nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2022‒11‒21
thirty-one papers chosen by

  1. Dos Siglos de Industria en la Argentina, Una Revisión Historiográfica By Marcelo Rougier
  2. The Ossified Economy: The Case of Germany, 1870-2020 By Naudé, Wim; Nagler, Paula
  3. Predistribution vs. Redistribution: Evidence from France and the U.S By Antoine Bozio; Bertrand Garbinti; Jonathan Goupille-Lebret; Malka Guillot; Thomas Piketty
  4. The Intergenerational Transmission of College: Evidence from the 1973 Coup in Chile By Bautista, M. A.; Gonzalez, F; Martinez, L. R; Muñoz, P; Prem, M
  5. The Dynamic Consequences of State-Building: Evidence from the French Revolution By Cédric Chambru; Emeric Henry; Benjamin Marx
  6. A demographic and nutritional analysis of urban lower-class dwellers in modern Japan: the case of one Saimin-chiku in Tokyo, ca.1930 By Kenichi Tomobe; Minori Oshidari; Keisuke Moriya
  7. Subnational democratization and the onset of the Mexican drug war By Luis Sanchez; Vassilis Sarantides
  8. Capital Controls and the Global Financial Cycle By Matschke, Johannes; Lovchikova, Marina
  9. Measuring and explaining rural inequality in a pre-industrial setting: income inequality in sixteenth-century Ottoman Manisa By Ceylan, Pinar
  10. Real interest rates and population growth across generations By Lucas Fuhrer; Nils Herger
  11. Colonial Origins of Comparative Development in Ghana By Iddrisu Kambala, Mohammed
  12. Those Who Were Better Off: Capital and Top Incomes in Fascist Italy By Giacomo Gabbuti
  13. Lack of Substantive Representation in Europe: Causes and Consequences By Günther, Laurenz; Günther, Laurenz
  14. Wealth-Income Ratios in Free Market Capitalism: Switzerland, 1900-2020 By Enea Baselgia; Isabel Z. Martínez
  15. Structural Change, Land Use and Urban Expansion By Nicolas Coeurdacier; Florian Oswald; Marc Teignier
  16. Competition, Benchmarking, and Electoral Success: Evidence from 65 years of the German Bundestag By Frank, Marco; Stadelmann, David
  17. Quality of Communications Infrastructure, Local Structural Transformation, and Inequality By Camilo Andrés Acosta Mejía, Luis Baldomero-Quintana
  18. The New Speak and Economic Theory or How We Are Being Talked To By Jean-Paul Fitoussi
  19. Innovative design on the shop floor of the Saint-Nazaire Airbus factory By Honorine Harlé; Sophie Hooge; Pascal Le Masson; Kevin Levillain; Benoit Weil; Guillaume Bulin; Thierry Ménard
  20. Income per-capita across-countries By Perilla Jimenez, Juan
  21. A Glimpse of Freedom: Allied Occupation and Political Resistance in East Germany By Martinez, Luis R.; Jessen, Jonas; Xu, Guo
  22. To Be or Not to Be: The Entrepreneur in Neo-Schumpeterian Growth Theory By Henrekson, Magnus; Johansson, Dan; Karlsson, Johan
  23. Income and Wealth Inequality in Hong Kong, 1981-2020: The Rise of Pluto-Communism? By Thomas Piketty; Li Yang
  24. Revealed in transition : The political effect of planning’s legacy By Natkhov, Timur; Pyle, William
  25. Diplomatic Stance of the Japanese Business Community in the First World War: Focusing on relations with major warring nations and the concept of economic alliance, in the middle of the war (Japanese) By SAKAMOTO Masazumi
  26. The Anatomy of Intergenerational Income Mobility in France and its Spatial Variations By Gustave Kenedi; Louis Sirugue
  27. Global monetary and financial spillovers: Evidence from a new measure of Bundesbank policy shocks By Cloyne, James S.; Hürtgen, Patrick; Taylor, Alan M.
