nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2022‒09‒19
fifteen papers chosen by

  1. The Journey of a Remittance in the US-Mexico Corridor: From My Salary to My Family By Batiz-Lazo, Bernardo; González-Correa, Ignacio
  2. Share ownership and the introduction of no liability legislation in nineteenth-century Australia By Grant Fleming; Frank Liu; David Merrett; Simon Ville
  3. Persecution, Pogroms and Genocide: A Conceptual Framework and New Evidence By Becker, Sascha O.; Mukand, Sharun; Yotzov, Ivan
  4. The development of the arid tropics: lessons for economic history By Roy, Tirthankar
  5. Economic history and the future of pedagogy in economics By Brownlow, Graham; Colvin, Christopher L.
  6. Sheila Dow's Open Systems By Davis, John B.
  7. Nobel Students Beget Nobel Professors By Richard S. J. Tol
  8. Quality of sub-national government and regional development in Africa By Iddawela, Yohan; Lee, Neil; Rodríguez-Pose, Andrés
  9. On Gale's Contribution in Revealed Preference Theory By Yuhki Hosoya
  10. Recentring the margins: theorizing African capitalism after 50 years By Breckenridge, Keith; James, Deborah
  11. Disruptive innovation and spatial inequality By Kemeny, Tom; Petralia, Sergio; Storper, Michael
  12. Performance and mechanisms of the Maoist economy: a holistic approach, 1950-1980 By Deng, Kent; Shen, Jim Huangnan; Guo, Jingyuan
  13. Modernizing and Reshaping the Bretton Woods Institutions for the 21st Century By Ajay Chhibber
  14. Financial Failure and Depositor Quality: Evidence from Building and Loan Associations in California By Todd Messer
  15. The Historical Role of Energy in UK Inflation and Productivity and Implications for Price Inflation in 2022 By Jennifer L. Castle; David F. Hendry; Andrew B. Martinez

  1. By: Batiz-Lazo, Bernardo; González-Correa, Ignacio
    Abstract: We describe cross border payments between families in the US-Mexico corridor including a map of the technological infrastructure.
    Keywords: remittances, fintech, Mexico, USA
    JEL: E42 L81 N2 N8
    Date: 2022–08
  2. By: Grant Fleming; Frank Liu; David Merrett; Simon Ville
    Abstract: The no liability company – where investors are not liable for uncalled parts of their shares - has been unique to Australasia. Deploying a large dataset, we provide the first empirical examination of the effects of this new corporate form on company formation and shareholding. Our focus is on Victorian goldmining, the earliest and most pervasive users of the no liability form. No liability companies largely replaced limited liability within a decade of the legislation in 1871, which was more rapid than the transition from unlimited to limited liability companies in several other nations. No liability companies attracted a broader occupational and locational range of investors beyond the mining industry and its districts, especially gentlemen and financiers. We conclude that investors believed no liability firms to be less risky because of the removal of call liabilities and the mitigation of previous regulatory failures.
    Keywords: Mining; goldmining; share ownership; Australia; company law; limited liability; no liability; investors; stock exchanges; occupations; Melbourne; investment booms.
    Date: 2022–08
  3. By: Becker, Sascha O. (Monash University); Mukand, Sharun (University of Warwick); Yotzov, Ivan (University of Warwick)
    Abstract: Persecution, pogroms, and genocide have plagued humanity for centuries, costing millions of lives and haunting survivors. Economists and economic historians have recently made new contributions to the understanding of these phenomena. We provide a novel conceptual framework which highlights the inter-relationship between the intensity of persecution and migration patterns across dozens of historical episodes. Using this framework as a lens, we survey the growing literature on the causes and consequences of persecution, pogroms, and genocide. Finally, we discuss gaps in the literature and take several tentative steps towards explaining the differences in survival rates of European Jews in the 20th century.
    Keywords: genocide, persecution, migration, immigration restrictions, exit or voice
    JEL: D74 F22 F51 N4 O15 R23
    Date: 2022–08
  4. By: Roy, Tirthankar
    Abstract: For centuries, the world’s tropical regions have been poorer than the temperate-zone countries. Does tropicality make the struggle for economic development harder? What do people caught up in the struggle do? The paper defines ‘tropicality’ as the combination of aridity and seasonal rainfall, and in turn, high inter- and intra-year variability in moisture influx. In the past, this condition would generate a variety of adaptive strategies such as migration and transhumance. In the twentieth century, the response pattern changed from adapting to moisture supply towards control of moisture supply. This process unleashed conflict and environmental stress in the vulnerable geography of the semi-arid tropics.
