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on Business, Economic and Financial History |
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Issue of 2024‒07‒08
39 papers chosen by |
| By: | Gustavo A. Del Angel (division of economics, cide); Lorena Pérez-Hernández (Heilbronn University) |
| Abstract: | This research explains the relevance of geopolitical factors and debt diplomacy during sovereign debt negotiations. We explain how the Mexican government reached an agreement with international creditors for the repayment of its foreign debt in 1942, after more than 25 years of unsuccessful negotiations. The agreement, that included a haircut of 90%, was the resul of a change in the geopolitical situation of Mexico, when the United States etered the Second World War and considered that country a strategic ally. The agreement, we argue, also derived from Mexico’s proactive stance in debt negotiations and bond repurchasing, in particular the effective strategy and negotiations by Eduardo Suárez, then the Mexican minister of finance. This paper studies the process of negotiations since 1922 and the conditions that allowed Mexico to reach un unusually advantageous settlement. This is a preliminary draft of a chapter to be published in the book Sovereign Debt Diplomacies (Juan Flores Zendejas and Pierre Penet, editors, Oxford University Press). |
| Keywords: | Deuda soberana, diplomacioa de la deuda, México, Eduardo Suárez. |
| Date: | 2023–05 |
| URL: | https://d.repec.org/n?u=RePEc:emc:wpaper:dte627&r= |
| By: | Berman, Yonatan; Milanovic, Branko |
| Abstract: | Homoploutia describes the situation in which the same people are rich in the space of capital and labor income. We combine survey and administrative data to document the evolution of homoploutia in the United States since 1950. In 1950, 10 percent of top decile capital-income earners were also in the top decile of labor income. Today, this indicator is 30 percent. This makes the traditional division to capitalists and laborers less relevant today. We find that the increase in homoploutia accounts for 20 percent of the increase in interpersonal income inequality since 1986. |
| Keywords: | political economy; homoploutia; income inequality |
| JEL: | D31 J01 P16 |
| Date: | 2023–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:123639&r= |
| By: | Daron Acemoglu; Pascual Restrepo |
| Abstract: | This paper studies the effects of automation in economies with labor market distortions that generate worker rents—wages above opportunity cost—in some jobs. We show that automation targets high-rent tasks, dissipating rents and amplifying wage losses from automation. It also reduces within-group wage dispersion for exposed groups. Automation-driven rent dissipation is inefficient and reduces (and could even negate) the productivity gains from automation. Using data for the US from 1980 to 2016, we find evidence of sizable rent dissipation and reduced within-group wage dispersion due to automation. Using these estimates and accounting for equilibrium effects, we estimate that automation accounts for 52% of the increase in between-group inequality in the US since 1980, with rent dissipation being responsible for a fifth of this contribution. We also estimate that inefficient rent dissipation offset 60–90% of the productivity gains from automation since 1980. |
| JEL: | J23 J31 O33 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32536&r= |
| By: | De Bromhead, Alan; Kenny, Sean |
| Abstract: | This paper constructs the first estimates of Irish regional GDP over the twentieth century and traces the relative economic performance of Ireland's regions since independence. Using an array of data sources available at a county level, output in Agriculture, Industry and Services in benchmark census years is estimated. Applying a variety of alternative measures, we find a reduction in regional inequality over the period that is similar to the broader European pattern. Regional convergence over the period 1926-1991 was driven by both within-sector convergence in productivity and structural change. Our paper helps to understand the regional dimensions to Irish economic development from the birth of a newly independent state up to the eve of Ireland's growth 'miracle' in the 1990s, when the first official efforts were initiated to construct these figures. Finally, we connect our estimates to these official figures to examine GDP at the level of NUTS regions up to 2021. |
| Keywords: | Regional GDP, Ireland, Economic History, Inequality, Economic Growth |
| JEL: | N34 N94 O18 R11 R12 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:qucehw:298001&r= |
| By: | Gueyon Kim; Cassandra Merritt; Giovanni Peri |
| Abstract: | The evolution of work is of emerging importance to advanced economies' growth. In this study, we develop a new semantic-distance-based algorithm to identify “new work, ” namely the new types of jobs introduced in the US. We characterize how “new work” relates to task content of jobs and skill characteristics of workers and document its geographic distribution and association with employment growth. Then, we analyze whether local factors associated in the previous literature with agglomeration economies and productivity growth as well as local exposures to global shocks—technology, trade, immigration, and population aging—predict the creation of “new work.” We find local supply of college educated in 1980 as the strongest predictor of “new work.” Using the historical location of 4-year colleges, a strong instrument for local college share, we find a positive and significant causal effect of local supply of human capital on “new work.” |
