nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2021‒08‒23
thirty-one papers chosen by

  1. Pork, Infrastructure and Growth: Evidence from the Italian Railway Expansion By Roberto Bonfatti; Giovanni Facchini; Alexander Tarasov; Gian Luca Tedeschi; Cecilia Testa
  2. Migrant Selection and Sorting during the Great American Drought By Sichko, Christopher
  3. A Distributional Perspective on Primary Sources from Ancient Greece By Laurent Gauthier
  4. The First Doctrinal Consideration on "Transatlantic" Commercial Law: Tomás de Mercado’s Summa de tratos y contratos, 1569-1571 By Luisa Brunori
  5. Did the Executions of French Soldiers during the Great War Reflect Their Pacifist Views? By Olivier Guillot; Antoine Parent
  6. An analogical story or how do mega-events make it possible to rethink tourism as an instrument for the globalization of societies? From Barcelona to Paris via Milan. By P. Ballester
  7. We Do Not Know the Population of Every Country in the World for the past Two Thousand Years By Timothy Guinnane
  8. The Impact of Public Transportation and Commuting on Urban Labour Markets: Evidence from the New Survey of London Life and Labour, 1929-32 By Seltzer, Andrew; Wadsworth, Jonathan
  9. Book Review: S. Narayan. 2018. The Dravidian Years: Politics and Welfare in Tamil Nadu. By Narayan, Swati
  10. Why is the Euro punching below it’s weight? By Ilzetzki, Ethan; Reinhart, Carmen M.; Rogoff, Kenneth S.
  11. Variety, Fertility, and Long-term Economic Growth By Jianchoun Dou
  12. Voting like your betters: the bandwagon effect in the diet of the Holy Roman Empire By Volckart, Oliver
  13. Intergenerational Homeownership in France over the 20th Century By Bertrand Garbinti; Frédérique Savignac
  14. Trade-Policy Dynamics: Evidence from 60 Years of U.S.-China Trade By George A. Alessandria; Shafaat Y. Khan; Armen Khederlarian; Kim J. Ruhl; Joseph B. Steinberg
  15. Timor-Leste's drivers of growth and sectoral transformation By Sacchetto, Camilla; Logan, Sarah; Asare, Joevas; Saab, Moussa
  16. The Legacy of the Pinochet Regime By Gonzalez, Felipe; Prem, Mounu
  17. Long-Run Evidence on the Quantity Theory of Money By Luca Benati
  18. Task-Based Discrimination By Erik Hurst; Yona Rubinstein; Kazuatsu Shimizu
  19. Paradox of Monetary Profit, Shortage of Money in Circulation & Financialisation By Javidanrad, Farzad
  20. Mr. Keynes and the “Classics”; A Suggested Reinterpretation By Gauti B. Eggertsson; Cosimo Petracchi
  21. Speculation: a political economy of technologies of imagination By Bear, Laura
  22. Land Ceiling Legislations, Land Acquisition and De-industrialisation: Theory and Evidence from the Indian States By Pal, Sarmistha; Chowdhury, Prabal Roy; Saher, Zoya
  23. A Pomeranzian Growth Theory of the Great Divergence By Shuhei Aoki
  24. Gay Politics Goes Mainstream: Democrats, Republicans, and Same-Sex Relationships By Raquel Fernández; Sahar Parsa
  25. The Past and Future of Economic Growth: A Semi-Endogenous Perspective By Charles I. Jones
  26. Risks on Trade: The Activity of the Merchant in Thomas Aquinas's Commentary on the Sentences By Pierre Januard
  27. Accounting for Intergenerational Wealth Mobility in France over the 20th Century: Method and Estimations By Bertrand Garbinti; Frédérique Savignac
  28. The Ritual of Capitalization By Fix, Blair
  29. Book review of "Michele Alacevich, ´Albert O. Hirschman: An intellectual biography´(New York: Columbia University Press, 2021), 352 pages, $35.00 (hardcover), ISBN: 9780231553308 By BIANCHI, ANA MARIA AFONSO FERREIRA
  30. Understanding the Puzzle of Primary Health Care Use :Evidence from India By Kumar Sur, Pramod
  31. Why is the Vaccination Rate Low in India? By Kumar Sur, Pramod

  1. By: Roberto Bonfatti; Giovanni Facchini; Alexander Tarasov; Gian Luca Tedeschi; Cecilia Testa
    Abstract: This paper studies the role played by politics in shaping the Italian railway network, and its impact on long-run growth patterns. Examining a large state-planned railway expansion that took place during the second half of the 19th century in a recently unified country, we first study how both national and local political processes shaped the planned railway construction. Exploiting close elections, we show that a state-funded railway line is more likely to be planned for construction where the local representative is aligned with the government. Furthermore, the actual path followed by the railways was shaped by local pork-barreling, with towns supporting winning candidates more likely to see a railway crossing their territory. Finally, we explore the long-run effects of the network expansion on economic development. Employing population and economic censuses for the entire 20th century, we show that politics at a critical juncture played a key role in explaining the long-run evolution of local economies.
