nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2021‒09‒13
seventeen papers chosen by
Bernardo Bátiz-Lazo
Northumbria University

  1. The spatial distribution of population in Spain: An anomaly in European perspective By Eduardo Gutiérrez; Enrique Moral-Benito; Daniel Oto-Peralías; Roberto Ramos
  2. Fringe Banking and Financialisation: Pawnbroking in pre-famine and famine Ireland By Eoin McLaughlin; Rowena Pecchenino
  3. How economic ideas led to Taiwan’s shift to export promotion in the 1950s By Douglas A. Irwin
  4. The Legacy of the Pinochet Regime By González, F; Prem, M
  5. Commodity Prices and Global Inflation, 1851-1913 By Stefan Gerlach; Rebecca Stuart
  6. Double-edged sword: Persistent effects of Communism on life satisfaction By Otrachshenko, Vladimir; Nikolova, Milena; Popova, Olga
  7. From hermit kingdom to miracle on the Han By Douglas A. Irwin
  8. Competition in Transitional Processes: Polanyi and Schumpeter By Theresa Hager; Ines Heck; Johanna Rath
  9. Come cambia la cooperazione allo sviluppo. L’evoluzione della solidarietà internazionale nella società civile italiana, 1960-2020 By Polito, Fiorenzo
  10. Fluctuations and growth in Ragnar Frisch’s rocking horse model By Carret, Vincent
  11. Maternal Stress and Offspring Lifelong Labor Market Outcomes By Vincenzo Atella; Edoardo Di Porto; Joanna Kopinska; Maarten Lindeboom
  12. Water, climate, and economy in India from 1880 to the present By Roy, Tirthankar
  13. The beneficial impact of mother’s work on children’s absolute income mobility, Southern Sweden (1947-2015) By Brea-Martinez, Gabriel
  14. Lack of Food Access and Double Catastrophe in Early Life: Lessons from the 1974–1975 Bangladesh Famine By Shabnam, Nourin; Guven, Cahit; Ulubasoglu, Mehmet
  15. Are Latin American business groups different? An exploratory international political economy perspective By Carney, Michael; Estrin, Saul; Liang, Zhixiang; Shapiro, Daniel
  16. The effects of unemployment on fertility By Andersen, Signe Hald; Özcan, Berkay
  17. Cultural Modernisation And Film Industry: Naked Facts From IMDB By Violetta I. Korsunova; Olesya V. Volchenko

  1. By: Eduardo Gutiérrez (Banco de España); Enrique Moral-Benito (Banco de España); Daniel Oto-Peralías (Department of Economics, Universidad Pablo de Olavide); Roberto Ramos (Banco de España)
    Abstract: We exploit the GEOSTAT 2011 population grid with a very high 1-km2 resolution to document that Spain presents the lowest density of settlements among European countries. Only a small fraction of the Spanish territory is inhabited, particularly in its southern half, which goes hand in hand with a high degree of population concentration. We uncover through standard regression analysis and spatial regression discontinuity that this anomaly cannot be accounted for by adverse geographic and climatic conditions. The second part of the paper takes a historical perspective on Spain’s settlement patterns by showing that the spatial distribution of the population has been very persistent in the last two centuries, and that the abnormally low density of settlements with respect to European neighbors was already visible in the 19th century, which indicates that this phenomenon has not emerged recently as a consequence of the transformations associated with industrialization and tertiarization. Using data on ancient sites, we find that Spain did not feature scarcity of settlements in comparison to other countries in pre-medieval times, suggesting that its current anomalous settlement pattern has not always existed and is therefore not intrinsic to its geography.
    Keywords: Economic Geography, Spain
    JEL: R10
    Date: 2021
  2. By: Eoin McLaughlin (University College Cork); Rowena Pecchenino (Maynooth University)
    Abstract: Pawnbroking, one of the oldest and most accessible forms of credit, was a common feature of life in pre-famine and famine Ireland. This paper studies the role of pawnbroking in the Irish financial system during this important period, applying insights from modern studies on fringe banking to analyse pawnbroking in Ireland. In the period under study, a formal tiered financial system existed; regulated joint stock banks offered services to industry and the better off, while fringe banks provided financial services largely, but not exclusively, to unbanked groups. The main findings are that pawnbrokers provided a steady source of credit throughout the island of Ireland and that this credit stream was more durable than that provided by alternative financial service providers in the fringe banking market, especially during the famine. Our findings suggest a nuanced interpretation is needed as we find strong interrelationships between the various financial service providers.
