|
on Business, Economic and Financial History |
| By: | Lambert, Thomas |
| Abstract: | This research note/paper examines several factors that have been mentioned and debated as determinants of how Britain moves from feudalism to mercantilism and then to capitalism by way of agricultural and industrial innovations and also how it arrives at the cusp of the industrial revolution. Of special interest are somewhat recent conjectures of macroeconomic data, investment estimates, and data on horses, serfs, and slaves of previous centuries that perhaps can better contribute to and add some clarification to the debates over the transition from feudalism to capitalism and the transition from an early form a capitalism or mercantilism to the industrial revolution. The estimates, empirical notes, and exploratory analyses in this paper partially support the Brenner thesis or concept of the transition from feudalism to capitalism and also support the notion that the proceeds of slave sales and slave production provide a substantive portion of British investment amounts leading up to the industrial revolution of the 18th Century. The mainstream economic notions of property rights, thrift, free markets, and free trade are only part of the picture of how Britain achieves economic prominence in the 19th Century. Exploitation of people and animals play a very significant role that has been ignored or minimized in many history and economic history accounts. |
| Keywords: | Baran ratio, economic surplus, investment, slave trade, slavery, serfs, horses, Great Britain |
| JEL: | B51 B52 N13 N33 N44 |
| Date: | 2024–11–09 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124978 |
| By: | Thierry Warin |
| Abstract: | This article provides a comprehensive historical and contemporary analysis of how international trade theory and practice have developed. It begins with the classical economic theories of the 17th to 19th centuries – spanning Italian mercantilists like Antonio Serra, French Physiocrats such as François Quesnay, English classical economists like Adam Smith and David Ricardo, and German protectionist thinkers like Friedrich List – and examines how these early thinkers understood trade in goods versus services. The narrative then traces major shifts through the 19th and 20th centuries, highlighting the rise of industrial trade, changes in theory, and the institutionalization of global trade rules. Finally, it connects these historical foundations to the platform economy of the 21st century, in which technology and data (often dubbed “the new oil”) have dramatically reshaped what is tradable. Throughout, we discuss the surge in services trade – including the persistent U.S. surplus in services – and the challenges of measuring trade in an era of digital platforms. These measurement issues, we argue, are not mere statistical quirks but reflect deeper transformations in the global economy. The discussion proceeds in a chronological yet thematic flow, tying together the major milestones in the evolution of trade and maintaining a scholarly perspective on each phase. Cet article propose une analyse historique et contemporaine complète de l'évolution de la théorie et de la pratique du commerce international. Il commence par les théories économiques classiques du 17e au 19e siècle - couvrant les mercantilistes italiens comme Antonio Serra, les physiocrates français comme François Quesnay, les économistes classiques anglais comme Adam Smith et David Ricardo, et les penseurs protectionnistes allemands comme Friedrich List - et examine comment ces premiers penseurs comprenaient le commerce des biens par rapport à celui des services. Le récit retrace ensuite les principales évolutions au cours des XIXe et XXe siècles, en soulignant l'essor du commerce industriel, les changements théoriques et l'institutionnalisation des règles du commerce mondial. Enfin, il relie ces fondements historiques à l'économie de plateforme du XXIe siècle, dans laquelle la technologie et les données (souvent surnommées « le nouveau pétrole ») ont radicalement remodelé ce qui est échangeable. Tout au long de l'ouvrage, nous discutons de l'essor du commerce des services - y compris de l'excédent persistant des États-Unis dans ce domaine - et des défis que pose la modélisation du commerce à l'ère des plates-formes numériques. Selon nous, ces problèmes de mesure ne sont pas de simples bizarreries statistiques, mais reflètent des transformations plus profondes de l'économie mondiale. La discussion se déroule de manière chronologique et thématique, en reliant les principaux jalons de l'évolution du commerce et en maintenant une perspective scientifique sur chaque phase. |
| Keywords: | international trade, global economy, evolution, economic theories, digital transformation, commerce international, économie mondiale, évolution, théories économiques, transformation numérique |
| Date: | 2025–05–20 |
| URL: | https://d.repec.org/n?u=RePEc:cir:cirwor:2025s-12 |
| By: | Nick Byrd |