    Keywords: infrastructural development, political economy
    JEL: N01 N73 D72
    Date: 2021
  2. By: Sichko, Christopher
    Abstract: Migration is among the most basic adaptation methods to inhospitable environments and has large economic consequences for both migrants and the broader economy. To estimate the impact of the worst drought in U.S. history on migration, I match 1940 census data with county-level drought conditions. I find that drought substantially increased migration rates for individuals with a 12th grade education or higher but had little impact on migration rates for people with less education. This differential migration response to drought by education was most pronounced in counties with larger economic downturns during the Great Depression, consistent with the hypothesis that individual liquidity constraints limited migration for people with lower human capital. In terms of where migrants went, I show that the majority of migrants in the late 1930s relocated to rural destinations. In fact, migrants from drought counties were less likely to relocate to cities compared to similar migrants from non-drought counties. These findings detail the impact of widespread drought for Depression-era migration and document the central role of individual human capital in the uptake of migration from climate shocks.
    Date: 2021–08–09
  3. By: Laurent Gauthier (LED - Laboratoire d'Economie Dionysien - UP8 - Université Paris 8 Vincennes-Saint-Denis)
    Abstract: Ancient Greek history is sometimes perceived as offering a dearth of material for quantitative approaches, and it has not benefited from much interest from either quantitative historians or cliometricians. In this paper, we show that there is a strong potential for the quantitative exploitation of ancient Greek data, but new methods may be required. Indeed, focusing on primary sources, we build several large-scale and centralized datasets by exploiting electronically available, albeit sometimes atomic, literary and epigraphic texts, such as the Diorisis corpus, inscriptions from PHI, onomastic sequences from the BDEG and MAP, and individual names from the LGPN. Stepping aside from the methods that are common in quantitative history, we then consider the information in a distributional perspective inspired from the methods of complex systems analysis. Relying on this renewed combination of clio and metrics, we point out a series of regularity patterns in these historical records. Considering ancient Greek data in a nonatomic fashion, in the light of broad distributional patterns, raises new questions for historians.
    Keywords: Ancient Greece,digital humanities,econometrics,power laws
    Date: 2021–08–05
  4. By: Luisa Brunori (CHJ - Centre d'histoire judiciaire - UMR 8025 - Université de Lille - CNRS - Centre National de la Recherche Scientifique, Université de Lille)
    Abstract: The "Suma de tratos y contratos" (1569-1571) by Tomás de Mercado is the first legal treatise on trade that explicitly takes into account the specificities of Spanish trade with the Indias. Tomás de Mercado was faced with very profound changes in trade: long distances, large convoy sizes, the need for large amounts of funding, high risk, variations in prices and the value of money... From a theological-legal point of view, these upheavals posed new and complex questions. Mercado, advisor to the merchants of Seville and an excellent knowledge of New Spain, analyses the sudden transformation of economic and juridical practice with finesse and realism. The 'Suma' is thus an extraordinary real-time testimony to the profound transformations taking place in 16th century commerce. Moreover, faced with fundamental questions of moral order and juridical legitimacy, Mercado proposes legal solutions of high equilibrium in which theological imperatives are masterfully reconciled with the needs of transatlantic commercial practice.
    Keywords: Legal history,Business history,Early modern History,Law and Economics,Late scholasticism,Commercial law
    Date: 2021–06
  5. By: Olivier Guillot; Antoine Parent
    Abstract: This paper explores the issue of the executions of French soldiers during the WW1 in a quantitative perspective. The database of French Ministry of Defense “Shot in the First World War†is exploited here for the first time to provide a complete description of the statistical portrait of the soldiers who were sentenced to death by a council of war or summarily executed. This database provides individual characteristics (skills, occupations), military variables (corps, rank) to which we have added contextual variables related to living conditions, weather conditions, illiteracy rates, dummies for regional language, county’s level of alcohol consumption, county’s voters abstention rate. Specifically, we investigate whether the variations in the number of executions over time were related to the intensity of engagements or to pacifist motives or other political considerations, as suggested in the literature. Two main findings emerge from our research: conversely to conventional wisdom, the soldiers executed in 1917, the year of the mutinies, did not differ from the rest of the sample. If statistical differences exist between years, the difference refers to 1914, not 1917. Our analysis leads to nuance the pacifist explanation. We give evidence that the conditions of survival on the front and the intensity of fights were the two main drivers of executions.
