nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2021‒06‒28
35 papers chosen by

  1. Growth, War, and Pandemics: Europe in the Very Long-run By Prados de la Escosura, Leandro; Rodríguez-Caballero, Carlos Vladimir
  2. Between communism and capitalism: long-term inequality in Poland, 1892–2015 By Bukowski, Pawel; Novokmet, Filip
  3. The Palestine Currency Board: Its History and Currency By Berlin, Howard
  4. The Seeds of Ideology: Historical Immigration and Political Preferences in the United States By Giuliano, Paola; Tabellini, Marco
  5. The Gold Standard and the International Dimension of the Great Depression. By Luca Pensieroso; Romain Restout
  6. Globalization and Political Economy of Food Policies: Insights from Planting Restrictions in Colonial Wine Markets By Giulia Meloni; Johan Swinnen
  7. Neuroticism Mediates the Relationship Between Industrial History and Modern-Day Regional Obesity Levels By Daly, Michael; Obschonka, Martin; Stuetzer, Michael; Sutin, Angelina; Shaw-Taylor, Leigh; Satchell, Max; Robinson, Eric
  8. Capitalism, Populism and Democracy: Revisiting Samuelson’s Reformulation of Schumpeter By Emilio Ocampo
  9. Social mobility and political regimes: intergenerational mobility in Hungary, 1949-2017 By Bukowski, Pawel; Clark, Gregory; Gáspár, Attila; Peto, Rita
  10. Colonial Legacy of Language Politics and Medium of Instruction Policy in India By Jolad, Shivakumar; Doshi, Isha
  11. The Effect of the Second World War on the Growth Pattern of Height in Japanese Children: Catch-up Growth, Critical Windows and the First Thousand Days By Cole, Tim J.; Ogasawara, Kota; Schneider, Eric
  12. J'Accuse! Antisemitism and Financial Markets in the time of the Dreyfus Affair By Do, Quoc-Anh; Galbiati, Roberto; Marx, Benjamin; Ortiz Serrano, Miguel Angel
  13. Political Power, Elite Control, and Long-Run Development: Evidence from Brazil By Ferraz, Claudio; Finan, Frederico; Martinez-Bravo, Monica
  14. Leaning against the wind and crisis risk By Schularick, Moritz; Ter Steege, Lucas; Ward, Felix
  15. Pratica degli affari e prescrizioni morali: interesse e sconto nei manuali di aritmetica mercantile (secoli XVI-XVIII) By Zanini, Andrea
  16. Medieval Cities Through the Lens of Urban Economic Theories By Jedwab, Remi; Johnson, Noel; Koyama, Mark
  17. Rupture and continuity in the original divide between micro-dynamics and macro-dynamics By Vincent Carret
  18. Women at Work in the United States since 1860: An Analysis of Unreported Family Workers By Chiswick, Barry R.; Robinson, RaeAnn Halenda
  19. The Impact of Interwar Protection: Evidence from India By Arthi, Vellore; Lampe, Markus; Nair, Ashwin; O'Rourke, Kevin Hjortshøj
  20. Shareholder Value or Public Purpose? From John Maynard Keynes and Adolf Berle to the Modern Debate By Suzanne J. Konzelmann; Victoria Chick; Marc Fovargue-Davies
  21. Détermination du PIB réel trimestriel du Québec et analyse du cycle économique, 1948-1980 By Mario Fortin; Marcelin Joanis; Philippe Kabore; Luc Savard
  22. Globalization and political economy of food policies: insights from planting restrictions in colonial wine markets By Giulia Meloni; Johan Swinnen
  23. What Happened to the US Economy During the 1918 Influenza Pandemic? A View Through High-Frequency Data By Francois R. Velde
  24. Bombing and the Two Vietnams By Vuong, Vu; Chang, Simon; Palmer, Michael
  25. Gender Differences in Peer Recognition by Economists By David Card; Stefano DellaVigna; Patricia Funk; Nagore Iriberri
  26. Long-Term Decline of Regions and the Rise of Populism: The Case of Germany By Maria Greve; Michael Fritsch; Michael Wyrwich
  27. Reallocating Liquidity to Resolve a Crisis: Evidence from the Panic of 1873 By Haelim Anderson; Kinda Cheryl Hachem; Simpson Zhang
  28. Crisis Innovation Policy from World War II to COVID-19 By Daniel P. Gross; Bhaven N. Sampat
  29. What Does Codetermination Do? By Simon Jäger; Shakked Noy; Benjamin Schoefer
  30. Technological Change and Obsolete Skills: Evidence from Men’s Professional Tennis By Ian Fillmore; Jonathan Hall
  31. From ‘Capital and Ideology’ to ‘Democracy and Evidence’: A Review of Thomas Piketty By Ewan McGaughey
  32. Resurrecting the UK Corporate Sector Accounts By Bill Martin
  33. Fiscal versus Monetary Policy in the 1960s By Friedman, Milton
  34. International Migration Literature Search in Bangladesh during the period of 1971-2020 By Khan, Adnan; Mrs, Sultana
  35. Rising inequality and trends in leisure By Boppart, Timo; Ngai, L. Rachel

  1. By: Prados de la Escosura, Leandro; Rodríguez-Caballero, Carlos Vladimir
    Abstract: This paper contributes to the debate on the origins of modern economic growth in Europe from a very long-run perspective using econometric techniques that allow for a long-range dependence approach. Different regimes, defined by endogenously estimated structural shocks, coincided with episodes of pandemics and war. The most persistent shocks occurred at the time of the Black Death and the twentieth century's world wars. Our findings confirm that the Black Death often resulted in higher income levels, but reject the view of a uniform long-term response to the Plague while evidence a negative reaction in non-Malthusian economies. Positive trend growth in output per head and population took place in the North Sea Area (Britain and the Netherlands) since the Plague. A gap between the North Sea Area and the rest of Europe, the Little Divergence, emerged between the early seventeenth century and the Napoleonic Wars lending support to Broadberry-van Zanden's interpretation.