| Abstract: | By late 20th century, the rationality wars had launched debates about the nature and norms of intuitive and reflective thinking. Those debates drew from mid-20th century ideas such as bounded rationality, which challenged more idealized notions of rationality observed since the 19th century. Now that 21st century cognitive scientists are applying the resulting dual process theories to artificial intelligence, it is time to dust off some lessons from this history. So this paper synthesizes old ideas with recent results from experiments on humans and machines. The result is Strategic Reflectivism, which takes the position that one key to intelligent systems (human or artificial) is pragmatic switching between intuitive and reflective inference to optimally fulfill competing goals. Strategic Reflectivism builds on American Pragmatism, transcends superficial indicators of reflective thinking such as model size or chains of thought, and becomes increasingly actionable as we learn more about the value of intuition and reflection. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.22987 |
| By: | Arthur Apostel (Ghent University, Department of Economics) |
| Abstract: | In the absence of a wealth register, Belgian wealth inequality needs to be estimated. Here I apply the mortality multiplier approach to Belgian inheritance tax tabulations and administrative microdata, collectively covering 1935 to 2022. Belgian wealth inequality has strongly declined during the 20th century and seems relatively stable in recent years. I triangulate my estimates with national accounts aggregates and previous work on Belgian wealth inequality. The evolution of Belgian wealth inequality is in line with other European countries for which long-run estimates are available. |
| Keywords: | Wealth inequality, Inheritance, Mortality multipliers, Belgium |
| JEL: | D3 G5 H2 N3 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbb:reswpp:202505-477 |
| By: | Ruixue Jia; James Kai-sing Kung |
| Abstract: | This study reviews the culture and institutions of Confucianism and explores their implications for the trajectory of China’s historical development. We trace the origins and evolution of the core elements of Confucianism and synthesize research on its relationship to clan culture, state institutions, and a broad array of societal values. We also highlight promising but underexplored directions for future research. While Confucianism is often invoked to explain China’s absence from the Industrial Revolution and its lack of democratization, we caution against such retrospective determinism. As a multidimensional and abstract tradition, Confucianism likely allows for varied interpretations and institutional adaptations across time and context. |
| JEL: | N15 O43 P51 Z10 Z13 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33883 |
| By: | Kurz Heinz D.; Strohmaier Rita; Knell Mark |
| Abstract: | Technological change, an overwhelming fact in recent socioeconomic history, involves, as Joseph A. Schumpeter famously put it, âcreative destructionâ on a large scale: it gives rise to new goods, production methods, firms, organisations, and jobs, while rendering some received ones obsolete. Its impact extends beyond the economy and affects society, culture, politics, and the mind-set of people. While it allows solving certain problems, it causes new ones, inducing further technological change. Against this background, the paper attempts to provide a detailed, yet concise exploration of the historical evolution and measurement of technological change in economics. It touches upon various questions that have been raised since Adam Smith and by economic and social theorists after him until today living through several waves of new technologies. These questions include: (1) Which concepts and theories did the leading authors elaborate to describe and analyse the various forms of technological progress they observed? (2) Did they think that different forms of technological progress requested the elaboration of different concepts and theories â horses for courses, so to speak? (3) How do different forms of technological progress affect and are shaped by various strata and classes of society? Issues such as these have become particularly crucial in the context of the digitisation of the economy and the widespread use of AI. Finally, the paper explores the impact of emerging technologies on the established theoretical frameworks and empirical measurements of technological change, points to new measurements linked to the rise of these technologies, and evaluates their pros and cons vis-Ã -vis traditional approaches. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:laedte:202503 |
| By: | Yuya Sasaki; Ariell Zimran |
| Abstract: | We propose a method to correct estimates from historical linked data for bias arising from type-I error—"false matches." We estimate the rate of false matching from the disagreement rate in characteristics that should agree across the two linked datasets. Combined with an understanding of the empirical patterns arising from false matches, knowledge of this rate enables us to correct for bias from false matches. Our method enables correction of estimates of both population moments and regression coefficients with valid inference. We illustrate the properties of our method via simulation and demonstrate them using linked US census data. |
