nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2022‒08‒15
37 papers chosen by
Bernardo Bátiz-Lazo
Northumbria University

  1. Correspondent banking, systematic risk, and the Panic of 1893 By Cotter, Christopher; Rousseau, Peter L
  2. Job tenure and unskilled workers before the Industrial Revolution: St Paul’s Cathedral 1672-1748 By Paker, Meredith; Stephenson, Judy; Wallis, Patrick
  3. A talk with a Nobel Laureate Prof. Oliver Hart on “Voice vs. Exit” By Ayesha Atique
  4. Journal of Economic Literature codes classification system (JEL) By Heikkilä, Jussi T. S.
  5. Diagnosing unemployment: the dual project of the ENSAE's band By Plassard, Romain
  6. Life and debt: a view from the South By James, Deborah
  7. H. David Evans, 1941-2022: Progenitor of Computable General Equilibrium Modelling in Australia By Peter Dixon
  8. A History of Pakistan Railways From Pre-Partition Times till Now: A Historical Review with Key Evolutionary Milestones By Danish Bhutto
  9. Who Benefits from Meritocracy? By Moreira, Diana B.; Perez, Santiago
  10. “Oil nationalism” as a deterrent to structural change? The case of oil contracts in Argentina (1958-1962) By Manuel Màximo Cruz; Santiago José Gahn
  11. The settlers’ fortunes: Comparing tax censuses in the Cape Colony and early American Republic By Johan Fourie; Frank W. Garmon Jr.
  12. The Narrow Corridor: How Nations Struggle For Liberty By Raja Rafi Ullah; Hafeez Ur Rehman Hadi
  13. Living standards in settler South Africa, 1865-1920 By Johan Fourie; Kris Inwood; Martine Mariotti
  14. An Exploration of Racial Residential Segregation Trends in Atlanta: 1970-2020 By Lakshmi Pandey; David L. Sjoquist
  15. Effects of Restrictive Abortion Legislation on Cohort Mortality Evidence from 19th Century Law Variation By Joanna N. Lahey; Marianne H. Wanamaker
  16. On the stabilizing role of cash for societies By Rösl, Gerhard; Seitz, Franz
  17. Change in and Changing Economics By Davis, John B.
  18. Twin transitions of decarbonisation and digitisation: a historical perspective on energy and information in European economies By Fouquet, Roger; Hippe, Ralph
  19. Measuring the carnation revolution: a synthetic control analysis of economic crisis in Portugal (1974-1992) By Luciano Amaral; Bruno Lopes Marques; João Pereira dos Santos
  20. Restoring confidence in troubled financial institutions after a financial crisis By Charles W. Calomiris; Mark A. Carlson
  21. Monetization, wars, and the Italian fiscal multiplier By Michele Fratianni; Federico Giri; Riccardo Lucchetti; Francesco Valentini
  22. Testing the Hayek hypothesis: Recent theoretical and experimental evidence By Brian Albrecht; Omar Al-Ubaydli; Peter Boettke
  23. Monetary Growth and Financial Sector Wages By Michael Patrick Curran; Matthew J. Fagerstrom; Ryan Zalla
  24. Have We Passed Peak Capitalism? By Fix, Blair
  25. Does the creation of smaller states lead to higher economic growth? Evidence from state reorganization in India By Vikash Vaibhav; K.V. Ramaswamy
  26. The Great Migration and Educational Opportunity By Cavit Baran; Eric Chyn; Bryan A. Stuart
  27. Demographic Transition, Industrial Policies and Chinese Economic Growth By Michael Dotsey; Wenli Li; Fang Yang
  28. Theories of value in the history of economic thought, from objective theory of value to the subjective one : Analysis and diagnostic By Aniss Mennoune
  29. Business and Investment Issues in Pakistan By Usman Ahmad; Amena Urooj,; Uzma Zia
  30. The Shadow of the Neolithic Revolution on Life Expectancy: A Double-Edged Sword By Raphaël Franck; Oded Galor; Omer Moav; Ömer Özak
  31. Can collective property rights foster development? Evidence from a quasi-natural experiment in Colombia By Joaquín Daniel Ramírez-Cabarcas
  32. On the long-run relationship between R&D expenditures and GDP: some considerations for the case of Italy (1963-2013) By Santiago José Gahn
  33. Disruptive innovation and spatial inequality By Tom Kemeny; Sergio Petralia; Michael Storper
  34. Financialization Historically Contemplated By Tsaliki, Persefoni; Tsoulfidis, Lefteris
  35. Don't reduce Amartya Sen to a single identity! By Antoinette Baujard
  36. Persecution and Migrant Self-Selection: Evidence from the Collapse of the Communist Bloc By Ran Abramitzky; Travis Baseler; Isabelle Sin
  37. Agglomeration Spillovers and Persistence: New Evidence from Large Plant Openings By Carlianne Patrick; Mark Partridge

  1. By: Cotter, Christopher; Rousseau, Peter L
    Abstract: During the U.S. National Banking Period (1863-1913), a network of correspondent banking relationships left the nation vulnerable to systemic risks, bank failures, and financial panics. We use comprehensive data on primary correspondent relationships for all national, state, savings, and private banks in the lead up to the Panic of 1893 to show that failures of both upstream and downstream correspondents increased the likelihood that a given bank would itself fail, and that these effects varied over the course of the Panic. Members of the New York Clearinghouse, despite a very low incidence of actual failure, also saw significant weakening of their balance sheets early in the Panic when their downstream respondents failed, and falling stock prices throughout the disruption. The results demonstrate a two-way system-wide weakness of the correspondent system that the Federal Reserve Act of 1914 presumably sought to remedy.