    Keywords: little divergence; Long-run Growth; Malthusian; Pandemics; war
    JEL: E01 N10 N30 N40 O10 O47
    Date: 2020–05
  2. By: Bukowski, Pawel; Novokmet, Filip
    Abstract: We construct the first consistent series on the long-term distribution of income in Poland by combining tax, household survey and national accounts data. We document a U-shaped evolution of inequalities from the end of the 19th century until today: (i) inequality was high before WWII; (ii) abruptly fell after the introduction of communism in 1947 and stagnated at low levels during the whole communist period; (iii) experienced a sharp rise with the return to capitalism in 1989. We find that official survey-based measures strongly under-estimate the rise in inequality since 1989. Our results highlight the prominent role of capital income in driving the U-shaped evolution of top income shares. The unique inequality history of Poland speaks to the central role of institutions and policies in shaping inequality in the long run.
    Keywords: income inequality; transformation; Poland
    JEL: D31 E01 N34
    Date: 2021–06–02
  3. By: Berlin, Howard (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise)
    Abstract: When the British defeated the Ottoman Turks and the armistice was signed on October 31, 1918, Palestine, part of the defeated Ottoman Empire, was administratively divided into the Mutasarrifate (a sub province) of Jerusalem and the Vilayets (a major administrative district or province) of Beirut and Damascus. Palestine was then governed by the British, first as a military occupation, and then as a Mandate granted to them as a Trust by the League of Nations. Prior to 1927, Palestine had no currency that was solely its own, but rather coins and banknotes of many other countries that were used in Palestine. These were mostly those of Turkey, Egypt, France, Great Britain, India, Germany, Russia, Austria, and the United States. The author of this working paper traces the need for a Palestine currency and the formation of the Palestine Currency Board, which remained in effect until March 31, 1952, nearly four years after the State of Israel was established on May 14, 1948. Parts of this working paper was adapted from the author’s book: The Coins and Banknotes of Palestine Under the British Mandate, 1927-1947, McFarland & Company, Inc. (2001) and is built on the writings of numismatic researchers Jack H. Fisher, Esq. (deceased) and Raphael Dabbah, both of whom the author has had the pleasure of knowing for many years. Where verbatim passages are taken from British sources, the British spellings have been retained. Unless credited otherwise, all images of coins and currency notes were from the author’s collection.
    Keywords: Palestine Mandate; currency board; coins; currency notes
    JEL: E58 N15
    Date: 2021–06–18
  4. By: Giuliano, Paola; Tabellini, Marco
    Abstract: We test the relationship between historical immigration to the United States and political ideology today. We hypothesize that European immigrants brought with them their preferences for the welfare state, and that this had a long-lasting effect on the political ideology of US born individuals. Our analysis proceeds in three steps. First, we document that the historical presence of European immigrants is associated with a more liberal political ideology and with stronger preferences for redistribution among US born individuals today. Next, we show that this correlation is not driven by the characteristics of the counties where immigrants settled or other speci c, socioeconomic immigrants' traits. Finally, we provide evidence that immigrants brought with them their preferences for the welfare state from their countries of origin. Consistent with the hypothesis that immigration left its footprint on American ideology via cultural transmission from immigrants to natives, we show that our results are stronger when inter-group contact between natives and immigrants, measured with either intermarriage or residential integration, was higher. Our fi ndings also indicate that immigrants influenced American political ideology during one of the largest episodes of redistribution in US history--the New Deal-- and that such effects persisted after the initial shock.
    Keywords: cultural transmission; Immigration; Political Ideology; Preferences for Redistribution
    JEL: D64 D72 H2 J15 N32 Z1
    Date: 2020–05
  5. By: Luca Pensieroso; Romain Restout
    Abstract: Was the Gold Standard a major determinant of the onset and protracted character of the Great Depression of the 1930s in the United States and worldwide? In this paper, we model the ‘Gold-Standard hypothesis’ in an open-economy, dynamic general equilibrium framework. We show that encompassing the international and monetary dimensions of the Great Depression is important to understand the turmoil of the 1930s, especially outside the United States. Contrary to what is often maintained in the literature, our results suggest that the vague of successive nominal exchange rate devaluations coupled with the monetary policy implemented in the United States did not act as a relief. On the contrary, they made the Depression worse.
    Keywords: Great Depression, Gold Standard, Open Macroeconomics, Dynamic General Equilibrium.
