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on Business, Economic and Financial History |
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Issue of 2020‒11‒23
23 papers chosen by |
| By: | Suprinyak, Carlos Eduardo; Assistant, JHET |
| Abstract: | Accounts of Nicholas Georgescu-Roegen’s career usually focus on his pioneer contributions to mathematical economics during the 1930s and his later conversion to a critical approach to economic theory anchored on the entropy law. These disparate moments, however, were connected by Georgescu-Roegen’s strong attraction to the study of problems afflicting less developed societies. This began with his work on the agrarian economy of his native Romania, in the late 1940s, under the auspices of Harvard’s Russian Research Center. Thenceforth, he embarked on a journey that spawned his early interest in Leontief-type linear models, an extended tour of Southeast Asia commissioned by Vanderbilt University’s Graduate Program in Economic Development, and several visits to Brazil during the 1960s. The paper highlights these lesser-known aspects of Georgescu-Roegen’s trajectory, examining how he built on neo-populist writings from the early 20th century to construct an alternative to the mainstream emphasis on industrialization policies. |
| Date: | 2020–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:8vybt&r=all |
| By: | Oslington, Paul; Assistant, JHET |
| Abstract: | Bernard Lonergan S.J. (1904-84) is unusual among major theologians in engaging deeply with economic theory. In the 1940s he developed his own dynamic multisectoral macroeconomic model, informed by reading of Smith, Marx, Keynes, Hayek, Schumpeter, and later Kalecki. Lonergan’s economic research is little known because the economic manuscripts were not published in his lifetime, and his interactions with professional economists were limited. In the 1970s, however, when he returned to economics he engaged with Post-Keynesians and taught a graduate course on macroeconomics at Boston College until illness overtook him. This paper places Lonergan’s economic research in the context of his overall intellectual project, outlines his macroeconomic model and associated theory of the business cycle, then evaluates his contribution in relation to mid-twentieth century macroeconomics and considers whether it has anything to offer contemporary economists. Whatever view we take of his theoretical contributions, Lonergan’s work opens up connections between economics and theology. |
| Date: | 2020–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:wytpq&r=all |
| By: | Claudia Olivetti; M. Daniele Paserman; Laura Salisbury; E. Anna Weber |
| Abstract: | We present new findings about the relationship between marriage and socioeconomic background in the United States in the late 19th and early 20th Centuries. Imputing socioeconomic status of family of origin from first names, we document a socioeconomic gradient for women in the probability of marriage and the socioeconomic status of husbands. This socioeconomic gradient becomes steeper over time. We investigate the degree to which it can be explained by occupational income divergence across geographic regions. Regional divergence explains about one half of the socioeconomic divergence in the probability of marriage, and almost all of the increase in marital sorting. Differences in urbanization rates and the share of foreign-born across states drive most of these differences, while other factors (the scholarization rate, the sex ratio and the share in manufacturing) play a smaller role. |
| JEL: | J12 J62 N31 N32 N91 N92 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28033&r=all |
| By: | Ilan Noy; Toshihiro Okubo; Eric Strobl |
| Abstract: | The COVID-19 pandemic has brought into sharp relief the connection between the epidemiology of a virus, the structure of the economy and society that becomes exposed to it, and the actions chosen by government and by individuals and communities to combat it or ameliorate its economic impact. Surprisingly, there has not been much research on the economy of the 1918-1920 influenza pandemic, even though it likely was the highest mortality event in the 20th century, more lethal than the two World Wars. This paper focuses on Japan, which as a minor participant, was not directly affected by World War I. We exploit the diversity of experiences with the pandemic and its attendant policy responses across Japanese prefectures; and investigate the importance of the pandemic (measured by excess mortality), and of non-pharmaceutical policy interventions (NPIs) in determining the economic impact of the pandemic. We do so by focusing on the production and employment in the textile sector, given the availability of data and the general importance of the sector for emerging economies (as Japan was at the time). We investigate the role of NPIs in ameliorating the economic costs for the sector during the pandemic years (1918-1920), and indeed find that the implemented NPIs were effective in ameliorating the pandemic’s economic consequences, rather than worsening them. In this case, there was no trade-off between money and life, but rather the two were complimentary. |