  28. Taxation with a Grain of Salt: The Long-Term Effect of Fiscal Policy on Local Development By Tommaso Giommoni; Gabriel Loumeau
  29. The Long and Winding Roads: Roads, Inequality, and Growth in Colombia By Quintero, Luis; Sinisterra, Guillermo
  30. Tyranny, Blind Spot in the Humanities By Andreu Solé
  31. Louis Bachelier's Théorie de la spéculation : The missing piece in Walras' general equilibrium By Nicole El Karoui; Antoine Parent; Pierre-Charles Pradier

  1. By: Marcelo Rougier (IIEP-Baires-UBA/CONICET)
    Abstract: Más allá de la significativa carencia de obras generales, los estudios sobre períodos o aspectos particulares de la problemática industrial son copiosos y conllevan un no menor desafío a la hora de una presentación sistematizada para un período amplio como el que aquí se intenta por vez primera, que abarque desde los inicios del proceso hasta la actualidad. Apelamos en este trabajo a introducir aquellas obras que consideramos más relevantes y originales (reconociendo la imposibilidad de dar cuenta de todos los aportes) en una presentación cronológica en base a etapas de algún modo consensuadas por la literatura especializada: un período “protoindustrial” durante la organización nacional, los inicios de la industrialización en el marco del modelo agroexportador, la industrialización por sustitución de importaciones en sus fase inicial o “fácil” y en su mayor despliegue o “compleja”, la desindustrialización selectiva iniciada a mediados de los años setenta, y la recuperación posterior al cambio de siglo). Cada período será a su vez cruzado de modo transversal por diferentes ejes o dimensiones de análisis con el propósito de identificar los avances y carencias y recuperar un análisis integrador de la historia de la industria en la Argentina.
    Keywords: historiografía - insdustria - Argentina
    JEL: N3 L6
    Date: 2022–11
  2. By: Naudé, Wim (RWTH Aachen University); Nagler, Paula (Erasmus University Rotterdam)
    Abstract: We describe Germany's rise as an industrial power in the late 19th century through radical innovation and entrepreneurship, and contrast this with the post-World War II period. This latter period, although it contained the German economic miracle, was nevertheless a period during which innovation slowed down - a somewhat surprising conclusion, but consistent with the decline in business dynamism noted in a growing number of advanced economies. We document this decline using several innovation indicators, and offer four broad, interrelated explanations in a historical context: (i) the innovation system is locked into incremental innovation, (ii) the diffusion of technology is slowing down, (iii) the education system is subject to weaknesses, and (iv) entrepreneurship is stagnating. Implications for policy are noted. Our paper contributes to the literature on the decline in business dynamism and the "great stagnation", to the literature on the historical forces that determine innovation outcomes, and to the literature that seeks to identify what makes an entrepreneurial state.
    Keywords: innovation, Germany, entrepreneurship, technology
    JEL: N13 N14 O31 O33
    Date: 2022–09
  3. By: Antoine Bozio (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, EHESS - École des hautes études en sciences sociales, IPP - Institut des politiques publiques); Bertrand Garbinti (CREST-THEMA - CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique - THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université, ENSAE - Ecole Nationale de la Statistique et de l'Analyse Economique - Ecole Nationale de la Statistique et de l'Analyse Economique); Jonathan Goupille-Lebret (CNRS - Centre National de la Recherche Scientifique, GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - ENS LSH - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique, ENS Lyon, Université de Lyon, Université de Lyon (Université de Lyon)); Malka Guillot (HEC Liège); Thomas Piketty (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, EHESS - École des hautes études en sciences sociales)
    Abstract: We construct series of post-tax income for France over the 1900-2018 period and compare them with U.S. series. We quantify the extent of redistribution and estimate the impact of redistribution vs pretax inequality on post-tax inequality. We obtain three major findings. First, redistribution has increased in both countries to reach similar levels today. Second, the long-run decline in post-tax inequality in France is due mostly to the fall in pretax inequality. Third, the relative lower post-tax inequality in France is entirely explained by differences in pretax inequality. This suggests that more attention should be paid to policies affecting pretax inequality.
