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on Business, Economic and Financial History |
| By: | Ivan Boldyrev |
| Abstract: | What are the effects of authoritarian regimes on scholarly research in economics? And how might economic theory survive ideological pressures? The article addresses these questions by focusing on the mathematization of economics over the past century and drawing on the history of Soviet science. Mathematics in the USSR remained internationally competitive and generated many ideas that were taken up and played important roles in economic theory. These same ideas, however, were disregarded or adopted only in piecemeal fashion by Soviet economists, despite the efforts of influential scholars to change the economic research agenda. The article draws this contrast into sharper focus by exploring the work of Soviet mathematicians in optimization, game theory, and probability theory that was used in Western economics. While the intellectual exchange across the Iron Curtain did help advance the formal modeling apparatus, economics could only thrive in an intellectually open environment absent under the Soviet rule. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.14315 |
| By: | Victor Gay (IAST - Institute for Advanced Study in Toulouse, TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | Why are some countries so much richer than others today? This course explores the historical origins of modern economic growth and global economic inequality across countries. After a brief introduction of the field of economic history, we will study when and where modern economic growth emerged, with a particular focus on the Great Divergence and the Industrial Revolution in Western Europe. The course will however cover other settings, such as China, Japan, and Southern Asia (except the United States). Then, we will investigate the factors that can explain these historical patterns, looking successively at the role of institutions, culture, and geography. Finally, we will discuss various issues that come along with modern economic growth in historical perspective such as pollution and global pandemics. |
| Date: | 2024–01–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04650773 |
| By: | Herr, Hansjörg |
| Abstract: | Today all countries have fiat money issued by a central bank. There is no obligation by a central bank to exchange its money for gold or any other good. Central banks have the monopoly to issue central bank money and have the power to create their money out of nothing. Creating such a monetary system is functional for a capitalist economy and must be regarded as a major feat of civilization, which could only be completed after around 200 years of capitalist development. This article traces the painful farewell from gold from the Classical Gold Standard in the early 19th century up to the end of the Bretton Woods system in the mid-20th century. |
| Keywords: | money, gold standard, currency systems |
| JEL: | E40 N20 P20 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:300844 |
| By: | Kohnert, Dirk |
| Abstract: | Jews in Africa have a long history. Africans have encountered Jewish myths and traditions in different forms and situations, leading to the development of a new Jewish identity linked to that of the Diaspora. Different groups of black Jews from western, central, eastern and southern Africa used and imagined their oral traditions and traditional practices to construct a distinct Jewish identity. In the early 20th century, two separate diasporas merged into an entirely new arena. Africans and African Americans adopted Judaism as a form of personal emancipation from colonial oppression and the effects of neo-colonialism. The adoption of Judaism by black Africans was a form of liberation from Anglo-Christian authority. Blacks and Jews are the two marginalised and stigmatised minorities in Western culture. Since ancient times they have maintained a complex relationship of identification, cooperation and rivalry. The Igbo of Nigeria, for example, were at the forefront of a normative Jewish movement that included several other ethnic groups. The rhetoric of the Holocaust, Zionism and the external features of Judaism were exploited by the Biafran neo-secessionists for their own ends. Furthermore, from the first mention of Africans in the Hebrew Bible to the contemporary demands of the Black Lives Matter movement, there has been support for the 'Palestinian resistance' but almost nothing that could have provoked a confrontation between blacks and Jews. The majority of African Jews live in South Africa. However, most of them are white. The South African Jewish community numbered more than 120, 000 in the mid-1970s. After several large waves of emigration at the end of the apartheid regime, the number fell to just over 50, 000. However, the Jewish claim to South African citizenship is controversial. The South African host society distinguishes between the Jewish diaspora and South African citizenship. Since the early 1990s, the second-largest Jewish community in sub-Saharan Africa has developed in Nigeria, which previously did not appear on any map of the Jewish world. Nine out