    Keywords: World War I, Defense economics, Conflict, Military history
    JEL: N44 K14 K42 D74
    Date: 2021–08
  6. By: P. Ballester (IGS - Groupe IGS, Université Sorbonne Nouvelle - Paris 3, IEFT - Institut Européenne de Formation au Tourisme - School of Tourism & Hospitality)
    Abstract: Subject: This is a proposal that is both theoretical but taking as a stand to propose an alliance between a synchronic and diachronic history through an exceptional research object, theworld expo / world's fairs. We offer an analysis grid of the global history of our world through the universal exhibitions, but within a renewed framework of our iterative analyzes. Terrain: We take the regional capital of Catalonia, Barcelona and its tourism as our main terrain, through world fairs such as those of 1888, 1929, 1936 (popular Olympics), 1954 Mediterranean Games and the modern Olympic Games of 1992 as mega-events. But beyond this to present our analog methodology, we will focus on European exhibitions in Seville, Milan and Paris as an example, but also American and Asian exhibitions with Osaka and New York. Methodology: An analogical history is proposed and allows us without going into anachronisms to offer a long historical and geographical chain of world expo / world's fair as an element or vector of a global history of tourism. During the conference, we will present the frameworks of this methodology, which is appropriate both for an activity such as tourism but also within the framework of the rewriting of the world history of tourism and the knowledge economy through pre-established grid items. analysis of the event in a time ring. Between a geohistory and a geoeconomy of tourism, we arrive at three main results: a - the universal exhibitions respond to each other over time, long, medium and short; the dynamics of the movement of man-tourists and imaginaries open up to a global history of tourism of which Spain is the champion at the end of the 20th century. b - the means of mass communications offer alternative realities very often on behalf of political and economic actors it is a nebenwelt or side world, another world or a parallel world which is staged and told by building at the both the history of a country, of the host city and the global history of tourism.
    Abstract: Asunto: Esta es una propuesta al mismo tiempo teórico pero tomando como sesgo proponer una alianza entre una historia sincrónica y diacrónica a través de un objeto excepcional de investigación, las exposiciones universales. Ofrecemos una cuadrícula de análisis de la historia global de nuestro mundo a través de las exposiciones universales, pero dentro de un marco renovado de nuestros análisis iterativos. Terreno: Tomamos la capital regional de Cataluña, Barcelona y su turismo como nuestro principal terreno, a través de ferias mundiales como las de 1888, 1929, 1936 (Olimpiadas populares), los Juegos del Mediterráneo de 1954 y los Juegos Olímpicos modernos de 1992 como megaeventos. . Pero más allá de esto para presentar nuestra metodología analógica, nos centraremos en exposiciones europeas en Sevilla, Milán y París como ejemplo, pero también exposiciones americanas y asiáticas con Osaka y Nueva York. Metodología: Se propone una historia analógica y nos permite sin entrar en anacronismos ofrecer una larga cadena histórica y geográfica de exposiciones mundiales como elemento o vector de una historia global del turismo. Durante la conferencia, presentaremos los marcos de esta metodología, que es apropiada tanto para una actividad como el turismo como en el marco de la reescritura de la historia mundial del turismo y la economía del conocimiento a través de elementos de cuadrícula preestablecidos. el evento en un anillo de tiempo. Entre una geohistoria y una geoeconomía del turismo, llegamos a tres resultados principales: a - las exposiciones universales se responden entre sí en el tiempo, largo, medio y corto; la dinámica del movimiento de los hombre-turistas y los imaginarios se abren a una historia global del turismo de la que España es campeona a finales del siglo XX. b - los medios de comunicación masiva ofrecen realidades alternativas muy a menudo en nombre de los actores políticos y económicos es un nebenwelt o mundo lateral, otro mundo o un mundo paralelo que se escenifica y cuenta construyendo en ambos la historia de un país, de la ciudad anfitriona y la historia mundial del turismo.