| Keywords: | pandemic, influenza, Japan, textiles, non-pharmaceutical interventions |
| JEL: | H75 I15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8651&r=all |
| By: | James Feigenbaum; Daniel P. Gross |
| Abstract: | Telephone operation, one of the most common jobs for young American women in the early 1900s, provided hundreds of thousands of female workers a pathway into the labor force. Between 1920 and 1940, AT&T adopted mechanical switching technology in more than half of the U.S. telephone network, replacing manual operation. We show that although automation eliminated most of these jobs, it did not affect future cohorts' overall employment: the decline in demand for operators was counteracted by growth in both middle-skill jobs like secretarial work and lower-skill service jobs, which absorbed future generations. Using a new genealogy-based census linking method, we show that incumbent telephone operators were most impacted by automation, and a decade later were more likely to be in lower-paying occupations or have left the labor force entirely. |
| JEL: | J21 J24 J62 J63 M51 M54 N32 O33 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28061&r=all |
| By: | Joshua K. Hausman; Paul W. Rhode; Johannes F. Wieland |
| Abstract: | We argue that falling farm product prices, incomes, and spending may explain 10-30 percent of the 1930 U.S. output decline. Crop prices collapsed, reducing farmers' incomes. And across U.S. states and Ohio counties, auto sales fell most in crop-growing areas. The large spending response may be explained by farmers' indebtedness. Reasonable assumptions about the marginal propensity to spend of farmers relative to nonfarmers and the pass-through of farm prices to retail prices imply that the collapse of farm product prices in 1930 was a powerful propagation mechanism worsening the Depression. |
| JEL: | E32 E65 N12 N52 Q11 Q12 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28055&r=all |
| By: | Tavlas, George S.; Assistant, JHET |
| Abstract: | Aaron Director taught at the University of Chicago from 1930 to 1934 and from 1946 to 1967. Both periods corresponded to crucial stages in the development of Chicago monetary economics under the leaderships of Henry Simons and Milton Friedman, respectively. Any impact that Director may have played in the development of those stages and to the relationship between the views of Simons and Friedman has been frustrated by Director’s lack of publications. I provide evidence, much of it for the first time, showing the important role played by Director in the development of Chicago monetary economics, including his role as a transmitor of Simons’s ideas to Friedman. |
| Date: | 2020–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:xw67b&r=all |
| By: | Curi, Luiz Felipe Bruzzi; Cunha, Alexandre Mendes; Assistant, JHET |
| Abstract: | Rui Barbosa was a renowned jurist who served as the first Finance Minister of the Brazilian Republic, established in 1889. Despite his renown as an intellectual, Barbosa faced a severe financial crisis during his ministerial tenure and gained a bad reputation for his economic policy. In the texts produced in this context, he combined different traditions of economic thought from the point of view of the legal expert serving as economic policymaker. In the field of public finance, while assimilating arguments associated to German state socialism and its North American developments, he was also influenced by French liberal economist Paul Leroy-Beaulieu. Through these international assimilations, Barbosa constructed an assemblage of economic ideas organized not by theoretical affiliations in the contemporary sense, but around two main goals: to rationalize and legitimize his policy as Finance Minister and to influence the legal ordering of the Brazilian fiscal economy. |
| Date: | 2020–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:c2mzv&r=all |
| By: | Léa Saint-Raymond (ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres) |
| Abstract: | The field of art market studies is based on a famous opposition, coined by Harrison and Cynthia White in 1965, regarding the "academic" system, as opposed to the "dealer-critic" one. Published in 1965, their book, Canvases and Careers, Institutional Change in the French Painting World, was qualified by Patricia Mainardi and Pierre Vaisse, but their criticism dated back to the 1990s. In the meantime, the development of digital methods makes possible a broader reassessment of Harrison and Cynthia White's theory. Based on a corpus of Parisian auction sales, from 1831 through 1925, this paper uses econometrics to call into question the antagonism between the academic and the dealer-critic system, and comes to another conclusion: the academic system was crucial to determine the value of artworks and its efficiency did not collapse in the 1870s, nor in the 1880s, but rather after the Great War. |