    Keywords: Fringe banking, financialisation, pawnbroking, Ireland
    JEL: G21 G51 N23
    Date: 2021–09
  3. By: Douglas A. Irwin (Peterson Institute for International Economics)
    Abstract: Taiwan was the first developing country to adopt an export-oriented trade strategy after World War II. The factors usually associated with big shifts in policy—a macroeconomic crisis, a change in political power or institutions, lobbying by export interests, pressure from international financial institutions—were not present; it was ideas that were key. In 1954, economist S. C. Tsiang proposed that Taiwan boost export earnings rather than squeeze import spending to deal with its chronic shortage of foreign exchange. He recommended a currency devaluation to establish a realistic exchange rate and a market-based system of foreign exchange allocation to end the inefficient rationing by the government. Four years later, a policymaker, K. Y. Yin, fought for the adoption of Tsiang’s proposal, helping clear the way for Taiwan’s phenomenal growth in trade.
    Keywords: trade reform, foreign exchange, flexible exchange rates
    JEL: F13 F31 N75
    Date: 2021–08
  4. By: González, F; Prem, M
    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.
    Keywords: Post-dictatorship institutional change in Chile, Elements of continuity and change in Chile, Analysis of dictatorial political practices in post-dictatorship democracies, Political and social elites in Chile
    JEL: D2 G2 G3 M2 N86
    Date: 2021–08–04
  5. By: Stefan Gerlach; Rebecca Stuart
    Abstract: This paper uses annual data to study the interaction of consumer and commodity prices in 15 economies over the period 1850-1913. We find that consumer price inflation in all 15 countries co-moves with a broad measure of changes in commodity prices. Consumer prices comove most strongly with changes in metal prices, in particular pig iron prices. Furthermore, changes in pig iron prices and production, which have attracted much attention in the literature on 19th century US business cycles, co-move with the international business cycle, suggesting that pig iron prices offer a transmission channel through which international business cycle movements affect inflation.
    Keywords: commodity prices, Gold standard, global inflation, pig iron
    JEL: E31 F40 N10
    Date: 2021–09
  6. By: Otrachshenko, Vladimir; Nikolova, Milena; Popova, Olga
    Abstract: Communism was a two-edged sword for the trustees of the former regime. Communist party members and their relatives enjoyed status and privileges, while secret police informants were often coerced to work clandestinely and gather compromising materials about friends, colleagues, and neighbors. We examine the long-term consequences of such connections to the communist regime for life satisfaction in Central and Eastern Europe and the former Soviet Union. We also calculate a monetary equivalent of those effects and empirically test mechanisms. The findings underscore that past communist regime connections have a persistent but differential effect on life satisfaction.
    Keywords: Communist regime,historical legacy,Eastern Europe,former Soviet Union,life satisfaction,elite networks,Communist party,informants
    JEL: D60 I31 N00 P26 P36 P52
    Date: 2021
  7. By: Douglas A. Irwin (Peterson Institute for International Economics)
    Abstract: In 1960, South Korea’s exports were about 1 percent of GDP, and the country’s ability to import depended almost entirely on US aid. After changing its foreign exchange and trade policies in the mid-1960s, Korea saw a surge in exports to more than 10 percent of GDP by the end of the decade. What factors account for the shift in policy that enabled this dramatic export growth to occur? The United States helped initiate the process by withholding financial assistance, pressuring Korea to devalue its currency and reform its foreign exchange regime. Initially, the Korean government resisted taking these steps, but in 1964 it became firmly committed to an export promotion strategy to boost foreign exchange earnings and end its dependence on American aid.
    Keywords: export promotion, export orientation, devaluation, foreign exchange reform
    JEL: F13 F31 N75
    Date: 2021–09
  8. By: Theresa Hager (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria); Ines Heck (University of Greenwich, Great Britain); Johanna Rath (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria)
    Abstract: We examine parallels and differences in the analyses of societal transition by Karl Polanyi and Joseph A. Schumpeter. We argue that although their understanding of historical processes differs – transformational-political vs. evolutionary-natural – the central mechanism of change they describe is the same. We identify three spheres essential to both authors’ works: the economic, the political and the socio-cultural sphere. Polanyi and Schumpeter describe an expansion of the economic sphere culminating in a subordination of the other parts of society. In capitalism this dominance stems from capitalism’s emergence as well as the concept of competition. The consequence is a profound change in societal relations. Changes in the socio-cultural sphere in turn produce changes in the political sphere that bring about detrimental consequences for democracy. In our paper we carve out the similarities as well as the differences in the respective theories, clarify the role competition plays therein and discuss the consequences for the political process. We adopt an analytical framework that puts the nearly analogous mechanism of change in the centre. This in turn enables us to make use of the complementarity and to gain valuable insights on the interdependence of capitalism and democracy that can inform trends and phenomena that are currently observed.