    Abstract: Objet : Il s'agit d'une proposition à la fois théorique mais prenant comme parti-pris de proposer une alliance entre une histoire synchronique et diachronique à travers un objet de recherche exceptionnel, les expositions universelles. Nous proposons une grille d'analyse d'histoire globale de notre monde à travers les expositions universelles, mais dans un cadre renouvelé de nos analyses itératives. Terrain : Nous prenons comme principal terrain la capitale régionale de Catalogne, Barcelone et son tourisme à travers les expositions universelles comme celle de 1888, 1929, 1936 (olympiades populaires), 1954 Jeux méditerranéens et les Jeux olympiques modernes de 1992 comme méga-événements. Mais au-delà pour présenter notre méthodologie analogique, nous porterons nos regards sur les expositions européennes de Séville, Milan et Paris comme exemple, mais aussi américaines et asiatiques avec Osaka et New York. Méthodologie : Une histoire analogique se propose et nous permet sans rentrer dans les anachronismes de proposer une longue chaîne historique et géographique des expositions universelles comme élément ou vecteur d'une histoire globale du tourisme. Lors du colloque nous présenterons les cadres de cette méthodologie adéquate à la fois pour une activité comme le tourisme mais aussi dans le cadre de la réécriture de l'histoire mondiale du tourisme et de l'économie de la connaissance à travers des items préétablis de grille d'analyse de l'événement dans un anneau temporel. Entre une géohistoire et une géoéconomie du fait touristique, nous aboutissons à trois résultats principaux : a - les expositions universelles se répondent les unes à travers les autres sur le temps, long, moyen et court ; des dynamiques de circulations des hommes- touristes et des imaginaires ouvrent à une histoire globale du tourisme dont l'Espagne est le chantre à la fin du XXe siècle. b – les moyens de communications de masse proposent des réalités alternatives bien souvent pour le compte des acteurs politiques et économiques c'est un nebenwelt ou side world, un autre monde ou un monde parallèle qui se met en scène et en récit en construisant à la fois l'histoire d'un pays, de la ville hôte et l'histoire globale du tourisme.
    Keywords: world's fair,world expo,tourism,marketing,communication,globalization,economy,Barcelona,​​Milan,exposición universal,turismo,comunicación,globalización,economía,​​Milán,exposition universelle,tourisme,globalisation,économie,Barcelone,Milan
    Date: 2021–06–24
  7. By: Timothy Guinnane
    Abstract: Economists have reported econometric results that rely on estimates of the population of every country in the world for the past two thousand or more years. The underlying source is usually McEvedy and Jones’ Atlas of World Population History, published in 1978. The McEvedy and Jones data have important weaknesses. The reported populations for years before 1500 are, for most countries, little more than guesses, as are many estimates for more recent times. Research relying on McEvedy and Jones cannot take advantage of improved estimates reported since 1978. McEvedy and Jones often infer population sizes from their view of a particular economy, making their estimates poor proxies for economic growth. Although some economists treat the African data as pertaining to modern nation-states, in most cases it is not. With a few welcome exceptions, economists using this source do not take the measurement error issues seriously. Results that rest on McEvedy and Jones are unreliable. The willingness to rely on such data discourages effort to provide serious improvements.
    Keywords: long-run growth, historical populations, measurement error, McEvedy and Jones
    JEL: N00 N10 O40 O47 J10 C18
    Date: 2021
  8. By: Seltzer, Andrew (Royal Holloway, University of London); Wadsworth, Jonathan (Royal Holloway, University of London)
    Abstract: This paper examines the consequences of the commuter transport revolution on working class labour markets in 1930s London. The ability to commute alleviated urban crowding and increased workers’ choice of potential employers. Using GIS-based data constructed from the New Survey of London Life and Labour, we examine the extent of commuting and estimate the earnings returns to commuting. We obtain a lower-bound estimate of two percent increase in earnings per kilometer travelled. We also show that commuting was an important contributor to improving quality of life in the early-twentieth century.
    Keywords: public transportation, New Survey of London Life and Labour, GIS, earnings
    JEL: N94 J39 N34
    Date: 2021–08
  9. By: Narayan, Swati
    Abstract: Narayan’s book The Dravidian Years provides a rare glimpse of the political economy landscape of the most transformative period in Tamil Nadu’s social history from an insider’s perspective of a former public administrator who has served for three decades in the Indian bureaucracy. The book depicts the southern Indian state’s evolution from a deeply casteist British province to one with a radical social justice agenda, which over time however mutates into a more diluted hybrid amalgamation of capitalistic economic development with an ingrained ethos of populist social welfare.
    Date: 2021–08–02
  10. By: Ilzetzki, Ethan; Reinhart, Carmen M.; Rogoff, Kenneth S.
    Abstract: On the twentieth anniversary of its inception, the euro has yet to expand its role as an international currency. We document this fact with a wide range of indicators including its role as an anchor or reference in exchange rate arrangements—which we argue is a portmanteau measure—and as a currency for the denomination of trade and assets. On all these dimensions, the euro comprises a far smaller share than that of the US dollar. Furthermore, that share has been roughly constant since 1999. By some measures, the euro plays no larger a role than the Deutschemark and French franc that it replaced. We explore the reasons for this underperformance. While the leading anchor currency may have a natural monopoly, a number of additional factors have limited the euro’s reach, including lack of financial center, limited geopolitical reach, and US and Chinese dominance in technology research. Most important, in our view, is the comparatively scarce supply of (safe) euro-denominated assets, which we document. The European Central Bank’ lack of policy clarity may have also played a role. We show that the euro era can be divided into a “Bundesbank-plus” period and a “Whatever it Takes” period. The first shows a smooth transition from the European Exchange Rate Mechanism and continued to stabilize German inflation. The second period is characterised by an expanding ECB arsenal of credit facilities to European banks and sovereigns.