    Keywords: tropical; economic growth; inequality; drought; development; Taylor & Francis deal
    JEL: N10 N55 N57
    Date: 2022–08–11
  5. By: Brownlow, Graham; Colvin, Christopher L.
    Abstract: Economic history is integral to the study of economics and economies. Besides providing students with a valuable long-run perspective on the modern world, the field also helps them to better understand the contingency of economic theory. Despite a newfound interest in economic history among economists, teaching and learning in economic history at undergraduate level varies enormously across the UK. We review the different types of economic history provisioning in UK universities, account for the trends we document, and set out viable options for reform. We advance the idea that the teaching of economic history can be integrated into other higher-level undergraduate field courses, an approach we call "Teaching Economics With Economic History". We end by focusing on economic history teaching within the context of business schools.
    Keywords: economic history,pedagogy,undergraduate curriculum
    JEL: A22 B20 N01
    Date: 2022
  6. By: Davis, John B. (Department of Economics Marquette University)
    Abstract: This paper reviews Sheila Dow’s contributions to open systems thinking as a form of methodological argument and as an important foundation for pluralism in economics. It reviews the origins of her thinking in connection with her distinction between Cartesian/Euclidian and Babylonian thinking in the history of economics, discusses the further development of her views regarding open and closed systems in her 2002 Economic Methodology book and in connection with her ‘structured pluralism’ concept, discusses the 2005 paper co-authored with Victoria Chick, “The Meaning of Open Systems.†examines Dow’s and Chick’s view and critique of critical realism in regard to the relationship between models and theorizing and uses Piero Sraffa’s 1930s the open-closed distinction to provide a similar understanding of such boundaries and the relationship between models and theorizing, and finally comments on Dow’s contribution to openclosed systems thinking and pluralism in economics.
    Keywords: open systems, Babylonian, Euclidian, structured pluralism, critical realism, Samuels, Sraffa
    JEL: B41 B50
    Date: 2022–08
  7. By: Richard S. J. Tol
    Abstract: It is unclear whether the hierarchy in the economics profession is the result of the agglomeration of excellence or of nepotism. I construct the professor-student network for laureates of and candidates for the Nobel Prize in Economics. I study the effect of proximity to previous Nobelists on winning the Nobel Prize. Conditional on being Nobel-worthy, students and grandstudents of Nobel laureates are not significantly more or less likely to win. Professors of Nobel Prize winners, however, are significantly more likely to win.
    Keywords: network formation, research training, Nobel prize
    JEL: A14 D85 Z13
    Date: 2022
  8. By: Iddawela, Yohan; Lee, Neil; Rodríguez-Pose, Andrés
    Abstract: Despite widespread interest in government quality and economic development, the role of sub-national government has been largely overlooked. This represents an omission in Africa, given ongoing processes of devolution in much of the continent. In this article, we consider the impact of sub-national government institutions on economic development in 339 regions across 22 African countries. We create a novel index of sub-national government quality based on large-scale survey data and assess its impact on regional economies using satellite data on night light luminosity. To address causality concerns, we instrument sub-national government quality with data from pre-colonial societies. Our results show a positive and significant relationship between sub-national government quality and regional economic development, even when controlling for the quality of national-level institutions. Better sub-national governments are a powerful but often overlooked determinant of development in Africa.
    Keywords: institutions; quality of government; regions; Africa; decentralisation
    JEL: N0 R14 J01
    Date: 2021–08–03
  9. By: Yuhki Hosoya
    Abstract: We investigate Gale's important paper published in 1960. This paper contains an example of a candidate of the demand function that satisfies the weak axiom of revealed preference and that is doubtful that it is a demand function of some weak order. We examine this paper and first scrutinize what Gale proved. Then we identify a gap in Gale's proof and show that he failed to show that this candidate of the demand function is not a demand function. Next, we present three complete proofs of Gale's claim. First, we construct a proof that was constructible in 1960 by a fact that Gale himself demonstrated. Second, we construct a modern and simple proof using Shephard's lemma. Third, we construct a proof that follows the direction that Gale originally conceived. Our conclusion is as follows: although, in 1960, Gale was not able to prove that the candidate of the demand function that he constructed is not a demand function, he substantially proved it, and therefore it is fair to say that the credit for finding a candidate of the demand function that satisfies the weak axiom but is not a demand function is attributed to Gale.
    Date: 2022–08
  10. By: Breckenridge, Keith; James, Deborah
    Abstract: This introduction to our special issue addresses scholars’ failure, in recent times, to consider and analyse the forms of capitalism that have developed on the African continent. To redress the balance, it takes up the study of economic arrangements on the continent—property, infrastructure, debt, financialisation, regulation—as well as exploring the history and politics of the scholarly field of African economics as an intellectual and institutional project. In the process it considers the advantages (and drawbacks) of seeing Africa as part of the ‘global south’. Central to the special issue is the question of how to marry an analysis of intimate and smaller-scale economies centred on household, family and (often informal) labour regimes, on the one hand, with a recognition of large-scale processes such as the central banking systems imposed by states, the increasing prevalence of high-tech finance, the emergence of continent-wide regulation, and the influence of multilateral development agencies and the international publication industry, on the other. How, we ask, can the importance of these institutions, so unlike in size and scale, be reckoned without assuming that the bigger and more powerful ones always prevail?