| JEL: | C10 C23 C49 C55 C81 C83 J61 J62 N30 N31 N32 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33881 |
| By: | Stéphane Becuwe; Bertrand Blancheton; Christopher M. Meissner |
| Abstract: | We explore changes in product quality during France’s major liberalization episode of the mid-nineteenth century. Using new data and existing techniques from the international trade literature, we investigate the relative quality of French products versus those of international competitors, within industry changes in quality, and within product quality changes. France produced relatively high quality/high unit value products in the traded sector throughout the period. Liberalization was associated with an overall decline in the quality of French exports. However, some of the best-selling exports experienced an apparent rise in quality around the time of liberalization. As for imports, while French spending may have switched to lower quality products due to liberalization, lower tariffs were associated with rising within product quality. |
| JEL: | F14 N74 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33902 |
| By: | Sandye Gloria (Université Côte d'Azur, CNRS, GREDEG, France) |
| Abstract: | This article examines Menger's theory of money in the lens of the philosophical concept of emergence. While Menger's theory of the emergence of money is well known, the precise nature of this process has been relatively unexplored. The article begins by situating itself within philosophical debates to understand the meaning, scope, and implications of emergence. Section 2 demonstrates that the Mengerian approach is based on an ontology, epistemology, and methodology that differ from those of his contemporaries, particularly Walras. In this approach, the concept of emergence becomes legitimate and even attains the status of an epistemic concept. Finally, we categorise the type of emergence associated with the monetary phenomenon in light of the typology presented in the first section. As a result we argue that money is a weak case of diachronic and epistemological emergence involving a top-down, selective causal effect. |
| Keywords: | Emergence, Money, Menger, Complexity |
| JEL: | B13 B41 B53 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2025-24 |
| By: | Goutsmedt, Aurélien (UC Louvain - F.R.S-FNRS); Sergi, Francesco; Acosta, Juan |
| Abstract: | What do economists do in central banks? Why do central banks hire economists? This book investigates the evolving role of economists and economic knowledge within central banks, arguing that their current centrality is neither self-evident nor historically inevitable. While the presence and influence of economists in central banks today may seem natural, this book shows that it is the result of a complex, gradual, and uneven historical process shaped by institutional structures, disciplinary transformations, and shifting relationships between science and policy. Drawing on a rich but dispersed body of literature, the book traces how economists progressively gained authority through the establishment of statistics departments, the adoption of macroeconometric models, and the emergence of a shared cognitive infrastructure between academia and central banks. Rather than focusing on individuals or doctrines, it examines general trends and institutional shifts across a series of national case studies to show how central banks function as boundary organizations, at the intersection of policy and science. |
| Date: | 2025–05–22 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:acymv_v1 |
| By: | Johannes Buggle; Max Deter; Martin Lange |
| Abstract: | This paper examines how network ties between local social leaders influenced the diffusion of mass protests in an autocracy. We focus on the Protestant Church and the Peaceful Revolution in East Germany. To quantify the role of leader networks in protest diffusion, we compile biographical records of over 1, 600 Protestant pastors, including their employment and education histories. Our findings reveal that network connections led to an increase in protest diffusion by up to 4.9 percentage points in a given week. Moreover, we highlight the importance of network centrality, pastors as information bridges, and the interaction with preexisting grievances and repression. |
| Keywords: | autocracy, religion, protests, networks, leaders |
| JEL: | D72 D74 N44 P16 |
| Date: | 2025–04–29 |
| URL: | https://d.repec.org/n?u=RePEc:bdp:dpaper:0064 |
| By: | Bartscher, Alina K.; Kuhn, Moritz; Schularick, Moritz; Steins, Ulrike I. |
