nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2022‒11‒14
34 papers chosen by

  1. ''Non-Competing Social Groups''? The Long Debate on Social Mobility in Italy (c. 1890-1960) By Giacomo Gabbuti
  2. Factor prices and induced technical change in the industrial revolution By Otojanov, Ravshonbek; Fouquet, Roger; Granville, Brigitte
  3. The New Speak and Economic Theory or How We Are Being Talked To By Jean-Paul Fitoussi
  4. Slavery and the British Industrial Revolution By Stephan Heblich; Stephen J. Redding; Hans-Joachim Voth
  5. ESPAREL. A look at the relationship between population and territory in Spain in historical perspective By Francisco J. Beltran Tapia; Alfonso Diez Minguela; Victor Fernandez Modrego; Alicia Gomez Tello; Julio Martinez-Galarraga; Daniel A. Tirado Fabregat
  6. The Economics of Women's Rights By Michèle Tertilt; Matthias Doepke; Anne Hannusch; Laura Moutenbruck
  7. Ora et Guberna. The Economic Impact of the Rule of St. Benedict in Medieval England By Domenico Rossignoli; Federico Trombetta
  8. Official Development Assistance at the Age of Consequences By Thomas MÉLONIO; Rémy Rioux; Jean-David Naudet
  9. French utilities committed to globalization (19th-21st centuries) By Hubert BONIN
  10. The Dynamic Consequences of State-Building: Evidence from the French Revolution By Cédric Chambru; Emeric Henry; Benjamin Marx
  11. Twin Transitions of Decarbonisation and Digitalisation: A Historical Perspective on Energy and Information in European Economies By Roger Fouquet; Ralph Hippe
  12. Coping with Disasters : Two Centuries of International Official Lending By Horn,Sebastian; Reinhart,Carmen M.; Trebesch,Christoph
  13. Cousins from Overseas: The Labour Market Impact of a Major Forced Return Migration Shock By Bohnet, Lara; Peralta, Susana; Pereira dos Santos, João
  14. Louis Bachelier's Théorie de la spéculation : The missing piece in Walras' general equilibrium By Nicole El Karoui; Antoine Parent; Pierre-Charles Pradier
  15. The Risks of Nation-Building through Military Aid and Intervention By Eugen Dimant; Tim Krieger; Daniel Meierrieks
  16. Not part of the plan? Women, state feminism and Indian socialism in the Nehru years By Sherman, Taylor C.
  17. Cousins from Overseas: The Labour Market Impact of a Major Forced Return Migration Shock By Lara Bohnet; Susana Peralta; João Pereira dos Santos
  18. Scarred but Wiser : World War 2's COVID Legacy By Lokshin,Michael M.; Kolchin,Vladimir; Ravallion,Martin
  19. Reversing Fortunes of German Regions, 1926-2019: Boon and Bane of Early Industrialization? By Berbée, Paul; Braun, Sebastian T.; Franke, Richard
  20. The Effects of Racial Segregation on Intergenerational Mobility: Evidence from Historical Railroad Placement By Eric Chyn; Kareem Haggag; Bryan A. Stuart
  21. Bank Local Specialization By Anne Duquerroy; Clément Mazet-Sonilhac; Jean-Stéphane Mésonnier; Daniel Paravisini
  22. Hedging Against Inflation: Housing vs. Equity By Fehrle, Daniel
  23. Central Bank Mandates and Monetary Policy Stances: through the Lens of Federal Reserve Speeches By Bertsch, Christoph; Hull, Isaiah; Lumsdaine, Robin L.; Zhang, Xin
  24. The Breakup of the Bell System and its Impact on US Innovation By Watzinger, Martin; Schnitzer, Monika
  25. A Critical Note on Ricardo's Views on Absolute and Relative Value in terms of Labor Values. By Miguel D. Ramirez
  26. Long-Term and Intergenerational Effects of Education : Evidence from School Construction in Indonesia By Akresh,Richard; Halim,Daniel Zefanya; Kleemans,Marieke
  27. Talking about growth, the discourse of the European Central Bank, 1997-2021 By Eric Dehay
  28. Church Book Registry: A Cliometric View By Jacob Weisdorf
  29. The Long Shadow of Short-Term Schooling Disruption : Analysis of Kuwait's Civil Service Payroll Data By Bilo,Simon; Ajwad,Mohamed Ihsan; Alansari,Ebtesam; Alhumaidan,Lama; Alrashidi,Faleh M F E
  30. A la Recherche du Temps Perdu : Legal and Quantitative Analysis of the First Documented Option Market - Paris 1844-1939 By Antoine Parent; Pierre-Charles Pradier
  31. Innovation with and without patents By Josef Taalbi
  32. A brief history of payment netting and settlement By Bindseil, Ulrich; Pantelopoulos, George
  33. How the risk of job automation in the UK has changed over time By Darke, Matthew James
  34. Statistical sources for assessing financial literacy By Sara Lamboglia; Fabio Travaglino

  1. By: Giacomo Gabbuti
    Abstract: In the light of the recent literature on the intellectual history of inequality, this paper offers the first survey and a tentative classification of the Italian literature addressing issues related to social mobility, from late-19th century to the 'Economic Miracle' of the 1950s. During these decades, the foremost Italian economists and statisticians (among others, Pareto, Gini, Einaudi and Pantaleoni) worked on issues, from the role of inheritance to the intergenerational transmission of status, which are very related to the modern understanding of social mobility. While reflecting the evolution and debates in Italian society, these authors participated to a broader international debate, that should lead us to reconsider the lack of interest for inequality by economists in this period.