    JEL: N10 E13 N01
    Date: 2021
  6. By: Giulia Meloni; Johan Swinnen
    Abstract: Globalization transforms not just the economics of production and exchange in the world, but also the political economy of public policies. We analyze how wine regulations, and more specifically planting rights restrictions, have been affected by globalization, in particular colonial expansions of wine producing empires. We study several historic cases and find that (a) planting right restrictions and compulsory uprooting of vineyards are introduced to deal with falling wine prices as colonial wine production takes off and expands; (b) that enforcement of the restrictions and uprooting was difficult and often imperfect; and (c) that there was a strong persistence of the policies: after their introduction the restrictions remain in place for a long time (often centuries) and they are only removed after major shocks to the political economy equilibrium.
    Keywords: colonial expansions; globalization; planting restrictions; regulation; wine history
    JEL: F68 L66 N40 N50 Q15 Q18
    Date: 2021
  7. By: Daly, Michael; Obschonka, Martin; Stuetzer, Michael; Sutin, Angelina; Shaw-Taylor, Leigh; Satchell, Max; Robinson, Eric
    Abstract: Objective: The historical factors and contemporary mechanisms underlying geographical inequalities in obesity levels remain uncertain. In this study we examine whether modern regional variation in obesity is partly a result of the impact of large-scale industry on the personality traits of those living in regions once at the center of the Industrial Revolution. Method: Exposure to the effects of the Industrial Revolution was assessed using unique historical data from English/Welsh counties (N=111). Specifically, we examined the relationship between the regional employment share in large-scale coal-based industries in 1813-1820 and contemporary regional obesity levels (2013-2015). The Big Five personality traits and regional unemployment levels were examined as potential mediators of this association. Results: The historical regional employment share in large-scale industries positively predicted the modern-day regional prevalence of obesity. Mediation analysis showed that areas exposed to the decline of large-scale industries experienced elevated neuroticism and unemployment levels that explained almost half of the association between the historical dominance of large-scale industry and modern-day obesity levels. Conclusions: Our results provide initial evidence that raised regional neuroticism levels may play a key role in explaining why exposure to the rapid growth and subsequent decline of large-scale industries forecasts modern-day obesity levels.
    Keywords: Social deprivation; personality; obesity; industrialization
    JEL: I15 L16 N1 N9
    Date: 2019–10–19
  8. By: Emilio Ocampo
    Abstract: In the 1970s and early 1980s Paul Samuelson reformulated the conditional prediction made by Joseph Schumpeter in Capitalism, Socialism and Democracy by replacing socialism with populism. According to Samuelson, “populist democracy” had attained its fullest development in the Southern Cone. He viewed Argentina as the paradigmatic case that proved his theory. Samuelson’s thesis was that a strong electoral demand for equality and antipathy to business had hindered sustained economic growth. At the time, Samuelson also believed the advanced Western economies could follow the same path as Argentina. The Reagan and Thatcher revolution proved him wrong. However, the emergence of populism in Europe and the US in recent years makes his reformulation of Capitalism, Socialism and Democracy seem more plausible. The objective of this paper is to review and critique Samuelson’s theory and to assess its relevance and usefulness today. Its main conclusions can be summarized as follows. First, Samuelson’s theory is incomplete and therefore has limited power to explain current or past populist waves. Secondly, his analysis of the Argentine case was based on an erroneous interpretation of Argentine history. Third, despite being an outlier, Argentina’s addiction to populism offers a cautionary tale.
    Keywords: Samuelson, Schumpeter, Capitalism, Socialism, Democracy, Populist Democracy, Argentina, Chile, Uruguay.
    JEL: B20 B30 N16 O54 P48
    Date: 2021–06
  9. By: Bukowski, Pawel; Clark, Gregory; Gáspár, Attila; Peto, Rita
    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 five 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. Fourth, the descendants of the noble class in Hungary in the eighteenth century were still significantly privileged in 1949 and later. And fifth, while social mobility rates did not change measurably during the transition, the composition of the political elite changed fast and sharply.
    Keywords: social mobility; status inheritance; institutions; transition
    JEL: J62 N34 P36
    Date: 2021–06
  10. By: Jolad, Shivakumar; Doshi, Isha
    Abstract: The sphere of language politics within India has been a complex one, and rightly so, owing to the country’s rich and immense linguistic diversity. Naturally, this complexity has trickled into the Medium of Instruction (MOI) used in Indian schools. Hindi, English, and state languages dominate the school MOI undermining the enormous Language and Mother Tongue diversity in India. Even though the Indian Constitution and the three National Education Policies have emphasized Mother Tongue/Local language as the MOI at the primary education level, there continues to be a divergence between policy and the actual MOI used in government and private schools in India. In this article, we argue that the political hegemony of languages and its reflection in the MOI at present derives from the historic domination of classical languages in the pre-colonial era and its replacement by English in the colonial era. We trace the MOI in indigenous schools of the 19th Century and assert that their elasticity and adaptability was suited to local conditions. We argue that formal western education created rigidity and homogeneity through centralized curriculum and common language. We discuss the ambivalence of East India Company and British India’s policies on medium of Instruction in English and Vernacular languages. We highlight different phases of anglicization of Education in India, and its adoption and expansion by Indians. We argue that despite attempts at reinvention of education by national leaders and push for Mother Tongue as MOI in the early 20th century, English continued to dominate Indian education.
