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on Business, Economic and Financial History |
| By: | Esteves, Rui; Tuncer, Ali Coskun |
| Abstract: | Contemporaries and historians agree that British colonies did not borrow on their own credit but on imperial fiat. We explore the history of colonial bonds explicitly guaranteed by Britain to qualify this assertion. We find that markets priced guarantees above other colonial bonds and that colonial governments lobbied for them. The introduction of other regulatory enhancements reduced the value of guarantees in the late 19th century, but it recovered in the interwar. British authorities were ambivalent about guarantees—worrying about creating moral hazard while using guarantees to lower the costs of developmental and strategic projects in the colonies. |
| Keywords: | Loan guarantees |
| JEL: | F54 H81 N20 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19267 |
| By: | Ramos-Toro, Diego; Voytas, Elsa |
| Abstract: | We examine how people think and speak about the history of race in the United States. Based on 14, 033 surveys, we document substantial ideological divides in views about the Civil War, the Civil Rights Movement, and slavery's legacy, with pronounced differences among white respondents. The structure of historical narratives also varies by ideology: Conservatives, particularly white conservatives, emphasize individual agency and detach the past from the present, while liberals tend to portray the present as the continuation of the past. Evidence from two survey-embedded interventions suggests that historical narratives about race can deepen polarization in institutional satisfaction. |
| JEL: | D63 D72 D83 J15 P16 Z1 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cbscwp:342449 |
| By: | Gay, Victor; Milner, Benjamin |
| Abstract: | Combining district-level measures of World War I military fatalities with full-count census microdata, we show that wartime mortality increased postwar female labor force participation in England and Wales. Women shifted away from traditionally female occupations, while military deaths increased the shares of single and widowed women, whose participation rates were higher. Yet the overall effect of military mor-tality on postwar female labor force participation remained modest. A harmonized comparison with France suggests that stronger internal migration in England and Wales rapidly dissipated local marriage- and labor-market imbalances, while more generous pensions for war widows weakened their labor supply response. |
| Keywords: | World War I; Female labor force participation; England and Wales |
| JEL: | J16 J21 N33 N34 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:132063 |
| By: | Emmanuel S. De Dios (School of Economics, University of the Philippines Diliman) |
| Abstract: | We present an historical background and narrative of Spanish policies affecting Philippine trade that maps them onto the changing landscape of influential ideas and emerging political and economic exigencies confronting the colonizing power. An integral or global perspective is adopted that complements a purely colonial or insular viewpoint. This provides a fuller and at times novel understanding of the changes observed in Philippine commercial history during the period, the intended purposes of colonial policies, and the reasons for their failure or success. |
| Keywords: | 16.C-19.C Spanish colonial commercial policy; Manila-Acapulco galleon trade; Mexico City merchant lobby; Atlantic flota system; Spanish mercantilism; Bourbon reforms; Royal Philippine Company; Consulate of Manila; late Spanish liberal trade and investment |
| JEL: | N75 N73 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:phs:dpaper:202507 |
| By: | Michael Callen; Gregory Levy; Saipremnath Muthukumaran; Jonathan L. Weigel; Noam Yuchtman |
| Abstract: | Explaining why some countries grow rich while others remain poor requires knowing how — and when — institutions change. A large body of research argues that institutional change often occurs at critical junctures: moments when multiple institutional futures are possible, including a return to the status quo. Yet most empirical work examines critical junctures only in retrospect, risking the omission of pivotal moments when institutions were in flux but ultimately remained unchanged. We develop a new empirical approach to detect critical junctures as they unfold. Our key insight is to understand critical junctures as moments of uncertainty about institutions, which provides a text classifier with a theoretically motivated object to detect in contemporaneous discourse. In this chapter, we apply this idea to the study of historical critical junctures using newspaper text as a rich source of information regarding contemporary beliefs about institutional uncertainty. We translate this insight into a measurement strategy by training a large language model-based classifier, which we apply to the Times of London archive — 11.95 million articles spanning 1800 to 2019 — while focusing our main empirical analysis on 120 years of reporting from 1900 to 2019. This produces the first long-run, text-based measure of institutional uncertainty grounded in the concept of critical junctures. Compared to established indices of geopolitical and economic risk, our measure innovates on several fronts: (i) it captures high uncertainty even in periods without formal institutional change, consistent with ex-ante definitions of critical junctures; (ii) it provides earlier signals of major global convulsions, such as World War I; (iii) it evaluates candidate critical junctures using a common ex ante measure; and (iv) it opens new avenues for studying how critical junctures shape institutions and long-run development. Today, our Times-based index suggests that institutional uncertainty in the US and UK is as elevated as it was in the early 1940s — a signal missed by other leading measures of risk. |