    Keywords: inequality,redistribution,predistribution,taxes,transfers
    Date: 2022–10–27
  4. By: Bautista, M. A.; Gonzalez, F; Martinez, L. R; Muñoz, P; Prem, M
    Abstract: We study the transmission of higher education across generations using the arrival of the Pinochet dictatorship to Chile in 1973 as natural experiment. Pinochet promoted a large contraction in the number of seats opened for new students across all universities. Using census data, we find that parents who reached college age shortly after 1973 experienced a sharp decline in college enrollment. Decades after democratization, we observe that their children are also less likely to enroll in higher education. The results imply large and persistent downstream effects of educational policies implemented half a century ago
    Keywords: Higher education, Dictatorship, Intergenerational transmission
    JEL: I23 H52
    Date: 2022–10–18
  5. 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
  6. By: Kenichi Tomobe (Graduate School of Economics, Hitotsubashi University); Minori Oshidari (Bank of Yokohama); Keisuke Moriya (Graduate School of Economics, Hitotsubashi University)
    Abstract: This study aims at investigating a method to measure the standard of living, nutritional status, and physical condition of the saimin ("the poor") who suddenly appeared in the modern age and settled there despite their poverty. In the study of social science, the mainstream theories of poverty are Charles James Booth's stratification theory based on income level and Benjamin Seebohm Rowntree's minimum cost of living theory based on the cost of living; both have their merits and demerits. This paper will measure the poverty levels in terms of income and cost of living using data from a specified sub-district located in Tokyo (the results of an on-site survey of approximately 180 households). Many households living in the Saimin-chiku faced poverty both income levels and cost of living. In addition, observation of the health status of the saimin households showed that roughly half of the community had a disease of some sort, or a tuberculosis patient in the household. This provides a perspective which illuminates the difference in situation between the saimin households, who made a living based on an economy of mutual support, and the small farmer households, who had a communal consumption lifestyle but had the capacity to be self-supporting.
    Keywords: household, poverty, health, living standard, nutrition intake
    JEL: I14 N00 R00
    Date: 2022–11
  7. By: Luis Sanchez (Department of Economics, University of Sheffield, 9 Mappin Str, Sheffield S1 4DT, UK.); Vassilis Sarantides (Athens University of Economics and Business, Patission 76, Athens 10434, Greece)
    Abstract: The Mexican drug war escalated dramatically since 2007. However, its origin is in the 1990s turf wars involving the main drug trafficking organisations operating in the country. In this study we seek to examine the main cause of turf wars at the municipal level between 1995-2006. In particular, we highlight the significant role of a large-scale land titling reform (PROCEDE) that secured property rights for the electorate, previously controlled by the state party (PRI) for seven decades. Our results indicate that political change at the municipality level after the rollout of PROCEDE is a significant determinant of organised crime deaths (OCDs). We further provide evidence that the effect is exacerbated when municipal political change is combined with a change at the gubernational level. We also show that increased intercartel violence is inextricably linked to the geographic expansion of cartel operations. Overall, the fall of the PRI at the subnational level after the rollout of PROCEDE - to signify its strong local roots - broke the equilibrium between corrupted local officials and local drug cartels making the latter more vulnerable to expansion operations of rival cartels resulting in more OCDs.
    Keywords: land reform; PROCEDE; PRI; democratisation; organised crime deaths
    JEL: D72 K42 O54 Q15
    Date: 2022–10
  8. By: Matschke, Johannes; Lovchikova, Marina
    JEL: F36 F38 F41
    Date: 2022
  9. By: Ceylan, Pinar
    Keywords: pre-industrial inequality; agricultural incomes; property rights institutions; Ottoman tax surveys; Ottoman rural history
    JEL: N01 N30 N35 N45 N50 N55
    Date: 2022–11
  10. By: Lucas Fuhrer (Swiss National Bank); Nils Herger (Study Center Gerzensee)
    Abstract: This paper empirically examines the effect of population growth on real interest rates. Although this effect is well founded in macroeconomic theory, the corresponding empirical results have been rather tenuous. Demographic interest rate theories are typically based on long-term relationships across generations. Accordingly, key population trends appear often only across decades, if not centuries, worth of data. To capture these trends, we distinguish between population growth resulting from a birth surplus and net migration. Within a panel covering 12 countries and the years since 1820, we find robust evidence that the birth surplus significantly affects the real interest rate.