| Abstract: | Using new household-level data, we study the secular increase in U.S. household debt and its distribution since 1950. Most of the debt were mortgages, which initially grew because more households borrowed. Yet after 1980, debt mostly grew because households borrowed more. We uncover home equity extraction, concentrated in the white middle class, as the largest cause, strongly affecting intergenerational inequality and life-cycle debt profiles. Remarkably, the additional debt did not lower households' net worth because of rising house prices. We conclude that asset-price-based borrowing became an integral part of households' consumption-saving decisions, yet at the cost of higher financial fragility. |
| Keywords: | Household debt, Home equity extraction, Inequality, Household portfolios, Financial fragility |
| JEL: | G51 E21 E44 D14 D31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:318398 |
| By: | Bruno T. Rocha; Patrícia C. Melo; Rui Colaço; João de Abreu e Silva; Nuno Afonso |
| Abstract: | As urban land increased in mainland Portugal by 55.9% between 1990 and 2012 and the country developed an extensive motorway network between the 1980s and the early 2010s, we set out to investigate the effect of motorways on urban sprawl across mainland municipalities. We document the evolution of urban sprawl for these 275 municipalities across several dimensions, including the population density of urban land, its degree of fragmentation and shape irregularity (which we combine in a summary “total interface” indicator), and the differences between the central urban unit and the remaining “peripheral” urban land. Given that the spatial distribution of motorways is likely to be endogenous, we use road itineraries from the 18th century as an instrumental variable. Our results suggest that motorways contributed to the fragmentation of urban land into numerous urban patches. Also, we identify important within-municipality heterogenous effects, in that motorways did not cause the contiguous growth of the central urban unit (typically the largest urban unit in each municipality) but, conversely, appeared to contribute in a significant manner to the development of peripheral urban land. There is also some evidence that motorways contributed to an increase in the shape irregularity of urban areas. Finally, we show that motorways caused a decrease in urban population density, but only in the relatively small group of more urbanised municipalities. |
| Keywords: | Urban sprawl; urban land; urban fragmentation; motorways; transport accessibility; instrumental variables; Portugal. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp03802025 |
| By: | Emiliano Carlevaro (School of Economics and Public Policy of Economics, University of Adelaide); Qazi Haque (School of Economics and Public Policy of Economics, University of Adelaide); Leandro Magnusson (Department of Economics, University of Western Australia) |
| Abstract: | This paper revisits the U.S. fiscal-monetary policy mix using econometric methods that are robust to weak identification and sensitive to structural changes. We find that the pre-Volcker period was predominantly characterised by a passive monetary-passive fiscal regime, consistent with indeterminacy and the presence of self-fulfilling inflationary expectations. However, we cannot rule out the possibility of a passive monetary-active fiscal configuration during the 1960s and 1970s, in line with the Fiscal Theory of the Price Level. In contrast, the post-Volcker period exhibits strong evidence of an active monetary-passive fiscal regime, reflecting greater inflation control and fiscal discipline. |
| Keywords: | Fiscal-monetary interactions, weak identification |
| JEL: | E63 E61 C63 E32 E31 E52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:uwa:wpaper:25-05 |
| By: | Randy A. Becker |
| Abstract: | This technical note discusses two major efforts beginning in 2008 to recover historical Census Bureau data from legacy computer tapes. This note describes the scope of both efforts, where to find the files that were recovered, where to find more information about the recovered data (e.g., record layouts), some of the challenges in making them into usable data, and some of the tools and resources that are available to help. |
| Keywords: | All |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:cen:tnotes:25-12 |
| By: | Wallace P. Marcelino (UFPA); Adilson Giovanini (UDESC); Fabrício Missio (Cedeplar/UFMG); Frederico G. Jayme Jr (Cedeplar/UFMG) |
| Abstract: | The purpose of this paper is to analyze the foreign trade of biodiversity products (BioTrade) from a Latin American structuralist perspective and propose economic policy recommendations. Latin America (LA) is one of the most biodiverse regions in the world, which grants it a competitive advantage. Indicators reveal that the Center-Periphery relationship persists in manufacturing activities, modern services, and biodiversity-related trade. The primary reason for this is the historical lack of endogenous technological progress in LA countries, which limits the ability to harness economic opportunities. The principal economic policy recommendation is the formulation and implementation of an industrial policy that strategically leverages the region's biodiversity. |
| Keywords: | Economic Development; Structuralist Economics; Biodiversity |