| JEL: | F1 J11 J14 J23 J24 J61 O33 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32526&r= |
| By: | Grant Goehring; W. Walker Hanlon |
| Abstract: | Public health interventions often involve a trade-off between improving health and protecting individual rights. We study this trade-off in a high-stakes setting: prostitution regulations aimed at reducing the spread of sexually transmitted infections (STIs) in Victorian Britain. These regulations, known as the Contagious Disease Acts (CDAs), introduced a system of registration of sex workers, compulsory medical inspections, and the involuntary confinement of infected workers, in a legal market for sex. The first part of our analysis shows that the CDAs led to substantial public health improvements. However, despite their effectiveness, the CDAs were ultimately repealed. The second part of our study examines the causes of this repeal. We show that repeal was driven by concerns about the violation of the basic rights of sex workers and unequal treatment relative to men who purchased sex. These findings emphasize that the success of a public health intervention depends not only on its effectiveness as a sanitary measure but also on how the costs of the regulation are distributed. |
| JEL: | I15 J16 N33 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32505&r= |
| By: | Hakan Yilmazkuday (Department of Economics, Florida International University) |
| Abstract: | This paper investigates the effects of global geopolitical risk on stock prices of 29 economies by using the local projections method for the monthly period between 1985M1-2023M9. The results show that a positive unit shock of global geopolitical risk (normalized to one standard deviation) reduces stock prices (normalized to one standard deviation) in a statistically significant way by 0.80 in Latvia, 0.71 in China, 0.62 in the Euro Area, 0.50 in Sweden, 0.42 in the United Kingdom, 0.39 in the United States, 0.38 in Switzerland, 0.34 in Israel, 0.28 in Canada, and 0.21 in Denmark in a year following the shock, whereas it increases those only in Iceland by 0.28 that can be used to hedge against any geopolitical risk. Subsample analyses further suggest that the negative effects of the same shock exist in several economies (including the United States, China and Euro Area) during the first half of the sample period that coincides with the geopolitical events that the United States is involved with, whereas they only exist in Russia, Poland, Euro Area and the United Kingdom for the second half of the sample period, suggesting that the Russo-Ukrainian War has mostly affected the stock prices in these nearby economies. It is implied that the geographical location of geopolitical events as well as the countries involved are important indicators to understand the effects of any global geopolitical risk on stock prices. |
| Keywords: | Geopolitical Risk, Stock Prices, Local Projections Method |
| JEL: | G15 G41 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:fiu:wpaper:2407&r= |
| By: | David Card; Leah Clark; Ciprian Domnisoru; Lowell Taylor |
| Abstract: | A school finance equalization program established in Mississippi in 1920 failed to help many of the state's Black students – an outcome that was typical in the segregated U.S. South (Horace Mann Bond, 1934). In majority-Black school districts, local decision-makers overwhelmingly favored white schools when allotting funds from the state's preexisting per capita fund, and the resulting high expenditures on white students rendered these districts ineligible for the equalization program. Thus, while Black students residing in majority-white districts benefited from increased spending and standards for Black schools, those in majority-Black districts continued to experience extremely low – and even worsening – school funding. We model the processes that led the so-called equalization policy to create disparities in schooling resources for Black students, and estimate effects on Black children using both a neighboring-counties design and an IV strategy. We find that local educational spending had large impacts on Black enrollment rates, as reported in the 1940 census, with Black educational attainment increasing in marginal spending. Finally, we link the 1940 and 2000 censuses to show that Black children exposed to higher levels of school expenditures had significantly more completed schooling and higher income late in life. |
| JEL: | I24 I28 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32496&r= |
| By: | Likun Cao; Ziwen Chen; James Evans |