    Date: 2022–06
  11. By: Iddrisu Kambala, Mohammed
    Abstract: A striking feature of Ghana’s development landscape is the stark development disparity between a relatively developed South and a trailing North. Explanations for the disparity have often been hinged on differences in geography and past colonial experience. In this study, I provide an empirical justification for the historical hypothesis that the dynamics of colonial rule contributed significantly to the development divergence between the North and the South. I exploit the asymmetric regional distribution of past colonial public investments in education, health and infrastructure to show that the dynamics of colonial rule explain a significant portion of the development disparity between the two regions. I also survey compelling historical anecdotes to show that prior to the colonial project the North was a relatively prosperous region.
    Keywords: Colonial rule; development disparity; colonial investments; Northern Ghana; Southern Ghana
    JEL: N00 O10 Z0
    Date: 2022–01–01
  12. By: Giacomo Gabbuti
    Abstract: In the centennial of the March on Rome, this paper contributes to the political economy of Italian Fascism by addressing in quantitative terms the fortunes of Italian economic elites during the interwar period. Macro-economic indicators indicate capital accumulation and high profits, in a period characterised by international economic turmoil, alongside increasing concentration. New fiscal evidence is adopted to show the increasing relative position of the rich, including new series of top income shares. A discussion of taxation at the top and its evasion makes it possible to place these developments within the regressive economic policies of the Fascist regime.
    Keywords: Fascist Italy; income inequality; interwar Europe; top incomes; capital.
    Date: 2022–10–17
  13. By: Günther, Laurenz; Günther, Laurenz
    JEL: D72 D78 N44 P16
    Date: 2022
  14. By: Enea Baselgia; Isabel Z. Martínez
    Abstract: We estimate the ratio of private wealth to national income, βpt, for Switzerland from 1900 to 2020. Our results indicate that over the 20th century, βpt did not follow a U-shaped pattern as in most European countries. Instead, its was exceptionally stable at around 500%. We argue that this consistently high βpt was the result of geopolitical factors combined with Switzerland’s capital friendly policy-making. Since the turn of the century, however, βpt has been on a rapid rise to reach 793% in 2020. This considerable increase is mainly driven by large capital gains, especially in housing wealth.
    Keywords: wealth-income ratio, distribution, economic growth, housing prices
    JEL: N34 D31 D33 E01
    Date: 2022
  15. By: Nicolas Coeurdacier (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Florian Oswald (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Marc Teignier (University of Barcelona)
    Abstract: We develop a multi-sector spatial equilibrium model with endogenous land use: land is used either for agriculture or housing. Urban land, densely populated due to commuting frictions, expands out of agricultural land. With rising productivity, the reallocation of workers away from agriculture frees up land for cities to expand, limiting the increase in land values despite higher income and increasing urban population. Due to the reallocation of land use, the area of cities expands at a fast rate and urban density persistently declines, as in the data over a long period. As structural change slows down, cities sprawl less and land values start increasing at a faster rate, as in the last decades. Quantitative predictions of the joint evolution of density and land values across time and space are confronted with historical data assembled for France over 180 years.
    Keywords: Structural Change,Land Use,Productivity Growth,Urban Density
    Date: 2021–12–03
  16. By: Frank, Marco; Stadelmann, David
    JEL: D72 D78 H11
    Date: 2022
  17. By: Camilo Andrés Acosta Mejía, Luis Baldomero-Quintana
    Abstract: We document that improvements in the quality of communication infrastructure have a causal impact in employment growth, wage inequality, and sectoral economic activity in US counties. Our treatment is the quality of communication infrastructure in a county measured by the av erage Internet speeds offered by telecommunication companies. For identification, we use as instrumental variable the structure of ARPANET (the precursor of Internet), a network funded by the Department of Defense, whose information we retrieved from historical government doc uments. We show that faster Internet increases the shares of employment in high skilled services sectors, while negatively affecting activity in services sectors like retail, accommodation and food services. Two mechanisms explain our results: input-output linkages and a rise in high-skilled workers in ICT-intensive occupations. Our results are consistent with the Rybczynski theorem. Lastly, our results suggest that reduction in communication costs induced by better Internet in U.S. counties increases local inequality.