| Keywords: | art market,Salon,econometrics,Harrison and Cynthia White,academic system,dealer-critic system |
| Date: | 2019–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02986357&r=all |
| By: | Roca Fernandez, Eric; Litina, Anastasia |
| Abstract: | Our research advances the hypothesis and empirically establishes that a higher incidence of solar eclipses is associated with higher social complexity and complex thinking in premodern societies. We construct a novel dataset of solar eclipses' incidence at the ethnic-group level, bringing together a wide range of historical, ethnic and GIS data sources. We exploit variations in the exposure to solar eclipses in a set of 1267 ethnic groups derived from Murdock's 1967 Ethnographic Atlas. Variation in the exposure to total eclipses is exogenous, as eclipses are randomly and sparsely distributed all over the globe. Moreover, unlike other natural phenomena, solar eclipses do not destroy capital |be it human or physical. We use jurisdictional hierarchy levels, political integration and class stratification to account for social complexity. Increasing levels of gods' involvement in human affairs and the play of games proxy for complex thinking. Our results are robust to a wide range of geographical and ethnic-group controls as well as to a horse race regression between solar eclipses and other natural phenomena: lunar eclipses, earthquakes and volcano eruptions. As a potential mechanism, we hypothesize that solar eclipses and the fear they instilled raise the demand for explanations. Societies that experience frequently such episodes develop more complex societal structures and become more versed in complex thinking in an attempt to comprehend and eventually control the natural environment. |
| JEL: | O1 Z12 P16 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224553&r=all |
| By: | Chassonnery-Zaïgouche, Cléo (University of Lausanne); Assistant, JHET |
| Abstract: | A Review of “A History of Feminist and Gender Economics” by Giandomenica Becchio. |
| Date: | 2020–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:agc6p&r=all |
| By: | Treb Allen; Dave Donaldson |
| Abstract: | How much of the spatial distribution of economic activity today is determined by history rather than by geographic fundamentals? And if history matters for the distribution, does it also affect overall efficiency? This paper develops a tractable theoretical and empirical framework that aims to provide answers to these questions. We derive conditions on the strength of agglomeration externalities, valid for any geography, under which temporary historical shocks can have extremely persistent effects and even permanent consequences (path dependence). We also obtain new analytical expressions, functions of the particular geography in question, that bound the aggregate welfare level that can be sustained in any steady-state, thereby bounding the potential impact of history. Our simulations—based on parameters estimated from spatial variation across U.S. counties from 1800-2000—imply that small variations in historical conditions have substantial consequences for both the spatial distribution and the efficiency of U.S. economic activity, both today and in the long-run. |
| JEL: | C33 C62 F1 R11 R13 R23 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28059&r=all |
| By: | Bíró, Gábor; Assistant, JHET |
| Abstract: | Author's response to Erwin Dekker's review of “The Economic Thought of Michael Polanyi” published in the Journal of the History of Economic Thought |
| Date: | 2020–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:2h7e5&r=all |
| By: | Meierrieks, Daniel; Krieger, Tim; Dimant, Eugen |
| Abstract: | Does U.S. military aid make the United States safer? To answer this question, we collect data for 173 countries between 1968 and 2014. Exploiting quasi-random variation in the global patterns of U.S. military aid, we provide causal estimates of U.S. military aid on anti-American terrorism. We find that higher levels of military aid lead to an increased likelihood of the recipient country producing anti-American terrorism. This finding also holds when subjected to a battery of robustness checks (e.g., alternative instrumental variables, sub-sample analyses, examination of heterogeneous effects, placebo tests). For our preferred specification, at the sample mean doubling U.S. military aid increases the risk of anti-American terrorism by 4.4 percentage points, which in turn is approximately 30% of the sample mean. 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 in particular 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 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224548&r=all |