    Keywords: Social mobility; equality of opportunity; inheritance; Italian economic thought.
    Date: 2022–10–17
  2. By: Otojanov, Ravshonbek; Fouquet, Roger; Granville, Brigitte
    Abstract: Using historical data for the 1700–1914 period, this paper analyses the nature and direction of technical change in Britain. The evidence in this paper indicates that, over this long period, labour-saving technology adoption was a major response to changes in relative factor prices, thus supporting the hypothesis that ‘induced innovation’ was a major driver of technical change during the British industrial revolution. Labour saving was made possible and sustained by capital-augmenting and energy-augmenting technical change coupled with continuous capital accumulation and abundant energy supplies. This process placed the British economy on a higher capital–labour ratio equilibrium, and was the primary force driving sustained productivity growth, which further raised wages and living standards.
    Keywords: factor-saving technical change; induced innovation; industrial revolution; Grantham Research Institute on Climate Change and the Environment at the London School of Economics; and the ESRC Centre for Climate Change Economics and Policy (CCCEP); ES/R009708/1
    JEL: N73
    Date: 2022–09–26
  3. By: Jean-Paul Fitoussi (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, LUISS - Libera Università Internazionale degli Studi Sociali Guido Carli [Roma])
    Abstract: This article seeks to show how the impoverishment of language has changed the course of the evolution of economic theory, much as in 1984 the Newspeak changed the order of things and the course of the political regime. At the origin of such an evolution was the stratagem to act as if neoclassical theory was subsequent to Keynesian theory. The inversion of the time arrow had far reaching consequences on the development of economics. In great part the development of a science depends of the scholars who practice it and of its teaching to the new researchers who will further develop it. Both depend on the history of thought. The consequences on economic policies have been major, especially in Europe. By cancelling most of the Keynesian concepts from the Newspeak dictionary, the relative weights of the market and the state were changed, which could only lead to a preference for liberal, market- oriented, policies.
    Date: 2022
  4. By: Stephan Heblich (University of Toronto); Stephen J. Redding (Princeton University); Hans-Joachim Voth (University of Zurich)
    Abstract: Did overseas slave-holding by Britons accelerate the Industrial Revolution? We provide theory and evidence on the contribution of slave wealth to Britain’s growth prior to 1835. We compare areas of Britain with high and low exposure to the colonial plantation economy, using granular data on wealth from compensation records. Before the major expansion of slave holding from the 1640s onwards, both types of area exhibited similar levels of economic activity. However, by the 1830s, slavery wealth is strongly correlated with economic development – slave-holding areas are less agricultural, closer to cotton mills, and have higher property wealth. We rationalize these findings using a dynamic spatial model, where slavery investment raises the return to capital accumulation, expanding production in capital-intensive sectors. To establish causality, we use arguably exogenous variation in slave mortality on the passage from Africa to the Indies, driven by weather shocks. We show that weather shocks influenced the continued involvement of ancestors in the slave trade; weather-induced slave mortality of slave-trading ancestors in each area is strongly predictive of slaveholding in 1833. Quantifying our model using the observed data, we find that Britain would have been substantially poorer and more agricultural in the absence of overseas slave wealth. Overall, our findings are consistent with the view that slavery wealth accelerated Britain’s industrial revolution.