    Date: 2021–06–18
  11. By: Cole, Tim J.; Ogasawara, Kota; Schneider, Eric
    Abstract: This paper analyses the influence of the Second World War on the long-run pattern of child growth in Japan. We construct a prefecture-level dataset of mean heights of boys and girls from ages six to nineteen from 1929 to 2015. Linking the heights recorded at different ages for the same birth cohort, we measure a counterfactual causal effect of the nutritional shock of rationing, food shortages and other health shocks during the Second World War on the growth pattern of children. We find that at adulthood, Japanese boys and girls were 3.0 and 1.7 cm shorter than they would have been if the war had never occurred. The war also led to a delay in the pubertal growth spurt of about 0.5 years and slower maturation of children. These effects were greatest for children who experienced the war in late childhood and early adolescence. However, there were not strong penalties for children exposed to the war in utero and in early life, suggesting that they experienced catch-up growth as health conditions improved after the war. These findings challenge the thousand-days consensus that children cannot recover from nutritional shocks in early life and indicate that adolescence can be a sensitive period for health shocks.
    Keywords: Catch-up growth; Child growth; Health shocks; Japan; nutrition; Second World War
    JEL: I15 J13 J16 N35 O15
    Date: 2020–05
  12. By: Do, Quoc-Anh; Galbiati, Roberto; Marx, Benjamin; Ortiz Serrano, Miguel Angel
    Abstract: This paper studies discrimination in financial markets in the context of the "Dreyfus Affair" in 19th century France. We analyze the market performance of firms with Jewish board members during this historical episode. Building on empirical evidence and a model with antisemitic and unbiased agents, we show how investors betting on firms with Jewish connections earned higher returns during the media campaign organized to rehabilitate Dreyfus, the unfairly accused Jewish officer at the center of the Affair. Our paper provides novel evidence that discrimination can affect stock prices and create rents for some market participants. While these rents may attract betting against discriminators, the uncertainty surrounding discriminatory beliefs can limit the extent of arbitrage and allow discrimination to survive in the long run.
    Keywords: antisemitism; discrimination; financial markets
    JEL: G14 G41 J15 J71 N23
    Date: 2020–05
  13. By: Ferraz, Claudio; Finan, Frederico; Martinez-Bravo, Monica
    Abstract: This paper analyzes how changes in the concentration of political power affect long-run development. We study Brazil's military dictatorship whose rise to power dramatically altered the distribution of power of local political elites. We document that municipalities that were more politically concentrated prior to the dictatorship in the 1960s are relatively richer in 2000, despite being poorer initially. Our evidence suggests that this reversal of fortune was the result of the military's policies aimed at undermining the power of traditional elites. These policies increased political competition locally, which ultimately led to better governance, more public goods, and higher income levels.
    Date: 2020–06
  14. By: Schularick, Moritz; Ter Steege, Lucas; Ward, Felix
    Abstract: Can central banks defuse rising stability risks in financial booms by leaning against the wind with higher interest rates? This paper studies the state-dependent effects of monetary policy on financial crisis risk. Based on the near-universe of advanced economy financial cycles since the 19th century, we show that discretionary leaning against the wind policies during credit and asset price booms are more likely to trigger crises than prevent them.
    Keywords: Financial Stability; local projections; monetary policy
    JEL: E44 E50 G01 G15 N10
    Date: 2020–05
  15. By: Zanini, Andrea
    Abstract: Catholic Church’s usury restrictions and their effects on business life have long attracted scholars’ attention. Several essays reconstruct the evolution of usury doctrine and its relations with the diffusion of new contracts and financial techniques to enable the payment of interest. This paper aims to investigate the real influence of the Church’s precepts on financial transactions starting from a different observation point. The most important source used in this work is commercial arithmetic textbooks printed in Italy from the beginning of the 16th century to the end of the 18th century and specifically devoted to businessmen. Although quite limited from a theoretical point of view, these books reflect coeval business practice. In particular, they contain several examples illustrating calculation techniques, including problems concerning interest and discount. Many authors try to give suggestions to their readers, as well as some ethical and moral advice, showing whether, in their opinion, a specific financial practice was licit or not. Therefore, these textbooks represent a useful source to shed light upon the influence of the Church’s usury precepts on the business world in the early modern age.
    Keywords: financial calculation, usury, commercial arithmetic, Italy, early modern age
    JEL: N23
    Date: 2021–06
  16. By: Jedwab, Remi; Johnson, Noel; Koyama, Mark
    Abstract: We draw on theories and empirical findings from urban economics to explore and explain patterns of city growth in the Middle Ages (c. 800-1500 CE). We discuss how agricultural development and physical geography determined the location and size of cities during the medieval period. We also consider the relative importance of economies of scale, agglomeration, and human capital spillovers in medieval cities and discuss how their growth was limited by disamenities and constraints on mobility. We discuss how medieval cities responded to shocks such as the Black Death and describe how institutions became increasingly important in determining their trajectories. Avenues for future research are also laid out.