| By: | Alain Burlaud (CNAM - Conservatoire National des Arts et Métiers [CNAM]) |
| Date: | 2020–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02985745&r=all |
| By: | Becker, Sascha O.; Mergele, Lukas; Wößmann, Ludger |
| Abstract: | German separation in 1949 into a communist East and a capitalist West and their reunification in 1990 are commonly described as a natural experiment to study the enduring effects of communism. We show in three steps that the populations in East and West Germany were far from being randomly selected treatment and control groups. First, the later border is already visible in many socio-economic characteristics in pre-World War II data. Second, World War II and the subsequent occupying forces affected East and West differently. Third, a selective fifth of the population fled from East to West Germany before the building of the Wall in 1961. In light of our findings, we propose a more cautious interpretation of the extensive literature on the enduring effects of communist systems on economic outcomes, political preferences, cultural traits, and gender roles. |
| Keywords: | political systems,communism,preferences,culture,Germany |
| JEL: | D72 H11 P26 P36 N44 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224541&r=all |
| By: | Jean-Bernard Chatelain (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - 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); Kirsten Ralf (INSEEC SBE - INSEEC School of Business & Economics - INSEEC Business School - Institut des hautes études économiques et commerciales Business School (INSEEC), ESCE – International Business School) |
| Abstract: | This paper is a study of the history of the transplant of mathematical tools using negative feedback for macroeconomic stabilization policy from 1948 to 1975 and the subsequent break of the use of control for stabilization policy which occurred from 1975 to 1993. New-classical macroeconomists selected a subset of the tools of control that favored their support of rules against discretionary stabilization policy. The Lucas critique and Kydland and Prescott's time-inconsistency were overstatements that led to the "dark ages" of the prevalence of the stabilization-policy-ine¤ectiveness idea. These overstatements were later revised following the success of the Taylor (1993) rule. J |
| Keywords: | Control,Stabilization Policy Ine¤ectiveness,Negative feedback,Dynamic Games Keywords: Control,Dynamic Games |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02978527&r=all |
| By: | Charaf Ech-Chatbi (X-DEP-MATHAPP - Département de Mathématiques Appliquées de l'École polytechnique - X - École polytechnique) |
| Abstract: | Our modern financial system traces its origin to the ancient Babylonian banking system. The same fractional lending idea that is used today was used by merchants in the regions of ancient Babylonia, Assyria and Sumeria around 2000 BC. Later, the idea found its way to ancient Greece, the Roman Empire, China, India and then to us. The fractional lending concept was not the fruit of scientific research like what is done in other scientific endeavors where most of the best ideas are the result of a long process of trial and error. Is it not time to rethink the way we do banking in this digital age and try other ideas? The last 40 years of cryptographic research culminated with the creation of Bitcoin currency system in 2009. We would like to expand on this and introduce three ideas to help rethink the banking system of the 21 st century: 1) the concept of a biometric currency, 2) the concept of being your own bank and issue your own loans with zero-interest rate 3) and redefining the fractional reserve lending. We propose a biometric currency concept that will enable people to self finance and to safely store their money in their hands. Contrary to cryptocurrencies that are issued by blockchain miners and Fiat currencies that are issued by bankers, Biom will be issued by everyone. The goal is to create from human life a precious asset like Gold that will benefit all. |
| Keywords: | Biometric Currency,Fractional Reserve Banking,Bit- coin,Cryptocurrency,Digital Currency,Banking System,Fractional Lend- ing,Quantitative Easing * One Raffles Quay,North Tower Level 35 048583 Singapore |
| Date: | 2020–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02975798&r=all |
| By: | Dekker, Erwin; Assistant, JHET |
| Abstract: | A book review of “The Economic Thought of Michael Polanyi” by Gábor Bíró |
| Date: | 2020–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:fkgdn&r=all |