    Keywords: Slavery, Industrial Revolution, Great Britain
    JEL: F60 J15 N63
    Date: 2022–09
  5. By: Francisco J. Beltran Tapia (Norwegian University of Science and Technology); Alfonso Diez Minguela (Universitat de Valencia); Victor Fernandez Modrego (Universitat de Valencia); Alicia Gomez Tello (Universitat de Valencia); Julio Martinez-Galarraga (Universitat de Barcelona); Daniel A. Tirado Fabregat (Universitat de Valencia)
    Abstract: This document presents ESPAREL (“España, del Antiguo Régimen al Estado Liberal†), a project in the field of digital humanities. The main objective of ESPAREL has been to generate a spatial data infrastructure (SDI) that allows linking the territorial structure of the Ancien Régime with that of the Liberal State at the end of the 19th century and with the current one, linking the existing population entities in (1) the Census of 1787 (CP1787), (2) the Nomenclator of Spain of 1887 (NE1887) and (3) the Basic General Nomenclator of Spain (NGBE). Firstly, the NE1887 (106,491 population entities) was digitised and converted into data format using optical character recognition techniques (OCR) and machine learning algorithm programming. The main entities of the NE1887 were then linked to the existing entities (NGBE), and given that the NGBE includes the geographical coordinates of the entities, this made it possible to geolocate the NE1887, opening the door to its processing by means of Geographical Information Systems (GIS). Once this work had been carried out, CP 1787 (20,236 entities organised into towns, villages, places, hamlets, etc.) was linked to this database. The results of this project, which can be consulted openly on the ESPAREL platform (, will allow progress to be made in a number of areas of historical research. These include the study of changes in settlement patterns over time and the depopulation that has taken place in a significant part of Spain. By way of example, the second part of the text presents a case study, based on the Comunitat Valenciana, which, by going beyond the municipalities, shows the possibilities offered by ESPAREL to improve our knowledge of the origins of depopulation, with a level of territorial detail not achieved until now.
    Keywords: digital humanities, population entities, nomenclator, census of 1787
    JEL: C8 J1 H1 N9 O1 R1
    Date: 2022–10
  6. By: Michèle Tertilt (Universität Mannheim); Matthias Doepke (Northwestern University); Anne Hannusch (University of Mannheim); Laura Moutenbruck (University of Mannheim)
    Abstract: Two centuries ago, in most countries around the world, women were unable to vote, had no say over their own children or property, and could not obtain a divorce. Women have gradually gained rights in many areas of life, and this legal expansion has been closely intertwined with economic development. We aim to understand the drivers behind these reforms. To this end, we distinguish between four types of women's rights—economic, political, labor, and body—and document their evolution over the past 50 years across countries. We summarize the political-economy mechanisms that link economic development to changes in women's rights and show empirically that these mechanisms account for a large share of the variation in women's rights across countries and over time.
    Keywords: female suffrage, family economics, bargaining, political economy
    JEL: D13 D72 E24 J12 J16 N30 O10 O43
  7. By: Domenico Rossignoli; Federico Trombetta
    Abstract: Within the turmoil of the Norman Conquest, did religious institutions affect the economic outcomes of their land? Exploiting historical data about the changes of holdings' landlords occurred after the Conquest, we compare the economic performance of estates controlled by different types of lords. Holdings controlled by Benedictine Monasteries (vis-a–vis secular lords) experienced a higher growth rate in productive capacity. We explore several potential mechanisms, showing that the effect is driven by holdings where the superior layer of the feudal structure remains Benedictine. We suggest that the effect is partially due to the governance structure of Benedictine monasteries.
    JEL: N33 O43 Z12 D70
    Date: 2022
  8. By: Thomas MÉLONIO; Rémy Rioux; Jean-David Naudet
    Abstract: Official Development Assistance (ODA) was introduced in the 1960s as a temporary instrument to respond to a phase in world history involving decolonization, the Cold War, industrialization and flagrant inequalities between the “North” and the “South”. Fifty years later, in an influential text, Jean-Michel Severino and Olivier Ray (2009) noted that ODA had become a “global public policy”, while pondering its imminent demise. ODA seems to be both an instituted, supported, financed global policy – and thus resilient in a constantly changing world – and at the same time does not escape recurrent criticism.