of ten Nigerian Jews are Igbo. Estimates range from 3, 000 to 30, 000 Jews. Israel, however, refuses to recognise them as a Jewish population. In the DR Congo, a small Jewish community has held a special position since colonial times. Many Jews were among Leopold II's close advisers and agents in his Congo Free State (1885-1908). Jews also played an important role in Katanga Province in the 20th century, when the first mines were opened there and a railway line to South Africa was built. However, Mobutu's Zairisation (1973) and the looting of 1991 forced most Jewish entrepreneurs to leave the country. Ethiopia could be considered the cradle of Judaism, including the ancient kingdom of Sheba, mentioned in the Hebrew Bible and the Koran, and Beta Israel. Today, however, the harsh reality faced by Ethiopian Jewish immigrants in Israel reveals the racism that is deeply rooted in Israeli society. |
| Abstract: | Juden in Afrika haben eine lange Geschichte. Afrikaner sind jüdischen Mythen und Traditionen in unterschiedlichen Formen und Situationen begegnet, was zur Entwicklung einer neuen jüdischen Identität geführt hat, die mit der der Diaspora verknüpft ist. Verschiedene Gruppen schwarzer Juden aus West-, Zentral-, Ost- und Südafrika nutzten und imaginierten ihre mündlichen Überlieferungen und traditionellen Praktiken, um eine eindeutige jüdische Identität aufzubauen. Ab dem frühen 20. Jahrhundert verschmolzen zwei getrennte Diasporas in einer völlig neuen Arena. Afrikaner und Afroamerikaner übernahmen das Judentum als eine Form der persönlichen Emanzipation von der kolonialen Unterdrückung und den Auswirkungen des Neokolonialismus. Die Übernahme des Judentums durch Schwarzafrikaner war eine Form der Befreiung von der anglo-christlichen Autorität. Schwarze und Juden sind in der westlichen Kultur die beiden marginalisierten und stigmatisierten Minderheiten. Seit der Antike pflegen sie ein komplexes Verhältnis zwischen Identifikation, Kooperation und Rivalität. Die Igbo von Nigeria beispielsweise standen an der Spitze einer normativen jüdischen Bewegung, die auch mehrere andere ethnische Gruppen umfasste. Die Holocaust-Rhetorik, Zionismus und die äußeren Merkmale des Judentums wurden von biafranischen Neo-Sezessionisten instrumentalisiert. Außerdem gab es, von der ersten Erwähnung von Afrikanern in der hebräischen Bibel bis zu den zeitgenössischen Forderungen der Black Lives Matter-Bewegung, Unterstützung für den „palästinensischen Widerstand“, aber fast nichts, was eine Konfrontation zwischen Schwarzen und Juden hätte provozieren können. Die meisten afrikanischen Juden leben in Südafrika. Allerdings sind die meisten von ihnen weiß. Die jüdische Gemeinde Südafrikas zählte Mitte der 1970er Jahre mehr als 120.000 Mitglieder. Nach mehreren großen Auswanderungswellen am Ende des Apartheidregimes sank sie auf knapp über 50.000. Der Anspruch jüdischer Personen auf südafrikanische Zugehörigkeit ist jedoch umstritten. Die südafrikanischen Aufnahmegesellschaft unterscheidet zwischen der jüdischen Diaspora und südafrikanische Zugehörigkeit. In Nigeria hat sich seit Anfang der 1990er Jahre die zweitgrößte jüdische Gemeinde in Subsahara Afrika entwickelt, die zuvor auf keiner Landkarte der jüdischen Welt auftauchte. Neun von zehn nigerianischen Juden sind Igbo. Schätzungen zählen 3.000 bis 30.000 Juden. Israel weigert sich allerdings, sie als jüdische Bevölkerung anzuerkennen. In der DR Kongo nimmt eine kleine jüdische Gemeinde seit der Kolonialzeit eine besondere Stellung ein. Viele Juden gehörten zu den engen Beratern Leopolds II. und den Agenten seines Freistaats Kongo (1885–1908). Juden spielten im 20. Jahrhundert auch eine wichtige Rolle in der Katanga-Provinz, seitdem dort die ersten Minen eröffnet und eine Eisenbahnlinie nach Südafrika gebaut wurde. Allerdings zwangen Mobutus Zairisierung (1973) und die Plünderungen im Jahr 1991 die meisten jüdischen Unternehmer, das Land zu verlassen. Äthiopien könnte als Wiege des Judentums betrachtet werden, einschließlich des alten Königreichs Saba, das in der hebräischen Bibel und im Koran erwähnt wird, ebenso wie Beta Israel. Heute jedoch offenbart die harte Realität, mit der äthiopisch-jüdische Einwanderer in Israel konfrontiert sind, den Rassismus, der tief in der israelischen Gesellschaft verwurzelt ist. |
| Keywords: | Jewish identity, Jewish mythologie, Black Jews, Jewish diaspora, Beta Israel, Lemba people |
| JEL: | F35 F52 F54 K37 N17 O15 O55 Z12 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:300872 |
| By: | Timothy J. Hatton |
| Abstract: | Sailing ships persisted on emigrant voyages to Australia until the late nineteenth century and passage durations decreased by three weeks from the late 1840s to the mid-1880s. The shortening of voyages by sail has been linked to improvements in navigation and in sailing ship technology but without quantitative estimates. Analysis of 311 voyages of emigrant ships that sailed directly from a UK port to Adelaide from 1848 to 1885 shows that the decline in voyage duration was associated with increases in tonnage, iron construction and, above all, clipper-style ship design. Advances in ship technology also enabled captains to take fuller advantage of sailing the so-called great circle route to Australia. Examining a unique dataset of the tracks of 290 voyages from Europe to Melbourne in 1854-62, I find that larger and clipper-style ships reduced voyage durations, both directly, because they were faster on a given track, and indirectly, because they could better exploit the great circle route. |