| JEL: | O1 O4 L80 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:cdp:texdis:td682 |
| By: | Nuno Garoupa; Rok Spruk |
| Abstract: | This paper examines whether major political institutional disruptions produce temporary shocks or structural breaks in long-term development. Using the 1979 Iranian Revolution as a natural experiment, we apply the synthetic control method to estimate its causal effect on economic growth and institutional quality. Drawing on a panel of 66 countries from 1950 to 2015, we construct counterfactual trajectories for Iran in the absence of revolutionary change. Our results show a persistent and statistically significant divergence in per capita GDP, institutional quality, and legal constraints on executive power. We perform in-space and in-time placebo tests to rule out confounding events, such as the Iran-Iraq War and international sanctions, and propose confidence interval estimation to address uncertainty in treatment effects. The findings identify the Iranian Revolution as a structural institutional rupture, with implications for the classification of institutional change more broadly. We contribute a generalizable empirical framework for distinguishing between temporary and structural institutional shocks in long-run development. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.02425 |
| By: | Margaret M. Jacobson; Eric M. Leeper; Bruce Preston |
| Abstract: | When Roosevelt abandoned the gold standard in April 1933, he converted government debt from a tax-backed claim to gold to a claim to dollars, opening the door to unbacked fiscal expansion. Roosevelt followed a state-contingent fiscal rule that ran nominal-debt-financed primary deficits until the price level rose and economic activity recovered. Theory suggests that government spending multipliers can be substantially larger when fiscal expansions are unbacked than when they are tax-backed. VAR estimates using data on “emergency” unbacked spending and “ordinary” backed spending confirm this prediction and find that primary deficits made quantitatively important contributions to raising both the price level and real GNP after 1933. VAR evidence does not support the conventional monetary explanation that gold revaluation and gold inflows, which raised the monetary base, drove the recovery independently of fiscal actions. |
| Keywords: | Great depression; Monetary-fiscal interactions; Monetary policy; Fiscal policy; Government debt |
| JEL: | E31 E52 E62 E63 N12 |
| Date: | 2024–02–28 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:100034 |
| By: | Schmidtlein, Lisa (Institute for Employment Research (IAB), Nuremberg, Germany); Schmucker, Alexandra (Institute for Employment Research (IAB), Nuremberg, Germany); Vom Berge, Philipp (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "This data report describes the Sample of Integrated Employer-Employee Data (SIEED) 1975 - 2023." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bundesrepublik Deutschland ; Stichprobe Integrierter Employer-Employee Daten ; Datenaufbereitung ; Datengewinnung ; Datenqualität ; Datenspeicherung ; Datenzugang ; IAB-Beschäftigtenhistorik ; Integrierte Erwerbsbiografien ; Stichprobenverfahren ; 10.5164/IAB.SIEED7523.de.en.v1 ; 1975-2023 |
| Date: | 2025–05–30 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabfda:202504(en) |
| By: | Carlos G\'oes |
| Abstract: | Thomas Piketty's Capital in the Twenty-First Century puts forth a logically consistent explanation for changes in income and wealth inequality patterns. However, while rich in data, the book provides no formal empirical testing for its theorized causal chain. This paper tests the hypothesis that the $r-g$ gap drives income inequality and the increasing capital share of national income. Using panel VAR models with data from 18 advanced economies over 30 years, I find no empirical support for Piketty's predictions. The results suggest that dynamics such as savings-rate adjustments and diminishing returns to capital play critical roles in offsetting the hypothesized effects. These findings challenge the theoretical underpinnings of the growth in inequality and call for alternative explanations. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.01521 |
| By: | Bosker, M.; Haasbroek, M. |
| Abstract: | We use detailed historical data on India’s domestic infrastructure to show how its high domestic transport costs have conditioned the local labour market consequences of its drastic import tariff liberalization in the early 1990s. We find that districts located farther away from the country’s main international gateways are better shielded from the resulting increased foreign import competition: their non-agricultural employment falls less than in otherwise similarly exposed districts located closer to India’s major ports. At the same time, they also benefit less from improved access to foreign intermediates: non-agricultural employment increases less than in districts with a similar input-output structure but located closer to the country’s main ports. These employment responses also vary across firms of different sizes: employment in small to medium sized firms is hit hardest by increased import competition, whereas employment in medium to large firms benefits most from better access to foreign intermediates. This difference between small and large firms is also most pronounced in districts best-connected to India’s major ports. |