| JEL: | D70 O10 P00 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35545 |
| By: | Daniel P. Gross; Bhaven N. Sampat; Hansen Zhang |
| Abstract: | Between 1945 and 1970, the U.S. Department of Defense was one of the country's largest funders of university research, and the most important in the physical sciences and engineering. Political pressures subsequently led to this funding declining nearly two-thirds by the mid-1970s and never fully recovering. We show that these cuts were felt across the U.S. research system, with ensuing declines in university scientists, PhD production, and research output. Early career scientists who were DoD-funded in 1970 were more likely than peers to leave universities, with many moving to industry. Though some became more likely to patent, in the aggregate, this appears to have reduced science-linked innovation in related technologies and compressed U.S. leadership in formerly DoD-driven fields. These effects extend to outcomes more closely related to military objectives: fewer PhDs entered the defense industrial base, and an initial increase in science-linked defense patenting in the most exposed technology areas gave way to a long-run decline. |
| JEL: | H56 I23 N42 N72 O31 O32 O33 O38 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35491 |
| By: | Flores Zendejas, Juan; Nodari, Gianandrea |
| Abstract: | This article explores how profit-seeking behavior among central banks shaped their adherence to the gold exchange standard during the interwar period, focusing on the case of Chile. Existing literature has emphasized ideology, credibility, and political considerations to explain monetary orthodoxy. However, it has largely overlooked the role of financial incentives embedded in the structure of the gold exchange regime. Drawing on new archival evidence, particularly the minutes of the Central Bank of Chile’s Board of Directors, we show that the institution actively managed its foreign reserves to maximize returns by placing them in correspondent banks in London and New York. This proactive strategy was encouraged by institutional design and shareholder expectations but created vulnerabilities by reducing reserve liquidity and increasing exposure to currency and counterparty risk. These fragilities became evident during the sterling crisis of 1931, when Chile incurred severe losses and was unable to act as a lender of last resort, leading to its abandonment of the gold standard in 1932. The Chilean case reflects broader practices among European and Latin American central banks, revealing how profitability considerations shaped monetary behavior and contributed to systemic fragility. |
| JEL: | E58 F33 N16 N26 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:gnv:wpaper:unige:195486 |
| By: | Hamid Noghanibehambari; Jason Fletcher |
| Abstract: | This paper examines the long-term effects of early-life exposure to county health departments (CHDs), a public health initiative aimed at providing affordable healthcare access to disadvantaged and underserved areas during the early decades of the 20th century, on later-life longevity. We employ Social Security Administration death records linked with the 1940 census and implement a difference-in-differences estimation strategy to compare the longevity of individuals exposed at different ages to the county-specific year of CHD establishment. We find that exposure to a CHD opening in the county of birth during fetal development and early years of life is associated with a 1-4-month increase in longevity. We observe considerable heterogeneity in the results, such that the effects are more concentrated among non-white individuals and individuals with lower-educated parents. Contemporaneous fertility and infant mortality data suggest reductions in infant mortality rates and increases in birth rates following CHD openings. Additionally, we find significant improvements in educational attainment, socioeconomic status, and income in early adulthood. We argue that enhancements in the fetal environment, improved fetal survival, and better early life health capital resulting from CHD exposure contribute to improvements in human capital during adulthood, with potential implications for later-life longevity. |
| JEL: | I1 I18 J14 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35533 |
| By: | Raphaël Franck (CEPR - Center for Economic Policy Research, University of Stuttgart = Universität Stuttgart); Victor Gay (IAST - Institute for Advanced Study in Toulouse, TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements 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: | This study argues that urbanization changed the relationship between candidates' occupation and their electoral success. To identify the causal effect of local variation in urbanization, we exploit exogenous changes in the boundaries of electoral constituencies in the 1928, 1932, and 1936 French parliamentary elections. We find that urbanization reduced the electoral success of lawyers—who had historically dominated electoral politics—while benefiting employees and workers. This effect was concentrated on the left of the political spectrum, whereby left-wing employees and workers displaced left-wing lawyers. |
| Keywords: | Third Republic, France, Urbanization, Political representation, Election |
| Date: | 2026–08–20 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04364519 |
| By: | Federico, Giovanni; Incerpi, Andrea |
| Abstract: | Italy after its Unification in 1861 adopted a very aggressive policy of state-building funded by foreign capital. The GDP grew but Italy experienced a financial crisis which could have led to an Argentinian-style default. Italy had to let the lira float but succeeded to avoid default by adopting a prudent fiscal policy. Imports of capital dried up and the Italian economy stagnated until the end of the century. This paper analyses the causal relations between fiscal policies, imports of capital and economic performance with an open economy model. The short-term effects of the imports of capital on the real economy were small at best and the long run benefits of the post-Unification policies are questionable. |