    Keywords: Interbank networks, correspondent banking, the Panic of 1893, bank contagion
    JEL: G01 G21 N21
    Date: 2022–05–19
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:113340&r=
  2. By: Paker, Meredith; Stephenson, Judy; Wallis, Patrick
    Abstract: How were unskilled workers selected and hired in preindustrial labour markets? We exploit records from the rebuilding of St. Paul’s Cathedral, London (1672–1748) to analyze the hiring and employment history of over one thousand general building labourers, the benchmark category of ‘unskilled’ workers in long-run wage series. Despite volatile demand, St. Paul’s created a stable workforce by rewarding the tenure of longstanding workers. More senior workers received more days of work each month, preference when jobs were scarce, and the opportunity to earn additional income. We find the cathedral’s strategy consistent with reducing hiring frictions and turnover costs.
    Keywords: labour markets; construction; unskilled labour; churn; job creation; tenure; early modern; construction workers
    JEL: N33 N63 N83 J21 J22 J23
    Date: 2022–07
    URL: http://d.repec.org/n?u=RePEc:ehl:wpaper:115595&r=
  3. By: Ayesha Atique (GCUF Alumna)
    Abstract: The debate commenced with a question which has recently become a hot topic in the U.S and Europe; what could be the suitable objective of a public company. In this regard, almost half a century ago, one of the most famous economists, Milton Friedman, asserted in the New York Times that corporations have just one social responsibility that is to make money for their owners. However, many people do not agree with this point of view of Milton Friedman.
    Keywords: Talk, Nobel Laureate, Prof. Oliver Hart,
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:pid:wbrief:2021:41&r=
  4. By: Heikkilä, Jussi T. S.
    Abstract: The Journal of Economic Literature codes classification system (JEL) published by the American Economic Association (AEA) is the de facto standard classification system for research literature in economics. The JEL classification system is used to classify articles, dissertations, books, book reviews, and working papers in EconLit, a database maintained by the AEA. Over time, it has evolved and extended to a system with over 850 subclasses. This paper reviews the history and development of the JEL classification system, describes the current version, and provides a selective overview of its uses and applications in research. The JEL codes classification system has been adopted by several publishers, and their instructions are reviewed. There are interesting avenues for future research as the JEL classification system has been surprisingly little used in existing bibliometric and scientometric research as well as in library classification systems.
    Keywords: economics,JEL codes,classification systems,classifications,bibliometrics,scientometrics
    JEL: A10 A14
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:zbw:esprep:261388&r=
  5. By: Plassard, Romain
    Abstract: Throughout the 1980s and 1990s, there was a continuing effort to specify and estimate general equilibrium models with rationing (GEMR). However, this applied work has never been studied in a historical perspective. My article contributes to fill this gap. The focus is on the research led by French statisticians/econometricians including Patrick Artus, Sanvi Avouyi-Dovi, Christian Gourieroux, Jean-Jacques Laffont, Guy Laroque, and Alain Monfort. I show that there were two different motivations behind their work on GEMR: to inform economic policy and to advance data analytics. I explain the conditions under which each project emerged, account for their development, and discuss their scope. It follows a fresh perspective on the history of the microfoundations of macroeconomics.
    Keywords: Disequilibrium macroeconomics, Estimation, Unemployment, Economic Policy, ENSAE.
    JEL: B21 B22 B23 E13 E61
    Date: 2022–06–27
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:113584&r=
  6. By: James, Deborah
    Abstract: This paper explores how, in countries in the global south where sharp rises in indebtedness have accompanied the financialization of the economy, debt factors into other relationships and meanings in the life of the family and household. Using ethnographic material from South Africa, it explores local concepts of householding, obligation and saving (asking whether relations of commodified debt nullify those of longstanding social commitment), investigates how people convert between cash-based or short term imperatives and moral or longer-term ones, and shows how barriers are sometimes erected between these separate spheres thus making them incommensurable. The paper challenges some accounts of the “financialization of daily life” which imply a one-way, top-down intrusion by the market—with state backing—into people’s intimate relations, commitments and aspirations, and maintains that we need to explore the complicity of participants’ engagement with these processes rather than seeing them as imposed on unwilling victims.