    Date: 2021–09
  9. By: Polito, Fiorenzo
    Abstract: The set of Italian organisations and associations engaged in international development cooperation and humanitarian aid activities in Italy is characterised by an extreme complexity and variety. This work aims to trace a historical reconstruction of the Italian panorama of non-governmental organizations, otherwise known by the acronym of NGOs, from the 1960s up to 2020. In approaching the study of development cooperation in Italy, one cannot in fact ignore NGOs: they represent one of the most peculiar aspects of Italian international cooperation, that is, a "solidarity from below" that has its roots in Catholic and secular cultural dimensions. Only later did the government open spaces of operation by recognising on a legal level the personal commitment of citizens and their organisational forms - to then assume the direct management of interventions and of the same cooperation. This analysis, which is part of a broader doctoral research work that analyses the evolution of the organisational models adopted by NGOs in Italy, aims at responding to a double need: on the one hand, the need to reconstruct the evolutionary history of the archipelago international cooperation and solidarity organisations to understand their working methods, functioning mechanisms, as well as internal dynamics of change; on the other hand, the need to transmit the historical memory of women and men whose personal life is deeply intertwined with their professional one and who have devolved their work commitment to the many themes of international solidarity. These people have in fact seen the birth and growth of international solidarity initiatives of Italian civil society, accompanying the processes of development and transformation and thus accumulating a knowledge capital of considerable importance and scope, which however often does not find channels to be transmitted. What emerges from this narrative is a story of political, financial and organisational changes involving institutions and civil society. Sharing the spirit and the need to know, understand and know in order to orient oneself, this contribution represents a necessary prelude to a longer reflection that will help to systematise and articulate the evolution of international cooperation and solidarity organisations in Italy.
    Keywords: NGOs; international cooperation; aid; civil society; Italy
    JEL: F35
    Date: 2021
  10. By: Carret, Vincent
    Abstract: Ragnar Frisch's famous "rocking horse" model has been the object of much praise and even controversy since its publication in 1933. This paper offers a new simulation of the model to show that there exists cyclical trajectories in the propagation mechanism. By building an analytical solution taking the same form as Frisch's original solution, we can provide new insights into the ideas encapsulated in his model, in particular the fact that the author constructed a model combining cycles and growth. The exploration of Frisch's formal construction of the model leads us to link his statistical work on the decomposition of time series with his economic insights on investment cycles, which both led to the 1933 model. We contrast Frisch’s approach to that of other econometricians who used similar equations, showing that their different mathematical solutions were the product of what they wanted to show with their models.
    Date: 2021–08–23
  11. By: Vincenzo Atella (University of Rome Tor Vergata); Edoardo Di Porto (Federico II University of Napoli); Joanna Kopinska (Sapienza University of Rome); Maarten Lindeboom (Vrije Universiteit Amsterdam)
    Abstract: This paper examines the effects of in-utero exposure to stress on lifelong labor market outcomes. We exploit a unique natural experiment that involved randomly placed Nazi raids on municipalities in Italy during WWII. We use administrative data on the universe of private sector workers in Italy and link this data to unique historical data with detailed information about war casualties and Nazi raids across space (Municipality) and time. We find that prenatal stress exposure leads to lower wage earnings when workers start their career, and that this effect persists until retirement. The earnings penalty is in large part due to the type of job that people hold and interruptions in their working career due to unemployment. We further show that workers exposed to in-utero stress face larger earnings reductions after job loss due to mass layoffs. This earnings loss deepens their relative disadvantage over time.
    Keywords: Early-life, stress, life-long earnings, mass layoff, dynamic complementarities
    JEL: I10 O10
    Date: 2021–09
  12. By: Roy, Tirthankar
    Abstract: Theories of economic growth based on Western Europe are inadequate when applied to India because the two areas are incommensurate in their geographies and their resources. Because its initial conditions were different from those in, say, Europe and North America, India could arrive at economic growth only by solving different problems—preeminent among them being reliable access to clean water. The actions taken by the state, scientists, and society since 1880 in India weakened the chains that linked water insecurity, low yield, mass mortality, and caste-biased mortality but at the inevitable cost of ecological stress. In a tropical-monsoon climate, where well-being and the environment were constantly in flux, asking deprived individuals to consume less or cooperate more was not necessarily the best response to water problems. Science and capitalism provided better solutions. This article explores the interaction between water, environmental change, and economic change in India since the end of the nineteenth century. A struggle to mitigate poverty and inequality in access to water, a condition that the tropical-monsoon climate made almost universal, delivered economic growth and demographic transition in colonial India (1858–1947) and postcolonial India. At the same time, ensuring the fair distribution of a vital resource like water led to its overexploitation. The “tragedy of the commons” notion that Hardin advanced is not an accurate representation of this syndrome (see below).1
    JEL: N55
    Date: 2021–03–01
  13. By: Brea-Martinez, Gabriel
    Abstract: This paper examines the influence of mothers’ employment on children’s economic mobility in a period when women’s labor market participation was still increasing, and it was still was far from common for a mother to be in paid work. It focuses on a period of transition for women’s labor market participation in Sweden, when mothers faced higher barriers to employment. The findings show that intergenerational income associations indicate that the mother’s income did not influence her children directly, in line with the results of most studies on this topic. Nevertheless, I also found that these traditional measures of income mobility failed to capture the important effects of maternal paid labor on children’s income mobility. By using extremely rich longitudinal data from Southern Sweden, I studied the trends in children’s absolute upward mobility (i.e., earning more than their fathers). I found that whether a mother was in paid work, was economically independent, and had an income similar to that of the father – which is a proxy for economic autonomy – during the late childhood and adolescence of her children had substantial effects on her children’s upward economic mobility, and especially on that of her daughters.