| Keywords: | Italy; Economic policy; 19th century |
| JEL: | N13 N43 N73 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19287 |
| By: | Remy Levin; Daniela Vidart |
| Abstract: | We design a method for measuring the risk preferences of agents in the deep past. The method combines a structural model of crop choice as a portfolio allocation with machine-learning prediction of expected crop returns, using historic agronomic and climate data. We estimate county-level risk preferences for the United States and farmer-level preferences in Kansas from 1889 to 1929. More risk averse farmers leveraged less, were less likely to purchase novel WWI Liberty Bonds, and were more likely to participate in local risk-sharing institutions. We show that higher risk aversion predicts slower tractor adoption and farm mechanization during the 1920s. |
| JEL: | D81 G11 N51 N52 O13 Q12 Z10 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35634 |
| By: | Oded Galor; Marc Klemp; Daniel C. Wainstock |
| Abstract: | What gave rise to the mosaic of cultural expressions across the globe? Why are some societies more culturally diverse than others? This study develops a unified theory of cultural evolution, characterizing the forces that have governed this process over the course of human existence. The research advances the hypothesis that population movements and socioeconomic transformations generated a mismatch between inherited cultural traits and prevailing ecological and societal conditions, setting in motion an evolutionary process governed by adaptation-based vertical transmission, horizontal diffusion, and fitness-based evolutionary selection. The theory generates novel testable predictions concerning the origins of the global cultural mosaic and the cross-societal variation in cultural diversity. First, greater ecological distance between ancestral environments generated greater cultural distance across societies. Second, prehistoric differences in ancestral diversity contributed to divergent adaptive capacity and greater cultural distance. Third, societies descended from more diverse prehistoric populations exhibit greater cultural diversity despite convergence induced by adaptation to a common environment and societal norms. Drawing on measures of cultural distance and diversity derived from folkloric and musical traditions among ethnic groups, visual representations of common concepts, and the dispersion of norms, values, and attitudes, the empirical analysis lends credence to the predictions of the theory. |
| JEL: | O10 Z10 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35656 |
| By: | Mohammad Ghaderi; Sébastien Plante; Nikolai Roussanov; Sang Byung Seo |
| Abstract: | Do corporate bond investors earn compensation for bearing credit risk? We construct a new historical corporate bond database spanning 128 years to estimate a corporate bond counterpart to the equity risk premium. Combining hand-collected archival data with modern sources, we assemble a panel of over 100, 000 bonds and 7 million observations. While recent samples suggest corporate bond excess returns largely reflect the term premium, our long sample reveals a sizable and statistically significant credit risk premium. Credit spreads predict future corporate bond returns and macroeconomic aggregates, though their ability to forecast business cycle fluctuations weakens when prewar data are included. |
| JEL: | G1 G12 N21 N22 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35578 |
| By: | Hanming Fang; Chang Liu |
| Abstract: | Total fertility rates in East Asia have fallen to levels without historical precedent, even though the region’s Confucian heritage long placed extraordinary emphasis on family continuity and large families. We argue that this “Confucian Fertility Paradox” dissolves once we separate two strands of the tradition and recognize that modernization affected them very differently. The pro-natal strand, built on lineage continuity, ancestor worship, and reliance on sons for old-age support, was gradually switched off as child mortality fell, incomes rose, women entered the labor force, and state pensions replaced the family as the main source of security in old age. What survived was the second strand: the veneration of education and of status won through examination success, rooted in the imperial examination tradition. Under modern conditions this surviving strand reverses sign with respect to its effect on fertility. Where the historical examination system rewarded having many sons so that one might succeed, the modern single-ranking tournament rewards concentrating resources on one or two intensively educated children, and the quantity–quality tradeoff turns a once pro-natal culture into a powerful engine of low fertility. Drawing on recent empirical evidence from China and Korea, we show how education competition becomes the channel through which traditional values now suppress childbearing. We explain why standard pro-natalist policies, such as removing birth restrictions or offering cash subsidies, accomplish little when the underlying problem is a competitive equilibrium in parental investment, and we argue that policies aimed at the source of the distortion, such as structural reform of educational pathways, hold more promise. |
| JEL: | J1 J10 J13 J18 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35532 |
| By: | Ager, Philipp; Pedersen, Maja; Sharp, Paul; Tsoukli, Xanthi |