    Keywords: aspiration; debt; family; financialisation; household; South Africa; RES-062-23-1290; UKRI block grant
    JEL: N0 F3 G3
    Date: 2021–02–05
    URL: http://d.repec.org/n?u=RePEc:ehl:lserod:106517&r=
  7. By: Peter Dixon
    Abstract: David Evans was an Australian who completed a path-breaking Ph. D. thesis at Harvard in 1968 under the supervision of Wassily Leontief. The thesis set out Australia's first computable general equilibrium (CGE) model, with an application to an analysis of Australia's then policy of high tariffs. David returned to Australia in 1968 but left in 1973 and spent the rest of his career in the UK. Despite his relatively brief time working in Australia, David was a major contributor to Australian economics. In this paper, I start with a few personal reminiscences about David. Then I explain how the Evans model worked, and its limitations. This is followed by a description of what happened in Australian CGE research in the 1970s, post Evans. Since then, Australia has become well known in this field. The international reach of Australian CGE modelling is described briefly in the final part of the paper.
    Keywords: H David Evans, Linear programming, Computable general equilibrium modelling, Australian tariff policy
    JEL: C68 C61 B32
    Date: 2022–07
    URL: http://d.repec.org/n?u=RePEc:cop:wpaper:g-331&r=
  8. By: Danish Bhutto (M.Phil Scholar, PIDE)
    Abstract: Pakistan’s railway sector is not “on rails” and the sector seems to be wrapped around a single institution, Pakistan Railways (PR)—managed collectively by the Ministry of Railways (MoR) and PR. The crisis in PR started in the 1970s and continues to this date. The passenger traffic has reduced, freight traffic has truncated, revenues have scaled-down while working expenses have soared.
    Keywords: Pakistan, Railways,
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:pid:wbrief:2021:59&r=
  9. By: Moreira, Diana B. (University of California, Davis); Perez, Santiago (University of California, Davis)
    Abstract: Does screening applicants using exams help or hurt the chances of lower-SES candidates? Because individuals from lower socioeconomic backgrounds fare, on average, worse than those from richer backgrounds in standardized tests, a common concern with this “meritocratic” approach is that it might have a negative impact on the opportunities of lower-SES individuals. However, an alternative view is that, even if such applicants underperformed on exams, other (potentially more discretionary and less impersonal) selection criteria might put them at an even worse disadvantage. We investigate this question using evidence from the 1883 Pendleton Act, a landmark reform in American history which introduced competitive exams to select certain federal employees. Using newly assembled data on the socioeconomic backgrounds of government employees and a difference-in-differences strategy, we find that, although the reform increased the representation of “educated outsiders” (individuals with high education but limited connections), it reduced the share of lower-SES individuals. This decline was driven by a higher representation of the middle class, with little change in the representation of upper- class applicants. The drop in the representation of lower-SES workers was stronger among applicants from states with more unequal access to schooling as well as in offices that relied more heavily on connections prior to the reform. These findings suggest that, although using exams could help select more qualified candidates, these improvements can come with the cost of increased elitism.
    Keywords: inequality, intergenerational mobility, job testing
    JEL: M5
    Date: 2022–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp15341&r=
  10. By: Manuel Màximo Cruz; Santiago José Gahn
    Abstract: Due to growing oil imports, political leaders had been forced to let private companies produce the much-needed oil without which modern life is impossible. The most strident political clashes with what is known as ‘oil nationalism’, both ending in a coup d’´etat, happened in the period 1954/55 and 1958/63. The former had President Per´on’s dealings with the California Argentina de Petr´oleos S.A., a subsidiary of the Standard Oil, at the center of a heated debate and, the latter, had President Frondizi’s oil contracts with foreign oil companies. The historical, political and diplomatic background is developed so as to understand the complexities that led to the annulment of this unprecedented and effective policy with impressive effects on oil production and investment. For the first time, we show empirical evidence on the effectiveness of these contracts on domestic oil production.
    Keywords: Argentina, economic development, Foreign Direct Investment, import substitution policies, industrial policy, petroleum sector, structural change
    JEL: E22 F21 F23 G31 H54 L16 L52 N46 O14
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:crn:wpaper:crn2103&r=
  11. By: Johan Fourie (Department of Economics, Stellenbosch University); Frank W. Garmon Jr. (Department of Leadership and American Studies, Christopher Newport University)
    Abstract: Europeans at the end of the eighteenth century had settled across the globe, from North and South America to Australia to the southern tip of Africa. While theories of institutional persistence explain the ‘reversal of fortunes’ between settled and unsettled regions, few studies consider the large differences in early living standards between settler societies. This paper uses newly transcribed household-level tax censuses from the Dutch and British Cape Colony and the United States shortly after independence to show comparative levels of income and wealth over four decades both between the two regions and within them. Cape farmers were, on average, more affluent than their American counterparts. While crop output and livestock were more unequally distributed at the Cape, slave ownership in America was more unequal. There was little indication of an imminent reversal of fortunes.
