nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2021‒05‒24
sixty-five papers chosen by

  1. Capital in Spain, 1850-2019 By Prados de la Escosura, Leandro
  2. Money, Banking, and Old-School Historical Economics By Monnet, Eric; Velde, François R.
  3. Slavery and development in nineteenth century Brazil By Palma, Nuno Pedro G.; Papadia, Andrea; Pereira, Thales; Weller, Leonardo
  4. Collateral Damage: The Legacy of the Secret War in Laos By Riaño, Juan Felipe; Valencia Caicedo, Felipe
  5. Do Old Habits Die Hard? Central Banks and the Bretton Woods Gold Puzzle. By Monnet, Eric; Puy, Damien
  6. History and Urban Economics By Hanlon, William Walker; Heblich, Stephan
  7. The Great Depression as a Saving Glut By Degorce, Victor; Monnet, Eric
  8. An annual index of Irish industrial production, 1800-1921 By Kenny, Sean; Lennard, Jason; O'Rourke, Kevin Hjortshøj
  9. The History and Politics of Public Debt Accounting By Monnet, Eric; Truong-Loï, Blaise
  10. Not an ordinary bank but a great engine of state: the bank of England and the British economy, 1694-1844 By O'Brien, Patrick; Palma, Nuno Pedro G.
  11. Monetary Capacity By Bonfatti, Roberto; Brzezinski, Adam; Karaman, Kivanç; Palma, Nuno Pedro G.
  12. Regional Inequalities and the West-East Divide in Turkey since 1880 By Asik, Günes; Karakoç, Ulas; Pamuk, Sevket
  13. The Gravitational Constant? By Jacks, David S.; O'Rourke, Kevin Hjortshøj; Taylor, Alan M.
  14. Merger or Acquisition? Introduction to the Handbook of Historical Economics By Alberto Bisin; Giovanni Federico
  15. The Impact of Technological Change on Labor and Wage: The Japanese Silk Weaving Industry during the Industrial Revolution By Tetsuji Okazaki
  16. Regulatory Measures to Dismantle Pyramidal Business Groups: Evidence from the United States, Japan, Korea and Israel By Hamdani, Assaf; Kosenko, Konstantin; Yafeh, Yishay
  17. Banks, Credit Supply, and the Life Cycle of Firms: Theory and Evidence from Late Nineteenth Century Japan By Sergi Basco; John P. Tang
  18. Predistribution vs. Redistribution: Evidence from France and the U.S. By Bozio, Antoine; Garbinti, Bertrand; Goupille-Lebret, Jonathan; Guillot, Malka; Piketty, Thomas
  19. Forecasting Output Growth of Advanced Economies Over Eight Centuries: The Role of Gold Market Volatility as a Proxy of Global Uncertainty By Afees A. Salisu; Rangan Gupta; Sayar Karmakar; Sonali Das
  20. Financing the rebuilding of the City of London after the Great Fire of 1666 By Coffman, D'Maris; Stephenson, Judy Z.; Sussman, Nathan
  21. Una propuesta metodológica para el estudio del uso del suelo a nivel municipal en España. Jerez de la Frontera, 1754-1931 By José Ignacio Jiménez Blanco
  22. Measuring Colonial Extraction: The East India Company's Rule and the Drain of Wealth (1757-1858) By Nogues-Marco, Pilar
  23. Democracy, technocracy and economic growth: evidence from 20 century Spain By Alessandro Melcarne; Juan S. Mora-Sanguinetti; Rok Spruk
  24. Shipwrecked by Rents By Arteaga, Fernando; Desierto, Desiree; Koyama, Mark
  25. Does Education Matter? Tests from Extensions of Compulsory Schooling in England and Wales 1919-22, 1947, and 1972 By Clark, Gregory; Cummins, Neil
  26. Political Cleavages and the Representation of Social Inequalities in Japan 1953-2017 By Amory Gethin
  27. Accounting for Growth in Spain, 1850-2019 By Prados de la Escosura, Leandro; Rosés, Joan R.
  28. How to Escape from the Debt Trap: Lessons from the Past By Thomas Mayer; Gunther Schnabl
  29. The Sectoral Innovation Database, 1994-2016.Methodological Notes By Mario Pianta; Andrea Coveri; Jelena Reljic
  30. Social Inequalities, Identity, and the Structure of Political Cleavages in Argentina, Chile, Costa Rica, Colombia, Mexico, and Peru, 1952-2019 By Oscar Barrera; Ana Leiva; Clara Martínez-Toledano; Álvaro Zúñiga-Cordero
  31. Divisões administrativas do Império Colonial Português By Nuno Valério
  32. Historical Data: Where to Find Them, How to Use Them By Giuliano, Paola; Matranga, Andrea
  33. The Legal Origins of Financial Development: Evidence from the Shanghai Concessions By Ross Levine; Chen Lin; Chicheng Ma; Yuchen Xu
  34. Art dealers’ inventory strategy: the case of Goupil, Boussod & Valadon from 1860 to 1914 By Geraldine David; Christian Huemer; Kim Oosterlinck
  35. The Effect of Colonial and Pre-Colonial Institutions on Contemporary Education in Africa By Leone Walters; Carolyn Chisadza; Matthew Clance
  36. Health Inequality and the 1918 Influenza in South Africa By Johan Fourie; Jonathan Jayes
  37. Do Family Policies Reduce Gender Inequality? Evidence from 60 Years of Policy Experimentation By Kleven, Henrik; Landais, Camille; Posch, Johanna; Steinhauer, Andreas; Zweimüller, Josef
  38. Were Late-Nineteenth-Century, Small-Town Americans Life-Cycle Savers? By Howard Bodenhorn
  39. The Ancient Origins of the Wealth of Nations By Ashraf, Quamrul H.; Galor, Oded; Klemp, Marc
  40. Imported or Home Grown? The 1992-3 EMS Crisis By Eichengreen, Barry; Naef, Alain
  41. The Bright and Dark Side of Financial Support from Local and Central Banks after a Natural Disaster: Evidence from the Great Kanto Earthquake, 1923 Japan By Tetsuji Okazaki; Toshihiro Okubo; Eric Strobl
  42. Populist Leaders and the Economy By Funke, Manuel; Schularick, Moritz; Trebesch, Christoph
  43. Wine’s belated globalization, 1845 to 2025 By Kym Anderson; Vicente Pinilla
  44. The Toll of Tariffs: Protectionism, Education and Fertility in Late 19th Century France By Vincent Bignon; Cecilia García-Peñalosa
  45. Urban economics in a historical perspective: Recovering data with machine learning By Combes, Pierre-Philippe; Gobillon, Laurent; Zylberberg, Yanos
  46. Immigrant Distribution in the United States during the Age of Mass Migration By Ariell Zimran
  47. From a common empire to colonial rule: commodity market disintegration in the Near East By Panza, Laura
  48. Institutional Change and Institutional Persistence By Acemoglu, Daron; Egorov, Georgy; Sonin, Konstantin
  49. Social Mobility and Social Regimes: Intergenerational Mobility in Hungary, 1949-2017 By , Rita; Bukowski,; Clark, Gregory; Gáspár, Attila
  50. Colonial legacies: Shaping African cities By Baruah, Neeraj; Henderson, Vernon; Peng, Cong
  51. Cartas e Leis Orgânicas do Império Colonial Português By Nuno Valério
  52. Mechanization, Task Assignment, and Inequality By Yuki, Kazuhiro
  53. Bombs, Broadcasts and Resistance: Allied Intervention and Domestic Opposition to the Nazi Regime during World War II By Adena, Maja; Enikolopov, Ruben; Petrova, Maria; Voth, Hans-Joachim
  54. Economic Uncertainty and Divisive Politics: Evidence from the "dos Españas" By Garcia-Uribe, Sandra; Mueller, Hannes Felix; Sanz, Carlos
  55. O Império Colonial nas Constituições Portuguesas By Nuno Valério
  56. Responsáveis políticos pelo Império Colonial Português By Nuno Valério
  57. Ballot or Bullet: The Impact of UK's Representation of the People Act on Peace and Prosperity By Rohner, Dominic; Saia, Alessandro
  58. Suburbanization in the United States 1970-2010 By Stephen J. Redding
  59. A historical perspective on prudential regulation, currency mismatches and exchange rates in Latin America and the Caribbean By Martín Tobal; Renato Yslas
  60. Decreasing Time to Baccalaureate Degree in the United States By Denning, Jeffrey T.; Eide, Eric R.; Mumford, Kevin J.; Sabey, Daniel
  61. The persistent consequences of adverse shocks: how the 1970s shaped UK regional inequality By Rice, Patricia; Venables, Anthony
  62. Reigniting Economic Growth: Lessons from three centuries of data By Roy Havemann; Edward Kerby
  63. "A short history of transparency and central banks in the academic literature" By Eric Dehay; Nathalie Levy
  64. Developing Air and Land Control at Toronto’s Airport: How Do Cities Use Their Fiscal Space? By Nick Lombard
  65. Efficiency and Productivity Analysis from a System Perspective:Historical Overview. By Antonio Peyrache; Maria C. A. Silva

  1. By: Prados de la Escosura, Leandro
    Abstract: The rising trend in the capital-output ratio and the productivity slowdown have put capital back in the economist's agenda. This paper contributes to the debate by providing new estimates of net capital stock and services for Spain over the last 170 years. The net capital (wealth) stock-GDP ratio rose over time and doubled in the last half-a-century. Capital services grew fast over the long-run accelerating in the 1920s and from the mid-1950s to 2007. Until 1975 its acceleration was helped by an increase in the 'quality' of capital. Capital deepening proceeded steadily, accelerating during 1955-1985, and slowing down thereafter for expanding sectors attracted less investment-specific technological progress. Although capital consumption rose over time, the rate of depreciation fell from 1970 to 2007 as new capital goods' relative prices declined due to embodied technological change.