    JEL: Q
    Date: 2022–10–12
  9. By: Hubert BONIN
    Abstract: Whilst being enrooted in public “common goods”, French utilities, either State-controlled or private, became more and more committed to strategies of developing abroad their portfolio of engineering and managing skills. They followed the past of economic imperialism along geopolitics in emerging countries (Russia, Ottoman Empire, Latin America), then also throughout the colonial empire; such offensives were embodied by the adventure of the Suez Canal. From the 1980s, the reconstruction of the worldwide connections opened doors to geoeconomics, that is the will to resist competition and to conquer market shares abroad thanks to the valuation of capital of competence and trust. Every public, privatised or already quoted companies took part to the run for concessions and the deliveries of engineering and managing services (waste, water, postal, railway, bus, energy utilities). This contributed to the competitiveness of French economy and economic patriotism.
    Keywords: Internationalised public services, Concessions abroad, Suez Canal, globalised business models, colonial equipment
    JEL: F15 F23 L94 L92 L95 L97
    Date: 2022
  10. By: Cédric Chambru (UZH - Universität Zürich [Zürich] = University of Zurich); Emeric Henry (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Benjamin Marx (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR)
    Abstract: How do radical reforms of the state shape economic development over time? In 1790, France's first Constituent Assembly overhauled the kingdom's organization to set up new administrative entities and local capitals. In a subset of departments, new capitals were chosen quasi-randomly as the Assembly abandoned its initial plan to rotate administrative functions across multiple cities. We study how exogenous changes in local administrative presence affect the state's coercive and productive capacity, as well as economic development in the ensuing decades. In the short run, proximity to the state increases taxation, conscription, and investments in law enforcement capacity. In the long run, the new local capitals and their periphery obtain more public goods and experience faster economic development. One hundred years after the reform, capitals are 40% more populated than comparable cities in 1790. Our results shed new light on the intertemporal and redistributive impacts of state-building in the context of one of the most ambitious administrative reforms ever implemented.
    Keywords: State Capacity,State-Building,Administrative Reform,Economic Development
    Date: 2021–12
  11. By: Roger Fouquet (Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science (LSE)); Ralph Hippe (EU agency Cedefop)
    Date: 2022
  12. By: Horn,Sebastian; Reinhart,Carmen M.; Trebesch,Christoph
    Abstract: Official ending is much larger than commonly known, often surpassing total private cross-border capital flows, especially during wars, financial crises and natural catastrophes. This paper assembles the first comprehensive long-run dataset of official international loans, covering 230,000 loans, grants and guarantees extended by governments, central banks, and multilateral institutions in the period 1790–2015. Historically, wars have been the main catalyst of government-to-government lending. The scale of official credits granted in and around WW1 and WW2 was particularly large, easily surpassing the scale of total international bailout lending after the 2008 crash. During peacetime, development finance and financial crises are the main drivers of official cross-border finance, with official flows often stepping in when private flows retrench. In line with predictions of recent theoretical contributions, this paper finds that official lending increases with the degree of economic integration. In financial crises, governments help those countries to which they have greater trade and banking exposure, hoping to reduce the collateral damage to their own economies. Since the 2000s, official finance has made a sharp comeback, largely due to the rise of China as an international creditor and the return of central bank cross-border lending in times of stress, this time through swap lines.
    Keywords: Armed Conflict,Natural Disasters,Investment and Investment Climate,Financial Structures,Financial Sector Policy
    Date: 2021–04–05
  13. By: Bohnet, Lara (New York University); Peralta, Susana (Universidade Nova de Lisboa); Pereira dos Santos, João (RWI)
    Abstract: We study the labour market impact of the return of half a million Portuguese due to onset of the colonial war in 1974. Both the size and similarity with the native population (almost 80% were Portuguese-born) make this a unique shock. We use census data from 1960 and 1981 to document a decrease in dependent employment of 15% for native males and 62% for females. The bulk of the effects is driven by Portuguese-born repatriates. We use shit-share IVs based on the repatriates' municipality of birth, and the municipal hotel capacity, exploiting a large-scale resettlement program.
