nep-his New Economics Papers
on Business, Economic and Financial History
Issue of 2022‒12‒19
seventeen papers chosen by

  1. A Keynesian-Minskian perspective on the transformation of industrial into financial capitalism By Heise, Arne
  2. US Immigration from Latin America in Historical Perspective By Gordon H. Hanson; Pia Orrenius; Madeline Zavodny
  3. Female and Male Calories Across the 19th and Early 20th Century Distributions Using Quantile Regression By Scott A. Carson
  4. The Gift of a Lifetime: The Hospital, Modern Medicine, and Mortality By Alex Hollingsworth; Krzysztof Karbownik; Melissa A. Thomasson; Anthony Wray
  5. Sticky wages and the Great Depression: evidence from the United Kingdom By Lennard, Jason
  6. From Global to Local: Trade Shocks and Regional Growth in Italy During the First Globalization By Gomellini, Matteo; Missiaia, Anna; Pellegrino, Dario
  7. Slavery and the British Industrial Revolution By Stephan Heblich; Stephen J. Redding; Hans-Joachim Voth
  8. The Evolution of Federal Budget Rules and the Effects on Fiscal Policy: How Informal Norms Have Trumped Formal Constraints By Calcagno, Peter; Lopez, Edward
  9. The World Bank, the IMF, and the GATT/WTO: Which institution most supported trade reform in developing economies? By Douglas A. Irwin
  10. Global Profit Shifting, 1975-2019 By Ludvig S. Wier; Gabriel Zucman
  11. The United States’ Record-Low Child Poverty Rate in International and Historical Perspective By Parolin, Zachary; Filauro, Stefano
  12. Eine Aufsteigererzählung aus der NS-Zeit. Die autobiographische Aufzeichnung von Erich Heim vom Juli 1941. By Grieger, Manfred; Heim, Lars
  13. Government Dietary Guidelines: Uncertain Science Leads to Questionable Public Health Policy By Archer, Edward; Marlow, Michael; Williams, Richard
  14. Technology Adoption and Late Industrialization By Choi, Jaedo; Shim, Younghun
  15. Scope, Scale and Concentration: The 21st Century Firm By Gerard Hoberg; Gordon M. Phillips
  16. The rise and fall of global financial flows in EU 15: new evidence using dynamic panels with common correlated effects By Mariam Camarero; Silviano Alejandro Muñoz; Cecilio Tamarit
  17. Multinational Enterprises and the French Trade Deficit By Pierre Cotterlaz; Sébastien Jean; Vincent Vicard

  1. By: Heise, Arne
    Abstract: The capitalism John Maynard Keynes struggled to analyse was clearly an industrial capitalism in which the investor used physical capital only to end up with more money than he started with. It is particularly the post Keynesian school of 'monetary or fundamentalist Keynesianism' which elaborated Keynes's monetary theory of production into an alternative economic paradigm that replaces the exchange ontology with an ontology based on nominal obligations. As economic history reports a higher speed of financial than real asset accumulation over the past half a century - a process often dubbed "financialisation" -, doubts have been raised as to whether this transformation of industrial capitalism into financialised capitalism demands for a new macroeconomic approach.
    Keywords: John Maynard Keynes,Hyman P. Minsky,monetary production economy,industrialcapitalism,financial capitalism,Financial Instability Hypothesis
    Date: 2022
  2. By: Gordon H. Hanson; Pia Orrenius; Madeline Zavodny
    Abstract: The share of US residents who were born in Latin America and the Caribbean plateaued recently, after a half century of rapid growth. Our review of the evidence on the US immigration wave from the region suggests that it bears many similarities to the major immigration waves of the 19th and early 20th centuries, that the demographic and economic forces behind Latin American migrant inflows appear to have weakened across most sending countries, and that a continued slowdown of immigration from Latin America post-pandemic has the potential to disrupt labor-intensive sectors in many US regional labor markets.
    JEL: F20 J6 O15
    Date: 2022–11
  3. By: Scott A. Carson
    Abstract: Alternative measures for material conditions are frequently used to evaluate economic welfare during development. The basal metabolic rate and calories are two alternative net nutrition measures that vary by demographics, nativity, residence, and socioeconomic status. During the 19th and early 20th centuries, males required about 20 percent more calories per day than females, and physically active laborers required more calories per day than sedentary white-collar and skilled workers. Individuals from rural Montana and the South required more calories per day than individuals from elsewhere within the US.