| Abstract: | Modularity is critical for the emergence and evolution of complex social, natural, and technological systems robust to exploratory failure. We consider this in the context of emerging business organizations, which can be understood as complex systems. We build a theory of organizational emergence as higher-order, modular recombination wherein successful start-ups assemble novel combinations of successful modular components, rather than engage in the lower-order combination of disparate, singular components. Lower-order combinations are critical for long-term socio-economic transformation, but manifest diffuse benefits requiring support as public goods. Higher-order combinations facilitate rapid experimentation and attract private funding. We evaluate this with U.S. venture-funded start-ups over 45 years using company descriptions. We build a dynamic semantic space with word embedding models constructed from evolving business discourse, which allow us to measure the modularity of and distance between new venture components. Using event history models, we demonstrate how ventures more likely achieve successful IPOs and high-priced acquisitions when they combine diverse modules of clustered components. We demonstrate how higher-order combination enables venture success by accelerating firm development and diversifying investment, and we reflect on its implications for social innovation. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.15042&r= |
| By: | Benton Wishart; Trevon D. Logan |
| Abstract: | The traditional historical narrative claims that White women were rarely involved in market transactions for enslaved people in the antebellum United States. Using transaction records, notary statements, and runaway advertisements, we provide the first quantitative estimates of the extent of White women’s involvement in antebellum slave transactions as owners of record. Contrary to the narrative, we find that White women were quite frequently noted as owners of record in transactions as both buyers and sellers. White women participated in more than 30% of the transactions in the largest market for enslaved people in the antebellum era. We also find that White women were especially likely to be owners involved in transactions with enslaved women, where they were listed as owners in nearly 40% of transactions. Linking transaction participants to the census, we find that White women owners were not more likely to be widows nor were they older than women in the general population. Overall, our results are consistent with the new historical narrative that White women were ubiquitous in enslavement transactions and this was a critical part of White women’s economic activity in the antebellum era. |
| JEL: | J1 N31 Z13 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32529&r= |
| By: | Accominotti, Olivier; Albers, Thilo; Oosterlinck, Kim |
| Abstract: | This paper explores how selective default expectations affect the pricing of sovereign bonds in a historical laboratory: the German default of the 1930s. We analyze yield differentials between identical government bonds traded across various creditor countries before and after bond market segmentation. We show that, when secondary debt markets are segmented, a large selective default probability can be priced in bond yield spreads. Selective default risk accounted for one third of the yield spread of German external bonds over the risk-free rate during the 1930s. Selective default expectations arose from differences in the creditor countries’ economic power over the debtor. |
| Keywords: | sovereign risk; debt default; secondary markets; creditor discrimination; The research leading to these results has received funding from the People Programme (Marie Curie Actions) of the European Union’s Seventh Framework Programme FP7/2007-2013/Under REA grant agreement 608129; OUP deal |
| JEL: | F34 G12 G15 H63 N24 N44 |
| Date: | 2023–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:120657&r= |
| By: | Dmitry Veselov (HSE University); Alexander Yarkin (Brown University) |
| Abstract: | Industrial policies, such as infrastructure investments and export tariffs, affect the allocation of labor and incomes across sectors, attracting substantial lobbying efforts by special interest groups. Yet, the link between structural change and lobbying remains underexplored. Using more than 150 years of data on parliamentary petitions in USA and Britain, we measure historical lobbying and document several stylized facts. First, lobbying over industrial policies follows a hump-shaped path in the course of structural change, while agricultural lobbying steadily declines. Second, big capitalists (manufacturers, merchants) are most active in lobbying for industrialization. Third, industrial concentration increases progressive lobbying, while concentrated landownership slows it down. We explain these patterns in a simple model of structural change augmented with a heterogeneous agents lobbying game. Model simulations match the dynamics of structural change, inequality, and lobbying for industrialization in the British data. |
| Keywords: | political economy, structural change, lobbying, wealth distribution, growth |
| JEL: | D33 D72 N10 N41 O14 O41 O43 P00 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0260&r= |
| By: | Rowena Gray; Siobhan M. O'Keefe; Sarah Quincy; Zachary Ward |
| Abstract: | We present new evidence on the long-run trend of occupational task content by race in the United States, 1900-2021. Black workers began the transition to better paid, cognitive-intensive modern jobs at least a generation after white workers; substantial convergence only occurred from 1960 onwards. Longitudinal data suggests that transitions to new task content were racially biased: Black men moved to jobs with lower rewarded task content than white men, conditional on initial task content, though gaps decreased after World War II. Routine-intensive Black workers were less likely to move up into non-routine analytic work compared to white workers in both historical and modern periods. The results suggest that task-displacement shocks, such as automating routine-manual work, widen Black-white inequality |