    Keywords: return migration, labour market, labour supply, entrepreneur- ship, instrumental variable
    JEL: F22 J20 R23
    Date: 2022–09
  14. By: Nicole El Karoui (Laboratoire de Probabilité, Statistique et Modélisation - LPSM); Antoine Parent (Université Paris 8 - LED, OFCE - Sciences Po and CAC-IXXI (Cliometrics and Complexity) - Institut Rhône-Alpin des systèmes complexes); Pierre-Charles Pradier (Centre d'Economie de la Sorbonne)
    Abstract: We propose a revisited view of Louis Bachelier's contribution to economic analysis. Conventional wisdom presents Bachelier as the founding father of modern financial theory. We show that Bachelier's work is constructed to respond to a gap in the Walrasian general equilibrium, where the options market is verbosely introduced but not modeled. By providing a price formation theory for the missing options market, Bachelier undoubtedly presents himself as the heir apparent of the mathematical economics tradition founded by Walras. Indeed, Bachelier's methodological stance is clearly formed on the "rational method" of Walras, proceeding by mathematical demonstration from postulates that we make explicit. We show additionally how Walras and Bachelier in pre-WW2 France reached to the same audience. We propose to name this augmented general equilibrium model the Walras-Bachelier model of intertemporal general equilibrium un the presence of risk. This theory prefigures the Arrow-Debreu model, with some differences which we make clear
    Keywords: general equilibrium; financial markets; option pricing; Bachelier; Walras
    JEL: B13 B16 B31 C02 C62 D53 G13
    Date: 2022–10
  15. By: Eugen Dimant; Tim Krieger; Daniel Meierrieks
    Abstract: This chapter discusses the role of military interventionism and aid in nation-building. We argue that (1) intervention strategies of foreign actors like the United States often unfavorably interact with local institutional settings, which (2) produces undesired outcomes not only for the target country of foreign intervention but also the intervening power. In line with these main findings, we also provide insights from our own empirical work (Dimant et al., 2022) showing that U.S. military aid has not been successful in enhancing military capacity in the recipient countries of military aid, but has rather contributed to exclusion and corruption. These unfavorable effects are, in turn, likely to produce anti-American resentment.
    Keywords: U.S. military aid, nation-building, interventionism, anti-American terrorism
    JEL: D74 F35 P45
    Date: 2022
  16. By: Sherman, Taylor C.
    Abstract: The 1950s are often derided in the scholarship as a period of welfarist policies which reinforced women’s role in the family and entrenched women’s economic dependence. This paper examines the Central Social Welfare Board, and in particular its Welfare Extension Projects, to provide a new characterisation of the approach to women’s issues during the period. It argues that the Central Social Welfare Board, with its unique administrative structure, its preference for voluntary activity, and its adherence to persuasion as a mode of action reflected many of the characteristics of Indian socialism of the time. It also sketches, from this angle, a partial picture of state feminism in India. In the Central Social Welfare Board, state feminism was concerned with the gradual transformation of women and a radical, if short-lived, makeover of the state.
    Keywords: state feminism; socialism; self-help; welfare-state; everyday state; community development; decentralisation; postcolonial nationalism; Durgabai Deshmukh
    JEL: B14 B24 P2 P3
    Date: 2021
  17. By: Lara Bohnet; Susana Peralta; João Pereira dos Santos
    Abstract: We study the labour market impact of a major shock of return migration, following the end of the Portuguese Colonial War in 1974. The retornados influx is unique because of its size (half a million people in a country of nine million), and similarity with the native population (almost 80% of the repatriates were Portuguese-born). Relying on rich census data from 1960 and 1981, with individual information on all repatriates, we document a sizeable 15% decrease for native males, and 62% for native females in dependent employment. Men move to self-employment, while women move to inactivity. The bulk of the effects is driven by Portuguese-born repatriates. We propose novel shift-share IVs, based on the repatriates’ municipality of birth, and the municipal hotel capacity, exploiting a large-scale resettlement program, and discuss possible mechanisms.
    Keywords: return migration, labour market, labour supply, entrepreneurship, instrumental variable
    JEL: F22 J20 R23
    Date: 2022
  18. By: Lokshin,Michael M.; Kolchin,Vladimir; Ravallion,Martin
    Abstract: The paper formalizes and tests the hypothesis that greater exposure to big shocks induces stronger societal responses for adaptation and protection from future big shocks. Support for this hypothesis is found in various strands of the literature and in new empirical tests using cross-country data on deaths due to COVID-19 and deaths during World War 2. Countries with higher death rates in the war saw lower death rates during the COVID-19 pandemic. The tests are robust to a wide range of model specifications and alternative assumptions.