    Keywords: Capital Deepening; Capital Stock and Services; Capital-output ratio; Spain
    JEL: D24 E01 E22 N33 N34
    Date: 2020–10
  2. By: Monnet, Eric; Velde, François R.
    Abstract: We review developments in the history of money, banking, and financial intermediation over the last twenty years. We focus on studies of financial development, including the role of regulation and the history of central banking. We also review the literature of banking and financial crises. This area has been largely unaffected by the so-called new econometric methods that seek to prove causality in reduced form settings. We discuss why historical macroeconomics is less amenable to such methods, discuss the underlying concepts of causality, and emphasize that models remain the backbone of our historical narratives.
    Keywords: Banking; Causality; Financial Intermediation; historical macroeconomics; money
    JEL: N01 N10 N20
    Date: 2020–10
  3. By: Palma, Nuno Pedro G.; Papadia, Andrea; Pereira, Thales; Weller, Leonardo
    Abstract: This paper brings new evidence on the legacy of slavery to economic development through the case study of Brazil during the nineteenth century. The conclusions contribute to the debate brought by the New History of Capitalism (NHC) about the role of slavery and industrialization in the United States. We argue that the NHC lacks a comparative perspective. Brazil imported more slaves than any other country in the world and slavery lasted longer and was more widespread than in the U.S. south. Rather than promoting economic growth and development, the evidence shows that slavery held back industrialization in Brazil. We also discuss the role of slavery on agricultural productivity and show that, as in the U.S. the use of violence does not explain increases in the productivity of cotton plantations.
    Keywords: Comparative History; New History of Capitalism; Slavery
    JEL: J47 N56 N66 O54
    Date: 2020–11
  4. By: Riaño, Juan Felipe; Valencia Caicedo, Felipe
    Abstract: As part of its Cold War counterinsurgency operations in Southeast Asia, the U.S. government conducted a "Secret War" in Laos from 1964-1973. This war constituted one of the most intensive bombing campaigns in human history. As a result, Laos is now severely contaminated with UXO (Unexploded Ordnance) and remains one of the poorest countries in the world. In this paper we document the negative long-term impact of conflict on economic development, using highly disaggregated and newly available data on bombing campaigns, satellite imagery and development outcomes. We find a negative, significant and economically meaningful impact of bombings on nighttime lights, expenditures and poverty rates. Almost 50 years after the conflict officially ended, bombed regions are poorer today and are growing at slower rates than unbombed areas. A one standard deviation increase in the total pounds of bombs dropped is associated with a 9.3% fall in GDP per capita. To deal with the potential endogeneity of bombing, we use as instruments the distance to the Vietnamese Ho Chi Minh Trail as well as US military airbases outside Laos. Using census data at the village and individual levels, we show the deleterious impact of UXOs in terms of health, as well as education, structural transformation and rural-urban migration.
    Keywords: Cold War; conflict; Development; growth; health; Human Capital; Laos; migration; structural transformation; UXO
    JEL: D74 N10 N15 O10 O53
    Date: 2020–10
  5. By: Monnet, Eric; Puy, Damien
    Abstract: We assess the importance of individual and institutional experience in shaping macroeconomic policy by studying the persistence of gold standard monetary practices in the Bretton Woods system. Using new historical data from the IMF, we show that, although they were not required to, countries continued to back currency in circulation with gold. The longer an institution had spent in the gold standard before 1944 (and the older the policymakers), the tighter the link between gold and currency during Bretton Woods. Such "old habits" prevented dollars and gold from working as perfect substitutes and ultimately contributed to the demise of the Bretton Woods system. Our findings highlight the persistence of past practices, even in the face of radical institutional change, and its consequences on the international monetary system.
    Keywords: Bretton Woods; central banking; culture & beliefs; Foreign reserves; gold; international monetary system
    JEL: D83 E52 F33 M1 N10
    Date: 2020–09
  6. By: Hanlon, William Walker; Heblich, Stephan
    Abstract: This article reviews recent literature using insights from history to answer central questions in urban economics. This area of research has seen rapid growth in the past decade, thanks to new technologies that have made available increasingly rich data stretching far back in time. The focus is to review innovative methods to exploit historical information and discuss applications of these data that provide new insights into (i) the long run growth of cities or regional economies and (ii) the spatial organization of economic activities within cities. The review also surveys the growing literature outside urban economics that uses the historical urbanization as a proxy for economic growth, discusses differences between how economic historians and urban economists think about the relationship between urbanization and growth, and considers how these views might be reconciled.
    Keywords: economic history; growth; Review; Urban Economics; Urbanization
    JEL: N7 N9 R00
    Date: 2020–09
  7. By: Degorce, Victor; Monnet, Eric
    Abstract: Facing the Great Depression, Keynes blamed the detrimental consequences of precautionary savings on growth (paradox of thrift). Yet, the magnitude, forms and effects of savings accumulation remain unexplored in studies on the international economic crash of the 1930s. Based on new data for 22 countries, we document that the Great Depression was associated with a large international increase in savings institutions' deposits. Banking crises spurred precautionary savings. Panel estimations show a negative conditional correlation between real GDP and deposits in savings institutions when a banking crisis hit. A back-of-the-envelope calculation suggests that the negative effect of precautionary savings on growth was at least as large as the direct effect of the decline in banking activity. The evolution of the saving rate began to reverse as countries left the gold standard.
    Keywords: banking crises; Great Depression; paradox of thrift; precautionary savings; Savings Banks
    JEL: B22 E21 E51 G01 G21 N1 N2
    Date: 2020–09
  8. By: Kenny, Sean; Lennard, Jason; O'Rourke, Kevin Hjortshøj
    Abstract: We construct an annual index of Irish industrial output for 1800-1921, the period during which the entire island was in a political Union with Great Britain. We also construct a new industrial price index. Irish industrial output grew by an average of 1.4 per cent per annum over the period as a whole, and by 1.8 per cent per annum between 1800 and the outbreak of World War I. Industrial growth was more rapid than previously thought before the Famine, and slower afterwards. While Ireland did not experience deindustrialization either before the Famine or afterwards, its industrial growth was disappointing when considered in a comparative perspective.
    Keywords: Famine; historical national accounts; Industrial Production; Ireland
    JEL: E01 N13 N14
    Date: 2020–10
  9. By: Monnet, Eric; Truong-Loï, Blaise
    Abstract: A country's public debt figures vary considerably in any given year, depending on the definitions used. It creates difficulties in constructing and interpreting long-term statistical series. We examine why and discuss the policy issues behind the definition and accounting of public debt in history. Based on a critical analysis of widely used historical sources, as well as case studies, this chapter discusses how to interpret historical public debt statistics. We examine general trends in the historical development of comparability of public debt statistics since the nineteenth century and distinguish three perspectives on debt accounting that have framed the construction of statistics over time: "financial", "circuitist" and "benchmarking". Since public debt accounting and policy depend on the way in which public debt is issued and traded and on the identity of creditors, each of these ideal types roughly corresponds to a historical period of capitalism.