    Keywords: African capitalism; central banks; development; debt; economics; finance; Global South; heterodox; informalisation; publishing; regulation
    JEL: N0 J1
    Date: 2021–02–10
  11. By: Kemeny, Tom; Petralia, Sergio; Storper, Michael
    Abstract: Although technological change is widely credited as driving the last 200 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 US Patent and Trademark Office (USPTO), 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 United States. 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: industrial revolutions; inequality; innovation; regional development; technological change
    JEL: J31 O30 O33 O51
    Date: 2022–07–20
  12. By: Deng, Kent; Shen, Jim Huangnan; Guo, Jingyuan
    Abstract: This article probes performance and mechanisms of the Maoist economy from 1950 to 1980, a period commonly regarded as a turning point that ushered in a bumpy but new path for China’s new economic fortune, including industrialisation and modernisation. Mao and his government have often been regarded as a developer and moderniser for China. This study questions it. To that end, the Maoist economy is re-conceptualised, re-examined, and re-assessed with qualitative and quantitative evidence including empirical modelling. The key findings suggest that the Maoist economy was a closed one with industrial dependence on agriculture in an urbanrural zero-sum. In the end, despite the official propaganda agriculture declined, industrial workforce stagnated, and the population was poor. This gloomy performance justified the post-Mao reforms and opening up, a game changer that put China on a very different trajectory of growth and development.
    Keywords: quesnay; zero-sum; a closed economy; economic performance; industrial dependence on agriculture; a low level equilibrium trap
    JEL: H57 N15 N35 O21 O41 P21
    Date: 2022–08
  13. By: Ajay Chhibber (George Washington University)
    Abstract: This paper lays out the contours of a reformed Bretton Woods Institutions - the IMF, the World Bank Group (WBG) and the WTO - that the world needs for the 21st century. Some of the challenges the world faces today - rising inequality, growing nationalism and protection are what led to World War II from whose ruin emerged the current Bretton Woods international financial architecture. While these institutions performed well over their first 50 years - they have been struggling in more recent times as problems of rising inequality, financial instability and protectionism have re-emerged. But in addition, the threat of climate change and ecological stress, rising disasters, and a more inter-connected world with new threats like cyber-security and pandemics require a new international financial architecture. A modernized and re-invigorated set of Bretton Woods institutions to help address and mitigate these challenges, with a global remit and the mandate to monitor agreed global rules and enhanced resources not only to help individual countries but also to address global problems.
    Keywords: Bretton Woods, IMF, WTO, World Bank,
    JEL: F40 F60 F02 E00 Q00 G20
    Date: 2022–06
  14. By: Todd Messer
    Abstract: Flightiness, or depositor sensitivity to liquidity needs, can be an important determinant of financial distress. I leverage institutional differences that attract depositors with varying flightiness across building and loan associations in California during the Great Depression. A new type of plan, the Dayton plan, involved less restrictive savings plans and lower withdrawal penalties. Dayton plans in California were more likely to close during the Great Depression. Archival evidence on lending rates and returns supports the flightiness mechanism.
    Keywords: Bank Failures; Banks, credit unions, and other financial institutions; Building and Loan; Great Depression
    JEL: N22 G23 G21
    Date: 2022–08–08
  15. By: Jennifer L. Castle (Climate Econometrics and Nuffield College, University of Oxford, UK); David F. Hendry (Climate Econometrics and Nuffield College, University of Oxford, UK); Andrew B. Martinez (Office of Macroeconomic Analysis, U.S. Department of the Treasury)
    Abstract: We model UK price and wage inflation, productivity and unemployment over a century and a half of data, selecting dynamics, relevant variables, non-linearities and location and trend shifts using indicator saturation estimation. The four congruent econometric equations highlight complex interacting empirical relations. The production function reveals a major role for energy inputs additional to capital and labour, and although the price inflation equation shows a small direct impact of energy prices, the substantial rise in oil and gas prices seen by mid-2022 contribute half of the increase in price inflation. We find empirical evidence for non-linear adjustments of real wages to inflation: a wage-price spiral kicks in when inflation exceeds about 6–8% p.a. We also find an additional non-linear reaction to unemployment, consistent with involuntary unemployment. A reduction in energy availability simultaneously reduces output and exacerbates inflation.
    Keywords: Energy; Inflation; Location Shifts; Indicator Saturation Estimation; Equilibrium Correction.
    JEL: C51 C22
    Date: 2022–09

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