    Keywords: Armed Conflict,Law and Justice Institutions,Conflict and Fragile States,Leprosy,Cholera,Communicable Diseases,Avian Flu
    Date: 2020–11–24
  19. By: Berbée, Paul; Braun, Sebastian T.; Franke, Richard
    JEL: N91 N92 O14 R12
    Date: 2022
  20. By: Eric Chyn; Kareem Haggag; Bryan A. Stuart
    Abstract: This paper provides new evidence on the causal impacts of city-wide racial segregation on intergenerational mobility. We use an instrumental variable approach that relies on plausibly exogenous variation in segregation due to the arrangement of railroad tracks in the nineteenth century. Our analysis finds that higher segregation reduces upward mobility for Black children from households across the income distribution and White children from low-income households. Moreover, segregation lowers academic achievement while increasing incarceration and teenage birth rates. An analysis of mechanisms shows that segregation reduces government spending, weakens support for anti-poverty policies, and increases racially conservative attitudes for White residents.
    JEL: D63 H0 J0 R0
    Date: 2022–10
  21. By: Anne Duquerroy (Centre de recherche de la Banque de France - Banque de France); Clément Mazet-Sonilhac (Centre de recherche de la Banque de France - Banque de France, ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Jean-Stéphane Mésonnier (Centre de recherche de la Banque de France - Banque de France, ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Daniel Paravisini (LSE - London School of Economics and Political Science, CEPR - Center for Economic Policy Research - CEPR)
    Abstract: Using micro-data of the universe of bank-SME relationships in France, we show that banks specialize locally (at the branch level) by industry, and that this specialization shapes the equilibrium amount of borrowing by small firms. For identification, we exploit the reallocation of local clients from closed down branches to nearby branches of the same bank, which induced quasi-random variation in the match between a firm's industry and the industry of specialization of the lending branch. We show that branch reallocation leads, on average, to a substantial and permanent decline in small firm borrowing. This decline is twice larger for firms whose accounts are reallocated from branches less specialized in their industry than the original one.
    Keywords: Bank specialization,SMEs,Relationship banking,Branch closures
    Date: 2022–02–03
  22. By: Fehrle, Daniel
    JEL: C22 C23 E31 E44 G11 N10
    Date: 2022
  23. By: Bertsch, Christoph (Research Department, Central Bank of Sweden); Hull, Isaiah (Finance Department, BI Norwegian Business School); Lumsdaine, Robin L. (Kogod School of Business, American University; Erasmus University Rotterdam; National Bureau of Economic Research (NBER); Tinbergen Institute; Center for Financial Stability); Zhang, Xin (BIS Innovation Hub Nordic Centre)
    Abstract: When does the Federal Reserve deviate from its dual mandate of pursuing the economic goals of maximum employment and price stability and what are the consequences? We assemble the most comprehensive collection of Federal Reserve speeches to-date and apply state-of-the-art natural language processing methods to extract a variety of textual features from each paragraph of each speech. We find that the periodic emergence of non-dual mandate related discussions is an important determinant of time-variations in the historical conduct of monetary policy with implications for asset returns. The period from mid-1996 to late 2010 stands out as the time with the narrowest focus on balancing the dual mandate. Prior to the 1980s there was a outsized attention to employment and output growth considerations, while non dual-mandate discussions centered around financial stability considerations emerged after the Great Financial Crisis. Forward-looking financial stability concerns are a particularly important driver of a less accommodative monetary policy stance when Fed officials link these concerns to monetary policy, rather than changes in banking regulation. Conversely, discussions about current financial crises and monetary policy in the context of inflation-employment themes are associated with a more accommodative policy stance.
    Keywords: Natural Language Processing; Machine Learning; Central Bank Communication; Financial Stability; Zero Shot Classification; Extractive Question Answering; Semantic Textual Similarity
    JEL: C63 D84 E32 E70
    Date: 2022–10–01
  24. By: Watzinger, Martin (University of Muenster and CEPR); Schnitzer, Monika (LMU Munich and CEPR)
    Abstract: We analyze the effects of the 1984 breakup of the Bell System on the rate, diversity, and direction of US innovation. In the antitrust case leading to the breakup, AT&T, the holding company of the Bell System, was accused of using exclusionary practices against competitors. The breakup was intended to end these practices. After the breakup, the scale and diversity of telecommunications innovation increased. Total patenting by US inventors related to telecommunications increased by 19%, driven by companies unrelated to the Bell System. Patenting by Bell's successor companies decreased, but not the number of top inventions.