    Keywords: nineteenth and 20th century US gender relations, net nutrition, physical activity, nineteenth and 20th century US race relations
    JEL: Q10 Q19 N11 N51
    Date: 2022
  4. By: Alex Hollingsworth; Krzysztof Karbownik; Melissa A. Thomasson; Anthony Wray
    Abstract: The past century witnessed a dramatic improvement in public health, the rise of modern medicine, and the transformation of the hospital from a fringe institution to one essential to the practice of medicine. In this paper, we explore how access to the hospital and modern medicine affects mortality. We do so by leveraging a combination of novel data and a unique quasi-experiment: a large-scale hospital modernization program introduced by The Duke Endowment in the early twentieth century. The Endowment helped communities build and expand hospitals, obtain state-of-the-art medical technology, attract qualified medical personnel, and refine management practices. We find that access to a Duke-supported hospital reduced infant mortality by 10%, saving one life for every $20,000 (2017 dollars) spent. Effects were larger for Black infants (16%) than for White infants (7%), implying a reduction in the Black-White infant mortality gap by one-third. We show that the effect of Duke support persisted into later life with a 9% reduction in mortality between the ages of 56 and 65. We further provide evidence on the mechanisms that enabled these effects, finding that Endowment-supported hospitals attracted higher-quality physicians and were better able to take advantage of new medical innovations.
    JEL: I14 J13 N32
    Date: 2022–11
  5. By: Lennard, Jason
    Abstract: How sticky were wages during the Great Depression? Although classic accounts emphasise the importance of nominal rigidity in amplifying deflationary shocks, the evidence is limited. In this paper, I calculate the degree of nominal wage rigidity in the United Kingdom between the wars using new granular data covering millions of wages. I find that nominal wages changed infrequently but that wage cuts were more common than wage rises on average. Nominal wage adjustment fluctuated over time and by state, so that in 1931 amid falling output and prices more than one-third of workers received wage cuts.
    JEL: J1
    Date: 2022–11–10
  6. By: Gomellini, Matteo (Department of Economic History, School of Business, Economics and Law, Göteborg University); Missiaia, Anna (Department of Economic History, School of Business, Economics and Law, Göteborg University); Pellegrino, Dario (Department of Economic History, School of Business, Economics and Law, Göteborg University)
    Abstract: Globalization can create winners and losers at the spatial level within national economies. 1bis paper examines the economic impact of international trade on local economies in the case of late nineteenth-century Italy. We combine data on foreign trade at the national level with census data on manufacturing employment, and with our new estimates of agricultural employment by crop at the provincial level. Crossing this information, we compute two measures of trade exposure at the local level, namely import penetration and export ratio. We then perform a panel analysis to test whether changes in trade exposure explained provincial GDP growth. First, we detect that import penetration of agricultural products was associated with lower growth of Southern provinces. Second, we :find that Northern provinces were more able to benefit from positive export dynamics in the manufacturing sector. The latter finding might stem from a higher degree of mechanization among Northern manufacturing firms. These results suggest that trade exposure could have been a factor contributing to widening the (already existent and growing) North-South gap.
    Keywords: First; Globalization:; lntemational; Trade:; Regional; Development:; Italian; Economic; History
    JEL: F14 N13 N73 N93 R11
    Date: 2022–11–01
  7. By: Stephan Heblich; Stephen J. Redding; Hans-Joachim Voth
    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: industrial revolution, overseas slave-holding, slavery wealth
    Date: 2022–11–16
  8. By: Calcagno, Peter; Lopez, Edward (Mercury Publication)
    Abstract: Today’s fiscal policy challenges are rooted in the way that fiscal policy rules have evolved over the history of the United States. This paper demonstrates that two shifts of informal norms occurred in the decades surrounding the turn of the 20th century.
  9. By: Douglas A. Irwin (Peterson Institute for International Economics)
    Abstract: The 1980s and 1990s saw a policy revolution in developing countries in which many highly protected (if not closed) economies were opened to world trade. These reforms were largely undertaken unilaterally, but international economic institutions such as the World Bank, the International Monetary Fund, and the General Agreement on Tariffs and Trade/World Trade Organization supported these efforts. This paper examines the ways in which these institutions promoted, or failed to promote, trade policy reform during this pivotal period.