| Keywords: | Words Gains from Trade, Domestic Infrastructure, Local Labour Demand, India |
| JEL: | F14 F15 R11 |
| Date: | 2025–04–29 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2529 |
| By: | Lins, Karl V.; Roth, Lukas; Servaes, Henri; Tamayo, Ane |
| Keywords: | ESG; women in leadership; investor preferences; #MeToo; gender equality; sexism; corporate culture; institutional ownership; valuation |
| JEL: | J50 L81 |
| Date: | 2025–05–26 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128200 |
| By: | Gholamreza Hajargasht (Griffith University); Alicia Rambaldi (School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, Australia); D.S. Prasada Rao (School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland, Australia) |
| Abstract: | Convergence in incomes, productivity-catch-up and technology gaps have been studied extensively. This study focuses on convergence in income and income distributions, two factors that determine welfare. The paper offers an intuitive notion of income convergence which is then used in establishing an analytical link between income (sigma) convergence and inequality measures. Empirical results reported are based on data series available from UQICD V3.0 (University of Queensland International Comparison Database) covering 185 countries and the period 1970 to 2019 covering pre- and post-globalization years. Using recently developed econometric methods, the paper finds strong evidence of weak-sigma convergence, absolute and conditional convergence; as well as convergence tested using economic transition curves proposed in Phillips and Sul (2009). However, the results vary depending on the groups of countries considered with robust results for the group of countries classified as the upper-middle income group. World inequality, accounting for income distributions within countries, peaked during 1990 to 1995 with a Gini coefficient around 0.72 decreasing to 0.575 by 2019. There is evidence of a reduction in between- country inequality coupled with a rise in within-country inequality. The paper proposes a new entropy-based measure of divergence between income distributions. Under Pareto-lognormal specification, fitted income distributions for a large number of countries for years between 1970 and 2019, available from the UQICD database, show a significant reduction in divergence in income distribution of countries in the world from 1985 to around 2015 but increasingly slightly until 2019. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:qld:uqcepa:197 |
| By: | Michaillat, Pascal; Saez, Emmanuel |
| Abstract: | To answer this question, we develop a new Sahm-type recession indicator that combines vacancy and unemployment data. The indicator is the minimum of the Sahm indicator -- the difference between the 3-month trailing average of the unemployment rate and its minimum over the past 12 months -- and a similar indicator constructed with the vacancy rate -- the difference between the 3-month trailing average of the vacancy rate and its maximum over the past 12 months. We then propose a two-sided recession rule: When our indicator reaches 0.3pp, a recession may have started; when the indicator reaches 0.8pp, a recession has started for sure. This new rule is triggered earlier than the Sahm rule: on average it detects recessions 0.8 month after they have started, while the Sahm rule detects them 2.1 months after their start. The new rule also has a better historical track record: it perfectly identifies all recessions since 1929, while the Sahm rule breaks down before 1960. With August 2024 data, our indicator is at 0.54pp, so the probability that the US economy is now in recession is 48%. In fact, the recession may have started as early as March 2024. |
| Keywords: | econ.GN, q-fin.EC |
| Date: | 2024–08–11 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:ucscec:qt0h0295t7 |
| By: | Aleksandar Keseljevic; Stefan Nikolic; Rok Spruk |
| Abstract: | We investigate the long-term impact of civil war on subnational economic growth across 78 regions in five former Yugoslav republics from 1950 to 2015. Leveraging the outbreak of ethnic tensions and the onset of conflict, we construct counterfactual growth trajectories using a robust region-level donor pool from 28 conflict-free countries. Applying a hybrid synthetic control and difference-in-differences approach, we find that the war in former Yugoslavia inflicted unprecedented regional per capita GDP losses estimated at 38 percent, with substantial regional heterogeneity. The most war-affected regions suffered prolonged and permanent economic declines, while capital cities experienced more transitory effects. Our results are robust to extensive variety of specification tests, placebo analyses, and falsification exercises. Notably, ethnic tensions between Serbs and Croats explain up to 40 percent of the observed variation in economic losses, underscoring the deep and lasting influence of ethnic divisions on economic impacts of the armed conflicts. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.02431 |