    Keywords: antitrust, innovation, diversity, exclusionary practices
    JEL: O30 K21 L40
    Date: 2022–10–10
  25. By: Miguel D. Ramirez (Department of Economics, Trinity College)
    Keywords: Absolute value;competitive capitalist economy;invariable measure of value;labor theory of value;national product;natural prices;relative value.
    JEL: B10 B12 B24
    Date: 2022–10
  26. By: Akresh,Richard; Halim,Daniel Zefanya; Kleemans,Marieke
    Abstract: This paper studies the long-term and intergenerational effects of the 1970s Indonesian school construction program, which was one of the largest ever conducted. Exploiting variation across birth cohorts and districts in the number of schools built suggests that education benefits for men and women persist 43 years after the program. Exposed men are more likely to be formal workers, work outside agriculture, and migrate. Men and women who were exposed to the program have better marriage market outcomes with spouses that are more educated, and households with exposed women have improved living standards and pay more government taxes. Mother’s program exposure, rather than father’s, leads to education benefits that are transmitted to the next generation, with the largest effects in upper secondary and tertiary education. Cost-benefit analyses show that school construction leads to higher government tax revenues and improved living standards that offset construction costs within 30-50 years.
    Keywords: Educational Sciences,Health Care Services Industry,Gender and Development,Labor Markets,Rural Labor Markets,Urban Housing,Urban Governance and Management,Municipal Management and Reform,Urban Housing and Land Settlements
    Date: 2021–03–02
  27. By: Eric Dehay (RIME-Lab - Recherche Interdisciplinaire en Management et Économie Lab - ULR 7396 - UA - Université d'Artois - Université de Lille)
    Abstract: The text proposes an analysis of the way the European Central Bank (ECB) considers the notion of economic growth or its limits and how the question of envi-ronmental risk has become an issue for it. For this purpose, an analysis of the speeches of the members of its board is carried out over the period 1997-2021. An automated statistical analysis of the corpus reveals the standard approach to growth adopted by the ECB. This is followed by a more qualitative reading of the discourse, which shows that the notions of sustainability and the climate crisis are becoming increasingly important in the rhetoric of the ECB, without leading to a radical revision of the way growth is conceived or to a questioning of its limits. In order to expand its discourse and action in the climate field, the ECB is rather pro-ceeding by superimposition, adding new ideas rather than replacing its initial paradigm. In doing so, it protects the legitimacy of its mandate and its epistemic credibility.
    Keywords: E58,textual analysis,growth,climate change,European central bank (ECB)
    Date: 2022
  28. By: Jacob Weisdorf (Sapienza University of Rome, CEPR, and CAGE)
    Date: 2022
  29. By: Bilo,Simon; Ajwad,Mohamed Ihsan; Alansari,Ebtesam; Alhumaidan,Lama; Alrashidi,Faleh M F E
    Abstract: This paper estimates the long-term impacts of schooling disruptions on private returns to schooling in Kuwait. It applies an instrumental variables approach to estimate the private returns to schooling, using unique civil service payroll data, with Kuwaiti students’ exposure to the Gulf War (1990–91) as the instrument. The Gulf War is a suitable instrument because it profoundly affected Kuwaiti students' schooling at the time and is unlikely to be correlated with many potentially problematic omitted variables, such as students’ ability. The analysis finds that (i) people who were of schooling age during the Gulf War tend to have lower educational attainment than people who were of schooling age after the Gulf War; (ii) men who were of schooling age at the time of the Gulf War earn on average 5.6 percent less for each year of schooling lost, and women earn correspondingly 6.8 percent less for each year of schooling lost; (iii) students who were in lower grades during the Gulf War tend to suffer a greater percentage wage loss for each year of lost schooling.