    Keywords: IMF, World Bank, GATT, WTO, trade reform, structural adjustment, conditional aid, tariff reduction, trade liberalization
    JEL: F13
    Date: 2022–12
  10. By: Ludvig S. Wier; Gabriel Zucman
    Abstract: This paper constructs time series of global profit shifting covering the 2015–19 period, during which major international efforts were implemented to curb profit shifting. We find that (i) multinational profits grew faster than global profits, (ii) the share of multinational profits booked in tax havens remained constant at around 37 per cent, and (iii) the fraction of global corporate tax revenue lost due to profit shifting rose from 9 to 10 per cent. We extend our time series back to 1975 and document a remarkable increase of multinational profits and global profit shifting from 1975 to 2019.
    JEL: E25 F23 H26
    Date: 2022–11
  11. By: Parolin, Zachary (Columbia University); Filauro, Stefano
    Abstract: From 2019 to 2021, the child poverty rate in the United States (US) declined by more than 50 percent, largely due to the temporary provision of an unconditional child allowance. This research note uses micro-data from more than 50 countries, and US data spanning more than 50 years, to place the 2021 child poverty rate in historical and international perspective. We demonstrate that whether using the Supplemental Poverty Measure (SPM) or relative poverty measures, the US child poverty rate in 2021 was at its lowest level since at least 1967. The US tax and transfer system reduced the 2021 SPM child poverty rate by more than 75 percent relative to the pre-tax/transfer child poverty rate, three times greater than its mean reduction effect between 1967-2019. Internationally, the temporary child allowance in the US reduced its 2021 child poverty rate from the 80th percentile to the 40th percentile among all countries examined. From 2019 to 2021, the relative US child poverty rate fell from a level comparable to Bulgaria to a level comparable to Germany. Moreover, the US tax and transfer system progressed from reducing child poverty at a rate comparable to Peru in 2019 to a rate comparable to Norway in 2021.
    Date: 2022–11–16
  12. By: Grieger, Manfred; Heim, Lars
    Abstract: Mit dem 1941 abgeschlossenen und für die Familie gedachten Ego-Text eines „Alten Kämpfers“ der NSDAP aus dem Braunschweiger Land soll ein Beispiel der Selbstsicht eines Bevorteilten des NS-Regimes vorgestellt werden, der die Selbstgewissheiten und die historischen Legitimitäten in einem familiären Umfeld ausbreiten wollte. Der Text zeigt, wie die nationalsozialistische Macht zu Selbstverständlichkeiten der persönlichen Wirklichkeitsperzeption wurde und durch das tiefe Eindringen in die eigene Persönlichkeit nicht mehr gesondert hervorgehoben werden musste. Oberflächlich betrachtet eine persönliche Leistungsbilanz, die den Kindern und der Familie Achtung abverlangen wollte, zeigte sich der Autor mit seinem Text als nationalsozialistischer Aufsteiger, der seine vollständige Übereinstimmung mit der NS-Herrschaft zur Hintergrundbeleuchtung dimmte, weil er selbst im Kleinen schon Repräsentant der Macht geworden war. Die Lebenswelten und das Denken von Führungskreisen der Kommunalverwaltung und der städtischen Daseinsvorsorge, die obgleich machtpolitisch subaltern, doch eine wesentliche Herrschaftsbasis des Nationalsozialismus bildeten, erhalten damit aus dem Privaten eine Rahmung ihrer langanhaltenden Regimeloyalität.
    Keywords: Weltwirtschaftskrise, Karriere, Braunschweig, Wirtschaftsamt, Stadtwerke
    JEL: B10 B15 B29 B31 B32
    Date: 2021
  13. By: Archer, Edward; Marlow, Michael; Williams, Richard (Mercury Publication)
    Abstract: The US Department of Agriculture has issued dietary recommendations for more than a century, and during that period the health, longevity, and nutritional status of Americans improved markedly. Before the release of the first Dietary Guidelines for Americ
  14. By: Choi, Jaedo; Shim, Younghun
    Abstract: We study how the adoption of foreign technology and local spillovers from such adoption contributed to late industrialization in a developing country during the postwar period. Using novel historical firm-level data for South Korea, we provide three empirical findings: direct productivity gains to adopters, local productivity spillovers of the adoption, and complementarity in firms' adoption decisions. Based on these findings, we develop a dynamic spatial model with firms' technology adoption decisions and local spillovers. The spillovers induce dynamic complementarity in firms' technology adoption decisions. Because of this complementarity, the model potentially features multiple steady states. Temporary adoption subsidies can have permanent effects by moving an economy to a new transition path that converges to a higher-productivity steady state. We calibrate our model to the microdata and econometric estimates. We evaluate the effects of the South Korean government policy that temporarily provided adoption subsidies to heavy manufacturing firms in the 1970s. Had no adoption subsidies been provided, South Korea would have converged to a less industrialized steady state in which the heavy manufacturing sector’s share of GDP would have been 15 percentage points lower and aggregate welfare would have been 10% lower compared to the steady state with successful industrialization. Thus, temporary subsidies for technology adoption had permanent effects.