    Keywords: settler economies, comparative development, slavery, inequality, colonies
    JEL: N37
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:sza:wpaper:wpapers375&r=
  12. By: Raja Rafi Ullah (Research Fellow, PIDE); Hafeez Ur Rehman Hadi (Research Fellow, PIDE)
    Abstract: Pakistan Institute of Development Economics (PIDE) recently organized a Distinguished Invited Lecture Series in which PIDE invited esteemed global scholars of unmatched academic excellence. The 3rd lecture was organized on the 13th of January, 2021 where the guest speaker was Professor James A. Robinson, the author of the renowned best-selling book Why Nations Fail, and the current Reverend Richard L. Pearson Professor of Global Conflict Studies at Chicago University. The lecture was titled ‘The Narrow Corridor: How Nations Struggle for Liberty, and the central theme of the discussion was to give insight into Professor Robinson’s recent book, The Narrow Corridor, which he has co-authored with Professor Daron Acemoglu. The lecture session was moderated by Vice-Chancellor, PIDE Dr. Nadeem Ul Haque.
    Keywords: Narrow Corridor, Struggle, Liberty,
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:pid:wbrief:2021:14&r=
  13. By: Johan Fourie; Kris Inwood; Martine Mariotti
    Abstract: We construct an anthropometric measure of living standards for White South Africans covering 55 years using five different military sources. Accounting for different selection across the forces, we find that prior to industrialisation, White South African males were amongst the tallest in the world. Rural living standards declined in response to natural disasters in the 1880s and 90s with those with the lowest living standards moving off the land and into the cities. We find a slight improvement in living standards after 1900 across all regions and occupations. During industrialisation, White males in South Africa continued to exhibit the highest living standards in the world as represented by their stature. Convergence to other nations in the early twentieth century shows, however, that while there may have been no industrialisation penalty, industrialisation did not lift living standards the way it did elsewhere.
    Keywords: anthropometric, South Africa, stature, height, living standards
    Date: 2022–07
    URL: http://d.repec.org/n?u=RePEc:auu:hpaper:106&r=
  14. By: Lakshmi Pandey (Center for State and Local Finance, Andrew Young School of Policy Studies, Georgia State University); David L. Sjoquist (Center for State and Local Finance, Andrew Young School of Policy Studies, Georgia State University)
    Abstract: In this report we explore two major demographic changes in the 10-county Atlanta Regional Commission region. First, between 1940 and 2020, the population of the ARC region changed dramatically, both in number and racial composition. Second, between 1970 and 2020 the region experienced a significant change in racial residential segregation.
    Date: 2022–04
    URL: http://d.repec.org/n?u=RePEc:ays:cslfwp:cslf2201&r=
  15. By: Joanna N. Lahey; Marianne H. Wanamaker
    Abstract: Recent studies based on 20th century US data conclude that abortion access raises children’s average socioeconomic outcomes. We generalize a model of fertility, highlighting assumptions under which these abortion predictions can be reversed. Using 19th century abortion restrictions, we empirically demonstrate these points. Despite a more than 5 percent increase in birth rates among abortion-restricted cohorts, we find little evidence of negative selection at birth. Longevity was affected nevertheless; in the first ten years of life, children in these larger cohorts died of infectious disease more frequently. These mortality effects diminish with age, potentially reversing at older ages as a result of disease immunity or other offsetting factors.
    JEL: H75 J1 J13 J16 J18 K14 K15 K38 N3 N31 N4 N41
    Date: 2022–07
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:30201&r=
  16. By: Rösl, Gerhard; Seitz, Franz
    Abstract: In this paper, we focus on the stabilizing role of cash from a society-wide perspective. Starting with conceptual remarks on the importance of money for the economy in general, special attention is paid to the unique characteristics of cash. As these become apparent especially during crisis periods, a comparison of the Great Depression (1929 - 1933) and the Great Recession 2008/09 shows the devastating effects of a severe monetary contraction and how a fully elastic provision of cash can help to avoid such a situation. We find interesting similarities to both crises in two separate case studies, one on the demonetization in India 2016 and the other on cash supply during various crises in Greece since 2008. The paper concludes that supply-driven cash withdrawals from circulation (either by demonetization or by capital controls) destabilize the economy if electronic payment substitutes are not instantly available. However, as there is no perfect substitute for cash due to its unique properties, from the viewpoint of the society as a whole an efficient payment mix necessarily includes cash: It helps to stabilize the economy not only in times of crises in general, no matter which government is in place. Consequently, it should be the undisputed task of central banks to ensure that cash remains in circulation in normal times and is provided in a fully elastic way in times of crisis.
    Keywords: cash,banknotes,money,crises,stabilization
    JEL: E41 E51 E58
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:zbw:imfswp:167&r=
  17. By: Davis, John B. (Department of Economics Marquette University)
    Abstract: Change in economics has likely always been a subject of discussion in economics and political economy. That discussion may have languished in the first post-World War II decades when neoclassicism was ascendent and dominated economics, but the emergence of game theory, more recently behavioral economics, and a variety of other new fields and approaches in economics since the 1980s has re-invigorated interest in the subject so that now there are many views on it. Yet systematic investigation of what change in economics involves has advanced little. Change is clearly always on-going in any discipline, but when it is said there is or is not ‘change in economics’ something more significant beyond this is usually intended. How, then, can this more significant sort of change be identified and explained? I begin by discussing the issue of method for analyzing change in economics.