| By: | Huning, Thilo R.; Wahl, Fabian |
| Abstract: | How can agricultural inheritance traditions affect structural change and economic development in rural areas? The most prominent historical traditions are primogeniture, where the oldest son inherits the whole farm, and equal partition, where land is split and each heir inherits an equal share. In this paper, we provide a theoretical model that links these inheritance traditions to the local allocation of labor and capital and to municipal development. First, we show that among contemporary municipalities inWest Germany, equal partition is significantly related to measures of economic development. Second, we conduct OLS and fuzzy spatial RDD estimates for Baden-Württemberg in the 1950s and today. We find that inheritance rules caused, in line with our theoretical predictions, higher incomes, population densities, and industrialization levels in areas with equal partition. Results suggest that more than a third of the overall inter-regional difference in average per capita income in present-day Baden Württemberg, or 597 Euro, can be explained by equal partition. |
| Keywords: | Inheritance rules,sectoral change,regional economic development,Baden-Württemberg,spatial inequalities |
| JEL: | D02 D31 N00 O18 Z00 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224512&r=all |
| By: | Jan-Egbert Sturm (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Vera Eichenauer (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Nauro Campos (University College London, London, UK) |
| Abstract: | This paper addresses two main questions: (a) Has European integration hindered the implementation of labour, financial and product market structural reforms? (b) Do the effects of these reforms vary more across sectors than across countries? Using more granular reform measures, longer time windows and a larger sample of countries than previous studies, we confirm that the euro triggered product but neither labour nor financial market reforms. Differently from previous studies, we find that: (a) the Single Market has similar effects to the euro, and (b) sectoral heterogeneity appears less important in explaining the economic impacts of reforms than country heterogeneity. |
| Keywords: | European integration, structural reforms, Single Market, Euro, sectoral heterogeneity |
| JEL: | F4 N1 N4 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:20-482&r=all |
| By: | Okotori, Tonprebofa, Waikumo; Ayunku, Peter, Ego |
| Abstract: | In this paper using monthly data for the period 1981-2018, we adopted VARmethodology to show the nexus of foreign direct investment(FDI), the exchange rate (EXR), and net exports in order to reveal the effect of one variable on the other. Granger causality test, impulse response functions as well as block wald/exogeneity were used to test the given hypothesis. The results show that FDI did not granger cause exchange rate (EXR), but exchange rate granger causes exchange rate volatility, but the exchange rate does not granger cause net exports and that net exports granger causes FDI, the FDI was found to granger net exports. The policy implication for the CBN can be seen in the fact that undermanaged capital flows and managed exchange rate regimes the bank might choose to influence growth in sectors of the economy such as the financial markets. It might not be certain that the CBN cannot thus operate an independent monetary policyasthecoreprescriptionsoftheMundell -Flemingmodelhavebeenbreached. |
| Keywords: | Foreign direct investment, VAR, CBN, Mundell-Fleming |
| JEL: | E58 E61 E65 E66 F62 N27 O16 O24 |
| Date: | 2020–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:103880&r=all |
| By: | Felbermayr, Gabriel; Steininger, Marina |
| Abstract: | When, about twenty years ago, the Euro was created, one objective was to facilitate intra-European trade by reducing transaction costs. Has the Euro delivered? Using sectoral trade data from 1995 to 2014 and applying structural gravity modeling, we conduct an ex post evaluation of the European Monetary Union (EMU). In aggregate data, we find a significant average trade effect for goods of almost 8 percent, but a much smaller effect for services trade. Digging deeper, we detect substantial heterogeneity between sectors, as well as between and within country-pairs. Singling out Germany, and embedding the estimation results into a quantitative general equilibrium model of world trade, we find that EMU has increased real incomes in all EMU countries, albeit at different rates. E. g. incomes have increased by 0.3, 0.6, and 2.1 percent in Italy, Germany, and Luxembourg, respectively. |
| Keywords: | Euro,trade,general equilibrium,quantitative trade models,European Union |
| JEL: | F15 F17 N74 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkie:225299&r=all |