    Keywords: Agglomeration effects; Asia; City Growth; Europe; Food Surplus Hypothesis; institutions; LaborMobility; Medieval Era; Pandemics; Urbanization
    JEL: N9 N93 N95 R11 R12 R19
    Date: 2020–05
  17. By: Vincent Carret (UL2 UFR SEG - Université Lumière - Lyon 2 - UFR de Sciences économiques et de gestion - UL2 - Université Lumière - Lyon 2, TRIANGLE - Triangle : action, discours, pensée politique et économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In 1933, Ragnar Frisch introduced a distinction between micro-dynamics and macro-dynamics in his paper on "Propagation problems and impulse problems in dynamic economics." His claim that he proposed the first macro-dynamic analysis and that micro-dynamic schemes were limited to the dynamics of specific markets or behaviors had a lasting impact on the field. But the introduction of this separation created a narrative hiding what had been done before and introduced a tension between the two approaches. By going back to the content of micro-dynamic analysis, we are led to two lines of research that were pursued during the 1920s and early 1930s: cobweb models and intertemporal optimization. A pivotal economist for going beyond micro-dynamics was Jan Tinbergen, who had contributed to both these approaches, and went beyond with new analytical tools. However, the idea of intertemporal optimization met with some opposition when it was scaled up to the whole economic system. This prompted Frisch to propose his new approach, which met with immediate success as more schemes were proposed. Tinbergen was himself one of the first converts to macro-dynamics, but the links between the two approaches and the new tensions created by their separation remained. This tension between the newly created categories can be viewed as a result of opposing views on causality, which were rooted in differing mathematical approaches, a point explicitly made by the next generation.
    Keywords: micro-dynamic,macro-dynamic,Ragnar Frisch,Jan Tinbergen,Charles Roos,Paul Samuelson,cobweb,intertemporal optimization,causality
    Date: 2021–05–30
  18. By: Chiswick, Barry R. (George Washington University); Robinson, RaeAnn Halenda (George Washington University)
    Abstract: Estimated labor force participation rates among free women in the pre-Civil War period were exceedingly low. This is due, in part, to cultural or societal expectations of the role of women and the lack of thorough enumeration by Census takers. This paper develops an augmented labor force participation rate for free women in 1860 and compares it with the augmented rate for 1920 and today. Our methodology identifies women who are likely providing informal and unenumerated labor for market production in support of a family business, that is, unreported family workers. These individuals are not coded in the original data as formally working, but are likely to be engaged in the labor force on the basis of the self- employment of other relatives in their household. Unreported family workers are classified into four categories: farm, merchant, craft, and boardinghouse keepers. Using microdata, the inclusion of these workers more than triples the free female labor force participation rate in the 1860 Census from 16 percent to 57 percent, more than doubles the participation rate in the 1920 Census from 24 percent to 50 percent, and has a trivial effect on the currently measured rate of 56 percent (2015-2019 American Community Survey). This suggests that rather than a steep rise from a very low level in the female labor force participation rate since 1860, it has in fact always been high and fairly stable over time. In contrast, the effect of including unreported family workers in the male augmented labor force participation rate is relatively small.
    Keywords: women, labor force participation, unreported family workers, occupational status, unpaid workers, self-employment, 1860 Census, 1920 Census, American Community Survey
    JEL: N31 J16 J21 J82
    Date: 2021–06
  19. By: Arthi, Vellore; Lampe, Markus; Nair, Ashwin; O'Rourke, Kevin Hjortshøj
    Abstract: Research on the quantitative impact of interwar protection on trade flows remains scarce, and much of it has concluded that the impact was surprisingly small. In this paper we ask: Did Indian interwar protection hurt UK manufacturers, by raising tariffs on manufactured imports? Or did it favour UK interests, by discriminating against "foreign" (i.e. non-British) producers? We answer this question by quantifying the impact of trade policy on the value and composition of Indian imports, using novel disaggregated data on both trade policies and imports for 114 commodity categories coming from 42 countries. Indian trade elasticities were generally larger than those in the United Kingdom at the same time. We find that even though Indian protection lowered total imports, it substantially boosted imports from the UK. Trade policy had a big impact on trade flows.
    Keywords: British Empire; India; interwar period; trade policy
    JEL: F13 F14 N75
    Date: 2020–05
  20. By: Suzanne J. Konzelmann; Victoria Chick; Marc Fovargue-Davies
    Abstract: The debate about corporate purpose is a recurring one that has re-emerged today. What should be the guiding principles of business: the pursuit of profit or a contribution to public well-being? We trace key elements in this debate in the UK and the US from the interwar years, when John Maynard Keynes and Adolf Berle made important contributions, to the present. Both the earlier and the current debates are centred around whether we see business institutions as strictly private entities, transacting with their suppliers, workers and customers on terms agreed with or imposed upon these groups, or as part of society at large and therefore expected to contribute to what society deems to be its interests. Whether current developments will ultimately produce a shift in corporate purpose akin to the one that followed the Second World War remains to be seen. But the parallels to the interwar debates, and the uncertain economic, political and social environment in which they took place, are striking. Our objective is to see what might be learned from the past to inform the current direction of thought concerning capitalism and corporate purpose.