    Keywords: Armed Conflict,Educational Sciences,Pensions&Retirement Systems,Economics of Education,Education Finance,Labor Markets
    Date: 2021–04–26
  30. By: Antoine Parent (Université Paris 8 -LED, OFCE - Sciences Po and CAC-IXXI (Cliometrics and Complexity) - Institut Rhône-Alpin des systèmes complexes); Pierre-Charles Pradier (Centre d'Economie de la Sorbonne)
    Abstract: We provide the first ever quantitative analysis of pricing and profitability of option trading in Paris from 1843 to 1939 based on data source featuring more than 75,000 option prices. Using a special case of the Black (1976) option pricing model, we show that, albeit options were consistently undervalued, the market was still profitable for all the parties. We prove that the exceptional longevity of the Paris options market was based on a 4-pillars market microstructure: (I.) systematic underpricing of cheap options to attract gamblers, (2.) administration of settlement price by the brokers' syndicate, (3.) parimutuel-like betting operation and safety thanks to (4.) a sophisticated risk management in the position-taking style which minimized actual clearing price manipulation
    Keywords: option pricing; financial risk management; betting markets; alternative investments
    JEL: G12 G14 N23 N24
    Date: 2022–10
  31. By: Josef Taalbi
    Abstract: A long-standing discussion is to what extent patents can be used to monitor trends in innovation activity. This study quantifies the amount and quality of information about actual innovation contained in the patent system, based on 4,460 Swedish innovations (1970-2015) that have been matched to international patents. The results show that most innovations were not patented and that among those that were, 43.9% of all innovations, only a fraction can be identified with patent quality data. The best-performing models identify 17% of all information about innovations, equivalent to an information loss of at least 83%. Econometric tests also show that the fraction of innovations responding to strengthened patent laws during the period were on average 8% percent. The overlap between the patent and innovation systems is hence more modest than often assumed. This accentuates the need to, alongside patents, develop versatile approaches in order to induce and monitor various aspects of innovation.
    Date: 2022–10
  32. By: Bindseil, Ulrich; Pantelopoulos, George
    Abstract: In earlier times, societies relied extensively on "IOUs" ("I owe you") to avert the need for settlement in specie. However, an IOU reliant economy is complex and fraught with financial stability risks. These problems can be overcome through clearing, netting and settlement, either without or with novation. From the perspective of creditors, the most expedient solution is for residual claims to be denominated in a large-scale, riskfree and divisible IOU that is analogous to settlement in specie, but without incurring the disadvantages ofsettlement in preciousmetalcoins. If such solutions are not feasible, it is then desirable that (1) networks of IOUs are simplified through netting, and (2) residual claims are denominated in relatively high-quality claims, which can be readily converted into risk-free positions. The purpose of this paper is to explore how such outcomes have been achieved through the lens of history. As will be shown - whilst netting and settlement with novation is an effective technique to mitigate financial instability risks - it is only through central banks acting as correspondents to the domestic financial system that the drawbacks of the IOU economy can be alleviated to the largest extent in order to attain lean balance sheets, lower credit risk and improved financial stability. At the same time, such a solution also ensures that the financial system remains layered.
    JEL: F33 G21 N20 N24
    Date: 2022
  33. By: Darke, Matthew James (University of Warwick)
    Abstract: Developments in Artificial Intelligence and Machine Learning technologies have had massive implications for labour automation. This paper builds on the task-based methodology first adopted by Frey and Osborne (2013) to predict how the risk of automation evolved in the UK labour between 2012 and 2017 using data from the UK Skills and Employment Survey. The analysis accounts for technological progress, making use of two sets of experts’ assessments for 70 occupations. The probability of automation is predicted for each individual using a set of self-reported job skills. It finds that the proportion of jobs at high-risk from automation has risen from 10.6% to 23.4%, and that this is largely due to better technology rather than changing job skill requirements. It also identifies sectors experiencing the greatest increase in automation risk between the two periods and, in contrast, those which appear complementary to technology, drawing on occupational case studies as evidence.
    Keywords: Employment ; Skills Demand ; Technology JEL Classification: J01 ; J21 ; J24 ; J62 ; O33
    Date: 2022
  34. By: Sara Lamboglia (Bank of Italy); Fabio Travaglino (Bank of Italy)
    Abstract: In the past decade, institutions, researchers and professionals all around the world have designed surveys with the aim of defining a metric for measuring financial literacy. However, the topic is still under discussion due to the complexity of the definition of financial literacy. In this paper, we review the main international and Italian surveys capturing financial literacy across different target groups: young people, adults and entrepreneurs. We analyse in detail the way financial literacy is defined and measured. We also report all the information gathered in each survey with a special focus on digital skill indicators, which are increasingly important in a rapidly changing financial landscape driven by digital technology.
    Keywords: Financial literacy, survey
    JEL: G53
    Date: 2022–10

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.