    Keywords: public debt
    Date: 2020–10
  10. By: O'Brien, Patrick; Palma, Nuno Pedro G.
    Abstract: From its foundation as a private corporation in 1694 the Bank of England extended large amounts of credit to support the British private economy and to support an increasingly centralized British state. The Bank helped the British state reach a position of geopolitical and economic hegemony in the international economic order. In this paper we deploy recalibrated financial data to analyse an evolving trajectory of connexions between the British economy, the state, and the Bank of England. We show how these connections contributed to form an effective and efficient fiscal-naval state and promoted the development of a system of financial intermediation for the economy. This symbiotic relationship became stronger after 1793. The evidence that we consider here shows that although the Bank was nominally a private institution and profits were paid to its shareholders, it was playing a public role well before Bagehot's doctrine.
    Keywords: Bank of England; National defence; State-building institutions
    JEL: H41 N13 N23 N43
    Date: 2020–10
  11. By: Bonfatti, Roberto; Brzezinski, Adam; Karaman, Kivanç; Palma, Nuno Pedro G.
    Abstract: Monetary capacity refers to a state's capacity to circulate money that is accepted by the public, whereas fiscal capacity refers to its capacity to tax. In this paper, we show both theoretically and empirically that monetary and fiscal capacity, and by extension, markets and states have a symbiotic relationship. On the theoretical front, we propose a model that establishes that a higher monetary capacity incentivizes the government to invest in the capacity to tax, because monetization eases taxation. Higher fiscal capacity, in turn, increases the public demand for money, because expected inflation is lower. On the empirical front, we find that monetary capacity had a significant and substantial causal impact on fiscal capacity. To identify this impact, we rely on a natural experiment, instrumenting the money stocks of England, France and Spain between 1550 and 1790 by the silver and gold output in the New World. Finally, to put our findings into a long-run perspective, we collect money stock and tax revenue data for European states from antiquity to the modern period, and document the close relationship between the two. These findings indicate that economic and political development cannot be understood independently. They also qualify the theory of the long-run neutrality of money: exogenous changes in money stock can and did have real long-run effects.
    Keywords: fiscal capacity; inflation; monetary capacity; monetary non-neutrality; monetization; Quantity Theory of Money; taxation
    JEL: E50 E60 H21 N10 O11
    Date: 2020–09
  12. By: Asik, Günes; Karakoç, Ulas; Pamuk, Sevket
    Abstract: This study examines the evolution of regional income inequalities and its causes within present day borders of Turkey since 1880. We construct indices for value added per capita for agriculture, industry and services as well as GDP per capita for each of the 58 administrative units for about one dozen benchmark years. For the recent period since 1987, we make use of the official series for the same 58 units. We find that the overall trend from the 1910's to the present has been convergence for the country as a whole. We also find an inverse U shaped pattern for the regional disparities in Turkey since 1880. While all other regions began to move towards country averages, the differences between the East and the rest of the country persisted and even increased. Our comparisons also suggest that regional disparities in Turkey have been and are still larger than those in European countries of similar size such as Italy, France and Spain. Problems of endogeneity make it difficult to establish causality at this stage of the research. Nonetheless, we are able to offer an interpretation consistent with our empirical findings. We argue that not a single cause but a combination of causes led by geography, structural change, industrialization and agglomeration economies, and ethnic conflict and demographic movements are behind this pattern for the country as a whole and for the fact that the East has continued to lag behind.
    Keywords: Ethnic Conflict; Industrialization; Ottoman Empire; Regional Development; Regional inequalities; Turkey
    JEL: N14 N15 N94 N95 O18 O53 O54 R12
    Date: 2020–09
  13. By: Jacks, David S.; O'Rourke, Kevin Hjortshøj; Taylor, Alan M.
    Abstract: We introduce a new dataset on British exports at the bilateral, commodity-level from 1700 to 1899. We then pit two primary determinants of bilateral trade against one another: the trade-diminishing effects of distance versus the trade-enhancing effects of the British Empire. We find that gravity exerted its pull as early as 1700, but the distance effect then attenuated and had almost vanished by 1800. Meanwhile the empire effect peaked sometime in the late 18th century before significantly declining in value. It was only after 1950 that distance would once again exert the same influence that it has today.
    Keywords: distance; Empire; Gravity
    JEL: F1 N7
    Date: 2020–09
  14. By: Alberto Bisin; Giovanni Federico
    Abstract: The relationship between history and economics as academic disciplines is methodologically subtle and sociologically contested. If the Cliometric revolution can be characterized as an acquisition of economics by history, the most recent trends in Historical Economics appear to turn this relationship on its head. In this Introduction we read the chapters of the Handbook as a forceful argument in favor of a merger between the two disciplines rather than the acquisition of one by the other; a merger which combines, notably, the detailed knowledge of historical sources, the capability of distilling complex historical processes into a model, and the statistical/econometric skills for identification and estimation.
    JEL: B40 N00
    Date: 2021–05
  15. By: Tetsuji Okazaki
    Abstract: The impact of the Industrial Revolution on labor has long attracted the interest of economists as well as economic historians, and recent technological changes and changes in the labor market have newly raised interest in this issue. The accepted view is that technological change in the Industrial Revolution was deskilling and lowered the wage of workers. This paper reexamines this view, by investigating the silk weaving industry in early twentieth-century Japan, which experienced the Industrial Revolution. Power looms, a major technological innovation in the Industrial Revolution, substituted for routine tasks of handloom weavers, and thereby made weavers concentrate on nonroutine tasks, such as stopping looms and supplying warp or weft when it ran out and connecting threads when they broke. Using the model of Autor et al. (2003) and newly constructed plant-level panel data, this paper studies the implications of this change in labor for wages. We find that adoption of power looms was associated with significant increases in the wage of both female and male adult workers, playing a central role in weaving, which suggests the need for revision of the view that technological change in the Industrial Revolution was deskilling.
  16. By: Hamdani, Assaf; Kosenko, Konstantin; Yafeh, Yishay
    Abstract: Large business enterprises, from the railroad barons of nineteenth century America to Amazon and Google today, are often perceived as important for economic performance and, at the same time, as potential abusers of their political and economic power. In this study, we compare the experiences of four countries that implemented policies to curb the influence of one type of large corporate entities â?? pyramidal business groups: The US in the 1930s; Japan during the American occupation (1945-1952); Korea following the Asian crisis (late 1990s); and Israel in the last decade (2010-2018). Novel regulatory measures, applied consistently in the US and Japan, where the extreme political circumstances were very favorable to economic reform, led to the demise of pyramidal business groups in these countries. Israel, where the reforms did not follow a severe crisis, also used specifically-designed regulatory tools over a decade-long period, resulting in a significant decline in the number and size of business groups. Korea, after experimenting with variety of regulatory measures, chose to rely primarily on corporate governance-focused reforms to curb the influence of the chaebol, but with limited effects; groups continue to dominate the Korean economy. Our findings point to the importance of specifically-designed regulatory tools, applied consistently over time, against the backdrop of a pro-reform political climate.
    Keywords: Business Groups; concentration of economic power; controlling shareholders; corporate governance; pyramids
    JEL: G38 K22 N20
    Date: 2020–10
  17. By: Sergi Basco; John P. Tang
    Abstract: How does local credit supply affect economic dynamism? Using an exogenous bond shock in historical Japan and new genealogical firm-level data, we empirically examine the effects of credit availability on firm life cycles. Our main result shows that, consistent with our theoretical model, the lifespan of firms decreases with bank capital. Capital-abundant regions have more firm destruction. For manufacturing, we document that these regions have both increased firm creation and destruction. These results suggest that samurai bonds were conducive to the emergence of banking, which eased firms’ financial constraints and led to more economic dynamism.
    Keywords: credit supply, banks, liquidity constraints, firm dynamics, entrepreneurship
    JEL: E51 N15 O16
    Date: 2021–05
  18. By: Bozio, Antoine; Garbinti, Bertrand; Goupille-Lebret, Jonathan; Guillot, Malka; Piketty, Thomas
    Abstract: How much redistribution policies can account for long-run changes in inequality? To answer this question, we quantify the extent of redistribution over time by the percentage reduction from pretax to post-tax inequalities, and decompose the changes in post-tax inequalities into different redistributive policies and changes in pretax inequalities. To estimate these redistributive statistics, we construct homogenous annual series of post-tax national income for France over the 1900-2018 period, and compare them with those recently constructed for the U.S. We obtain three major findings. First, redistribution has increased in both countries over the period, earlier in the U.S., later in France, to reach similar levels today. Second, the substantial long-run decline in post-tax inequality in France over the 1900-2018 period is due mostly to the fall in pretax inequality (accounting for three quarters of the total decline), and to a lesser extent to the direct redistributive role of taxes, transfers and other public spending (about one quarter). Third, the reason why overall inequality is much smaller in France than in the U.S. is entirely due to differences in pretax inequality. These findings suggest that policy discussions on inequality should, in the future, pay more attention to policies affecting pretax inequality and should not focus exclusively on "redistribution".