    JEL: E50 F30 F40 N20
    Date: 2020–07–31
  11. By: Jianchoun Dou (Shaanxi Normal University, Xi’an, China)
    Abstract: This study develops a novel mechanism to explain the long-term economic and demographic evolution from the Malthusian stage to the modern stage. In the model, the progress in human history is characterized by not only technological advances but also the expansion of variety of goods. The technological progress, which enhances productivity, is in favor of population growth. Meanwhile, the growth of variety that expands consumption sets tends to reduce fertility. The change of fertility finally depends on the relative growth rate of these two kinds of innovations. With the help of some hypotheses that correspond to the stylized facts in the history of science and technology, the model predicts an evolutional pattern of technology and fertility that is consistent with unified growth theory.
    Keywords: Variety, Fertility, Economic growth, Innovations
    JEL: J11 J13 N3
    Date: 2021–07–18
  12. By: Volckart, Oliver
    Abstract: Scholars agree that a core feature of the political style of the Holy Roman Empire was the focus on consensus, without which policies at the level of the Empire were impossible. The present article demonstrates that the consensus on which decisions of the imperial estates was based tended to be superficial and was often in danger of breaking down. This was because the diet’s open and sequential voting procedure allowed the bandwagon effect to distort outcomes. An analysis of the votes cast in the princes’ college of the diet of 1555 shows that low-status members of the college regularly imitated the decisions of high-status voters. Reforming the system would have required accepting that the members of the college were equals – an idea no one was prepared to countenance. Hence, superficial and transitory agreements remained a systematic feature of politics at the level of the Empire.
    Keywords: bandwagon effect; voting; early modern parliamentarism; Holy Roman Empire
    JEL: H11 N43
    Date: 2021–08
  13. By: Bertrand Garbinti (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique); Frédérique Savignac (Banque de france - Banque de France)
    Abstract: We estimate the intergenerational correlation in homeownership status between two generations for cohorts covering the 20th century. First, we find higher intergenerational correlation in France compared to previous results obtained for the U.K. for similar cohorts. Second, the intergenerational correlation is increasing across cohorts, with a relatively stable probability of being a homeowner for children of homeowners over time, and a decreasing probability for children whose parents were not homeowners. Third, the effect of parents' tenure status is persistent over the children's life cycle. Fourth, when isolating two subpopulations based on the receipt of intergenerational transfers, we find significant intergenerational correlation in tenure status for children who did not receive any gift or inheritance, as well as for children who received intergenerational transfers, suggesting that other factors such as intergenerational income correlation or the transmission of preferences might also explain this intergenerational correlation.
    Keywords: housing,intergenerational wealth mobility,cohorts G51,J62,R21
    Date: 2021–07–29
  14. By: George A. Alessandria; Shafaat Y. Khan; Armen Khederlarian; Kim J. Ruhl; Joseph B. Steinberg
    Abstract: We study the growth of Chinese imports into the United States from autarky during 1950-1970 to about 15 percent of overall imports in 2008, taking advantage of the rich heterogeneity in trade policy and trade growth across products during this period. Central to our analysis is an accounting for the dynamics of trade, trade policy, and trade-policy expectations. We isolate the lagged effects of past reforms and the current effects of uncertainty about future reforms. We build a multi-industry, heterogeneous-firm model with a dynamic export participation decision to estimate a path of trade-policy expectations. We find that being granted Normal Trade Relations (NTR) status in 1980 was largely a surprise and that, in the early stages, this reform had a high probability of being reversed. The likelihood of reversal dropped considerably during the mid 1980s, and, despite China's accession to the World Trade Organization (WTO) in 2001, changed little throughout the late 1990s and early 2000s. Thus, although uncertainty depressed trade substantially following the 1980 liberalization, much of the trade growth that followed China's WTO accession was a delayed response to previous reforms rather than a response to declining uncertainty.