    Keywords: Communication costs, Internet, infrastructure, local structural transformation, Hecksher-Ohlin-Vanek model, history of technology
    Date: 2022–10–18
  18. 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
  19. By: Honorine Harlé (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Sophie Hooge (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Kevin Levillain (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Benoit Weil (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Guillaume Bulin; Thierry Ménard
    Abstract: In this study, we examine innovative design practices on the Saint-Nazaire Airbus factory shop floor. The engineering and manufacturing engineering departments are in charge of the design of products and their industrialization, even though the factory is usually seen as a place for manufacturing, rather than design. However, there is also design activity in a factory that is devoted to the optimization of manufacturing processes. In this study, we highlight an alternative form of design that relies on a collective exploratory approach. A total of 30 projects from the Saint-Nazaire Airbus factory were selected and analyzed. Of these, two were selected as case studies to illustrate the factory's different design methods. Subsequently, quantitative analysis provided evidence of the existence of two design regimes: closed prescription and expandable prescription. The resulting solutions were examined, and it was found that designs under the expandable prescription regime provided more robust long-term solutions. This study offers new perspectives for reexamining innovation in manufacturing and exploring design activity on factory shop floors.
    Keywords: Design theory,Manufacturing,Factory,Industry 4.0,Innovative design
    Date: 2022
  20. By: Perilla Jimenez, Juan
    Abstract: A sample of 131 countries is classified into those at the frontier (24 OECD countries), and those that over the 1950-2019 period managed to catching-up, remained stagnant, or kept lagging further behind. Time-distance to the frontier suggests that successful catching-up has been already completed by some countries. But it would take no less than 27 years and as much as 194 years in the most optimistic scenario for other countries. The comparative analysis reveals patterns of (unconditional) convergence, secular stagnation and divergence characterized by differences in the approach to local innovation and technology diffusion from abroad, jointly with the ability to take advantage of economies of scale.
    JEL: O11 O47 O57
    Date: 2022–10–10
  21. By: Martinez, Luis R. (University of Chicago); Jessen, Jonas (European University Viadrina, Frankfurt / Oder); Xu, Guo (UC Berkeley)
    Abstract: This paper exploits the idiosyncratic line of contact separating Allied and Soviet troops within East Germany at the end of WWII to study political resistance in a non-democracy. When Nazi Germany surrendered, 40% of what would become the authoritarian German Democratic Republic was initially under Allied control but was ceded to Soviet control less than two months later. Brief Allied exposure increased protests during the major 1953 uprising. We use novel data on the appointment of local mayors and a retrospective survey to argue that even a "glimpse of freedom" can foster civilian opposition to dictatorship.
    Keywords: East Germany, political resistance, protest, autocracy, spatial RDD, World War II
    JEL: F51 H10 N44 P20
    Date: 2022–09
  22. By: Henrekson, Magnus (Research Institute of Industrial Economics); Johansson, Dan (Örebro University); Karlsson, Johan (Jönköping University, Sogang University)
    Abstract: Based on a review of 700+ peer-reviewed articles since 1990, identified using text mining methodology and supervised machine learning, we analyze how neo-Schumpeterian growth theorists relate to the entrepreneur-centered view of Schumpeter (1934) and the entrepreneurless framework of Schumpeter (1942). The literature leans heavily towards Schumpeter (1942); innovation returns are modeled as following an ex ante known probability distribution. By assuming that innovation outcomes are (probabilistically) deterministic, the entrepreneur becomes redundant. Abstracting from genuine uncertainty, implies that central issues regarding the economic function of the entrepreneur are overlooked such as the roles of proprietary resources, skills, and profits.
    Keywords: creative destruction, economic growth, entrepreneur, innovation, judgment, Knightian uncertainty
    JEL: B40 O10 O30
    Date: 2022–09
  23. By: Thomas Piketty (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, WIL - World Inequality Lab); Li Yang (DIW Berlin - Deutsches Institut für Wirtschaftsforschung)
    Abstract: In this paper, we aim to better understand the evolution and institutional roots of Hong Kong's growing economic inequality and political cleavages. The main findings of this paper are twofold. First, by combining multiple sources of data (household surveys, fiscal data, wealth rankings, national accounts) and innovative methodologies, we conduct a comprehensive analysis of the evolution of wage inequality, the capital share, as well as the concentration of top wealth in Hong Kong. Our evidence suggests a very large rise in income and wealth inequality in Hong Kong over the last four decades. Second, based on the latest opinion poll data, we provide evidence suggesting that business elites, who carry disproportionate weight in Hong Kong's Legislative Council, are more likely to vote for pro-establishment camp to ensure that policies are passed that protect their political and economic interests. We argue that the unique alliance of government and business elites in a partial democratic political system is the institutional root of Hong Kong's rising inequality and political cleavages.