| Abstract: | This study provides a comprehensive understanding of the Great Fire’s effects on London’s economic geography. Our analysis reveals both continuity and change. There was a swift postfire recovery accompanied by some shift in economic activity towards the City of Westminster by 1690, with markets spreading outside the City, but financial services largely remaining inside. Analysis of London Hearth Tax records further illustrates a significant change in the wealth distribution, with wealthier households returning to fire-impacted areas, reshaping the city’s housing and social structure. |
| Keywords: | Economic geography; Location of economic activity |
| JEL: | N22 N93 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19316 |
| By: | David Ronicle (Bank of England) |
| Abstract: | This paper presents the first in-depth empirical assessment of the Bank of England’s ‘overfunding’ policy, a neglected historical episode that may offer insights about quantitative tightening. Overfunding – government bond issuance in excess of fiscal financing needs – was used as an active monetary policy tool in the early 1980s to slow money growth. Exploiting high frequency issuance announcements and a novel external instrument derived from money market segmentation, I show that overfunding shocks had countervailing effects on asset prices. Excess gilt issuance raised long-term yields, via a portfolio balance channel, but reduced short-term rates, potentially through signalling effects. These offsetting forces led to limited effects on inflation and monetary aggregates. This offers a valuable insight for policymakers now – that the different channels of quantitative tightening can be exploited to calibrate the aggregate effects of balance sheet unwind. |
| Keywords: | Quantitative tightening;balance sheet policies;bond supply;term premia;signalling;monetary targeting |
| JEL: | E44 E52 E58 G12 N14 |
| Date: | 2026–05–22 |
| URL: | https://d.repec.org/n?u=RePEc:boe:boeewp:023305 |
| By: | Ritikaa Khanna; Rourke O'Brien; Andrew C. Stokes; Atheendar Venkataramani; Elizabeth Wrigley-Field |
| Abstract: | U.S. life expectancy stagnated and declined in the 2010s despite continued growth in real per capita income. We use Preston curves to characterize this pattern as a change in the relationship between income and longevity. Using state-level data from 1980 to 2019 and county-level data from 2000 to 2019, we estimate population-weighted Preston curves relating life expectancy to logged real per capita income. From 1980 to 2010, U.S. states followed the classic Preston curve pattern: rising income was accompanied by rising life expectancy. Counties followed the same pattern from 2000 to 2010. From 2010 to 2019, however, states and counties continued to become richer while life expectancy stagnated or declined. The curves shifted right without shifting up and became steeper, indicating decoupling and divergence: increases in aggregate resources over time no longer produced broad longevity gains, and, in any given year, inequality in life expectancy by income grew. These patterns are robust to alternative temporal anchors around the Great Recession and to substituting education for income. They also appear across sex and racial groups. County-level decompositions are broadly consistent with arguments that longevity has fallen due to widely shared exposures to social deterioration, which may account for the Preston curve reversal. Collectively, we show that the recent U.S. mortality crisis reveals a weakening—and growing inequality—in the conversion of aggregate resources into longevity gains. We conclude that the recent U.S. mortality crisis could be understood not only as a story about particular causes of death, but also as a weakening of institutional and social translation. |
| JEL: | I1 I14 I15 J19 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35470 |
| By: | Jerg Gutmann; Anna Lewczuk-Czerwi\'nska; Jacek Lewkowicz; Stefan Voigt |
| Abstract: | Constitutions as the formal foundation of a country's legal and political system have important economic and political effects. Yet, we still know little about why constitutions set effective constraints on politicians in some societies, while being largely disregarded in others. Here, we ask if national culture matters for constitutional compliance. We study a cross-section of 115 countries, making use of novel indicators of constitutional compliance. We find that societies with a more individualistic population exhibit higher levels of compliance. These results are robust and extend to instrumental variables estimations. They imply a novel transmission channel from cultural traits to long-term economic development: individualistic national culture increases the credibility of constitutional self-commitments. Our analysis also supports the more general idea that the effects of formal institutions depend on the informal institutional environment in which they are embedded. Regarding religion, our results are consistent with past research that attributes the lack of development in the modern Muslim world to deficient institutional quality. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.23369 |
| By: | Ran Abramitzky; Santiago Pérez; Joseph Price |
| Abstract: | We use newly digitized records for 1.2 million students at 60 co-educational U.S. colleges, 1915–1943, linked to enrollment records for their children through 1963, to study how colleges shape marital matching and the intergenerational transmission of educational advantage. About 6% of men and 9% of women marry someone from their own college. This homogamy is largely causal: within colleges, more different-sex classmates and longer campus overlap both raise same-college marriage. Same-college spouses are more educated, and this advantage persists across generations. Children of same-college couples more often attend selective colleges, with spousal education explaining a third of the gap. |
| JEL: | J0 N32 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35602 |
| By: | Daniel Eckert (University of Graz, Austria) |