    JEL: F1 F14 F62
    Date: 2021–08
  15. By: Sacchetto, Camilla; Logan, Sarah; Asare, Joevas; Saab, Moussa
    JEL: N0
    Date: 2021–06–08
  16. By: Gonzalez, Felipe (Pontificia Universidad Católica de Chile); Prem, Mounu
    Abstract: Chile has experienced more than thirty years of democracy at the shadow of the seventeen-year dictatorship led by Augusto Pinochet (1973-1990). This chapter provides an overview of the dictatorial legacies with an emphasis on the distribution of economic and political power, as viewed from the most recent literature in economics. We also describe the waves of discontent which have attempted to suppress the most important legacies during the past twenty years. We end with a discussion of the current path of institutional change that could put Pinochet’s legacy to an end.
    Date: 2021–08–04
  17. By: Luca Benati
    Abstract: Evidence from low-frequency regressions for 27 countries since the XVIII century suggests that the relationship between broad money growth and inflation has been mostly one-for-one, and largely invariant to changes in the monetary regime. There is little evidence that the relationship had been weaker under commodity standards than it has been under fiat standards. Only for the period since the mid-1980s, which has seen the introduction of monetary regimes in which inflation is directly targeted, the relationship appears to have materially weakened. Crucially, however, the slope relationship between the trends of money growth and inflation produced by time-varying parameters VARs has been near-uniformly one-for-one for all countries and sample periods, including the one following the end of the Great Inflation. This suggests that, although central banks’ targeting of inflation has weakened its relationship with money growth, time-series methods can still recover the one-for-one longhorizon relationship between the series. There is no evidence that, since WWII, inflation’s low-frequency relationship with credit growth has been stronger than with money growth. The relationship between money growth and nominal interest rates had been non-existent under commodity standards, and it has only appeared under fiat standards.
    Keywords: Quantity theory of money; Lucas critique; frequency domain; timevarying parameters VARs. Classification-JEL
    Date: 2021–06
  18. By: Erik Hurst; Yona Rubinstein; Kazuatsu Shimizu
    Abstract: Why did the Black-White wage gap converge from 1960 to 1980 and why has it stagnated since? To answer this question, we introduce a unified model that integrates notions of both taste-based and statistical discrimination into a task-based model of occupational sorting. At the heart of our framework is the idea that discrimination varies by the task requirement of each job. We use this framework to identify and quantify the role of trends in race-specific factors and changing task prices in explaining the evolution of the Black-White wage gap since 1960. In doing so, we highlight a new task measure - Contact tasks – which measures the extent to which individuals interact with others as part of their job. We provide evidence that changes in the racial gap in Contact tasks serves as a good proxy for changes in taste-based discrimination over time. We find that taste-based discrimination has fallen and racial skill gaps have narrowed over the last sixty years in the United States. However, since the 1980s, the effect of declining racial skill gaps and discrimination on the Black-White wage gap were offset by the increasing returns to Abstract tasks which, on average, favored White workers relative to Black workers.
    JEL: J24 J7
    Date: 2021–07
  19. By: Javidanrad, Farzad (University of Warwick)
    Abstract: Over the last four decades, the term “financialisation” has entered economics terminologies to explain the development of capitalist economies in which: a) the rate of profit in the production sector is falling or narrowing relative to that in the financial sector b) profit seeking through financial speculation has grown rapidly among the household and the production sectors; c) public and private debt is rapidly accelerating and its ratio to GDP is increasing swiftly; d) there is an independent and accelerated growth of the financial sector compared to that of the real sector. This paper is a theoretical attempt to shed light on these features through the lens of the paradox of monetary profit and its manifestation in the capitalist economy, i.e. the shortage of money in circulation. The aim of this paper is to show how the paradox of monetary profit provides a theoretical framework to analyse the mechanism by which the capitalist economies move towards financialisation. This theoretical argument shows the connection between the shortage of money in circulation and financialisation. The core idea proposed in this paper is that financialisation is the direct result of the shortage of money in circulation, and that this shortage can be explained through the paradox of monetary profit.
    Keywords: Capitalism, Paradox of Monetary Profit, Financialisation, Monetary production Economy, Marx JEL Classification: B11 ; E11 ; P10
    Date: 2021
  20. By: Gauti B. Eggertsson; Cosimo Petracchi
    Abstract: This paper revisits and proposes a resolution to an empirical and theoretical controversy between Keynes and the “classics” (or monetarists). The controversy dates to Keynes’s General Theory (1936)—most famously formalized in Hicks’s (1937) classic Econometrica article, in which the IS-LM model is first formally stated. We first replicate empirical tests formulated in the late 1960s and ’70s and show that more recent data have more statistical power and resolve the empirical debate in favor of the Keynesians, at least according to the criteria of the literature at that time. We then show, using a simple dynamic stochastic general equilibrium (DSGE) model, that the empirical tests suffer from the Lucas (1976) critique, as the conclusion fundamentally depends upon the assumed policy regime. Nevertheless, we argue, this new empirical result is useful: it provides evidence for the existence of a “Keynesian policy regime” according to which traditional monetary expansion loses its impact in the absence of a policy regime change, in the sense of Sargent (1982).