| Keywords: | Colonial Australia; Sailing ships; Voyage durations |
| JEL: | F22 N77 O33 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:auu:hpaper:123 |
| By: | Kolev, Stefan |
| Abstract: | This paper pursues two goals. First, to reflect on how historical Ordnungsökonomik (Economics of Order) illuminates the politico-economic crises in today's Western democracies via the increasing parallels to the fragilities and fractures of the 1930s. Second, based on these historical inspirations, to come closer to a modern Ordnungsökonomik targeted specifically at today's crises. The three-step approach consists of an anamnesis ("crisis burger"), a diagnosis ("anxiety from over-dynamics"), and a therapy ("fixed points towards order security"). The paper revisits the role of liberal political economists as order guardians amid what the paper calls superfragility, a context in which citizens radically lose trust and unsubscribe from the order, making the trust-enhancing role of liberal political economists existential for the order. |
| JEL: | A11 B25 B41 H11 P16 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:lefpes:301002 |
| By: | Adamopoulou, Effrosyni; Colombo, Mattia; Triviza, Eleftheria |
| Abstract: | This study examines how early-life exposure to food scarcity influences individuals' long-term time preferences and savings behavior. To this end, we analyze hand-collected historical data on livestock availability during World War II at the provincial level, alongside detailed survey data on elicited time preferences and household savings. By leveraging differences across cohorts and provinces in a difference-in-differences framework, we find that individuals who experienced more severe scarcity during early childhood develop higher levels of patience later in life and tend to hold more (precautionary) savings, conditional on income. Our findings suggest that exposure to protein scarcity during the first years of life and in utero can instigate a lasting increase in prudent behavior in the form of a coping mechanism. |
| Keywords: | patience, precautionary savings, scarcity, early life experiences |
| JEL: | D14 N44 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:300679 |
| By: | Jonas Jessen; Sebastian Schweighofer-Kodritsch; Felix Weinhardt; Jan Berkes |
| Abstract: | Using novel time-use data from Germany before and after reunification, we document two facts: First, spouses who both work full-time exhibit similar housework patterns whether they do so voluntarily or due to a full-time mandate, as in the GDR. Second, men’s amount of housework is independent of their spouse’s labour supply. We theoretically explain this pattern by the presence of two household goods and socially learned gender-specific comparative advantage in their home production. We label this gender specialisation as separate housework spheres. Empirical evidence strongly confirms separate housework spheres in the GDR, West Germany, subsequent years post-reunification, and in international time-use data across 17 countries since the 1970s. We consider several implications, such as those for child penalties, where separate housework spheres provide a novel explanation for why it is the mothers whose labour market outcomes strongly deteriorate upon the arrival of children. |
| Keywords: | gender, household allocation of time, norms |
| JEL: | D13 J16 J22 |
| Date: | 2024–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:bdp:dpaper:0043 |
| By: | Allen, Amy; Apostolidis, Paul; Azmanova, Albena; Ypi, Lea |
| Abstract: | In a discussion of Albena Azmanova’s book Capitalism on Edge (Columbia University Press, 2020), Amy Allen, Paul Apostolidis, Lea Ypi and Albena Azmanova debate key issues critical social theory confronts today. How should critical theorists re-engage with the critique of capitalism without entrapment in old ideological certainties? They revisit the classical debates about transformative agency, direction and methods of change, and the place of normative ideals and of moral theory in the critique of capitalism in light of the current historical juncture. |
| Keywords: | capitalism; crisis; critical theory; revolution; utopia |
| JEL: | P10 |
| Date: | 2023–01–29 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:118154 |
| By: | Rustam Jamilov; Tobias König; Karsten Müller; Farzad Saidi |