| JEL: | J24 J62 N31 N32 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32545&r= |
| By: | Martin J. Osborne |
| Abstract: | I argue that Acemoglu and Robinson (2000) misinterpret statements by Earl Grey that they claim support their thesis that the "Great" Reform Act of 1832 in the United Kingdom was a response to the threat of rebellion. I also point out some errors in their presentation of the evidence. |
| Keywords: | Inequality, Democracy, Franchise extension |
| JEL: | P |
| Date: | 2024–06–04 |
| URL: | https://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-778&r= |
| By: | SAKAMOTO, Norihito; 坂本, 徳仁; TADENUMA, Koichi; 蓼沼, 宏一 |
| Date: | 2024–06–12 |
| URL: | https://d.repec.org/n?u=RePEc:hit:econdp:2024-03&r= |
| By: | Dasgupta, Partha; Besley, Timothy |
| Abstract: | This conversation with Sir Partha Dasgupta, moderated by Annual Review of Economics Editorial Commitee Member Tim Besley, focuses on biodiversity and its implications for economic thought and policy. A video of this interview is available online at https://www.annualreviews.org/r/partha_d asgupta_interview. |
| Keywords: | asset management; biodiversity; development; economic theory; growth; inclusive wealth |
| JEL: | B41 D62 E61 F11 J11 Q21 |
| Date: | 2023–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:123495&r= |
| By: | McGovern, Patrick; Obradović, Sandra; Bauer, Martin W. |
| Abstract: | Has rising income inequality become a scandalous social problem as the English ethical socialist R. H. Tawney anticipated in an earlier era? We examine the salience and framing of income inequality within major UK and US newspapers over the period 1990–2015. Specifically, this includes the global banking crisis of 2008, which was the most significant financial crisis in capitalist economies since the Great Depression of 1929. Did this event trigger a public outcry? We divide the overall search into a full corpus for quantitative analysis of media salience and a smaller corpus for in-depth qualitative analysis of media frames. We find that media coverage of income inequality increased across the period in both countries and especially after 2008. With this increase, there is a shift in frame prevalence, with pre-2008 frames focusing on conceptualising rising income inequality while post-2008 frames focus on managing rising inequality (through interventions, policies and identifying scale of solutions needed). This shift is accompanied by a more polarised sentiment on income inequality, an increase in moralising language and a more balanced political slant. The proposed ‘solutions’ become absorbed within established repertoires offered by the political right and left, limiting the emergence of a Tawney Moment. Consequently, the rise in income inequality has not generated the kind of scandalising public outcry that Tawney would expect. We conclude by examining the possible reasons for the lack of outrage in the mass media. |
| Keywords: | United States; frame analysis; income inequality; mass media; United Kingdom |
| JEL: | N0 |
| Date: | 2023–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:123556&r= |
| By: | Murielle Troubady (Inrap - Institut national de recherches archéologiques préventives, IRAMAT-CEB - IRAMAT - Centre Ernest Babelon - IRAMAT - Institut de Recherche sur les Archéomatériaux - UTBM - Université de Technologie de Belfort-Montbeliard - UO - Université d'Orléans - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique, SFN - Société française de numismatique) |
| Abstract: | Coins as a means of analysing sites: archaeonumismstic An update on the development of numismatic practices in archaeology today. |
| Keywords: | Archéologie, Archéonumismatique, Société française de numismatique, Numismatique |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04580088&r= |
| By: | Giulia Buccione; Brian G. Knight |
| Abstract: | We investigate the rise of the religious right in the context of the Moral Majority and Jimmy Carter, the first Evangelical President. During Carter's Presidency, the Moral Majority, an Evangelical group headed by televangelist Jerry Falwell, turned against the incumbent Carter, a Democrat, and campaigned for Ronald Reagan, a Republican, in the 1980 Election. To investigate the role of religious groups and leaders in the political persuasion of followers, we first develop a theoretical model in which single-issue religious voters follow better-informed religious leaders when choosing which candidates to support. Using data from county-level voting returns, exit polls, and surveys, we document that Evangelical voters indeed shifted their support from Carter in 1976 to Reagan in 1980. We also provide three pieces of evidence that the Moral Majority played a role in this switching: survey data on Moral Majority campaign issues, exposure to Jerry's Falwell's television ministry, and exposure to state headquarters of the Moral Majority. |
| JEL: | P0 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32551&r= |
| By: | Tait, Scott |