    JEL: B0 B1 B22 E0 E12 E13 E4 E5 E50 E51 E52
    Date: 2021–08
  21. By: Bear, Laura
    Abstract: This introduction explores how to build a critical analysis of post-crisis capitalism by moving beyond Marx, Foucault and Callon's approaches. This is crucially important because powerful technocratic institutions and the discipline of economics are attempting to regain legitimacy by adopting theories that mirror performativity, discursive, narrative and network concepts within the social sciences. To combat this we need to forge a new approach that returns our attention to questions of accumulation and inequality. It is with this in view that the articles in the special issue use the concept of speculation and explore it in real estate markets, infrastructure financing, oil and gold trading, ethical finance and gambling. Overall speculation is understood to be future-oriented affective, physical and intellectual labour that aims to accumulate capital for various ends. Control of the means of speculation is governed by the distribution of contracts and credit in society. And crucially the amount of surplus value extracted depends on calculations of risk based on the imagination of social differences. Social evaluations are at the core of the technologies of imagination used in speculation. Speculation is akin to practices of divination or magic because it aims to reveal a hidden order of human and non-human ethical powers that explain the past, present and future and make it possible to act. Importantly this means that racial, gendered, national and other imaginings of the social permeate acts of speculation. From our perspective, we can write a critical and post-colonial account of capitalism that addresses inequalities of race and nation scandalously omitted from Marx, Foucault and Callon's accounts of ‘the economic’.
    Keywords: speculation; capitalism; accumulation; post-coloniality; timescapes
    JEL: J1
    Date: 2020–02–18
  22. By: Pal, Sarmistha (University of Surrey); Chowdhury, Prabal Roy (Indian Statistical Institute); Saher, Zoya (University of Nottingham)
    Abstract: We examine the impact of legislated land ceiling size on capital investment and industrialisation in the Indian states. India's land ceiling legislations of 1960s and 1970s imposed a ceiling on maximum land holdings and redistributed above-ceiling lands. These ceiling legislations, effectively implemented or not, had increased land fragmentation and increased transactions costs of acquiring land for both strategic and non-strategic reasons. States with smaller ceiling size are thus likely to have (i) lower capital investment; (ii) less factories and lower industrialisation too. Ceteris paribus, estimates of both relative (post-1971 ceiling legislations relative to pre-1971 ones) and aggregate effects of legislated ceiling size lend support to these hypotheses, after eliminating competing explanations. These results offer insights about how to reduce transactions costs of land acquisition, policies that we claim are also applicable beyond India.
    Keywords: land reform, land acquisition, land ceiling size, transaction costs of land acquisition, investment in capital, industrialisation, India
    JEL: H70 K11 L38 O14 Q15
    Date: 2021–07
  23. By: Shuhei Aoki
    Abstract: In this paper, I construct a growth model of the Great Divergence, which formalizes Pomeranz's (2000) hypothesis that the relief of land constraints in Europe caused divergence in economic growth between Europe and China since the 19th century. The model has agricultural and manufacturing sectors. The agricultural sector produces subsistence goods from land, intermediate goods made in the manufacturing sector, and labor. The manufacturing sector produces the goods from labor, and its productivity grows through learning-by-doing. Households make fertility decisions. In the model, a large exogenous positive shock in land supply makes the transition of the economy from the Malthusian state, in which all workers are engaged in agricultural production and per capita income is constant, to the non-Malthusian state, in which the share of workers engaging in manufacturing production gradually increases and per capita income grows at a roughly constant growth rate. The quantitative predictions of the model provide several insights on the cause of the Great Divergence.
    Date: 2021–08
  24. By: Raquel Fernández; Sahar Parsa
    Abstract: Attitudes towards same-sex relationships in the US have changed radically over a relatively short period of time. After remaining fairly constant for over two decades, opinions became more favorable starting in 1992—a presidential election year in which the Democratic and Republican parties took opposing stands over the status of gay people in society. What roles did political parties and their leaders play in this process of cultural change? Using a variety of techniques including machine learning, we show that the partisan opinion gap emerged substantially prior to 1992—in the mid 1980s —and did not increase as a result of the political debates in 1992-'93. Furthermore, we identify people with a college-and-above education as the potential "leaders" of the process of partisan divergence.