| Abstract: | We study bank runs using a novel historical cross-country dataset that covers 184 countries over the past 200 years and combines a new narrative chronology with statistical indicators of bank deposit withdrawals. We document the following facts: (i) the unconditional likelihood of a bank run is 1.2% and that of significant deposit withdrawals 12.7%; (ii) systemic bank runs, i.e. those that are accompanied by deposit withdrawals, are associated with substantially larger output losses than non-systemic runs or deposit contractions alone; (iii) bank runs are contractionary even when they are not triggered by fundamental causes, banks are well-capitalized, and there is no evidence of a crisis or widespread failures in the banking sector; (iv) in historical and contemporary episodes, depositors tend to run on highly leveraged banks, causing a credit crunch, and a reallocation of deposits across banks; and (v) liability guarantees are associated with lower output losses after systemic runs, while having a lender of last resort or deposit insurance reduces the probability of a run becoming systemic. Taken together, our findings highlight a key role for sudden bank liability disruptions over and above other sources of financial fragility. |
| Keywords: | bank runs, financial fragility, deposits, financial crises |
| JEL: | E44 E58 G01 G21 G28 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_589 |
| By: | Vuillemey, Guillaume (HEC Paris) |
| Abstract: | I show that home ownership decisions across countries and individuals are shaped by a cultural heritage from agriculture. For centuries, dominant assets in pre-industrial economies were either land or cattle. Consequently, the type of farming prevailing locally shaped preferences and believes about the relative value of immovable and movable assets. This cultural heritage had long-lasting consequences. Today, individuals originating from societies with a history of crop agriculture - where the dominant asset was land - are more likely to be homeowners. For identification, I rely both on home ownership decisions of second-generation immigrants in the US and on instrumental variables. |
| Keywords: | Homeownership; Culture; Persistence; Immovable assets; Movable assets; Agriculture; Land |
| JEL: | G11 G51 R21 |
| Date: | 2023–02–09 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1477 |
| By: | Pollitt, M. G. |
| Abstract: | David Newbery is one of the very best micro-economists that Cambridge has produced in recent decades. David has made many contributions to economics over the years, in development economics, public economics, industrial organization, economic regulation, transport and energy economics. We discuss his work in three general parts. The first focuses on his early work. This includes his work with Nobel Laureate, Joe Stiglitz, on commodity price stabilisation, with Richard Gilbert on patenting and with Nicholas Stern on taxation in developing countries. The second looks at his work on the pricing of transport and energy, particularly with respect to efficient road pricing and optimal energy taxation. This includes work with Nobel Laureate, Eric Maskin, and Larry Karp. The final part reviews his work on liberalised electricity market design, both in terms of the operation of wholesale electricity markets and the regulation of network monopolies. |
| Keywords: | Optimal tax theory; Road User Charges; Energy taxation; Electricity Reform |
| JEL: | H21 R48 Q48 L94 |
| Date: | 2024–07–15 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2442 |
| By: | Regina T. Riphahn; Irakli Sauer |
| Abstract: | We investigate the wage assimilation of East Germans who migrated to West Germany after reunification (1990-1999). We compare their wage assimilation to that of ethnic German immigrants from Eastern Bloc countries and international immigrants to West Germany who arrived at the same time. The analysis uses administrative as well as survey data. The results suggest that East Germans faced significant initial earnings disadvantages in West Germany, even conditional on age and education. However, these disadvantages were smaller than those of international immigrants, supporting the beneficial role of cultural similarity. The earnings gap relative to West German natives narrowed over time for all immigrants. These findings are robust to controlling for potentially endogenous return migration and labor force participation. Controls for fixed effects reveal that positive assimilation for East German and international immigrants was concentrated among highly educated immigrants. |
| Keywords: | migration, earnings assimilation, internal migration, labor market integration, cultural similarity, Germany, reunification |
| JEL: | F15 J31 J61 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11233 |
| By: | Heise, Arne |
| Abstract: | Controversy is vital in the pursuit of knowledge. Constructive dispute can drive intellectual growth and deepen understanding within a field. However, mutual respect, thorough engagement, and intellectual humility are necessary for productive exchanges. In this vein, I clarify in my response to Tom Palley's critique of my article that I did not argue against his claim regarding social conflict in Keynesian economics. However, I questioned whether social conflict is the sole ontological fault line, as Palley suggests. Additionally, I highlighted the distinction between Keynes' economics and Keynesian economics, challenging Palley's lumping them together as part of a liberal project. In conclusion, Palley's assertions regarding the absence of social conflict in Keynesian economics and its implications for economic laws lack foundation. |