    Keywords: Corporate purpose, shareholder primacy, John Maynard Keynes, Adolf Berle
    JEL: B31 L21 P16
    Date: 2020–06
  21. By: Mario Fortin; Marcelin Joanis; Philippe Kabore; Luc Savard
    Abstract: This study aims to consolidate the economic history of Quebec over the period from 1948 to 1980. Unlike previous economic studies relating to this period, we identify the chronology of the economic cycle of Quebec by estimating the real quarterly GDP by using the method of Ginsburgh (1973) as modified by De Carufel and Lizotte (1982). Our analysis of the duration and intensity of recessions confirms the presence of regional cycles in Canada. Il shows also that the business cycle of Quebec is more strongly correlated with the US cycle than with the cycle in the rest of Canada. Cette étude vise à affermir notre compréhension de l’histoire économique du Québec sur la période allant de 1948 à 1980. À la différence des études économiques antérieures portant sur cette période, nous identifions la chronologie du cycle économique du Québec en estimant le PIB réel trimestriel à l’aide de la méthode de Ginsburgh (1973) telle que modifiée par De Carufel et Lizotte (1982). Notre analyse de la durée et de l’intensité des récessions confirme la présence de cycles régionaux au Canada. Elle montre aussi que le cycle du Québec est plus fortement corrélé avec le cycle américain qu’avec le cycle du reste du Canada.
    Keywords: GDP,quarterlyization,business cycle,Ginsburgh method,1948-1980, PIB,trimestrialisation,cycle économique,méthode de Ginsburgh,1948-1980
    JEL: B22 B23 C13
    Date: 2021–06–17
  22. By: Giulia Meloni; Johan Swinnen
    Abstract: Globalization transforms not just the economics of production and exchange in the world, but also the political economy of public policies. We analyze how wine regulations, and more specifically planting rights restrictions, have been affected by globalization, in particular colonial expansions of wine producing empires. We study several historic cases and find that (a) planting right restrictions and compulsory uprooting of vineyards are introduced to deal with falling wine prices as colonial wine production takes off and expands; (b) that enforcement of the restrictions and uprooting was difficult and often imperfect; and (c) that there was a strong persistence of the policies: after their introduction the restrictions remain in place for a long time (often centuries) and they are only removed after major shocks to the political economy equilibrium.
    Date: 2021–05–25
  23. By: Francois R. Velde
    Abstract: Burns and Mitchell (1946, 109) found a recession of “exceptional brevity and moderate amplitude.” I confirm their judgment by examining a variety of high-frequency, aggregate and cross-sectional data. Industrial output fell sharply but rebounded within months. Retail seemed little affected and there is no evidence of increased business failures or stressed financial system. Cross-sectional data on manufacturing employment indicates that most of the recession, brief as it was, was due to the Armistice rather than the epidemic. Data from the nationwide coal industry documents the sharp but short-lived impact of the epidemic on labor supply and the lack of spill-overs on demand. City-level economic indicators show that the (brief) interventions to hinder the contagion reduced mortality at little economic cost because reduced infections mitigated the impact on the labor force.
    Keywords: 1918 influenza epidemic; US economy; business cycles; recession; non-pharmaceutical interventions
    JEL: E32 H12 I18 I19
    Date: 2020–04–15
  24. By: Vuong, Vu (University of Western Australia); Chang, Simon (University of Western Australia); Palmer, Michael (University of Western Australia)
    Abstract: The Vietnam War occurred when Vietnam was divided into two states with contrasting institutions. North Vietnam was characterized by a command economy under a stable political regime, whereas South Vietnam experienced a market economy and prolonged political instability. This paper uses this context to investigate the heterogeneous effect of childhood bombing exposure on health in adulthood. On average we found negative long-term effects on adult height and body mass index among the South Vietnamese population, while their counterparts in the North were barely affected. We argue that this heterogeneity is most likely attributable to the interplay of institutions and bombing.
    Keywords: bombing, body mass index, institutions, nutrition transition, Vietnam
    JEL: I15 O15 I31 H56 N35 N45
    Date: 2021–06
  25. By: David Card; Stefano DellaVigna; Patricia Funk; Nagore Iriberri
    Abstract: We study the selection of Fellows of the Econometric Society, using a new data set of publications and citations for over 40,000 actively publishing economists since the early 1900s. Conditional on achievement, we document a large negative gap in the probability that women were selected as Fellows in the 1933-1979 period. This gap became positive (though not statistically significant) from 1980 to 2010, and in the past decade has become large and highly significant, with over a 100% increase in the probability of selection for female authors relative to males with similar publications and citations. The positive boost affects highly qualified female candidates (in the top 10% of authors) with no effect for the bottom 90%. Using nomination data for the past 30 years, we find a key proximate role for the Society's Nominating Committee in this shift. Since 2012 the Committee has had an explicit mandate to nominate highly qualified women, and its nominees enjoy above-average election success (controlling for achievement). Looking beyond gender, we document similar shifts in the premium for geographic diversity: in the mid-2000s, both the Fellows and the Nominating Committee became significantly more likely to nominate and elect candidates from outside the US. Finally, we examine gender gaps in several other major awards for US economists. We show that the gaps in the probability of selection of new fellows of the American Academy of Arts and Sciences and the National Academy of Sciences closely parallel those of the Econometric Society, with historically negative penalties for women turning to positive premiums in recent years.