| Abstract: | In this note we make the claim that Karl Menger's "Logic of Ethics" in his 1934 monograph "Moral, Wille und Weltgestaltung" was not only a souce of methodological inspiration for Oskar Morgenstern's contribution to the development of game theory, but can actually be considered an anticipation of a game theoretic approach to coalition formation known today as hedonic games. |
| Keywords: | ethics, coalition formation, game theory, partitions, cooperative game theory, hedonic games |
| JEL: | B23 C71 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:grz:wpaper:2026-15 |
| By: | Desierto, Desiree; Koyama, Mark |
| Abstract: | How does institutional change take place? This question poses a number of challenges for scholars working in the New Institutional tradition. We discuss both functionalist approaches to institutional change and our preferred framework based on cooperation and conflict. We illustrate the latter approach through some applications taken from recent scholarship in economic history. |
| Keywords: | Institutions; Institutional change; Conflict; Cooperation; Efficiency |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19285 |
| By: | Brice Romuald Gueyap Kounga |
| Abstract: | Trust in local institutions matters for trade, public goods provision, conflict resolution, and democratic consolidation. Using individual data from rounds 6 and 7 of the Afrobarometer surveys, I document that respondents in former British colonies are substantially more likely to trust traditional leaders than respondents in former French colonies. Cross-country comparisons of this kind are confounded by unobserved heterogeneity in pre- and post-colonial histories. To make progress on identification, I focus on Cameroon, which contains regions colonized by Britain and regions colonized by France within a single modern state, and I exploit the former colonial partition line as a geographic discontinuity, comparing respondents who live close to either side of the anglophone-francophone boundary. The theoretical argument is that the two colonial powers differed systematically in how they treated customary authority: British indirect rule preserved the governance functions of chiefs, while French direct rule subordinated chiefs to the administration and assigned them its most coercive tasks, taxation and forced labor above all, and these divergent experiences shaped the legitimacy of chieftaincy in ways that persist through institutional continuity and socialization. Consistent with this argument, respondents on the formerly British side are 22 to 26 percentage points more likely to trust traditional leaders than their neighbors on the formerly French side, and they are far more likely to have contacted a traditional leader in the previous year. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.17436 |
| By: | Sabrina Siniscalchi (Universidad de la República (Uruguay). Facultad de Ciencias Sociales); Henry Willebald (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | We reconstruct long-run private wealth and national income for Uruguay, 1860–1940, by re-estimating Ochoa’s benchmark inventories with harmonized concepts and prices. Using a Piketty–Zucman-style framework, we document levels and turning points of the wealth–income ratio (β), the composition of private wealth (agricultural land, housing, other assets), an accounting decomposition separating the saving-induced terms (s/β) from real capital gains (q), and the evolution of the capital share (α) and implied return r=α/β. Uruguay’s β begins near the lower envelope traced by the United States and Sweden, rises after the 1880s toward the European core, and declines from the 1910s into the 1930s. Throughout, the portfolio remains persistently land-heavy –agricultural land (including livestock) dominates early on and falls only gradually– contrasting with the shift toward housing and other assets in core economies. The decomposition shows that phases of increase of real wealth are associated with positive s/β and q effects, while contractions reflect mainly capital losses. We hypothesize –and the evidence is consistent with the claim– that the exhaustion of the agro-export model was the primary driver of the interwar decline in β (closure of the agrarian frontier, technological limits of natural pastures, adverse external shocks, and stock liquidation), with fiscal and regulatory initiatives (e.g., higher taxation of large landholdings) as plausible auxiliary channels. By providing a transparent, Uruguay-first account within a bounded cross-country context, the paper expands the empirical basis for understanding the long-run dynamics of wealth, returns, and inequality in peripheral, land-intensive economies. |
| Keywords: | Wealth, Savings, Capital gains, Uruguay |
| JEL: | N36 D31 E01 E21 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:ulr:wpaper:dt-11-26 |
| By: | Michael Seewald (Universität Witten/Herdecke) |
| Abstract: | Economic innovation and transformation are future-oriented fields where financial risk-return and economic growth considerations permeate with visions of technological progress and cultural determinants of human behavior. This case study about the evolution of the entrepreneurial persona in the history of economic thought demonstrates how narrative research can contribute to understanding the growth dynamics of economic ecosystems. Rather than being indicators of flaws in otherwise rational economic processes, narrative twists and turns reflect the institutional and cultural preconditions of economic growth and innovation.Since the early days of industrialization, economic thought takes recourse to the institutional persona of the entrepreneur to explain dynamics of innovation and transformative growth. The descriptions of the entrepreneur in the works of Robert Cantillon, Joseph Schumpeter and Frank Knight show how the parameters