    Keywords: change, boundaries, interdisciplinary, core-periphery, research practices, world values survey, open-closed systems
    JEL: A12 A13 A14 B20 B41 B50
    Date: 2022–06
    URL: http://d.repec.org/n?u=RePEc:mrq:wpaper:2022-05&r=
  18. By: Fouquet, Roger; Hippe, Ralph
    Abstract: This paper investigates the structural transformation associated with the ‘twin transition’ of decarbonisation and digitalisation in European economies by placing it in a broader historical perspective. With this in mind, this paper analyses the long run trends in energy intensity and communication intensity since 1850. The evidence indicates that these economies experienced a coevolution of energy and communication intensities during their industrialisation phase, followed by a divergence in the energy and communication intensities associated with the development of high tech and ICT. Overall, this reflects the dematerialisation of these European economies. The paper also analyses the speed of historical energy transitions and communication technology transitions in these economies, finding that communication transitions appear to be substantially faster than energy transitions. The evidence suggests that twin transitions of the decarbonisation and digitalisation of economies are likely to experience a process of imbalanced structural transformation (with ICT continuing to forge ahead). This expectation should guide policy recommendations – increasing the need for low carbon industry to develop and create synergies between the two industries in order to avoid the new industrial revolution being high-carbon.
    Keywords: energy transitions; ICT; twin transition; energy intensity; historical; EP/R 035288/1; ES/R009708/1
    JEL: N0
    Date: 2022–07–02
    URL: http://d.repec.org/n?u=RePEc:ehl:lserod:115544&r=
  19. By: Luciano Amaral; Bruno Lopes Marques; João Pereira dos Santos
    Abstract: On 25 April 1974, a military coup toppled Western Europe’s oldest dictatorship, Portugal’s Estado Novo. The following years were characterized by political and economic instability with a wage explosion and the reduction of working hours for the country’s labor force, the expropriation of the assets of the business elite and a process of capital flight, and the end of colonial trade and the arrival of about half a million repatriates with the end of the empire. As a result of these events the Portuguese economy slowed from its 1950s and ‘60s high growth and industrialization, when it had been counted among the fastest growing in the world. But measuring the impact of the “Carnation Revolution” is very difficult due to its coincidence with the 1970s oil shocks. What part of responsibility for the poor performance should be attributed to the international crisis and what part to the consequences associated with the revolution? To disentangle the problem, we use the synthetic control method with data for other OECD countries. We find that the Carnation Revolution and the subsequent events caused a negative structural break that made GDP per capita lower than it would have been in the absence of the revolution and the instability. We also analyze the effects on the current account and capital-labor ratios.
    Keywords: Economic growth, Crisis, 1970s, Carnation revolution; Portugal
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:unl:unlfep:wp641&r=
  20. By: Charles W. Calomiris; Mark A. Carlson
    Abstract: After an unprecedented number of banks suspended operations in the during Panic of 1893, the head regulator of banks chartered by the United States government allowed about 100 banks to reopen after certifying their solvency. We evaluate whether actions by bank owners to change management, contract with depositors to extend liability maturity structure, write off bad assets, and/or inject capital affected bank survival and deposit retention. This historical episode is particularly informative because there was no expectation of government intervention. We find that contracting with depositors provided short-term benefits while dealing with bad assets was key for long-run viability.
    Keywords: Banking panics; Bank resolution; Market discipline; National Banking Era
    JEL: G21 G28 N21 N41
    Date: 2022–07–07
    URL: http://d.repec.org/n?u=RePEc:fip:fedgfe:2022-44&r=
  21. By: Michele Fratianni (Kelley School of Business, Bloomington, Indiana, USA and Universita' Politecnica delle Marche); Federico Giri (Universita' Politecnica delle Marche); Riccardo Lucchetti (Universita' Politecnica delle Marche); Francesco Valentini (Universita' Politecnica delle Marche)
    Abstract: This paper investigates the size of Italian fiscal multipliers under different business-cycle phases over the period 1872–2006. Using pre-WWII public defense expenditures as an instrument of total expenditures, we quantify the magnitude of the fiscal multiplier. Controlling for the business cycle phase, the multiplier is higher in recessions than in expansions. Furthermore, the multiplier is higher with the joint occurrence of monetization and slackness. Monetization alone does not exert a significant impact on the multiplier. Our results are confirmed using a timevarying parameter methodology that captures the country’s structural changes over a long stretch of time.
    Keywords: Fiscal multipliers; War defense spending; Slackness; Monetization; Timevarying parameters.
    JEL: E32 E58 E62 N13 N14
    Date: 2022–07
    URL: http://d.repec.org/n?u=RePEc:anc:wmofir:176&r=
  22. By: Brian Albrecht; Omar Al-Ubaydli; Peter Boettke
    Abstract: Economists well understand that the work of Friedrich Hayek contains important theoretical insights. It is less often acknowledged that his work contains testable predictions about the nature of market processes. Vernon Smith termed the most important one the 'Hayek hypothesis': that gains from trade can be realized in the presence of diffuse, decentralized information, and in the absence of price-taking behavior and centralized market direction. Vernon Smith tested this prediction by surveying data on laboratory experimental markets and found strong support. We extend Smith's work first by showing how subsequent theoretical advances provide a theoretical foundation for the Hayek Hypothesis. We then test the hypothesis using recent field experimental market data. Using field experiments allows us to test several other predictions from Hayek, such as that market experience increases the realized gains from trade. Generally speaking, we find support for Hayek's theories.