| Abstract: | Since the end of the Second World War, the United States has been the pre-eminent naval power and ultimate guarantor of global maritime security. It has also been one of the primary beneficiaries of the global maritime economic system, which in turn resourced its naval strength and increased the incentive to use that strength to protect the freedom of the seas. But a number of global changes, all likely beyond the United States’ control, are driving new dynamics in both security and economics in the maritime domain. These challenges include the return of great power competition at sea, the maritime consequences of climate change, increased pollution, the rapid rise of illicit trade and resource exploitation, and the erosion of maritime governance. These challenges are dynamic and inter-related—a change in one will often drive second and third order changes in the others. The United States has proven historically to be resilient and adaptive in the face of great challenges, and the maritime community has traditionally been a leader in innovation, collaboration, and positive-sum solutions. To meet the challenges of today and tomorrow, the United States should double down on those strengths, and work with allies to maintain and strengthen the rules-based international maritime system. Moreover, the United States should be a leader in envisioning changes to that system that will ensure it equitably meets the needs of all, accounts for the changes being driven by climate change and pollution, and anticipates a near-term future where autonomous systems will play a major role in the ecosystem. |
| Keywords: | Social and Behavioral Sciences, maritime security, naval power, climate changes, maritime governance, maritime economics |
| Date: | 2023–06–14 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:globco:qt9cc6x9zw&r= |
| By: | Selhausen, Felix Meier zu (Utrecht University); Weisdorf, Jacob (Sapienza University of Rome, CEPR AND CAGE) |
| Abstract: | We use Anglican marriage registers from six major cities in British Africa to examine how colonial educational and occupational opportunities affected gender inequality among the sampled couples in terms of access to schooling and the formal economy. The marriage registers concern more than 30, 000 Anglican converts making up a comparatively advantaged group of urban Africans aspiring to advance their economic and social status during British colonial rule through conversion to Christianity. We use the couple’s signature literacy and occupational descriptors to argue that mission schools and the colonial economy opened up a gender gap in access to formal employment during the early colonial period that declined again after the 1940s through the Africanization and feminization of the civil service. We discern that the gender gap among the sampled couples closed earlier and faster in our West African cities where women’s tradition of financial independence contested Christian missionary ideals of female domesticity more prevalent in our East African locations. Comparison with census data indicates that our sampled couples were forerunners for the educational and occupational developments of the average African in the sampled cities. |
| Keywords: | Africanization, Colonisation, Development, Feminization, Gender, Inequality, Labour, Missionaries, Schooling. JEL Classification: N37, O18, J16 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:711&r= |
| By: | Abigail Matthew; Amalia R. Miller; Catherine Tucker |
| Abstract: | This paper studies the implications of attempts at "ethnic-affinity" profiling on Facebook that reflects users' engagement with content on Facebook. Profiling by ethnic-affinity is highly correlated with Census estimates of population race by geography. However, more users were profiled as African-American in former slave states relative to the baseline population. This occurs because the targeting algorithm was better at identifying Black users through differentiated engagement with cultural content in these states. This implies that policies restricting the collection of racial identity data will be unsuccessful due to the existence of proxies, and that relying on proxies may introduce troubling biases. |
| JEL: | J15 J78 K24 M37 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32485&r= |
| By: | Luis Armona; Matthew Gentzkow; Emir Kamenica; Jesse M. Shapiro |
| Abstract: | We study newsworthiness in theory and practice. We focus on situations in which a news outlet observes the realization of a state of the world and must decide whether to report the realization to a consumer who pays an opportunity cost to consume the report. The consumer-optimal reporting probability is monotone in a proper scoring rule, a statistical measure of the amount of “news” in the realization relative to the consumer’s prior. We show that a particular scoring rule drawn from the statistics literature parsimoniously captures key patterns in reporting probabilities across several domains of US television news. We argue that the scoring rule can serve as a useful control variable in settings where a researcher wishes to test for bias in news reporting. Controlling for the score greatly lessens the appearance of bias in our applications. |
| JEL: | C44 D83 L82 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32512&r= |
| By: | Luca Pensieroso (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Alessandro Sommacal (University of Verona); Gaia Spolverini (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | We provide a historical decomposition of fertility in the United States by family type. We find that intergenerational coresidence was systematically associated with lower fertility than nuclear families, with the difference shrinking over time. This pattern is robust to controlling for several demographic and socioeconomic confounders. We build a simple, analytical model and show that a theory featuring both endogenous fertility and endogenous coresidence can rationalise the observed cross-family fertility difference. Simulations from a calibrated dynamic general equilibrium version of the model show that the model has the right qualitative behaviour, and is quantitatively meaningful. Using individual data, we discuss (and dismiss) several potential alternative explanations. |