| Keywords: | Keynes, social conflict, paradigm shift |
| JEL: | A14 B40 B51 E11 E12 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cessdp:300689 |
| By: | Vuillemey, Guillaume (HEC Paris) |
| Abstract: | Limited liability is a key feature of corporate law. Using data on asset prices and capital flows in mid-19th century England, I argue that its liberalization was not decided to relax firms' financing constraints, but to satisfy investors' demand for "safe" stores of value. Limited liability eliminated adverse selection about the quality of other shareholders; stocks could be held to store wealth in diversified portfolios, without extended forms of responsibility. Prices of newly issued stocks are consistent with this hypothesis. Thus, the quest for "safe" stores of value explains not only features of debt markets, but also of equity markets. |
| Keywords: | Limited Liability; Safe Assets; Corporate Responsability; Contracts; Law |
| JEL: | G32 N23 |
| Date: | 2023–02–09 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1476 |
| By: | Troncone, Massimo; Valli, Roberto (ETH Zürich) |
| Abstract: | Religious leaders wield significant electoral influence over their followers. In a clientelistic setting, politicians may seek to secure this influence by offering material benefits. To test this argument, we combine newly georeferenced information on the renovation history of Italian Catholic churches with a dataset of connections between Christian democratic politicians and Italian Catholic bishops. Leveraging the start of a connection with a difference-in-differences approach, we find that investments into church renovations increase when municipalities are represented by a politician with a personal connection to the sitting bishop. Additional results reveal that church investments increase only when bishops can plausibly mobilize support in favor of the connected politicians, and in places where Christian democrats are losing support. The findings shed new light on the individualistic strategies and motivations of elected politicians in influencing religious leaders. |
| Date: | 2024–07–26 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:nsyc3 |
| By: | Luo , Wei (Jinan University); Huang, Wei (Peking University); Park, Albert (Asian Development Bank) |
| Abstract: | We study the influence of social norms in determining the impact of early life exposure to the Great Chinese Famine of 1959–1961 on gender inequality. We model how social norms interact with adverse shocks to affect male and female survival chances and influence subsequent human capital investments. We test these predictions empirically by using the Fifth National Population Census of the People’s Republic of China in 2000 that has information on birthplace and estimate a difference-in-differences model that combines cohort and regional variation in exposure to the famine with regional variation in the culture of son preference. We find that son preference buffers the negative impact of intrauterine famine shocks on cohort male-to-female sex ratios and reduces famine’s impact on gender inequality in health and education. |
| Keywords: | famine; son preference; sex ratios; human capital investment |
| JEL: | I24 I26 J13 J16 |
| Date: | 2024–08–16 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0738 |
| By: | Crawford, Eric; Weber, Michael T.; Staatz, John M. |
| Abstract: | The history of agricultural economics and related international activities in AEC/AFRE has roots all the way back to faculty activity in the early 1920s and 1930s in the agricultural economics section of the Economics Department, and in the Department of Farm Management in the College of Agriculture. When the standalone Department of Agricultural Economics (AEC) (now called Agricultural, Food, and Resource Economics (AFRE)) was formed in 1949 by joining these two groups, activities began to increase with new faculty interests, resources and changing international problems and opportunities. From the outset, AEC/AFRE tenure-stream as well as fixed-term faculty, graduate students and host-country research collaborators have been instrumental in carrying out high-quality and relationship-building outputs, and in gaining resources for these efforts. |
| Keywords: | Agribusiness, Agricultural and Food Policy, Consumer/Household Economics, Crop Production/Industries, Food Security and Poverty, International Development, Marketing, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods |
| Date: | 2024–08–13 |
| URL: | https://d.repec.org/n?u=RePEc:ags:midasp:344559 |
| By: | Albertus, Michael; Gay, Victor |
| Abstract: | How does the process of building state strength affect social order? We examine how improvements in state communication networks and increased state presence impact rural unrest by combining original and detailed parish-level data from pre-revolutionary France on the expansion of the horse-post network with rural rebellion in this period. Using a staggered difference-in-difference framework, we find that the introduction of a new horse-post relay is associated with more local rebellion. We argue that the main mechanism is increased state presence and visibility. New horse-post relays are strongly associated with more rebellion against high-profile state agents – the military, police, and courts – and public buildings that symbolized and hosted state power. We find no evidence that relays fostered broader rebellion against the nobility or Church, or that the effects stem from informational or infrastructural changes occurring con-temporaneously. Our findings have implications for the scholarly understanding of the co-evolution of states and violence. |