    Keywords: inequality; Predistribution; redistribution; taxation
    JEL: E01 H2 H5 I3
    Date: 2020–10
  19. By: Afees A. Salisu (University of Ibadan); Rangan Gupta (University of Pretoria); Sayar Karmakar (University of Florida); Sonali Das (University of Pretoria)
    Abstract: In this paper we develop a proxy for global uncertainty based on the volatility of gold market over the annual period of 1311 to 2019, and then use this proxy metric to forecast historical growth rates for eight advance economies namely, France, Germany, Holland, Italy, Japan, Spain, the United Kingdom (UK), and the United States (US). We find that for the within-sample period, uncertainty negatively impacts output growth, but more importantly, over the out-of-sample period, gold market volatility produces statistically significant forecasting gains. Our findings are robust to an alternative measure of uncertainty based on the volatility of the changes in long-term sovereign real-rates over 1315 to 2019. These historical results have important implications for investors and policymakers in the current context in which high frequency gold price data is available.
    Keywords: Historical output growth, advance economies, gold market volatility, forecasting
    JEL: C22 C53 E32 Q02
    Date: 2021–05–17
  20. By: Coffman, D'Maris; Stephenson, Judy Z.; Sussman, Nathan
    Abstract: This paper presents new archival data to analyse how, in the absence of banking or capital market finance, the London Corporation funded the rebuilding of London after the Great Fire of 1666. The City borrowed at rates much lower than previously thought from its citizens and outside investors to replace vital services and to support large improvement works. Borrowing was partly secured on its' reputation and partly secured by future coal tax receipts. Although records show that the funding from these sources was forthcoming and would have covered costs, and most of the rebuilding project was completed in less than a decade, having invested in public goods without generating the expected fiscal flows, the City defaulted in 1683.
    Keywords: default; England; Financial Development; Financial Intermediation; growth; interest rate
    JEL: G23 N2 N23 O16 O43
    Date: 2020–11
  21. By: José Ignacio Jiménez Blanco
    Abstract: The main objective of this paper is to detect and explain the changes in land use that occurred between the mid-18th century and the eve of the Spanish Civil War in Jerez de la Frontera (Spain). A municipality characterized by its enormous extension, the predominance of the Mediterranean trilogy of dry land (cereal, vine and olive) and large property, as well as of its reverse: inequality and strong social tension. For this, a prior analysis of the available sources is carried out, from which an innovative methodological proposal is deduced, consisting of grouping these sources according to their nature, and preferably using those of a cadastral nature for the study of land use.
    Keywords: agriculture, land use, cadastral sources, assessment, Andalusia
    JEL: N53 Q15 Q24 R14 R52
    Date: 2021–05
  22. By: Nogues-Marco, Pilar
    Abstract: This paper revisits the relationship between capitalism and colonialism by examining the case of British India under East India Company rule (1757-1858). The Marxist-nationalist historiography claims that colonialism generated a steady drain of wealth and that this drain was responsible for Indian famines, poverty, inequality, and economic retardation. I use the East India Company budgets to measure the extent of the wealth that was drained through three direct channels: oppressive land taxes, unproductive expenditures on the imperial army and civil administration, and the unrequited export of commodities from India to Britain. I conclude that available figures lend empirical support to the Marxist interpretation. There was a drain of wealth, and its effect on the underdevelopment of former European colonies deserves further research.
    Keywords: Colonialism; drain of wealth; East India Company; India; Marxism
    JEL: B14 F54 N45
    Date: 2020–11
  23. By: Alessandro Melcarne (Université Paris Nanterre); Juan S. Mora-Sanguinetti (Banco de España); Rok Spruk (University of Ljubljana)
    Abstract: We examine the contribution of economic and institutional transitions as two potential sources of subnational economic growth in Spain. To this end, we exploit the economic reforms of the 1959 Stabilization Plan (as an example of technocratic, economy-oriented reform) and the democratic transition in 1979 in Spain as the sources of variation for a sample of 50 Spanish provinces in the period 1950-2016. Our approach is to examine the impacts by estimating the missing counterfactual scenarios using the synthetic control method. Our results unveil a positive effect for both economic and institutional transitions on subnational economic growth. A direct comparison of both transitions suggests that the effect of economic liberalization is four-fold higher than the effect of political liberalization. The average growth effect of the economic liberalization is around 40% higher relative to the counterfactual scenario and it appears to be permanent. The estimated effects are robust to the variety of placebo tests and additional robustness checks. This article also deepens the analysis of the effects of the 1959 plan and finds that the policies that generated the most positive impact were those of an “internal” nature, compared to the external ones, dependent on access to the IMF (also positive, but of lesser impact).
    Keywords: economic growth, political economy, Spain
    JEL: C23 D73 N24 O43
    Date: 2021–05
  24. By: Arteaga, Fernando; Desierto, Desiree; Koyama, Mark
    Abstract: The trade route between Manila and Mexico was a monopoly of the Spanish Crown for more than 250 years. The Manila Galleons were ``the richest ships in all the oceans'', but much of the wealth sank at sea and remain undiscovered. We introduce a newly constructed dataset of all of the ships that travelled this route. We show formally how monopoly rents that allowed widespread bribe-taking would have led to overloading and late ship departure, thereby increasing the probability of shipwreck. Empirically, we demonstrate not only that these late and overloaded ships were more likely to experience shipwrecks or to return to port, but that such effect is stronger for galleons carrying more valuable, higher-rent, cargo. This sheds new light on the costs of rent-seeking in European colonial empires.
    Keywords: Bribery; Corruption; rent-seeking; Shipwrecks
    JEL: K00 N00 N13
    Date: 2020–09
  25. By: Clark, Gregory; Cummins, Neil
    Abstract: Schooling and social outcomes correlate strongly. But are these connections causal? Previous papers for England using compulsory schooling to identify causal effects have produced conflicting results. Some found significant effects of schooling on adult longevity and on earnings, others found no effects. Here we measure the consequence of extending compulsory schooling in England to ages 14, 15 and 16 in the years 1919-22, 1947 and 1972. From administrative data these increases in compulsory schooling added 0.43, 0.60 and 0.43 years of education to the affected cohorts. We estimate the effects of these increases in schooling for each cohort on measures of adult longevity, on dwelling values in 1999 (an index of lifetime incomes), and on the the social characteristics of the places where the affected cohorts died. Since we have access to all the vital registration records, and a nearly complete sample of the 1999 electoral register, we find with high precision that all the schooling extensions failed to increase adult longevity (as had been found previously for the 1947 and 1972 extensions), dwelling values, or the social status of the communities people die in. Compulsory schooling ages 14-16 had no effect, at the cohort level, on social outcomes in England.
    Keywords: Education; Human Capital
    Date: 2020–09
  26. By: Amory Gethin (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, WIL - World Inequality Lab)
    Abstract: This paper exploits political attitudes surveys conducted between 1953 and 2017 to document long-run changes in the structure of political cleavages in Japan. I analyze the transformation of Japan's one-party dominant system from the hegemony of the Liberal Democratic Party (LDP) to the disintegration of conservative forces into multiple splinter parties and the rise of a new centrist coalition. Throughout Japan's contemporary history, persisting divides based upon foreign policy and remilitarization have remained a key axis of democratic conflicts. These divides have coincided with lower-educated voters showing greater support for the LDP and other conservative parties, which have generally advocated expansion of military spending and overseas interventions. The strength of the LDP in postwar decades also relied on a unique coalition of poorer rural areas and business elites, while socialist and communist parties found greater support among urban unionized wage earners. Urbanization, declining rural-urban inequalities, the expansion of education, and the subsequent fragmentation of the party system have put an end to this equilibrium and have been associated with a remarkable "depolarization" of Japan's political space. I also analyze the long-run transformation of generational divides in relation to changing attitudes to war memory and political parties.
