960-2017. Facing the evidence of instability in a constant-coefficient regression, we run a nonparametric regression, and find that the Fed's preference parameters have moved, implying that its preference can be represented by the asymmetric preference model putting more weights on high unemployment rate approximately before the era of Volcker's chairmanship and by the inflation targeting model during the 1980s and 1990s. The Fed's preferences again seem concerned about higher unemployment after the Global Financial Crisis. |
| Keywords: | asymmetric preference, inflation, monetary policy, time-varying parameter, unemployment, nonparametric regression |
| JEL: | E31 E52 E61 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:iek:wpaper:2007&r=all |
| By: | Katrin Hirte (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria) |
| Abstract: | Der 1953 publizierte Aufsatz 'The Methodology of Positive Economics' von Milton Friedman gilt als eine der 'einflussreichsten' Publikationen in der Oekonomik und gleichzeitig als eine der umstrittensten. Denn im genannten Aufsatz vertrat dieser die Ansicht, dass es in der Oekonomik bei der Aufstellung einer Hypothese nicht auf deren Ausgangsannahmen ankaeme, sondern dass es nur um die Aussagefaehigkeit dieser ginge. Fuer die Befuerworter*innen der friedman'schen Auffassung wirkte die behauptete Nichtrelevanz der Ausgangsannahmen wie eine Befreiung, konnten sie doch nun ohne Unbehagen Theorien verwenden, von denen sie wussten, dass diesen solch unrealistische Annahmen wie perfekte Maerkte zugrunde liegen. Kritiker*innen sahen hingegen in dieser Auffassung einen Freifahrtschein fuer Modellplatonismus. Wie anhaltend die Debatte in der Oekonomik nach wie vor gefuehrt wird, zeigt u. a. der 2009 erschienene Sammelband 'The Methodology of Positive Economics - Reflections on the Milton Friedman legacy'. Dabei konzentrieren sich diese Reflexionen wie schon zahlreiche andere hauptsaechlich auf inneroekonomische Debatten, aber kaum auf allgemeinere wissenschaftstheoretische und wissenschaftshistorische Auffassungen. Dies ist besonders bezueglich der Naturwissenschaften auffaellig, welche von Oekonom*innen gerne als 'Vorbild' herangezogen werden und was auch Milton Friedman in seinem Aufsatz tat, dort zum Gesetz des Freien Falls. Im Beitrag soll daher gezeigt werden, welche Einsichten durch Hinzuziehen der Erfahrungen aus den Naturwissenschaften gewonnen werden und hier am zentralen Beispiel eines Paradigmenwechsels in den Wissenschaften, der kopernikanischen Wende. Denn zu diesem besteht allgemein die Annahme, dass gerade dieses Beispiel gut verstaendlich und auch gut erforscht sei. Hierzu wird gezeigt, dass dies zwar zutrifft - insbesondere seit den Arbeiten von Noel Swerdlow (1973, 1976) -, aber dass die Erkenntnisse daraus kaum einen Eingang in die oekonomietheoretischen Debatten erfuhren. So blieb daher auch weitgehend unthematisiert, dass ausgerechnet das Kernanliegen von Kopernikus darin bestand, den auch damals schon bestehenden Instrumentalismus zu ueberwinden: Es ist - so Kopernikus - unzulaessig, beliebige Modelle zu entwerfen, nur um die 'Phaenomene zu retten'. Sondern umgekehrt gilt es, begruendete Ausgangsannahmen 'zu retten'. Daher findet sich der Slogan der 'Rettung der Regelmaessigkeiten', mit der Kopernikus dem damals praktizierten Instrumentalismus den Kampf ansagte, auch in der ersten Zeile seiner ersten Publikation von 1510. Und erst mit neuen begruendeten Annahmen - hier dem Heliozentrismus - wurde bekanntlich auch die Astronomie als Wissenschaft begruendet. |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:ico:wpaper:114&r=all |
| By: | Assistant, JHET; Baronian, Laurent |
| Abstract: | The paper is dedicated to Suzanne de Brunhoff’s monetary thought and shows how her analysis of very concrete monetary and financial problems of her time led her to develop the most innovative contributions to Marxist theory of money since classical Marxism. Concepts such as noncontemporaneity of capitalism with itself, pseudo-social validation, conflict centralization or State management of money and labor power reflect her profound analysis of the ways capitalism generates very particular relationships to space and time. It is by looking at this spatio-temporal dimension of Brunhoff’s concepts that this paper aims to reveal the novelty, power and fruitfulness of her monetary analysis. The first part of the paper seeks to define the meaning of the notion of general equivalent extracting from her reading of Marx's Capital, before situating her approach in relation to Institutionalist theories of money. The second turns to Brunhoff’s analysis of the particular time-spaces of capitalism. |