| Keywords: | State-building; rebellion, social order, postal network, Western Europe |
| JEL: | N44 P41 R42 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:129643 |
| By: | Vuillemey, Guillaume (HEC Paris) |
| Abstract: | I show that the saving glut spurs banking instability. In the US, banks locally exposed to its root causes -- higher savings by intangible-intensive firms and the rise in household wealth inequality -- massively increased deposits since 2000, leading to an unprecedented deposit-to-GDP ratio and to a surge in uninsured deposits. To causally identify an impact of this ``deposit glut'' on financial instability, I use the unexpected failure of Silicon Valley Bank in March 2023 as a quasi-natural experiment: other US banks with high local exposure to either intangible-intensive firms or wealth inequality experienced significantly larger drops in market valuation. |
| Keywords: | Saving glut; Silicon Valley Bank; Deposits; Financial stability; Wealth inequality; Intangibles |
| JEL: | E22 G21 |
| Date: | 2023–04–18 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1475 |
| By: | Doepke, Matthias; Gaetani, Ruben |
| Abstract: | Why has the college wage premium risen rapidly in the United States since the 1980s but not in European economies such as Germany? We argue that differences in employment protection can account for much of the gap. We develop a model in which firms and workers make relationship-specific investments in skill accumulation. The incentive to invest is stronger when employment protection creates an expectation of long-lasting matches. We argue that changes in the economic environment have reduced relationship-specific investment for less educated workers in the United States, but not for better-protected workers in Germany. |
| JEL: | I23 I20 J24 J31 J41 J63 |
| Date: | 2024–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:121605 |
| By: | Tomohiro Hirano; Alexis Akira Toda |
| Abstract: | "Rational bubble", as introduced by the famous paper on money by Samuelson (1958), means speculation backed by nothing. The large subsequent rational bubble literature has identified attaching bubbles to dividend-paying assets in a natural way as an important but challenging question. Miao and Wang (2018) claim to "provide a theory of rational stock price bubbles". Contrary to their claim, the present comment proves the nonexistence of rational bubbles in the model of Miao and Wang (2018). We also clarify the precise mathematical definition and the economic meaning of "rational bubble" in an accessible way to the general audience. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.14017 |
| By: | Christian Vedel |
| Abstract: | Is geography destiny? What is the role of first-nature geography in determining prosperity? This paper estimates the effect of randomly removing and introducing favorable first-nature geography to a specific region using a difference in difference design. In 1825 a storm created a new natural navigable waterway, bringing trade and prosperity to the otherwise relatively isolated northwestern Denmark. 700 years prior, the same event happened in reverse, when a previous channel closed up between 1086 and 1208. The elasticity of geography-induced market access is estimated to be 1.6, corresponding to 26.7 percent population growth within a generation of the event. Demonstrated mechanisms include trade, fertility, fishing, and the rise of manufacturing. The central finding is replicated in reverse in a register of dated archaeological sites. The 1086-1208 closing caused fewer buildings and sites containing coins. The general insight is the same: First-nature geography determines the levels and location of prosperity. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2408.00885 |
| By: | Amore, Mario Daniele (HEC Paris); Miller, Danny (HEC Montreal) |
| Abstract: | Although family firms are ubiquitous, their prevalence displays major geographic disparities and their performance differs across regions. We review an extensive literature in economics and finance showing that formal institutional factors play a key role in explaining variations in the diffusion of family firms and their performance. We also review a more neglected but rapidly emerging stream of research focusing on culture as a source of these variations. By providing a framework for current theories, findings and methods, we demonstrate how cultural elements such as trust, religion, family values and collectivism provide useful answers to where and why family firms exist and how well they perform. |
| Keywords: | family firms; culture; trust; social capital |
| JEL: | G34 |