    Date: 2021–03
  27. By: Prados de la Escosura, Leandro; Rosés, Joan R.
    Abstract: The current productivity slowdown has stimulated research on the causes of growth. We investigate here the proximate determinants of long-term growth in Spain. Over the last 170 years output per hour worked raised nearly 24-fold dominating GDP growth, while hours worked per person shrank by one-fourth and population trebled. Half of labour productivity growth resulted from capital deepening, one-third from total factor productivity, and labour quality contributed the rest. In phases of acceleration (the 1920s and 1954-85), TFP was labour productivity's main driver complemented by capital deepening. Since Spain's accession to the European Union (1985), labour productivity has sharply decelerated as capital deepening slowed down and TFP stagnated. Up to the Global Financial Crisis (2008) GDP growth mainly resulted from an increase in hours worked per person and, to a less extent, from sluggish labour productivity coming mostly from weak capital deepening. Institutional constraints help explain the labour productivity slowdown.
    Keywords: Capital Deepening; growth; labour productivity; Labour quality; Spain; total factor productivity
    JEL: D24 E01 N13 N14 O47
    Date: 2020–10
  28. By: Thomas Mayer; Gunther Schnabl
    Abstract: Rising public debt everywhere has raised the question of how to reduce debt again in the future. High public debt also seems to be an impediment for the exit of central banks from ultra-low interest rates and quantitative easing. Historical precedents and proposals have included austerity, haircuts and the generation of inflation. Each way has advantages and disadvantages, including uncertainty about effects and side-effects. We approach the issue from an historical perspective, based on case studies of prominent approaches to debt reduction. We analyze debt reduction through economic austerity in Italy, hyperinflation in Germany after World War I, inflation in Argentina since the 1980s, currency reform in Germany after WW II, and financial repression in the United States and the United Kingdom after WW II. Finally, we discuss Ronald McKinnon’s order of economic and financial liberalization as well as the Chicago Plan combined with the introduction of central bank digital currencies as an option for the future.
    Keywords: low-interest trap, over-indebtness, public debt, hyperinflation, monetary reform, economic reform, inflation, public debt relief
    JEL: H12 H63 P26
    Date: 2021
  29. By: Mario Pianta (Scuola Normale Superiore, Florence); Andrea Coveri (Department of Economics, Society & Politics, Università di Urbino Carlo Bo); Jelena Reljic (Sapienza Università di Roma)
    Abstract: The Sectoral Innovation Database (SID) has been developed at the University of Urbino over the last 20 years and combines several major sources of industry-level data, shedding light on the dynamics of structural change, the nature and impact of innovation, the internationalisation of production, the evolution of the quantity and quality of employment, income distribution patterns and the role of digitalization. The database covers six major European countries – France, Germany, Italy, the Netherlands, Spain and the United Kingdom (representing 75% of EU28’s GDP) – from 1994 to 2016, considering six time periods corresponding to upswings and downswings of business cycles. The first version of the SID provides data for 21 manufacturing and 17 service sectors for two-digit NACE Rev. 1 classes. As statistical surveys have moved to the twodigit NACE Rev. 2 classification, a second version of the Sectoral Innovation Database was produced, providing data for 18 manufacturing and 23 service sectors for two-digit NACE Rev. 2 classes. Major sources of data include the Community Innovation Surveys provided by Eurostat, the OECD’s STAN database, the WIOD database, the Eurostat’s EU Labour Force Surveys, and the EU KLEMS data on digitalization. The integrated information provided by the Sectoral Innovation Database offers a comprehensive view of industries’ dynamics in Europe and allows for an in-depth investigation of key research questions related to technological change, economic performance, international production, income distribution and employment.
    Keywords: Innovation, Industries, Databases, Demand, Offshoring, Labour market
    JEL: F15 J31 J51 L16 O33
    Date: 2021
  30. By: Oscar Barrera (WIL - World Inequality Lab , PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Ana Leiva (UiO - University of Oslo); Clara Martínez-Toledano (WIL - World Inequality Lab , Imperial College London); Álvaro Zúñiga-Cordero (WIL - World Inequality Lab , PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: This paper combines electoral surveys to analyze the transformation of the structure of political cleavages in Argentina, Chile, Costa Rica, Colombia, Mexico and Peru over the last decades. We document that Latin American countries are characterized by personalist leaderships (e.g., Fujimori in Peru, Uribe in Colombia) and important historical cleavages (e.g., anti vs. pro-PLN in Costa Rica) that blur class-based voting patterns and have led in some cases to the emergence of competing pro-poor and ethnic-based competing coalitions (e.g., PRN-PLN in Costa Rica, Fujimori-Humala in Peru) over the last decades. The party systems of Costa Rica, Colombia and Peru have thus generated volatile political socioeconomic cleavages, while in the more institutionalized party systems of Argentina, Brazil, Chile and Mexico they have been less volatile.
    Date: 2021–03
  31. By: Nuno Valério
    Abstract: This working paper presents the evolution of the administrative divisions of the Portuguese Colonial Empire from the late 19th century.
    Keywords: Portugal — administrative divisions — Colonial Empire JEL classification: N4 governo, direito e regulação — government, law and regulation
    Date: 2021
  32. By: Giuliano, Paola; Matranga, Andrea
    Abstract: The use of historical data has become a standard tool in economics, serving three main purposes: to examine the influence of the past on current economic outcomes; to use unique natural experiments to test modern economic theories; and to use modern economic theories to refine our understanding of important historical events. In this chapter, we provide a comprehensive analysis of the types of historical data most commonly used in economic research and discuss a variety of issues that they raise, such as the constant change in national and administrative borders; the reshuffling of ethnic groups due to migration, colonialism, natural disasters, and many other forces. We also point out which methodological advances allow economists to overcome or minimize these problems.
    Keywords: censuses; ethnographic data; geographical data; Historical data
    JEL: N0
    Date: 2020–10
  33. By: Ross Levine; Chen Lin; Chicheng Ma; Yuchen Xu
    Abstract: We assemble new data on the British and French concessions in Shanghai between 1845 and 1936 to assess the legal origins view of financial development. During this period, two regime changes altered the degree to which the British common and French civil law traditions held jurisdiction over the respective concessions: the 1869 formation of the Mixed Courts strengthened Western legal jurisdiction, while the 1926 rendition agreement returned those courts to Chinese control. By examining the changing application of different legal traditions to adjacent neighborhoods within the same city, we address identification challenges associated with cross-country studies. Consistent with the legal origins view, the financial development advantage in the British concession widened after the formation of the Courts and shrank after their rendition.
    JEL: G21 K4 N25 O16
    Date: 2021–05
  34. By: Geraldine David; Christian Huemer; Kim Oosterlinck
    Abstract: Proper inventory management is crucial for art galleries. Yet, despite its importance, inventory management has been overlooked in the literature. We distinguish four main strategies used by art dealers to manage their inventory and use this classification to set the inventory strategy of Goupil, Boussod & Valadon, a major art gallery active in France at the end of the 19th century, into perspective. Goupil’s books cover the sale of more than 25,000 artworks between 1860 and 1914. Rapidity to sell was a key element in Goupil’s strategy. Out of the sold artworks, almost 75% were sold within a year. Goupil required a slightly higher mark-up for artists from which he held a large inventory. Mark-up for artists in residence and the likelihood to sell their artworks at a loss were lower, signaling a preoccupation for their long-term market.
    Keywords: *N14; art gallery; Art market; Boussod & Valadon; Goupil; inventory strategy; N44; Z11
    Date: 2020–05–01
  35. By: Leone Walters; Carolyn Chisadza; Matthew Clance
    Abstract: This paper argues that contrary to previous ï¬ ndings, present-day education outcomes in Africa cannot be independently attributed to colonial or pre-colonial ethnic institutions. We propose that it is instead the complementarity or contention between colonial and precolonial institutions that result in education outcomes we observe today. Using geolocated DHS literacy outcomes for Cameroon, Cˆote d’Ivoire, Ghana, and Nigeria, our ï¬ ndings suggest that the positive effect of British rule on contemporary literacy is diminished in centralised ethnic regions. This paper contributes to debates on colonial and pre-colonial ethnic influences on African development, moving beyond country-level analysis.