of innovation, cristallized in the features of entrepreneurial activity, change along the trajectories of, and reflect, industrial and economic development. What these descriptions have in common are the fundamental features of innovative activity in otherwise steady economic ecosystems: the ability to embrace the uncertainty of a future venture through an informed view about future market demand; the stamina to impose change to incumbent structures and processes; and the acumen to mobilize ample financial funding to realize an innovative venture.The current debate around artificial intelligence and its potential to generate unprecedented future growth goes along with a messianic turn in the discourse about entrepreneurial activity. In the current debate about AI-led innovation, the entrepreneurial narrative, unchanged at its core, takes on a quasi-spiritual dimension. Entrepreneurs appear as saviour-like personae, able to break through a state of general stagnation and decline in order to enable not less than a new, technology-fuelled chapter for humanity. While the jury is out whether this scenario will unfold, the messianic turn of the entrepreneurial discourse shows that the instruments of mainstream economics do not seem to be suited to assess the growth dynamics of AI-led innovation. To assess this messianic turn of the entrepreneur and its bearings for future economic growth trajectories, a narrative turn in economic research appears warranted. |
| Date: | 2026–08–21 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05238679 |
| By: | Leonardo N. Ferreira; Haroon Mumtaz; Gabor Pinter |
| Abstract: | We study macroeconomic fluctuations in the United Kingdom over seven centuries (1271–2022) using a time-varying structural VAR with stochastic volatility. Business-cycle shocks are identified as the innovations maximising short-run output variance. Before 1900, these shocks display a stagflationary, supply-driven pattern consistent with wars, famines, and climate disruptions; post-1900 shocks become demand-driven, raising both output and inflation. Monetisation had large real effects in the sixteenth and seventeenth centuries, becoming increasingly inflationary thereafter. Output and inflation volatilities decline markedly over the full sample, suggesting a centuries-long Great Moderation. Overall, our results highlight how business cycle dynamics evolve with institutional, monetary, and structural transformations. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:bcb:wpaper:651 |
| By: | Tom Coupé (University of Canterbury) |
| Abstract: | Fears that automation destroys more jobs than it creates have resurfaced with artificial intelligence. Using five Eurobarometer waves (1989–2024) covering 12 European countries, I examine the long-run evolution of perceptions of technological unemployment. Contemporary pessimism is not historically unusual, it was substantially higher in 1989, and especially 1992, than in 2024. Social divides have also changed. Pronounced educational and occupational differences in 1989 had largely disappeared by 2024. An Oaxaca–Blinder decomposition shows that changing population composition explains little of the decline. These findings show that both the level and the socioeconomic and national patterning of concerns about technological unemployment have changed substantially over time. |
| Keywords: | Artificial Intelligence, Attitudes, Employment |
| JEL: | J24 O33 J23 |
| Date: | 2026–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:cbt:econwp:26/07 |
| By: | Len Ishmael |
| Abstract: | The US-Israeli war on Iran, a 'little excursion' envisaged to be over within a matter of weeks, has entered its fourth month. Shock waves ripple across the globe. This war is just one in a series of recent crises which have fractured the international community, making the decades of the 2020's among the most disruptive in recent history. Each crisis compounds the deleterious effects of those which came before. The war in Iran is no exception. It abruptly stalled economic momentum for countries of the Global South struggling to regain conditions of stability within which prospects for growth might improve. Crippled by skyrocketing energy costs, supply chain disruptions, and debt crises, these countries face a harsh reality: for most, recovery is stunted, as inflation, recession and insolvency continue to spiral. Shifts in the balance of world power add to the sense of crisis. On multiple fronts, the world, as we know it, is changing. And while there is no clarity regarding the final contours of what comes next, it does seem certain that the status quo is no more; much trust has been lost; there will be no going back. The Liberal World Order, its rules, norms and principles founded on the idea of open markets, free trade and multilateral cooperation, engineered primarily by the United States and Western allies in the wake of World War II, is disintegrating. It is contested and undermined, not only by external actors, but also by its architects. The rules-based framework which provided the veneer of legality and blunted the force of unregulated raw power, is being dismantled. In the process, the vision of Post War idealism constructed around concepts of the common good and shared prosperity, is being replaced by more narrowly defined objectives anchored in national interests. The Western Alliance – once the pillar of the Post World War Order – lies among the casualties. In many Western countries, polls show that the level of citizens trust in their governments and institutions is at an all-time low. For many, the capitalist model has failed to safeguard their interests. The rise of populism underscores the steady drifting of societies away from the values of liberalism, towards narrow definitions of national identity and belonging. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbcoen:pb45_26 |