    JEL: J16
    Date: 2021–06
  26. By: Maria Greve (Friedrich Schiller University Jena, Germany and University of Groningen, The Netherlands); Michael Fritsch (Friedrich Schiller University Jena, Germany); Michael Wyrwich (University of Groningen, The Netherlands and Friedrich Schiller University Jena, Germany)
    Abstract: What characterizes regions where right-wing populist parties are relatively successful? A prominent hypothesis proposed in recent literature claims that places that are "left behind" or "do not matter" are a breeding ground for the rise of populism. We re-examine this hypothesis by analyzing the rise of populism in Germany. Our results suggest that the high vote shares of populist parties are not only associated with low regional levels of welfare as such, but also with the long-term decline of a region's relative welfare. Hence, it is not the regions that do "not matter" that are most prone to the rise of populism, but the regions that once mattered, but are in long-term decline. Moreover, we find that regional knowledge represents an important channel through which the historical decline in wealth explains voting behavior in German regions.
    Keywords: Populism, economic development, territorial inequality, economic history
    JEL: R1 R11 D72 N94
    Date: 2021–05–11
  27. By: Haelim Anderson; Kinda Cheryl Hachem; Simpson Zhang
    Abstract: We study financial stability with constraints on central bank intervention. We show that a forced reallocation of liquidity across banks can achieve fewer bank failures than a decentralized market for interbank loans, reflecting a pecuniary externality in the decentralized equilibrium. Importantly, this reallocation can be implemented through the issuance of clearinghouse loan certificates, such as those issued in New York City during the Panic of 1873. With a new dataset constructed from archival records, we demonstrate that the New York Clearinghouse issued loan certificates to member banks in the way our model suggests would have helped resolve the panic.
    JEL: D53 D62 E42 E50 G01 N21
    Date: 2021–05
  28. By: Daniel P. Gross; Bhaven N. Sampat
    Abstract: Innovation policy can be a crucial component of governments' responses to crises. Because speed is a paramount objective, crisis innovation may also require different policy tools than innovation policy in non-crisis times, raising distinct questions and tradeoffs. In this paper, we survey the U.S. policy response to two crises where innovation was crucial to a resolution: World War II and the COVID-19 pandemic. After providing an overview of the main elements of each of these efforts, we discuss how they compare, and to what degree their differences reflect the nature of the central innovation policy problems and the maturity of the U.S. innovation system. We then explore four key tradeoffs for crisis innovation policy---top-down vs. bottom-up priority setting, concentrated vs. distributed funding, patent policy, and managing disruptions to the innovation system---and provide a logic for policy choices. Finally, we describe the longer-run impacts of the World War II effort and use these lessons to speculate on the potential long-run effects of the COVID-19 crisis on innovation policy and the innovation system.
    JEL: H12 H56 I18 N42 N72 O31 O32 O38
    Date: 2021–06
  29. By: Simon Jäger; Shakked Noy; Benjamin Schoefer
    Abstract: We provide a comprehensive overview of codetermination, i.e., worker representation in firms’ governance and management. We cover the institution’s history, implementation, and the best available evidence on its economic impacts. We argue that existing quasiexperimental estimates suggest that codetermination has zero or very small positive effects on worker and firm outcomes at the partial-equilibrium firm level. In addition, we test for general-equilibrium effects of codetermination laws using novel cross-country event studies exploiting a series of codetermination reforms between the 1960s and 2010s, and find no evidence that codetermination laws shift aggregate economic outcomes or the quality of industrial relations. We offer three potential explanations of the institution’s limited impact. First, existing codetermination laws convey relatively little authority to workers. Second, countries with codetermination laws have high baseline levels of informal worker involvement in decision-making, independently of formal codetermination. Third, codetermination laws may interact with other labor market institutions, such as union representation and collective bargaining. We close by discussing implications of these facts for recent codetermination proposals in the United States.
    JEL: J08 K31 M1 M5
    Date: 2021–06
  30. By: Ian Fillmore (Washington University in St. Louis); Jonathan Hall (University of Toronto)
    Abstract: Technological innovation can raise the returns to some skills while making others less valuable or even obsolete. We study the effects of such skill-altering technological change in the context of men’s professional tennis, which was unexpectedly transformed by the invention of composite racquets during the late 1970s. We explore the consequences of this innovation on player productivity, entry, and exit. We find that young players benefited at the expense of older players and that the disruptive effects of the new racquets persisted over two to four generations.
    Keywords: technological change, human capital, tennis
    JEL: J24 O33 Z22
    Date: 2021–06
  31. By: Ewan McGaughey
    Abstract: Thomas Piketty’s Capital and Ideology (2020) is a major, encyclopaedic and data-driven contribution to the effort of constructing a better human civilisation. This review summarises the main argument: a positive thesis that in every society, ideology feeds laws and institutions that create inequality, and inequality then bolsters ideology; a normative thesis that we need a better ideology, including ‘participatory socialism’, to solve our biggest challenges. The review then complements and critiques three central issues in the argument, that (1) the true concentration of economic power, the votes in the economy, is even more extreme than inequality of wealth and income, (2) the legal construction of markets, through property, contract, corporate, or human rights law, can ‘pre-distribute’ income and wealth to a vast extent before tax, and (3) social justice means expanding (not merely correcting or re-distributing) everyone’s opportunity, creative capacity, and human potential, and helps everyone to develop their personality to the fullest. Social justice is an unparalleled force, and is still the best answer to far-right, authoritarian or other failed ideologies, which have escalated inequality and driven climate damage. Perhaps the greatest achievement of Piketty’s work could be to bring economics firmly back to the values in the Universal Declaration of Human Rights.