    Keywords: Ethnic Institutions, Education, Africa
    JEL: I25 N17 Z13
    Date: 2021–01
  36. By: Johan Fourie; Jonathan Jayes
    Abstract: The 1918 influenza – the Spanish flu – killed an estimated 6% of South Africans. Not all were equally affected. Mortality rates were particularly high in districts with a large share of black and coloured residents. To investigate why this happened, we transcribed 39,482 death certiï¬ cates from the Cape Province. Using a novel indicator – whether a doctor’s name appears on the death certiï¬ cate – we argue that the unequal health outcomes were a consequence of unequal access to healthcare. Our results show that the racial inequalities in health outcomes that existed before October 1918 were exacerbated during the pandemic. Access to healthcare, as we expected, worsened for black and coloured residents of the Cape Province. Unexpectedly, however, we found that other inequalities were unchanged, or even reversed, notably age, occupation and location. Living in the city, for instance, became a health hazard rather than a beneï¬ t during the pandemic. These surprising results contradict the general assumption that all forms of inequality are exacerbated during a crisis. Our analyses suggest explanations for the widening racial gap in healthcare access during the 1918 pandemic, from both the demand and the supply side. We could ï¬ nd, however, no evidence of racial prejudice. Our ï¬ ndings conï¬ rm the importance of taking race into account in studying the effects of the 2020 Covid-19 pandemic or other world crises.
    Keywords: Spanish flu, health care, inequality, Healthcare, influenza, pandemic
    JEL: I14 N37
    Date: 2021–02
  37. By: Kleven, Henrik; Landais, Camille; Posch, Johanna; Steinhauer, Andreas; Zweimüller, Josef
    Abstract: Do family policies reduce gender inequality in the labor market? We contribute to this debate by investigating the joint impact of parental leave and child care, using administrative data covering the labor market and birth histories of Austrian workers over more than half a century. We start by quasi-experimentally identifying the causal effects of all family policy reforms since the 1950s on the full dynamics of male and female earnings. We then map these causal estimates into a decomposition framework a la Kleven, Landais and Søgaard (2019) to compute counterfactual gender gaps. Our results show that the enormous expansions of parental leave and child care subsidies have had virtually no impact on gender convergence.
    Date: 2020–11
  38. By: Howard Bodenhorn
    Abstract: Although the mobilization of savings is an important function of banks and other financial institutions, there is remarkably little evidence that bears on how and how well the financial sector mobilized household savings in the nineteenth and early twentieth century. This paper documents financial wealth accumulated by working-class Americans to see whether their behaviors followed the predictions of the life-cycle hypothesis. Hand-coded data from an Upstate New York savings bank matched to federal and state census data provides longitudinal data on individual savers between 20 and 90 years old. Fixed effects estimates on an unbalanced panel generates results that are consistent with the life-cycle hypothesis. Wealth-at-age profiles exhibit the classic hump shape, with peak wealth occurring in savers’ mid-sixties. At peak wealth, mean and median savers accumulated the equivalent of about one year’s income for a working-class man. Wealth declines with the number of children present in the household. Moreover, the native- and the foreign-born, and individuals born into different cohorts all accumulated wealth in a fashion consistent with the hypothesis’ predictions.
    JEL: N21
    Date: 2021–05
  39. By: Ashraf, Quamrul H.; Galor, Oded; Klemp, Marc
    Abstract: This essay explores the deepest roots of economic development. It underscores the significance of evolutionary processes in shaping fundamental individual and cultural traits, such as time preference, risk and loss aversion, and predisposition towards child quality, that have contributed to technological progress, human-capital formation, and economic development. Moreover, it highlights the persistent mark of the exodus of Homo sapiens from Africa tens of thousands of years ago on the degree of interpersonal population diversity across the globe and examines the impact of this variation in diversity for comparative economic, cultural, and institutional development across countries, regions, and ethnic groups.
    Keywords: Comparative development; entrepreneurial spirit; human evolution; interpersonal diversity; loss aversion; natural selection; preference for child quality; the; Time Preference
    JEL: N10 N30 O11 Z10
    Date: 2020–10
  40. By: Eichengreen, Barry; Naef, Alain
    Abstract: Using newly assembled data on foreign exchange market intervention, we construct a daily index of exchange market pressure during the 1992-3 crisis in the European Monetary System. Using this index, we pinpoint when and where the crisis was most severe. Our analysis focuses on a neglected factor in the crisis: the role of the weak dollar in intra-EMS tensions. We provide new evidence of the contribution of a falling dollar-Deutschmark exchange rate to pressure on EMS currencies.
    Date: 2020–10
  41. By: Tetsuji Okazaki; Toshihiro Okubo; Eric Strobl
    Abstract: Natural disasters can seriously damage firms as well as the banks that they use independent of their size. However, it is small- and medium-sized firms in particular that will be affected by this because they tend to be financially constrained and thus greatly depend on these potentially damaged local banks for financing. In this paper, we focus on the Great Kanto Earthquake of 1923, which resulted in serious damage to small- and medium-sized firms and banks in Yokohama City, to investigate how effective the provision of loans by local banks, as well as the Earthquake Bills policy implemented by the Bank of Japan, was in helping firms recover. Using linked firm- and bank-level datasets, we find that larger local banks allowed damaged firms to survive and grow. The Earthquake Bills policy mitigated the negative impact of bank damage on firms and prevented credit crunch, although this deteriorated the balance sheet of local banks and resulted in financial instability and a banking crisis as a side effect.
  42. By: Funke, Manuel; Schularick, Moritz; Trebesch, Christoph
    Abstract: Populism at the country level is at an all-time high, with more than 25% of nations currently governed by populists. How do economies perform under populist leaders? We build a new long-run cross-country database to study the macroeconomic history of populism. We identify 50 populist presidents and prime ministers from 1900 to 2018 and show that the economic cost of populism is high. After 15 years, GDP per capita is 10% lower compared to a plausible non-populist counterfactual. Rising economic nationalism and protectionism, unsustainable macroeconomic policies, and institutional decay under populist rule do lasting damage to the economy.
    Keywords: institutions; populism; protectionism
    JEL: E60 N10 P16
    Date: 2020–10
  43. By: Kym Anderson (Wine Economics Research Centre, School of Economics, University of Adelaide, Australia, and Arndt-Corden Dept of Economics, Australian National University, Canberra ACT 2601, Australia); Vicente Pinilla (Universidad de Zaragoza, Spain)
    Abstract: The latest wave of globalization has seen the share of global wine production crossing national borders treble, to more than 40. Prior to the 1980s, wine was confined mostly to southern Europe with very little trade outside that region. Why was wine globalization so belated? Why did it take so long for wine exports to take off even in the New World regions of European settlement? This article addresses these questions and also seeks to explain the bilateral patterns of wine trade. It concludes by speculating briefly on how wine markets might develop in the foreseeable future.
    Keywords: Growth in wine trade, Late emergence of New World wine exporters, Changes in beverage tastes, Premiumization of wine consumption, Beverage market projections
    JEL: F14 F17 L66 Q11 Q17
    Date: 2021–01
  44. By: Vincent Bignon (DGSEI DPEM - Banque de France, Direction générale des Statistiques, des Études et de l'International , CEPR - Center for Economic Policy Research - CEPR); Cecilia García-Peñalosa (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR, CESifo - Center for Economic Studies and Ifo for Economic Research - CESifo Group Munich)
    Abstract: This paper examines a novel negative impact of trade tariffs and the costs they induce by documenting how protectionism reversed the long-term improvements in education and the fertility transition that were well under way in late 19th-century France. The Méline tariff, a tariff on cereals introduced in 1892, was a major protectionist shock that shifted relative prices in favor of agriculture and away from industry. In a context in which the latter was more intensive in skills than agriculture, the tariff reduced the relative return to education, which in turn affected parents' decisions about the quantity and quality of children. We use regional differences in the importance of cereal production in the local economy to estimate the impact of the tariff. Our findings indicate that the tariff reduced enrolment in primary education and increased birth rates and fertility. The magnitude of these effects was substantial, with the tariff offsetting the increasing trend in enrolment rates and the decreasing one in birth rates by a decade.
    Keywords: education,fertility,protectionism,France
    Date: 2021–04–22
  45. By: Combes, Pierre-Philippe; Gobillon, Laurent; Zylberberg, Yanos
    Abstract: A recent literature has used a historical perspective to better understand fundamental questions of urban economics. However, a wide range of historical documents of exceptional quality remain underutilised: their use has been hampered by their original format or by the massive amount of information to be recovered. In this paper, we describe how and when the flexibility and predictive power of machine learning can help researchers exploit the potential of these historical documents. We first discuss how important questions of urban economics rely on the analysis of historical data sources and the challenges associated with transcription and harmonisation of such data. We then explain how machine learning approaches may address some of these challenges and we discuss possible applications.