| By: | Tetsuji Okazaki (Meiji Gakuin University); Toshihiro Okubo (Keio University); Eric Strobl (University of Bern) |
| Abstract: | In this paper we investigate how the disruption of local agglomeration economies affects firm adjustment following a catastrophic urban disaster. To this end we digitalized a unique survey of firms in Tokyo City completed shortly after the earthquake and before any government reconstruction intervention. Using detailed information on the damage experienced by firms and the main good that they produced, as well as where they were located, we construct measures of losses of local agglomeration economies by identifying firms that either permanently ceased operation or relocated elsewhere. To identify causal impacts we exploit plausibly exogenous variation in fire destruction generated by the interaction between fire outbreak locations and local wind direction and speed immediately after the earthquake. Our econometrics results show that a loss of agglomeration economies as a result of the earthquake had a substantial impact on firms shutting down or relocating, with average effects of 13 and 11 per cent for these outcomes, respectively. |
| Keywords: | Agglomeration economies; Natural disasters; Firm relocation; Firm exit; Urban resilience; Great Kanto Earthquake |
| JEL: | R12 R11 N95 L25 Q54 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0309 |
| By: | Dennen, Alfie |
| Abstract: | Who is responsible for a stopped public clock? This paper reports a national attempt to answer that question empirically, and argues that the pattern of non-answers is itself the finding. Two datasets were assembled. The first is a documented set of 402 stopped public clocks in Britain, collected by field observation and public contribution since 2007 and classified by current custodian; it is a floor, not a census. The second is a census of what English principal councils themselves know: Freedom of Information requests to all 314 principal local authorities, yielding 310 responses of which 187 were substantive, disclosing 566 council-managed clocks of which 70 (12.4%) were stopped. Of the documented set, only 26.4% stand on council-owned buildings, the one category where the Freedom of Information Act compels an answer about maintenance; roughly 74% stand on private, commercial, ecclesiastical or trust-owned buildings, beyond the reach of any public enquiry mechanism. I call this the accountability gap, and I present it strictly as a claim about reach, not cause: for three-quarters of documented failures, a citizen cannot even discover whose job the maintenance was. Direct approaches to some sixty private owners, met overwhelmingly with silence, corroborate the gap from the other side. The stopped public clock is proposed as a countable, photographable proxy for the dissolution of collective maintenance arrangements in the public realm, and the method as a replicable template for measuring accountability reach over any distributed class of shared assets. |
| Date: | 2026–08–13 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:ufke2_v1 |
| By: | Zachary Bleemer; Jesse Rothstein |
| Abstract: | American colleges and universities are highly stratified by pre-college academic achievement, family background, and institutional resources. We study the meritocratic consensus in American higher education: colleges that high-testing students (who are generally also from high-income families) attend spend dramatically more on instruction than do those that enroll lower-testing students. Stratification by test scores has been largely stable since the 1960s, but the stratification of instructional resources has risen sharply since 1970 at both private and public institutions. Non-academic admissions criteria like athletics, legacy, and affirmative action are second-order in determining the allocation of students to universities. Potential economic justifications for the positive association of instructional expenditures with student prior achievement—q-complementarity between achievement and resources, convex social returns to high human capital, and incentives to invest in learning prior to college—have little empirical support. Resource stratification across universities has not increased in the past decade, largely due to increased public funding of universities that enroll lower-testing students through financial aid programs like California's CalGrant, but stratification within institutions is now rising swiftly. |
| JEL: | I23 I24 N32 Z13 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35650 |
| By: | Marcus Vinicius de Freitas |
| Abstract: | This policy paper explores how China’s economic development model—rooted in pragmatism, long-term planning, and civilizational renewal—has become its most compelling soft power asset, particularly in the eyes of the Global South. While critically engaging with Joseph Nye’s original conception of soft power as a primarily cultural and normative force, the paper argues that China’s ability to transform itself from an impoverished postimperial state into the world’s largest trading nation constitutes a far more persuasive and concrete form of attraction. Drawing on the historical context of China’s “Century of Humiliation”, the paper emphasizes the distinctiveness of the Chinese response—not one of nostalgic paralysis, but of strategic rejuvenation. Rejuvenation, as opposed to mere modernization, is presented as a deeply internal, spiritual, and civilizational force that animates the Chinese development project and distinguishes it from other postcolonial experiences. Additionally, the paper identifies key lessons from the Chinese model, including the strategic role of the state, the necessity of long-term and quantifiable development goals (such as GDP per capita targets), the centrality of public education and national security, the importance of meritocratic leadership, and the cultivation of national industries aligned with strategic vocation. These insights are positioned as highly relevant for countries in Latin America and Africa seeking to move beyond dependency and reclaim their development trajectories on sovereign and dignified terms. Ultimately, the paper calls for a new grammar of global development—one that places excellence, integrity, rejuvenation, and purpose at its core, and where multipolarity is not just a geopolitical condition but a civilizational imperative. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:pp20_26_1 |