| By: | Hie Joo Ahn; Matteo Luciani |
| Abstract: | We disentangle price changes due to economy-wide shocks from those driven by idiosyncratic shocks by estimating a two-regime dynamic factor model with dynamic loadings on a new large dataset of finely disaggregated monthly personal consumption expenditures price inflation indexes for 1959-2023. We find that up to the mid-1990s and after the Covid pandemic, common shocks were the primary driver of US inflation dynamics and had long-lasting effects. In between, idiosyncratic shocks were the main driver, and common shocks had short-lived effects. |
| Keywords: | Core inflation; Dynamic factor model; Disaggregated consumer prices; Monetary policy |
| JEL: | C32 C43 C55 E31 E37 |
| Date: | 2024–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:100036 |
| By: | Pascal Michaillat |
| Abstract: | This paper develops a new method for detecting US recessions in real time. The method constructs millions of recession classifiers by combining unemployment and vacancy data to reduce detection noise. Classifiers are then selected to avoid both false negatives (missed recessions) and false positives (nonexistent recessions). The selected classifiers are therefore perfect, in that they identify all 15 historical recessions in the training period without any false positives. By further selecting classifiers that lie on the high-precision segment of the anticipation-precision frontier, the method optimizes early detection without sacrificing precision. On average, over 1929--2021, the classifier ensemble signals recessions 2.2 months after their true onset, with a standard deviation of 1.9 months. Applied to May 2025 data, the classifier ensemble gives a 71% probability that the US economy is currently in recession. Backtesting to 2004, 1984, and 1964 confirms the algorithm's reliability. Algorithms trained on limited historical windows continue to detect all subsequent recessions without errors. Furthermore, they all detect the Great Recession by mid-2008 -- even when they are only trained on data up to 1984 or 1964. The classifier ensembles trained on 1929--2004, 1929--1984, and 1929--1964 data give a current recession probability of 58%, 83%, and 25%, respectively. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2506.09664 |
| By: | Mr. Zamid Aligishiev; Hamed Ghiaie |
| Abstract: | This paper investigates dynamic relationships between U.S. government expenditure multipliers and the economy's cyclical position from 1949 to 2018 using a Time-Varying Parameter Vector Autoregression (TVP-VAR) model. We challenge the existing literature, which predominantly relies on predefined economic regimes and assumes a stable relationship between fiscal multipliers and business cycles. Our findings identify two distinct periods: fiscal multipliers were counter-cyclical from 1949 to the late 1980s, followed by a significant decline in their effectiveness during recessions thereafter. These variations are attributed to the prevailing fiscal-monetary policy mix; with higher fiscal multipliers during earlier recessions resulting from sharp shifts toward a fiscally led policy stance, followed by a decline after the Dot-com recession due to a transition toward a monetary-led policy mix. We find particularly low multipliers during the global financial crisis, which provides new insights into the evolving role of financial frictions in the transmission of fiscal policy. |
| Keywords: | State-dependent multipliers; Business cycle; Policy mix |
| Date: | 2025–05–30 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/108 |
| By: | Dower, Paul Castañeda; Gehlbach, Scott; Kofanov, Dmitrii; Nafziger, Steven; Novikov, Vladimir |
| Abstract: | Local violence often accompanies momentous political change, as feelings of political threat intersect with preexisting prejudices to endanger groups popularly associated with reform. We examine the relationship between such violence and settlement characteristics in the context of the 1905 Russian Revolution, which triggered numerous anti-Jewish pogroms. Counter to an extensive literature that emphasizes the contribution to conflict of ethno-religious polarization, we show that the sharp increase in pogroms after October 1905, when publication of the October Manifesto and accompanying anti-Semitic propaganda increased feelings of political threat among many non-Jews, was smaller in settlements with relatively large Jewish populations. We demonstrate that this empirical pattern can be rationalized with an elaborated version of the Esteban-Ray (2008) model of diversity and conflict when, as with the October Manifesto, political reform systematically alters the distribution of benefits across groups. |
| Date: | 2025–05–28 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:eakus_v1 |