    Keywords: History; Machine Learning; Urban Economics
    JEL: C45 C81 N90 R11 R12 R14
    Date: 2020–09
  46. By: Ariell Zimran
    Abstract: Immigrant distribution--the geographic dispersion of immigrants in the destination country--was a major issue in the United States in the late Age of Mass Migration. Policy debates were influenced by the widely held view that the new immigrants were generally less geographically mobile within the United States and specifically less likely to leave urban areas than were natives and earlier immigrants. I build new linked census datasets to investigate these claims by studying the rates of, selection into, and sorting of internal migration by US immigrants. I find that contemporary claims regarding immigrant distribution were either false, oversimplified, or the product of broader national trends that applied also to natives. Nonetheless, geographic assimilation--convergence in immigrants' and natives' county-of-residence distributions over time in the United States--was almost nonexistent.
    JEL: F22 J11 J15 J61 N31 N32 R23
    Date: 2021–05
  47. By: Panza, Laura
    Abstract: This paper investigates the impact of the disruption of the Ottoman Empire on the integration of regional and colonial commodity markets in the Near East during 1923-1939. Exploiting a novel dataset on quarterly wholesale prices in interwar Syria, Egypt, Turkey, France and the UK, it tests for cointegration and quantifies the magnitude and speed of price convergence across markets using VECMs. The results indicate that while regional market disintegrated, colonial market linkages strengthened, despite the anti-global environment of the interwar era.
    Keywords: cointegration; Colonial linkages; Interwar era; market integration; Near East
    JEL: N75 N95
    Date: 2020–11
  48. By: Acemoglu, Daron; Egorov, Georgy; Sonin, Konstantin
    Abstract: In this essay, we provide a simple conceptual framework to elucidate the forces that lead to institutional persistence and change. Our framework is based on a dynamic game between different groups, who care both about current policies and institutions and future policies, which are themselves determined by current institutional choices, and clarifies the forces that lead to the most extreme form of institutional persistence ("institutional stasis") and the potential drivers of institutional change. We further study the strategic stability of institutions, which arises when institutions persist because of fear of subsequent, less beneficial changes that would follow initial reforms. More importantly, we emphasize that, despite the popularity of ideas based on institutional stasis in the economics and political science literatures, most institutions are in a constant state of flux, but their trajectory may still be shaped by past institutional choices, thus exhibiting "path-dependent change", so that initial conditions determine both the subsequent trajectories of institutions and how they respond to shocks. We conclude the essay by discussing how institutions can be designed to bolster stability, the relationship between social mobility and institutions, and the interplay between culture and institutions.
    Keywords: conflict; Constitutions; democracy; Institutional Change; institutions; Persistence; stability
    JEL: C73 D72 D74 N10 N40 P16
    Date: 2020–09
  49. By: , Rita; Bukowski,; Clark, Gregory; Gáspár, Attila
    Abstract: This paper measures social mobility rates in Hungary 1949-2017, for upper class and underclass families, using surnames to measure social status. In these years there were two very different social regimes. The first was the Hungarian People's Republic, 1949-1989, a Communist regime with an avowed aim of favouring the working class. Then the modern liberal democracy, 1989-2020, a free-market economy. We find four surprising things. First, social mobility rates were low for both upper- and lower-class families 1949-2017, with an underlying intergenerational status correlation of 0.6-0.8. Second, social mobility rates under communism were the same as in the subsequent capitalist regime. Third, the Romani minority throughout both periods showed even lower social mobility rates. And fourth, the descendants of the noble class in Hungary in the eighteenth century were still significantly privileged 1949 and later.
    Keywords: inequality; Social mobility; social regimes
    Date: 2020–09
  50. By: Baruah, Neeraj; Henderson, Vernon; Peng, Cong
    Abstract: Institutions persisting from colonial rule affect the spatial structure and conditions under which 100's of millions of people live in Sub-Saharan African cities. In a sample of 318 cities, Francophone cities have more compact development than Anglophone, overall, in older colonial sections, and at clear extensive margins long after the colonial era. Compactness covers intensity of land use, gridiron road structures, and leapfrogging of new developments. Why the difference? Under British indirect and dual mandate rule, colonial and native sections developed without coordination. In contrast, integrated city planning and land allocation were featured in French direct rule. These differences in planning traditions persist.
    Keywords: Africa; Colonialism; Persistence; Sprawl; urban planning
    Date: 2020–09
  51. By: Nuno Valério
    Abstract: This working paper presents and analyses the charters and organic laws that regulated the Portuguese Colonial Empire between the definitive establishment of the constitutional monarchy in Portugal and the extinction of that Empire.
    Keywords: Portugal — Charters and organic laws — Colonial Empire JEL classification: N4 governo, direito e regulação — government, law and regulation
    Date: 2021
  52. By: Yuki, Kazuhiro
    Abstract: Mechanization (or automation) has proceeded continuously since the Industrial Revolution and seems to have accelerated recently due to the rapid advancement of information technology. This paper theoretically examines long-run trends of mechanization, shifts of tasks humans perform, and earnings levels and inequality. Specifically, the paper develops a Ricardian model of task assignment and analyzes how improvements of productivities of machines and an increase in the relative supply of skilled workers affect task assignment (which factor performs which task), earnings levels and inequality, and aggregate output. The model succeeds in capturing the great majority of the long-run trends. The paper also explores possible future trends of the variables when information technology continues to grow rapidly.
    Keywords: mechanization, automation, task assignment, earnings inequality, information technology
    JEL: J24 J31 N30 O14 O33
    Date: 2021–05
  53. By: Adena, Maja; Enikolopov, Ruben; Petrova, Maria; Voth, Hans-Joachim
    Abstract: Can bombs and broadcasts instigate resistance against a foreign regime? In this paper, we examine the canonical case of bombing designed to undermine enemy morale-the Allied bomber offensive against Germany during World War II. Our evidence shows that air power and the airwaves indeed undermined regime support. We collect data on treason trials and combine it with information on the bombing of over 900 German towns and cities. Using plausibly exogenous variation in weather, we show that places that suffered more bombardment saw noticeably more opposition. Bombing also reduced the combat motivation of soldiers: fighter pilots from bombed-out cities performed markedly less well after raids. We also provide evidence that exposure to BBC radio, especially together with bombing, increased the number of resistance cases. We corroborate these findings with the evidence on people's opinions and behavior using unique survey data collected in 1945.
    Keywords: bombing; Nazi regime; radio propaganda; resistance
    Date: 2020–09
  54. By: Garcia-Uribe, Sandra; Mueller, Hannes Felix; Sanz, Carlos
    Abstract: This article exploits two newspaper archives to track economic policy uncertainty in Spain in 1905-1945, a period of extreme political polarization. We find that the outbreak of the civil war in 1936 was anticipated by a striking upward level shift of uncertainty in both newspapers. We study the dynamics behind this shift and provide evidence of a strong empirical link between increasing uncertainty and the rise of divisive political issues at the time: socio-economic conflict, regional separatism, power of the military, and role of the church. This holds even when we exploit variation in content at the newspaper level.
    Date: 2020–11
  55. By: Nuno Valério
    Abstract: This working paper presents and analyses the rules concerning the Colonial Empire in the Portuguese constitutions
    Keywords: Portugal — Constitutions — Colonial Empires JEL classification: N4 governo, direito e regulação — government, law and regulation
    Date: 2021
  56. By: Nuno Valério
    Abstract: This working paper presents lists of the political officials that were responsible for the Portuguese Colonial Empire: kings, regents and Presidents of Republic of Portugal, members of the government and governors of possessions, provinces, colonies and states
    Keywords: Portugal — political officials — Colonial Empire JEL classification: N4 governo, direito e regulação — government, law and regulation
    Date: 2021
  57. By: Rohner, Dominic; Saia, Alessandro
    Abstract: Does democracy hold its promise to curb domestic political violence? While the matter has been heatedly debated for decades, not much reliable causal evidence exists so far. To study this question we focus on UK's Victorian Age of Reform, and in particular the Representation of the People Act of 1867 -- which is widely regarded as a critical juncture in the history of democratization. We have constructed a novel dataset on conflict events and economic performance around the 1868 Elections (the first elections where newly enfranchised citizens could vote) and exploit arguably exogenous variation in enfranchisement intensity across UK cities. We find a strong and robust peace-promoting effect of franchise extension and identify as major channel the beneficial impact of representation on local economic growth.