    Date: 2022–07
  24. By: Natkhov, Timur; Pyle, William
    Abstract: Decades of investment decisions by central planners left communist societies with structures of production ill-prepared for competitive markets. Their vulnerability to liberalization, however, varied across space. Similar to the effects identified in the “China shock” literature, we hypothesize that post-market-shock outcomes will reflect pre-market-shock structures of production. Tracking voting outcomes at the district level in Russia’s presidential elections, we document asymmetric reactions to the liberalization of markets in 1992. Electoral support for the pro-market incumbent declined most in areas with structural inheritances that made them most vulnerable to reforms. This finding sheds new light on an old debate about the importance of “initial conditions” (as opposed to policies) to the trajectories of post-communist societies.
    JEL: N14 N44 P00 P23
    Date: 2022–11–07
  25. By: SAKAMOTO Masazumi
    Abstract: The history of Japan's foreign relations during the First World War can be thought of as having two currents: a diplomatic history centered on the Asia-Pacific region, mainly in terms of Chinese interests and relations with the United States connected with that history, and a trade history which is described as the term of economic growth. However, little attention has been paid to the relationship between the two, e.g., the business community's interests regarding Japan's foreign policy. The analysis of the tone of the major economic newspapers in the mid-First World War period and the trade chronology compiled by the Ministry of Finance reveal that the business community had certain diplomatic interests toward the major warring nations of the First World War, such as Britain, Russia, and Germany, depending on their trade situation. At the same time, they reveal that the business community had expressed significant concern about the concept of the inter-Allied economic alliance, including a postwar regime, and decoupling from antagonist countries, as discussed at the Economic Conference of the Allies in 1916. The results suggest that considering the intentions (interests) of the business community while determining Japan's foreign policy is significant at a time when trade and diplomacy are closely linked.
    Date: 2022–10
  26. By: Gustave Kenedi (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Louis Sirugue (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: We provide new estimates of intergenerational income mobility in France for children born in the 1970s using rich administrative data. Since parents' incomes are not observed, we employ a two-sample two-stage least squares estimation procedure. At the national level, every measure of intergenerational income persistence (intergenerational elasticities, rank-rank correlations, and transition matrices) suggests that France is characterized by relatively strong persistence relative to other developed countries. Children born to parents in the bottom 20% of their income distribution have a 10.1% probability of reaching the top 20% as adults. This probability is of 39.1% for children born to parents in the top 20%. At the local level, we find substantial spatial variations in intergenerational mobility. It is higher in the West of France and particularly low in the North and in the South. We uncover significant relationships between absolute upward mobility and characteristics of the environment an individual grew up in, such as the unemployment rate, population density, and income inequality.
    Keywords: Intergenerational mobility,Measurement,Spatial variations,France
    Date: 2021–11
  27. By: Cloyne, James S.; Hürtgen, Patrick; Taylor, Alan M.
    Abstract: Identifying exogenous variation in monetary policy is crucial for investigating central bank policy transmission. Using newly-collected archival real-time data utilized by the Central Bank Council of the German Bundesbank, we identify unexpected changes in German monetary policy from 580 policy meetings between 1974 and 1998. German monetary policy shocks produce conventional effects on the German domestic economy: activity, prices, and credit decline significantly following a monetary contraction. But given Germany's central role in the European Monetary System (EMS), we can also shed light on debates about the international transmission of monetary policy and the relative importance of the U.S. Federal Reserve for the global cycle during these years. We find that Bundesbank policy spillovers were much stronger in major EMS economies with Deutschmark pegs than in non-EMS economies with floating exchange rates. Furthermore, compared to monetary spillovers from the U.S., German spillovers were comparable or even larger in magnitude for both pegs and floats.