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:feb:artefa:00759&r=
  23. By: Michael Patrick Curran (Department of Economics, Villanova School of Business, Villanova University); Matthew J. Fagerstrom (Department of Economics, Villanova School of Business, Villanova University); Ryan Zalla (Economics Department, University of Pennsylvania, 133 South 36th Street, Philadelphia, PA 19104, USA.)
    Abstract: We investigate the relation between monetary growth and compensation in the financial industry since the end of the Bretton Woods system. Estimating local projections, we find that the growth of the monetary base positively associates with a higher differential between financial and average wages. Our findings indicate that the effects are short lived, lending support to the temporary non-neutrality of money argued by David Hume and against the more permanent non-neutrality argued by Richard Cantillon. Our results help clarify debates on the non-neutrality of money going back to the eighteenth century. [This is the updated version of Working Paper #41.]
    Keywords: Cantillon Effect; Inequality; Money Non-neutrality; Financial Industry
    JEL: D31 E31 E52
    Date: 2022–07
    URL: http://d.repec.org/n?u=RePEc:vil:papers:55&r=
  24. By: Fix, Blair
    Abstract: Among leftists, predicting the end of capitalism is a favorite parlor game. For example, as a graduate student in the 2010s, I remember discovering the 1976 edition of Marx’s Capital and being struck by the introduction. Written by the Belgian Marxist Ernest Mandel, the foreword concluded that it was ‘most unlikely’ that capitalism would survive another half-century. This prediction (and many like it) did not age well. What capitalism’s critics often misunderstand is that social orders rarely ‘die’. More often, they fade into irrelevance. Just as no one can point to the end-date of feudalism, it seems unlikely that capitalism will have a decisive ‘finish’. But what it may have is a peak. The goal of this post is to chart the rise (and potential peak) of ‘capitalism’ … as I understand it. This caveat is key. To study a social system, we must first define it. To many people, capitalism is a ‘mode of production’ (a definition inherited from Marx). The view that I take here, however, is that capitalism is primarily an ideology — or what Jonathan Nitzan and Shimshon Bichler call a ‘mode of power’. Capitalism is a set of ideas that justify the modern social order. Although there are many ways to chart the rise of capitalism, what interests me here is that it was the first major ideology to have spread during the era of mass publication. That means capitalism’s rise (and potential peak) should be visible in the word frequency of written language. For example, as capitalism spread, we’d expect that capitalist jargon — words like ‘market’ and ‘price’ — should become more common. And feudal jargon — words like ‘fief’ and ‘vassal’ — should become less common. Now, I’ve chosen these specific words as an illustration. But for my actual analysis, I do not ‘choose’ the jargon words. Instead, I choose a corpus of text that I believe encapsulates the ideology in question (capitalism or feudalism). And from there, I let the jargon of the text speak for itself. The basic idea is that jargon words are those that are both frequently used in a text corpus and overused relative to mainstream English. The first step of the analysis, then, is to select a corpus of ideological texts. To capture feudal ideology, I use a sample of 22 modern English bibles. I use modern translations because I don’t want text that contains archaic words (like ‘thou’). And I use the Bible because christian theology formed the backbone of European feudalism.1 To capture capitalist ideology, I use a sample of 43 introductory economics textbooks. My claim is that these textbooks deal mostly in capitalist metaphysics; they describe a fantasy world of self-equilibrating markets in which each person earns what they produce.2 With my sample of biblical and economics text, I first isolate the jargon words of each corpus. Then I use the Google English corpus to measure how the frequency of this jargon has changed over time. (As a consistency check, I also analyze the text in paper titles on the Sci-Hub database and book titles in Library Genesis.) I find that over the last several centuries, biblical jargon became less popular and was slowly replaced by economics jargon. I also find evidence that the popularity of economics language peaked during the 1980s, and has since declined. Ominously, this peak coincides with an uptick in the popularity of biblical language. In simple terms, it seems that we (anglophones) are in the midst of an ideological transition.
    Keywords: capitalism,economics,idelology,language,religion
    JEL: Z12 P16 Z13 Z1 A
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:zbw:esprep:261301&r=
  25. By: Vikash Vaibhav; K.V. Ramaswamy (Indira Gandhi Institute of Development Research)
    Abstract: In the largest territorial reorganization since the 1950s, when the modern state boundaries were demarcated, the Indian union government carved out three new states from three large north Indian states in November 2000. This was accompanied by discussions along political and sociological lines. But the debates along economic lines were muted, owing to a lack of data. Equipped with three and a half decades-long macro panel data, we investigate whether the event had an impact on the per capita income. For comparison, we construct five separate counterfactuals using techniques such as synthetic control and elastic net regularization. The three erstwhile `combined' states do not show any evidence of extraordinary growth. We further investigate the six states separately to see if the `new' states grew at the expense of their `parent' states. The state of Uttarakhand shows `extraordinary' growth in the post-reorganization period. Two other smaller states (Bihar and Chhattisgarh) did grow faster than their counterfactual, but do not qualify for the statistical significance test. Three other states (Jharkhand, Madhya Pradesh, and Uttar Pradesh) also do not show a significant change in their growth path. Overall, we find that the creation of smaller sub-national administrative units may not be a panacea for their economic problems.