| Date: | 2024–05–06 |
| URL: | https://d.repec.org/n?u=RePEc:ctl:louvir:2024006&r= |
| By: | Hunter, Janet |
| Abstract: | he decade following the Great Kantō Earthquake of 1923 witnessed a proliferation of writings by officials, academics, businessmen, and journalists on the economic consequences of the disaster. This abundance of contemporary analysis stands in strong contrast to the relative scarcity of subsequent scholarly studies of many aspects of the disaster’s economic impact. In this article, I suggest that part of the reason for this relative lacuna lies in broader trends within economics and economic history scholarship. In particular, a focus on quantitative analysis and macro-level indicators has led to the conclusion that over the longer term, the Kantō earthquake, like similar disasters elsewhere, did not matter that much for the development of the country’s economy. I also show that although recent advances in economic theory, especially in the economics of disasters, can strengthen historians’ analyses of the economic consequences of the 1923 disaster, many of these ‘new’ conceptual frameworks were foreshadowed by contemporary commentators seeking to analyze the impact of the disaster on the economic life of the nation. Ikeuchi Yukichika’s book Shinsai Keizai Shigan, published in December 1923, is a particularly good example of how, just like recent disaster economists, Japanese contemporaries viewed the analysis of markets as the key to understanding both the economic impact of the disaster and how best to rebuild Japan’s economy. |
| Keywords: | earthquake; disaster; economy; historiography; markets |
| JEL: | J1 |
| Date: | 2024–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122979&r= |
| By: | Markus K. Brunnermeier; Sergio Correia; Stephan Luck; Emil Verner; Tom Zimmermann |
| Abstract: | This paper studies how a large increase in the price level is transmitted to the real economy through firm balance sheets. Using newly digitized macro- and micro-level data from the German inflation of 1919-1923, we show that inflation led to a large reduction in real debt burdens and bankruptcies. Firms with higher nominal liabilities at the onset of inflation experienced a larger decline in interest expenses, a relative increase in their equity values, and higher employment during the inflation. The results are consistent with real effects of a debt-inflation channel that operates even when prices and wages are flexible. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.13296&r= |
| By: | Eric Lob (Florida International University); Hakan Yilmazkuday (Department of Economics, Florida International University) |
| Abstract: | This paper provides a political economy analysis of the bilateral trade relations and patterns of exchange that existed between Iran and Sub-Saharan Africa (SSA) from 1962 to 2021. The paper contributes to the growing literature on Iran-Africa relations by empirically delineating not just the changes, but also the continuities between Iran and its African trading partners before and after the Iranian Revolution. It also adds nuance to the broader scholarship on South-South cooperation by showing the disparity between the rhetoric of South-South solidarity and reciprocity between Iran and SSA, on one side, and their low and fluctuating trade volumes, on the other. These volumes resulted from historical inertia or path dependency and structural factors, including trade complementarities and geopolitical conditions, more than demographic, cultural or religious realities. They were also shaped by the agency and decision-making of Iranian and African leaders and officials regarding the extent to economically engage with each other. |
| Keywords: | Iran, Prebisch-Singer Hypothesis, South-South Cooperation, Sub-Saharan Africa, Trade Patterns |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:fiu:wpaper:2405&r= |
| By: | Paul Goldsmith-Pinkham |
| Abstract: | This paper updates Currie et al. (2020b) by examining the credibility revolution across fields, including finance and macroeconomics, using NBER working papers up to May 2024. While the growth in terms related to identification and research designs have continued, finance and macroeconomics have lagged behind applied micro. Difference-in-differences and regression discontinuity designs have risen since 2002, but the growth in difference-in-difference has been larger, more persistent, and more ubiquitous. In contrast, instrumental variables have stayed flat over this period. Finance and macro, particularly corporate finance, has experienced significant growth in mentions of experimental and quasi-experimental methods and identification over this time period, but a large component of the credibility revolution in finance is due to difference-in-differences. Bartik and shift-share instruments have grown across all fields, with the most pronounced growth in international trade and investment, economic history, and labor studies. Synthetic control has not seen continued growth, and has fallen since 2020. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2405.20604&r= |