    JEL: P16 Z1 Z13
    Date: 2021–07
  25. By: Charles I. Jones
    Abstract: The nonrivalry of ideas gives rise to increasing returns, a fact celebrated in Paul Romer's recent Nobel Prize. An implication is that the long-run rate of economic growth is the product of the degree of increasing returns and the growth rate of research effort; this is the essence of semi-endogenous growth theory. This paper interprets past and future growth from a semi-endogenous perspective. For 50+ years, U.S. growth has substantially exceeded its long-run rate because of rising educational attainment, declining misallocation, and rising (global) research intensity, implying that frontier growth could slow markedly in the future. Other forces push in the opposite direction. First is the prospect of "finding new Einsteins": how many talented researchers have we missed historically because of the underdevelopment of China and India and because of barriers that discouraged women inventors? Second is the longer-term prospect that artificial intelligence could augment or even replace people as researchers. Throughout, the paper highlights many opportunities for further research.
    JEL: E0 O4
    Date: 2021–08
  26. By: Pierre Januard (PHARE - Philosophie, Histoire et Analyse des Représentations Économiques - UP1 - Université Paris 1 Panthéon-Sorbonne)
    Abstract: Thomas Aquinas's short text on the activity of merchants in his early work the Commentary on the Sentences is a milestone in the understanding of trade and in the treatment of a deficit of information about the trade's finality and the intention of the merchant. Three levels of risk can thus be distinguished, relating to the licitness of the trade, the conditions of the trading activity, and the remuneration of merchants; and these in turn encounter three types of risk: analytical risks, commercial risks and strategic risks. The treatment of trade activity in the Commentary on the Sentences thus offers a new understanding of later works such as De regno and the Summa theologiae.
    Keywords: Thomas Aquinas,scholastics,trade,merchant,just price,risk
    Date: 2021–08–03
  27. By: Bertrand Garbinti (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique); Frédérique Savignac (Banque de france - Banque de France)
    Date: 2021–07–29
  28. By: Fix, Blair (York University)
    Abstract: For more than a century, political economists have sought to understand the nature of capital. The prevailing wisdom is that there must be something ‘real’ — some productive capacity — that underpins capitalized values. This thinking, I argue, is a mistake. Building on Jonathan Nitzan and Shimshon Bichler’s theory of capital as power, I argue that capitalization is an ideology. It is a quantitative ritual for converting earnings into present value. Although the ritual is arbitrary, it gives rise to astonishing empirical regularities, reviewed here.
    Date: 2021–08–14
    Abstract: Book review of Michele Alacevich´s recently published book, "Albert O. Hirschman: An intellectual biography", CUP, 2021.
    Date: 2021–08–11
  30. By: Kumar Sur, Pramod
    Abstract: Can a domestic policy implemented by the government in the past help explain the puzzling practice of health care usage today? I study this question in the context of India, where households' use of primary health care services presents a paradox. A significant fraction of Indian households uses fee-charging private health care services even though most providers have no formal medical qualifications. The private share of health care use is even higher in markets where qualified doctors offer free care through public clinics. Combining contemporary household-level data with archival records, I examine the aggressive family planning program implemented during the emergency rule in the 1970s and explore whether the coercion, disinformation, and carelessness involved in implementing the program could partly explain the puzzle. Exploiting the timing of the emergency rule, state-level variation in the number of sterilizations, and an instrumental variable approach, I show that the states heavily affected by the sterilization policy have a lower level of public health care usage today. I demonstrate the mechanism for this practice by showing that the states heavily affected by forced sterilizations have a lower level of confidence in government hospitals and doctors and a higher level of confidence in private hospitals and doctors in providing good treatment.
    Keywords: Health care market, health care usage, confidence in institutions, sterilization, persistence, India, I11, N35, I12, J13
    Date: 2021–08
  31. By: Kumar Sur, Pramod
    Abstract: Why does the vaccination rate remain low, even in countries where long-established immunization programs exist, and vaccines are provided for free? We study this lower vaccination paradox in the context of India—which contributes to the largest pool of under-vaccinated children in the world and about one-third of all vaccine-preventable deaths globally. We explore the importance of historical events shaping current vaccination practices. Combining historical records with survey datasets, we examine the Indian government’s forced sterilization policy implemented in 1976-77 and find that greater exposure to forced sterilization has had a large negative effect on the current vaccination completion rate. We explore the mechanism for this practice and find that institutional delivery and antenatal care are low in states where policy exposure was high. Finally, we examine the consequence of lower vaccination, suggesting that child mortality is currently high in states with greater sterilization exposure. Together, the evidence suggests that government policies implemented in the past could have persistent impacts on adverse demand for healthseeking behavior, even if the burden is exceedingly high.
    Keywords: Vaccination, immunization, family planning, forced sterilization, institutional delivery, antenatal care, child mortality, persistence, N01, I12, I18, O53, J13, Z1
    Date: 2021–08

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.