    Keywords: State reorganization, Economic growth, Impact evaluation, Synthetic Control, Elastic Net
    JEL: O11 O47 R58
    Date: 2022–06
    URL: http://d.repec.org/n?u=RePEc:ind:igiwpp:2022-007&r=
  26. By: Cavit Baran (Northwestern University); Eric Chyn (NBER and Dartmouth College); Bryan A. Stuart (Federal Reserve Bank of Philadelphia)
    Abstract: This paper studies the impact of the First Great Migration on children. We use the complete-count 1940 Census to estimate selection-corrected place effects on education for children of Black migrants. On average, Black children gained 0.8 years of schooling (12 percent) by moving from the South to the North. Many counties that had the strongest positive impacts on children during the 1940s offer relatively poor opportunities for Black youth today. Opportunities for Black children were greater in places with more schooling investment, stronger labor market opportunities for Black adults, more social capital, and less crime.
    Keywords: Great Migration, human capital, education, place effect
    JEL: N32 J15 J24 H75
    Date: 2022–06
    URL: http://d.repec.org/n?u=RePEc:upj:weupjo:22-367&r=
  27. By: Michael Dotsey; Wenli Li; Fang Yang
    Abstract: We build a unified framework to quantitatively examine the demographic transition and industrial policies in contributing to China’s economic growth between 1976 and 2015. We find that the demographic transition and industrial policy changes by themselves account for a large fraction of the rise in household and corporate savings relative to total output and the rise in the country’s per capita output growth. Importantly, their interactions also lead to a sizable fraction of the increases in savings since the late 1980s and reduce growth after 2010. A novel and important factor that drives these dynamics is endogenous human capital accumulation, which depresses household savings between 1985 and 2010 but leads to substantial gains in per capita output growth after 2005.
    Keywords: Aging; Credit policy; Household saving; Output growth; China
    JEL: E21 J11 J13 L52
    Date: 2022–07–15
    URL: http://d.repec.org/n?u=RePEc:fip:feddwp:94497&r=
  28. By: Aniss Mennoune (Université Mohammed V)
    Date: 2022–06–22
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03702153&r=
  29. By: Usman Ahmad (Pakistan Institute of Development Economics); Amena Urooj, (Pakistan Institute of Development Economics); Uzma Zia (Pakistan Institute of Development Economics)
    Abstract: The economic history of Pakistan dominance with fragile industrial base, agriculture dominance, and political instability. Although, policies in the past were meant to strengthen the industrial base and for the protection domestic industries, country adopted a restricted trade regime. The government nationalized various industries and privatization program commenced to large scale nationalization in 1972-77.
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:pid:wbrief:2022:91&r=
  30. By: Raphaël Franck; Oded Galor; Omer Moav; Ömer Özak
    Abstract: This research explores the persistent effect of the Neolithic Revolution on the evolution of life expectancy in the course of human history. It advances the hypothesis and establishes empirically that the onset of the Neolithic Revolution and the associated rise in infectious diseases triggered a process of adaptation reducing mortality from infectious diseases while increasing the propensity for autoimmune and inflammatory diseases. Exploiting an exogenous source of variation in the timing of the Neolithic Revolution across French regions, the analysis establishes the presence of these conflicting forces - the beneficial effects on life expectancy before the second epidemiological transition and their adverse effects thereafter.
    JEL: I15 O10
    Date: 2022–07
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:30221&r=
  31. By: Joaquín Daniel Ramírez-Cabarcas
    Abstract: I estimate the effect of collective property rights on development in rural Colombia in the context of a case study. In the 1990s, the Colombian government started one of the most ambitious land re-orderings in Latin America, which titled collective property rights to Afro-Colombian communities throughout the Colombian Pacific. I take advantage of a historical accident in these titling processes, which delayed the collective land titling of one community for 16 years until November 2015, one year after the Colombian National Agricultural Census 2014 (CNA). With the CNA data, I use the delayed community as counterfactual for its titled neighbours, and use spatial regression discontinuity with the borders between communities, largely determined by proximity to river basins. In the context of this case study, I find that farms in collectively titled communities have higher agricultural yield by 6 percentage points, devote more farm area share to perennial crops by 28 percentage points, and have 18 percentage points higher school attendance. I suggest these results could be a consequence of a higher motivation of farmers in titled territories to invest in their land, along with collective forms of production to provide labor among poor farmers.
    Keywords: Property rights, Communal lands, Land reform
    JEL: P48 P32 Q15
    Date: 2022–07–22
    URL: http://d.repec.org/n?u=RePEc:col:000089:020327&r=
  32. By: Santiago José Gahn
    Abstract: This paper analyses empirically the long-run relationship between ‘pure’ public expenditures on Research and Development and GDP for the case of Italy (1963-2013). The results show that a 1% increase in ‘pure’ public research and development expenditure increases output by 0.1%. This shows that, as the consensus in the literature indicates, this type of expenditure has a persistent effect on GDP and calls for a review of the austerity policies that have been pursued in Italy on this type of expenditures since 1991.