| By: | Réka Juhász; Nathan J. Lane |
| Abstract: | We examine the ways in which political realities shape industrial policy through the lens of modern political economy. We consider two broad “governance constraints”: i) the political forces that shape how industrial policy is chosen and ii) the ways in which state capacity affects implementation. The framework of modern political economy suggests that government failure is not a necessary feature of industrial policy; rather, it is more likely to emerge when countries pursue industrial policies beyond their governance capacity constraints. As such, our political economy of industrial policy is not fatalist. Instead, it enables policymakers to constructively confront challenges. |
| JEL: | L52 O25 P00 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32507&r= |
| By: | MacLachlan, Anne J |
| Keywords: | Arts and Humanities, 150w, UCB, Project contributions |
| Date: | 2024–06–12 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:cshedu:qt2td1m68j&r= |
| By: | Massimo Tamberi (Dipartimento di Scienze Economiche e Sociali - Universita' Politecnica delle Marche) |
| Abstract: | There is substantial disagreement regarding the rate of economic growth, particularly concerning economists' perspectives on the rate of total factor productivity (TFP) growth. Some envision theoretical mechanisms implying constant growth, others have recently suggested a potential secular slowdown in TFP growth, while still others foresee an acceleration of economic growth in the near future, driven by the diffusion of new technologies (Artificial Intelligence). Understanding the direction and speed of progress is critically important for planning our future. A part of the research gap is due to the limited temporal coverage of available data sources. In this article, I attempt to bridge this gap by using an alternative (and unconventional) dataset. The analysis is technically straightforward, based on a simple approach that considers learning mechanisms. Although also the dataset used here has its limitations, it allows for an empirical analysis spanning many centuries, if not millennia. The results, thus derived from a historical approach, are very clear and hold significant implications for the future. The key message is that we should expect a progressive slowdown in the rate of scientific progress, although substantial progress will continue for the next few centuries. |
| Keywords: | economic growth; technological progress; historical perspective |
| JEL: | O47 O33 N00 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:anc:wpaper:487&r= |
| By: | Charles Angelucci; Simone Meraglia; Nico Voigtländer |
| Abstract: | We develop a framework that examines the organizational challenges faced by central rulers governing large territories, where administrative power needs to be delegated to local elites. We describe how economic change can motivate rulers to empower different elites and emphasize the interaction between local and nationwide institutions. We show that rising economic potential of towns leads to local administrative power (self-governance) of urban elites. As a result, the ruler summons them to central assemblies in order to ensure effective communication and coordination between self-governing towns and the rest of the realm. This framework can explain the emergence of municipal autonomy and towns’ representation in early modern European parliaments—a blueprint for Western Europe’s institutional framework that promoted state-formation and economic growth in the centuries to follow. We provide empirical evidence for our core mechanisms and discuss how the model applies to other historical dynamics, and to alternative organizational settings. |
| JEL: | D02 D72 D73 N43 N93 O43 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32542&r= |
| By: | Jonathan D. Rose |
| Abstract: | The 1985 thrift crises in Ohio and Maryland show how the Fed, as a lender of last resort, took proactive steps to enhance the effectiveness of its discount window. |
| Keywords: | thrift crises of 1985; lender of last resort; discount window |
| Date: | 2024–05–23 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00001:98303&r= |
| By: | Joseph A. Aguilar; Randall Akee; Elton Mykerezi |
| Abstract: | We examine how one of the largest U.S. place-based economic development programs, the Indian Gaming Regulatory Act (IGRA) of 1988, with annual revenues in excess of \$40 billion, affects local firm total employment and sales through direct channels and through IGRA's effects on adjacent non-gaming industry firms. Our analysis focuses on the effect of this national (across 29 U.S. states) place-based economic development program over several decades. We create a novel data set linking a firm-level panel dataset of business outcomes and tribal casino operations by geographic location over several decades. We find that after the start of tribal casino operations, there is a substantial average increase in employment and sales for local firms. We also show that casino operations drive initial increases in employment and sales; however, pre-existing firms also realize gains in employment and sales in the subsequent 2-5 years after the start of casino operations. These effects also spill over to firms in non-related industries; in our analysis, we exclude the Arts, Entertainment, Recreation, Accommodation and Food Services industries and we continue to observe higher employment for firms located on tribal reservations with casino operations. We provide the first evidence on the impact of place-based economic development on long-run business outcomes in some of the most underdeveloped regions in the U.S. |