    Keywords: Monetary policy,Bundesbank,trilemma,exchange rate,spillovers
    JEL: E32 E52 F42 F44
    Date: 2022
  28. By: Tommaso Giommoni; Gabriel Loumeau
    Abstract: This paper studies the long-term effect of taxation on economic geography and development. We rely on a unique natural experiment in place during France’s ancien régime: the salt tax. Introduced in the late 13th century and abrogated by the French Revolution in 1789, the salt tax was not uniformly levied across the French kingdom as its rate varied discontinuously in space. Using a series of rich and original historical data at regular time intervals and very fine spatial resolution since the fifteen century, we estimate a Spatial RDD model. We find that these exogenous tax rate differentials have had large effects on economic geography and development. These effects are, then, confirmed in a DiD analysis, that studies a very large time span (1400-1900 using regular intervals of 25 years) and documents the absence of pre-trends. Most of the effects can still be observed today in population density, firm density, and local average income.
    Keywords: taxation, long-term, economic georgraphy, development, spatial discontinuity, salt tax
    JEL: H20 N33 O23 J61
    Date: 2022
  29. By: Quintero, Luis; Sinisterra, Guillermo
    Abstract: We measure the impact on economic performance and land ownership inequality in municipalities of a large scale program of road network expansions and improvements that occurred in Colombia between 1993 to 2012. The treatment is measured as improvements in market access to incorporate network effects. We find that roads improve market access, and this increases both municipality GDP and land ownership inequality. We address endogeneity concerns by using two instruments. First, using detailed geographical information we create a least cost path counterfactual for the Colombian road networks linking important cities in 1938. We use this least cost path to calculate a counterfactual market access measure that is determined by exogenous topographic accidents. Next, we build an alternative market access measure which focuses on semi-random market access changes stemming from increased exposure to markets of smaller cities which were not determinant in defining the road network shape.
    Keywords: Desarrollo, Infraestructura, Investigación socioeconómica, Vialidad,
    Date: 2022
  30. By: Andreu Solé (HEC Paris - Ecole des Hautes Etudes Commerciales)
    Abstract: What is the singularity of our society and, consequently, how to name it? We first present a critique of three terms: liberalism, capitalism and "neo-liberalism" which are associated with this society by many researchers in the humanities and social sciences. We show that the classical, non-authoritarian liberalism of Adam Smith is a utopia. As for the word capitalism, it spreads a major confusion, that between market and company. Concerning the "neo-liberalism" of Hayek and Friedman, we argue that it is not liberalism. Then, we underline that our society is organized by and for companies, allowing us to formulate the proposal to call it "Enterprise-World". Finally, we highlight the tyranny - linked to the company - specific to this society, and invite us to wonder why most researchers in the humanities seem not to "see" it.
    Abstract: Quelle est la singularité de notre société et, en conséquence, comment la nommer ? Nous exposons d'abord une critique de trois termes : « libéralisme », « capitalisme » et « néolibéralisme » qui sont associés à cette société par beaucoup de chercheurs en sciences humaines. Nous démontrons que le libéralisme classique, non autoritaire, d'Adam Smith est une utopie. Quant au mot capitalisme, il diffuse une confusion majeure, celle entre marché et entreprise. S'agissant du « néolibéralisme » de Hayek et Friedman, nous faisons ressortir qu'il n'est pas du libéralisme. Ensuite, nous soulignons que notre société est organisée par et pour les entreprises, nous permettant de formuler la proposition de l'appeler « Entreprise-Monde ». Enfin, nous mettons en lumière la tyrannie-liée à l'entreprise-, spécifique de cette société, et invitons à se demander pourquoi la plupart des chercheurs en sciences humaines semblent ne pas la « voir ».
    Keywords: Liberalism,Neoliberalism,Capitalism,Company,Tyranny,Tyrannie,Libéralisme,Néolibéralisme,Capitalisme,Entreprise
    Date: 2022–07–20
  31. By: Nicole El Karoui (LPSM (UMR_8001) - Laboratoire de Probabilités, Statistique et Modélisation - SU - Sorbonne Université - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité); Antoine Parent (LED - Laboratoire d'Economie Dionysien - UP8 - Université Paris 8 Vincennes-Saint-Denis, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, CAC-IXXI, Complex Systems Institute); Pierre-Charles Pradier (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    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 in 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
    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.