    Date: 2021–08–29
  14. By: Shabnam, Nourin; Guven, Cahit; Ulubasoglu, Mehmet
    Abstract: We study the education outcomes of the 1974–1975 Bangladesh famine on early-life survivors using the 1991 Bangladesh microcensus data. We find that famine adversely affected the survivor children in areas that experienced higher rice prices relative to labour wage. In addition, children living in wealthy households in famine-stricken areas had better education outcomes than children with no famine exposure at all. We also find that, surprisingly, exposure to double catastrophe (i.e., concurrent famine and flood) in early life had weaker effects than exposure to single catastrophe. We show that disaster-alleviation mechanisms worked better in districts affected by double disasters.
    Keywords: The 1974–1975 Bangladesh Famine; Food Access; Early Life Malnutrition; Education Outcomes; Double Catastrophe
    JEL: I15 I25 J13 J24
    Date: 2021–08–04
  15. By: Carney, Michael; Estrin, Saul; Liang, Zhixiang; Shapiro, Daniel
    Abstract: We advance an international political economy (IPE) perspective that geo-political events can have long-lasting imprint effects on countries and their firms. We explore the idea that shared political history and geography combine to create specific structural conditions that shape the international competitiveness of all firms in the region. In particular, we consider whether the Monroe Doctrine of 1823, which asserted American influence in the Western Hemisphere, contributed to the creation of institutional structures across Latin America (LA) affecting the strategies of all firms to this day. We illustrate the IPE perspective using the example of the contemporary international competitiveness of LA business groups.
    Keywords: International political economy; business groups; international competitiveness; Latin America; imprint
    JEL: R14 J01
    Date: 2021–08–16
  16. By: Andersen, Signe Hald; Özcan, Berkay
    Abstract: We analyse the effects of unemployment on the likelihood of having a first and second birth in Denmark. The existing studies on this topic have generated contradictory results, and have made a weak case for the exogeneity of unemployment to fertility. We suggest that firm closures constitute an exogenous source of unemployment, and adopt firm closures as an instrument for estimating individuals’ fertility responses. Using a life-course approach, we exploit unique administrative data from Denmark that include all Danish residents born in 1966 and followed between 1982 and 2006. The data contain monthly information about each individual’s employment status, type of employer, relationship status and partner’s characteristics; as well as very detailed fertility information, including on stillbirths and registered miscarriages. We find that unemployment has a positive effect on motherhood transitions and a negative effect on fatherhood transitions, although the latter is not robust to the inclusion of controls. We find no significant effect of unemployment on second births.
    Keywords: unemployment; firm closures; first and second births; causality
    JEL: R14 J01 N0
    Date: 2021–09–01
  17. By: Violetta I. Korsunova (National Research University Higher School of Economics); Olesya V. Volchenko (National Research University Higher School of Economics)
    Abstract: This paper focuses on the relationship between film content and human values in Europe. Our research fills in two research gaps. For one thing, it reveals the links between people’s values and visual cultural production that can showcase the effects of changing values on culture. The other part of our research concerns the use of the Internet Movie Database (IMDb) as a data set reflecting changes in modern societies. We track the changes in film topics provided by the IMDb and European Values Study (EVS) data to see how the changes in people’s values are linked to the popularity of related topics. Our special focus lies on the link between choice values and the probability of nudity depiction in films. The sample contained all European countries across 1960-2013. Using multilevel regression analysis, we found that the probability of female nudity is associated with the level of choice values, whereas the male nudity is more likely to appear in films related to the topic of homosexuality.
    Keywords: cultural modernisation, emancipative values, film studies, female nudity, male nudity, nudity in films.
    JEL: A13 C3 Z11
    Date: 2021

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