| Date: | 2020–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:vg4h9&r=all |
| By: | Boris Collet (NIMEC - Normandie Innovation Marché Entreprise Consommation - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - ULH - Université Le Havre Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université, UNIROUEN - Université de Rouen Normandie - NU - Normandie Université) |
| Abstract: | Cet article s'intéresse à la formation et aux dynamiques d'un marché alternatif à travers le prisme de la théorie des champs. Nous inspirant des approches socio-historiques, nous revenons sur les origines de l'indépendance dans les marchés de l'art en étudiant la création de la Société des Artistes Indépendants en 1884 à Paris-groupe d'artistes postimpressionnistes et symbolistes français-et de son pendant américain, The Society of Independent Artists fondée en 1917 à New-York. Nous étudions les conditions d'émergence de cette catégorie de marché que l'on retrouve aujourd'hui au sein de nombreuses industries créatives. Nous constatons la double transversalité de la logique d'indépendance au sein des champs artistiques grâce à la notion de transferts culturels. Nous montrons comment l'indépendance constitue un espace positionnel inscrit dans une « culture de résistance » et structuré autour de la dialectique alternatif/mainstream. Enfin, nous discutons son appropriation et sa marchandisation et contribuons ainsi à une meilleure compréhension des dynamiques des marchés alternatifs en mettant en lumière les interrelations entre les dimensions artistiques, idéologiques et économiques qui conditionnent les marchés de l'indépendance. |
| Date: | 2020–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02927224&r=all |
| By: | Guinnane, Timothy; Streb, Jochen |
| Abstract: | Economists have long argued that introducing social insurance will reduce fertility. The hypothesis relies on standard models: if children are desirable in part because they provide security in case of disability or old age, then state programs that provide insurance against these events should induce couples to substitute away from children in the allocation of wealth. We test this claim using the introduction of social insurance in Germany in the 1880s and 1890s. Bismarck's social-insurance system provided health insurance, workplace-accident insurance, and old age pensions to a majority of the working population. The German case appeals because the social insurance program started on a large scale and was compulsory for covered classes of workers, and because fertility in Germany in this period was still relatively high. Focusing on the state of Prussia, we estimate differences-in-differences models that ask whether marriage and marital fertility reacted to the introduction or extension of the main social insurance programs. For Prussia as a whole we find little impact. |
| Keywords: | fertility transition,marriage pattern,old-age pension,health insurance,accident insurance |
| JEL: | J13 H55 N33 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:pp1859:13&r=all |
| By: | Vu, Tien Manh; Yamada, Hiroyuki |
| Abstract: | We quantified influences of Confucianism on gender inequality in present-day Vietnam. We used the number (or density) of the most successful test takers in the Vietnamese imperial examinations (1075–1919) in a given district as a proxy for mastering the subject of Confucianism. Using an instrumental variable approach, we considered possible impacts on sex ratio and educational attainment of women relative to men, based on test score and population census data. We found that Confucianism has a long lasting impact on gender inequality. However, the results also suggested that women tended to try harder, perhaps as a countermeasure against discrimination. |
| Keywords: | Confucianism; Gender inequality; Sex ratio; Education; Vietnam |
| JEL: | I14 I24 J16 N35 Z1 |
| Date: | 2020–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101487&r=all |