    Keywords: Capital, ideology, democracy, evidence, banks, asset managers, codetermination, economic power, social justice
    JEL: K10 K11 K22 K31
    Date: 2021–04
  32. By: Bill Martin
    Abstract: This paper develops what is believed to be a novel method of resurrecting UK national accounts corporate sector data before 1987, the date prior to which fully comprehensive sectoral data are not provided by the Office for National Statistics. A distinction is drawn between the sectors comprising private non-financial corporations (PNFC), on the one hand, and financial corporations, which include some state-controlled enterprises, on the other hand. The resurrected PNFC dataset runs in detail from 1960. A much more limited set of reconstructed data is available for financial corporations. The resurrected data include the savings – broadly speaking, the "retained profits" – and the financial balances – the difference between retained profits and capital spending – of both corporate sectors. Economists collaborating with the UK Economic Statistics Centre of Excellence describe an exercise of this kind as "especially difficult". My method of reconstruction relies on archived, out-of-date, too frequently unreliable national accounts datasets, the scrutiny of those data to remove mistakes, and a detailed examination of a subset of an otherwise overwhelming number of national accounts revisions confined to those having a material and enduring impact in the historic period before 1987. This "bottom-up" method of data reconstruction differs from the “top-down” method of resurrecting the accounts of the public, the rest-of-the-world and the “private” sectors, and the separation of the household sector from the aggregate corporate sector, described in a previous paper: Martin (2019). The combination of the two methods, one bottom-up, the other largely top-down, risks the creation of a dustbin into which data inconsistencies are unwittingly poured. A number of robustness tests provides reassurance that the differently derived historic data for sectoral saving make sense. Comparable tests of household and corporate sectors’ financial balance data are not possible, but the hypothesis that different vintages of PNFC financial balance data are isomorphic representations of the same economic variable is not rejected. The combination of the two methods has allowed improvements to be made to the resurrected household sector series that begin in 1946. Subject to the resolution of outstanding problems with official national accounts data, notably for gross fixed capital formation before 1960, and additional scrutiny and comment, it is the intention to make the complete resurrected sectoral dataset publicly available.
    Keywords: National accounts, private non-financial corporations, macroeconomics, UK statistics
    JEL: C82 E01 N1
    Date: 2020–06
  33. By: Friedman, Milton (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise)
    Abstract: In this lecture, Milton Friedman reviews the role of fiscal and monetary policies on the course of the U.S. business cycle, during several episodes from 1961 to 1969. He relates these developments to shifts in contemporary popular and scientific opinion about the determinants of the business cycle. In each episode of expansion or contraction, he shows that monetary policy – in the sense of changes in the rate of growth of the quantity of money – decisively dominated over fiscal policy in determining the pace of economic activity and the rate of inflation. During the lecture, Friedman makes several digressions to explain the variability of the lag in effect of monetary policy, the reason why interest rates are a poor guide to the stance of monetary policy, and why the downward-sloping liquidity preference function is a poor model that fails to comport with the real world. He also explains why tax increases are not necessarily contractionary, and why tax decreases are not necessarily expansionary.
    Date: 2021–06–23
  34. By: Khan, Adnan; Mrs, Sultana
    Abstract: The Bangladeshi diaspora consists of people of Bangladeshi descent who have immigrated to or were born in another country. First generation migrants may have moved abroad from Bangladesh for better living conditions, to escape poverty, to support their financial condition or to send money back to families in Bangladesh. With a total of 10 million Bangladeshis living abroad, the country has ranked fifth among top 20 countries of origin for international migrants. There is a large Bangladeshi diaspora population in Saudi Arabia. There are also significant migrant communities in various Arab states of the Persian Gulf, particularly the United Arab Emirates and Oman, where Bangladeshis are mainly classified as foreign workers. British Bangladeshis are mainly concentrated in east London boroughs Tower Hamlets and Newham; the migration to Britain is mainly linked with chain migration from the Sylhet Division. Besides the UK and Middle East, Bangladeshis also have a significant presence in the United States, Malaysia, South Africa, Singapore, and in other Western countries such as Italy, Canada, and Australia. This research paper is designed to provide an illustrated account of what kind of research has been done on these migrants at home and abroad over the past fifty years.
    Keywords: migration, expatriate, diaspora, temporary, workers, labour, literature
    JEL: J6 J60 J61 J62 J69
    Date: 2020
  35. By: Boppart, Timo; Ngai, L. Rachel
    Abstract: This paper develops a model that generates rising average leisure time and increasing leisure inequality along a path of balanced growth. Households derive utility from three sources: market goods, home goods and leisure. Home production and leisure are both activities that require time and capital. Households allocate time and capital to these non-market activities and supply labor. The dynamics are driven by activity-specific TFP growth and a spread in the distribution of household-specific labor market efficiencies. When the spread is set to replicate the increase in wage inequality across education groups, the model can account for the observed average time series and cross-sectional dynamics of leisure time in the U.S. over the last five decades.
    Keywords: leisure; labor supply; inequality; home-production; balanced growth path; forthcoming
    JEL: N0
    Date: 2021–03–30

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