    Keywords: Italy, research and development, Public Expenditures, public policy, structural change
    JEL: L16 N14 O30 O47
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:crn:wpaper:crn2201&r=
  33. By: Tom Kemeny; Sergio Petralia; Michael Storper
    Abstract: Although technological change is widely credited as driving the last two hundred years of economic growth, its role in shaping patterns of inequality remains under-explored. Drawing parallels across two industrial revolutions in the United States, this paper provides new evidence of a relationship between highly disruptive forms of innovation and spatial inequality. Using the universe of patents granted between 1920 and 2010 by the U.S. Patent and Trademark Office, we identify disruptive innovations through their rapid growth, complementarity with other innovations, and widespread use. We then assign more- and less-disruptive innovations to subnational regions in the geography of the U.S. We document three findings that are new to the literature. First, disruptive innovations exhibit distinctive spatial clustering in phases understood to be those in which industrial revolutions reshape the economy; they are increasingly dispersed in other periods. Second, we discover that the ranks of locations that capture the most disruptive innovation are relatively unstable across industrial revolutions. Third, regression estimates suggest a role for disruptive innovation in regulating overall patterns of spatial output and income inequality
    Keywords: technological change; regional development; industrial revolutions; innovation; inequality
    JEL: O30 O33 O51 J31
    Date: 2022–07
    URL: http://d.repec.org/n?u=RePEc:egu:wpaper:2211&r=
  34. By: Tsaliki, Persefoni; Tsoulfidis, Lefteris
    Abstract: This article examines the extent to which financialization is a new phase of capital accumulation characterized by its own economic laws in which the real (production) economy adjusts accordingly. In order to examine this hypothesis, we invoke the share of the financial sector in the GDP of the USA, as the best meaningful metric to approximate the expansion of the financialization over time. Our findings suggest that the financialization phenomena of the post-1982 years are comparable to those of the “roaring 1920s”. The observed differences are quantitative, in the main, and although they suggest the presence of regularities; nevertheless, they do not suggest an altogether different stage of a finance-led capitalism.
    Keywords: Financialization, profit rate, interest rate, long-cycles, financial fragility
    JEL: B50 G20 G30 N12 O15 O16
    Date: 2021–12–11
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:113634&r=
  35. By: Antoinette Baujard (UJM - Université Jean Monnet [Saint-Étienne], GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper reviews Amartya's Sen autobiography, Home in the World. A Memoir (Penguin Press, published08/07/2021, 480 pages. ISBN: 9781846144868), focused on his thirty first years of life. I show that the book emphasizes how Sen values discussions and reason, the voice of each human being in their plurality, and their capacity to act in and on the world. I also support that, in this memoir, Sen succeeds in circumventing the standard misunderstandings of his major contributions, by taking seriously the different potential interpretations of the thinkers who influenced his line of thinking, and defending the one he considers valid. I illustrate this claim with five cases which, by highlighting his multiple identities, avoid associating Sen to a misguided tag.
    Keywords: Amartya Sen,Welfare,Discussion,Reason,Identities,Memoir
    Date: 2022–02
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03633564&r=
  36. By: Ran Abramitzky; Travis Baseler; Isabelle Sin
    Abstract: How does persecution affect who migrates? We analyze migrants’ self-selection out of the USSR and its satellite states before and after the collapse of Communism using census microdata from the three largest destination countries: Germany, Israel, and the United States. We find that migrants arriving before and around the time of the collapse (who were more likely to have moved because of persecution) were more educated and had better labor market outcomes in the destination than those arriving later. This change is not fully explained by the removal of emigration restrictions in the Communist Bloc. Instead, we show that this pattern is consistent with more positive self-selection of migrants who are motivated by persecution. When the highly educated disproportionately forgo migrating to enjoy the amenities of their home country, persecution can induce them to leave.
    JEL: F22 J6 N30 N32 N34
    Date: 2022–07
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:30204&r=
  37. By: Carlianne Patrick; Mark Partridge
    Abstract: We use confidential Census microdata to compare outcomes for plants in counties that “win” a new plant to plants in similar counties that did not to receive the new plant, providing empirical evidence on the economic theories used to justify local industrial policies. We find little evidence that the average highly incentivized large plant generates significant productivity spillovers. Our semiparametric estimates of the overall local agglomeration function indicate that residual TFP is linear for the range of “agglomeration” densities most frequently observed, suggesting local economic shocks do not push local economies to a new higher equilibrium. Examining changes twenty years after the new plant entrant, we find some evidence of persistent, positive increases in winning county-manufacturing shares that are not driven by establishment births.
    Keywords: local economic development, agglomeration externalities, persistence
    JEL: R11 H25 R38
    Date: 2022–06
    URL: http://d.repec.org/n?u=RePEc:cen:wpaper:22-21&r=

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