    Keywords: conflict; democracy; Development; Elections; Enfranchisement; Franchise Extension; growth; riots; Social Violence; voting
    JEL: C33 D72 D74 N43 O17
    Date: 2020–09
  58. By: Stephen J. Redding
    Abstract: The second half of the twentieth century saw large-scale suburbanization in the United States, with the median share of residents who work in the same county where they live falling from 87 to 71 percent between 1970 and 2000. We introduce a new methodology for discriminating between the three leading explanations for this suburbanization (workplace attractiveness, residence attractiveness and bilateral commuting frictions). This methodology holds in the class of spatial models that are characterized by a structural gravity equation for commuting. We show that the increased openness of counties to commuting is mainly explained by reductions in bilateral commuting frictions, consistent with the expansion of the interstate highway network and the falling real cost of car ownership. We find that changes in workplace attractiveness and residence attractiveness are more important in explaining the observed shift in employment by workplace and employment by residence towards lower densities over time.
    Keywords: economic geography, suburbanization, transportation
    JEL: R12 R30 R40
    Date: 2021–05
  59. By: Martín Tobal (Banco de México); Renato Yslas (Banco de México)
    Abstract: This paper runs a survey across seventeen countries from Latin American and the Caribbean about the use, implementation characteristics and policy motivations of limits and requirements on FX positions, as well as the exchange rate regimes of these economies over 1992-2012. Among other novel stylized facts, we show that when referring to policy motivations, national authorities linked their regulatory measures mostly to currency mismatches and fluctuations of the exchange rate, and this pattern was clearer for the more flexible exchange rate regimes adopted in the aftermath of the currency crisis of the 1990s and early 2000s. Thus, we use the survey and the synthetic control method to show that changes in limits and requirements on FX positions affected fluctuations of the exchange rate.
    Keywords: Prudential Regulation; Exchange Rate Regimes; Foreign Currency Positions
    JEL: E58 F31
    Date: 2021–05
  60. By: Denning, Jeffrey T. (Brigham Young University); Eide, Eric R. (Brigham Young University); Mumford, Kevin J. (Purdue University); Sabey, Daniel (Brigham Young University)
    Abstract: After increasing in the 1970s and 1980s, time to bachelor's degree has declined since the 1990s. We document this fact using data from three nationally representative surveys. We show that this pattern is occurring across school types and for all student types. Using administrative student records from 12 large universities, we confirm the finding and show that it is robust to alternative sample definitions. We discuss what might explain the decline in time to bachelor's degree by considering trends in student preparation, state funding, student enrollment, study time, and student employment during college.
    Keywords: time to degree, college graduation
    JEL: I20 I21
    Date: 2021–04
  61. By: Rice, Patricia; Venables, Anthony
    Abstract: The economic shocks experienced by the UK economy in the 1970s brought major changes in the spatial distribution of employment rates in the UK. This paper traces out the long run implications of these changes, suggesting that they were highly persistent and to a large extent shape current UK regional disparities. Most of the Local Authority Districts that experienced large negative shocks in the 1970s have high deprivation rates in 2015, and they constitute two-thirds of all districts with the highest deprivation rates. We conclude that neither economic adjustment processes nor policy measures have acted to reverse the effect of negative shocks incurred nearly half a century ago.
    Keywords: de-industrialisation; employment; Regional Inequality
    JEL: O47 O50 R11 R12
    Date: 2020–09
  62. By: Roy Havemann; Edward Kerby
    Abstract: We estimate that since 1701, South Africa has experienced 163 years of per capita growth of more than 1 per cent a year. These expansions include 55 years of sustained per capita GDP growth of more than 3 per cent a year – windfall periods that were related to the discovery of diamonds and gold, global commodity price booms and inclusion into the global economy following the end of Apartheid. These windfalls and expansions are associated with a combination of favourable global conditions and improvements in domestic policy. Empirically, the policies that matter appear to be increased levels of education, infrastructure investment, the extension of civil rights, property rights and ï¬ nancial liberalisation. Windfalls are, however, also associated with signiï¬ cant increases in inequality. Since Union in 1910, average per capita GDP growth has been about 1.1 per cent; and since 1994 (despite the recent contraction) it has been about 1.7 per cent. Over the same period, the population growth rate has slowed to about 1.5 per cent a year, and with falling fertility, this rate is expected to fall slowly to closer to 1.2 per cent over the next decade. This means that maintaining the post-apartheid GDP growth rate would require real GDP growth of about 3.4 per cent. Based on the historical experience, and with the right policy mix, this can be achieved.
    Keywords: economic growth, Post-apartheid, data
    Date: 2021–02
  63. By: Eric Dehay (RIME-Lab - Recherche Interdisciplinaire en Management et Économie Lab - ULR 7396 - UA - Université d'Artois - Université de Lille); Nathalie Levy
    Abstract: Central banks underwent a "transparency revolution" during the 90s. Rather than considering it have been guided by a cost-benefit analysis, we assume that it is also a response imposed by a changing environment. The purpose of this text is to highlight the events or major trends that have brought about this revolution. A systematic review of the academic literature makes it possible to identify the concomitant themes that led to the questioning of the secret practices around central banks. It appears that the adoption of inflation targeting in the conduct of monetary policy and the creation of the euro, followed by the financial crisis and a growing general demand for greater transparency in the economic and political spheres, were the decisive events of the revolution.
    Keywords: Transparency,Central banks
    Date: 2020–01–01
  64. By: Nick Lombard (University of Toronto)
    Abstract: Today, Toronto’s Lester B. Pearson International Airport is the busiest in the country and anchors the second-largest employment zone in Canada. However, the growth of the airport and the surrounding region were not always in synch. Rather, from its approval in 1937 the airport and the surrounding region found themselves frequently at odds over land use planning and airport expansions. Overlapping federal, provincial, and municipal control over various aspects of airport and land use planning made the airport project seem rife with conflict. However, this paper finds that this jurisdictional and territorial overlap led to innovative governance around the airport. Despite the absence of legislated relationships between the various bodies responsible for governing airport expansion and surrounding land use, local officials in present-day Mississauga, Toronto, and Brampton, along with their on-the-ground counterparts from Ottawa and the province of Ontario, would construct a durable framework for informal cooperation that would enable the complementary planning of airport and surrounding land uses. This paper examines three key moments of airport expansion and adaptation with local planners: the 1953 Malton Airport Zoning ordinance, the 1958 jetport plan, and the 1968 expansion plan. It argues that at each of these points, governmental and non-governmental actors worked to construct a flexible framework through which information sharing and complementary planning could be carried out without formal or legislative approval. The result, this paper argues, was a robust infrastructure and land use planning coalition that continues today.
    Keywords: airports, land use planning, infrastructure, intergovernmental relations
    JEL: H10 H77 R58
    Date: 2021–05
  65. By: Antonio Peyrache (School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, Australia); Maria C. A. Silva (CEGE - Católica Porto Business School,)
    Abstract: A government faces the problem of allocating efficiently resources (factors of production or expenditure) to individual hospitals. In doing so, the government decides the quantity of resources that go to each single hospital and then leaves the decision on how to best use these resources to the hospital manager. The hospital manager will face the problem of allocating efficiently the resources she is given among the different departments of the hospital (i.e. cardiology, radiology, etc.) and she leaves the decision on how to best use these resources to the department head. Within each department, the head of the department decides how to allocate the resources she is given in order to service patients. What we just described is a multi-level parallel production network. To our surprise, such a system has been described mathematically (and in words) for the first time by Kantorovich (1939)and subsequently independently proposed by Koopmans (1951) and Johansen (1972). The problems of allocation of resources within the system and the measures of efficiency used by these early authors are astonishingly similar to the very recent literature on Network Data Envelopment Analysis (NDEA). NDEA witnessed exponential growth in the last decade. This prompted us to go deeper into the study of this _eld of research. In this chapter we review these early contributions in order to grasp a better understanding of the system approach to productivity and efficiency analysis. This topic has been quite neglected in the three decades going from the end of the '70 to the beginning of this century. The by-product of such a neglect is that in the last 10 to 20 years a lot of effort went into re-discovering the basic production structure described by Kantorovich, Koopmans and Johansen. The aim of this chapter is to make justice of the early contributions of these authors in view of the recent developments of system thinking in efficiency and productivity analysis. In the conclusion of the chapter, after having explored historically the development of this field of research, we will propose a number of topics that we think are important for the future development of this field of study.
    Date: 2021–05

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.