    Keywords: Technology adoption, industrialization, knowledge spillover, path dependence, big push
    JEL: O14 O33 O53 R12
    Date: 2022
  15. By: Gerard Hoberg; Gordon M. Phillips
    Abstract: We provide evidence that over the past 30 years, U.S. firms have expanded their scope of operations. Increases in scope and scale were achieved largely without increasing traditional operating segments. Scope expansion significantly increases valuation and is primarily realized through acquisitions and investment in R&D, but not through capital expenditures. We show that traditional concentration ratios do not capture this expansion of scope. Our findings point to a new type of firm that increases scope through related expansion, which is highly valued by the market.
    JEL: D20 D43 G30 O31 O34
    Date: 2022–11
  16. By: Mariam Camarero (University Jaume I and INTECO, Department of Economics, Campus de Riu Sec, E-12080 Castellón (Spain).); Silviano Alejandro Muñoz (University of València, Department of Applied Economics II, Av. dels Tarongers, s/n Eastern Department Building E-46022 Valencia, (Spain).); Cecilio Tamarit (University of València and INTECO, Department of Applied Economics II, Av. dels Tarongers, s/n Eastern Department Building E-46022 Valencia, (Spain).)
    Abstract: This paper assesses capital mobility for a panel of 15 European countries for the period 1970- 2019 using dynamic common correlated effects modeling (DCCE) as proposed in Chudik and Pesaran (2015). In particular, we account for the existence of cross section dependence, slope heterogeneity, nonstationarity and endogeneity in a multifactor error correction model (ECM) that includes one homogeneous break. The analysis also identifies the heterogeneous structural breaks affecting the relationship for each of the individual countries. The ECM setting allows for a complete assessment of the domestic saving-investment relationship in the long-run as well as two other elements usually neglected: short-run capital mobility and the speed of adjustment. When we account for a single homogeneous break, this is found at the euro inception. We obtain that long-run capital mobility is high but not perfect yet. We also provide empirical evidence for the Ford and Horioka (2017)’s hypothesis, who argue that goods market integration is a necessary condition to obtain zero correlation between domestic saving-investment. Our results stress the role played by the euro as a booster for both financial and real integration. However, a complete degree of economic integration has not been fully achieved. Short-run capital was highly mobile for the whole period, with some exceptions, coinciding with turmoil episodes. Additionally, from the application of the CS-DL threshold analysis proposed by Chudik et al. (2016), we find that economic risk and openness play a key role in capital mobility.
    Keywords: Capital mobility; Feldstein-Horioka puzzle; Structural Breaks; Cross-sectional dependence; Cointegration, unit roots.
    JEL: F36 F45 O16
    Date: 2022–11
  17. By: Pierre Cotterlaz; Sébastien Jean; Vincent Vicard
    Abstract: We assess whether multinational enterprises played a specific role in the deterioration of the French trade balance over 2000-2018. French multinationals contribute positively to the trade balance of goods, contrary to foreign multinationals and domestic firms. Yet their declining surplus, down by nearly 2 percentage points of GDP between 2000 and 2018, explains the deterioration of the French trade balance over the past two decades. Econometric evidence shows that this does not reflect poor specialization by French multinationals in the early 2000s or their takeover by foreign investors, but rather a specific trend in the sectors they dominate, beyond the cost conditions common to all companies in France. Against a background of buildup in French FDIs, these results suggest that the internationalization strategies of French firms have been dominated by offshoring over this period, including to serve the domestic market or previous export markets.
    Keywords: Multinational enterprises;Trade balance;Competitiveness
    JEL: F15 F23
    Date: 2022–09

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.