| JEL: | H55 O12 O18 R11 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32555&r= |
| By: | Francois de Soyres; Zina Saijid |
| Abstract: | Many central banks are at a critical juncture in their current monetary policy cycles as they assess whether it would be appropriate to embark on an easing phase following one of the most aggressive episodes of monetary tightening in recent history. In this note, we highlight key aspects of past monetary policy easing episodes in selected advanced economies and what lessons we may learn from these past experiences. |
| Date: | 2024–05–31 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:2024-05-31-1&r= |
| By: | Colombier, Carsten |
| Abstract: | This paper contributes to the still unresolved issue of the growth impact of government size by analysing a historical panel data set of 17 developed countries that ranges from 1880 to 2016. The unique feature of the long-time dimension allows for conducting a kind of natural experiment. Government size is closely related to economic-policy paradigms. The time span covers different economic policy paradigms, in particular, 'laissez-faire' before World War II and Keynesian economic policy after World War II. Before WW II government size is small, after WW II it is (has grown) big. Furthermore, this paper contributes to filling a gap in the literature by testing the non-linear hypothesis (Armey curve). We take particular attention to a key shortcoming of panel-data analysis - parameter or individual heterogeneity. Overall, this analysis suggests a systematic positive, albeit quite small, linear relationship of government size with economic growth. As a consequence, rather than concentrating their attention to the sheer size of government, policy makers are advised caring for an efficiently run and highquality government sector as a prerequisite for a steady growth path. |
| Keywords: | government size, economic growth, Armey curve, historical data, robustness analysis |
| JEL: | H50 E62 C23 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:uoccpe:297976&r= |
| By: | de Assis, Rebeca Froés; Loureiro, Carlos Felipe Grangeiro; Freitas, Clarissa; Timms, Paul |
| Abstract: | Through cross-sectional analysis, studies on transport-induced gentrification often interpret the phenomenon as an outcome instead of recognizing it as a set of intertwined processes. Consequently, limited insights are provided about the mechanisms underlying gentrification, which manifests gradually over the long-term interactions between transportation and urban development, primally driven by accessibility improvements. The absence of descriptive efforts poses a challenge for policymakers to predict or identify gentrification occurrence, besides inducing biased outcomes in investigations. This paper aims to provide researchers and policymakers with a conceptual framework of transport-induced gentrification, systematising explanations of space production and consumption in Latin-American metropolises. Firstly, we have undergone a theoretical review on land-use and transport interactions to develop an a priori conceptual framework. Subsequently, we applied a systematic literature review on empirical studies of Latin-American gentrification to incorporate some particularities into the framework, representing the phenomenon as an urban conflict generated in and through accessibility improvements. |
| Date: | 2024–05–28 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:ebf2h&r= |
| By: | José M. Menudo (Department of Economics, Universidad Pablo de Olavide); Francisco A. Borja (Department of Economics, Universidad San Francisco de Quito) |
| Abstract: | This paper examines the influence of the French liberal school in the formation of the Andean republics—Ecuador, Colombia, Peru, and Chile. Our primary focus lies on the teaching of political economy during the last two thirds of the 19th century. Our scrutiny to the chairs of political economy and a text mining analysis of their textbooks allows us to conclude that the French liberal school exerted a stronger influence compared to its British counterpart. In addition, the influence varied from the Chilean enthusiast reception to the political obstacles in the case of Colombia. |
| Keywords: | French liberal economists, Latin America, Spread of economic ideas, Teaching of Political Economy.. |
| JEL: | B31 B12 A11 A20 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pab:wpaper:24.01&r= |
| By: | Sebastián Katz (UBA); Eduardo Levy Yeyati (Universidad Torcuato di Tella) |
| Abstract: | Based on long series of per capita GDPs, we characterize the economic divergence of Argentina in the 20th century relative to a group of countries with comparable initial income per capita. We find the divergence to be considerably longer than usually conjectured, with two marked tranches in the first half of the century and in the post war period, the latter being associated with GDP underperformance despite the relative decline in population. We identify specific dates for the inflection points, discuss the context in each case, and propose a potential explanation of the divergence together with a description of the highly volatile plateau displayed since the 1990s. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:aoz:wpaper:325&r= |