| Date: | 2023–04–17 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1487 |
| By: | Ariza Ruiz, Efrén Danilo; Garza, Nestor |
| Abstract: | We document and analyze the emergence and consolidation of neoliberalism in higher education in economics in Colombia. The research focuses on four interrelated categories through which the neoliberal ideology changed the scientific field of economics by replacing endogenously developed analytical traditions during the 1980s -1990s: 1) homogenization of curricula; 2) neoclassical mathematization; 3) use of textbooks; and 4) quantitative assessment (scientometrics) of academic quality. The results show how a generation of economists combined their networks of social capital and legitimacy from international academic connections, to simultaneously impose their worldview in academia, the public administration, and private sector. Our analyses highlight the transfer of the neoliberal values to the education field through the concepts of quality assessment and scientometrics, which institutionalized the exercise of power to discipline intellectual inquiries and scholarship. |
| Keywords: | Higher Education, Economists, Research Policy, Cultural Capital, Sociological Studies, Neoclassical Economics |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cessdp:300688 |
| By: | Elie Bouri (Adnan Kassar School of Business, Lebanese American University, Lebanon); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Christian Pierdzioch (Department of Economics, Helmut Schmidt University, Holstenhofweg 85, P.O.B. 700822, 22008 Hamburg, Germany.); Onur Polat (Department of Public Finance, Bilecik Seyh Edebali University, Bilecik, Turkiye) |
| Abstract: | Using monthly data from 1871 to 2024 and logistic models with shrinkage estimators, we compare the contribution of stock and oil-market moments (returns, volatility, skewness, and kurtosis) to the accuracy of out-of-sample forecasts of U.S. recessions at various forecast horizons, while controling for various standard macroeconomic predictors and the total connectedness indexes of the moments. Adding stock-market moments to the potential predictors improves significantly the accuracy of out-of-sample forecasts at the long forecast horizon, whereas oil-market moments and connectedness indexes do not contribute much. The lagged recession dummy, the term spread, and stock returns are found to be the top predictors of recessions. |
| Keywords: | Recessions, Stock-market and oil-market moments, Forecasting, Shrinkage estimators, AUC statistics |
| JEL: | C53 E32 E37 G17 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:pre:wpaper:202435 |
| By: | Bank of Japan (Bank of Japan) |
| Abstract: | On May 21, 2024, the second workshop on the "Review of Monetary Policy from a Broad Perspective, " entitled "Economic Activity, Prices, and Monetary Policy over the Past 25 Years, " was held at the Bank of Japan's Head Office. At the workshop, economists and financial and economic experts participated in a lively discussion. Session 1 provided a review of economic and price developments in Japan since the late 1990s and a presentation on recent changes in the environment. Participants then discussed issues such as the impact of "Quantitative and Qualitative Monetary Easing" on the economy and prices, the reasons why behavior and a mindset based on the assumption that wages and prices would not increase easily had become entrenched as the norm in society, and whether the norm should be judged as changing. Session 2 provided a presentation on the effectiveness of unconventional monetary policy through the "expectations channel" under the effective lower bound on interest rates and on the economic implications of moderate price increases. Participants then discussed issues such as the mechanisms of inflation expectations formation, the evaluation of the effects of monetary policy on expectations, and the consistency of theoretical views on the benefits of moderate price increases with reality. In the panel discussion in Session 3, participants started by discussing reasons why the norm had formed and recent changes in the norm. Participants highlighted reasons for the formation of the norm since the late 1990s, such as the fact that maintaining employment had become the top priority, leading to a suppression of wages, and the fact that price competition continued to be severe. Meanwhile, while one view was that the norm was changing due to factors such as the growing shortage of labor, another view was that there had been no major structural changes in the labor market and that the recent increases in wages and prices may have been a temporary phenomenon caused by exogenous shocks. In addition, panelists reviewed the lessons learned from the monetary policy of the past 25 years. With regard to unconventional monetary policy, some argued that it had had positive effects such as improving the output gap even under the effective lower bound on interest rates, while others pointed to the difficulty of influencing expectations and the side effects of prolonged monetary easing on productivity. |
| Date: | 2024–08–09 |
| URL: | https://d.repec.org/n?u=RePEc:boj:bojron:ron240809a |