| By: | de Moraes, Isaias Albertin (Federal University of ABC) |
| Abstract: | This article examines Alberto Guerreiro Ramos’s contributions to understanding the dilemmas and prospects of Brazilian economic development, em-phasizing the originality and relevance of his thought. The methodological approach is based on a bibliographic review, aiming to identifying the State of the Art on the subject. The analysis is structured around four axes: i) biographical context, ii) theoretical-methodological foundations, iii) critiques of structural obstacles, and iv) proposals for a national-developmental project in Brazil. The study concludes that Guerreiro Ramos’s work rep-resents a landmark in Critical Sociology and Sociology of Development, in Brazil and should be further explored in contemporary economic studies. |
| Date: | 2026–08–06 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:kc2rq_v1 |
| By: | Juan Manuel Rodriguez Repeti (IIEP-UBA); Danilo Trupkin (UDESA) |
| Abstract: | This paper documents how inventory dynamics vary across levels of development and how they respond to real and financial shocks. Using a balanced panel of 72 small open economies over 1993–2022, spanning advanced to low-income economies, we show that inventories are strongly procyclical in advanced economies but become acyclical at lower income levels, while volatility and persistence rise as development declines. Using local projections, we estimate inventory responses to a long-run productivity shock and to a financial shock identified from the spread between U.S. corporate bond yields and Treasury yields. Productivity shocks generate temporary inventory accumulation across all groups, with smoother adjustment in advanced economies and more irregular cycles in emerging and developing economies. Financial shocks trigger decumulation followed by a rebound in higher-income groups, but a delayed, unreversed decline in low-income economies. |
| Keywords: | Inventories; Business Cycles; Productivity Shocks; Financial Shocks; Local Projections; Emerging Economies |
| JEL: | E22 E32 E44 F41 C33 O11 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:aoz:wpaper:405 |
| By: | Yvonne Krabbe-Alkemade; France Portrait; Maarten Lindeboom; Marjolein Broese van Groenou; Hendrika J Luijen; Dorly Deegdijk |
| Abstract: | This study examines the causal effect of labor market restrictions faced by women in early adulthood on later-life cognitive functioning. To identify this effect, we exploit an exogenous policy change in the Netherlands that removed restrictions on married women's access to paid employment in 1957. Our study draws on data from the Longitudinal Aging Study Amsterdam, an ongoing cohort study of older individuals. We focus on individuals aged 75 and older born between 1928 and 1947. We first examine how work restrictions in early adulthood shape lifetime employment. Next, we assess how these work restrictions affect women’s later-life cognitive outcomes exploiting an exogenous change in labor restriction laws and complement this with an instrumental variables approach. The estimation results indicate that restricted access to paid employment for women in early adulthood reduced labor force participation and occupational prestige over the life course. These reduced labor market opportunities, in turn, led to poorer cognitive functioning after age 75. We also find some suggestive evidence that these restrictions resulted in faster cognitive decline. Taken together, our findings indicate that restrictions on women’s access to paid employment adversely affect cognitive functioning, thereby contributing to cognitive disparities between men and women in later life. More broadly, they highlight the long-term cognitive benefits of sustained labor market engagement and cognitively stimulating work, with potential implications for dementia prevention. |
| Keywords: | Cognitive functioning at older age, dementia, access to paid employment, gender disparities |
| JEL: | J16 J19 J24 |
| Date: | 2026–09–03 |
| URL: | https://d.repec.org/n?u=RePEc:mhe:chemon:paper_1788391888415_642 |
| By: | Poshatskii, Viacheslav |
| Abstract: | The World Bank publishes over 1, 000 time series in its World Development Indicators (WDI) catalogue, yet individual series are periodically retired. Using WDI's own archival metadata, we document that 1, 338 currently unlisted series codes are absent from the public API and bulk-download catalogue, and that none of 40 retired series queried returned data through the World Bank's official API. We treat this as a silent-archival phenomenon: series disappear from the catalogue without public notice, release of a cessation report, or an archival dataset. We characterize the scale of the phenomenon, the metadata signals that identify retired series, and the resulting implications for reproducibility of economic research that relies on WDI time series. |
| Date: | 2026–08–13 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:4uwm3_v1 |
| By: | Grigoriadis, Theocharis |
| Abstract: | Why does industrialization in some cases generate social consolidation and in other cases political conflict? This paper argues that the answer depends on how industrial finance is allocated. I develop a dynamic political-economy model in which the government channels external liquidity into industry under either centralized or decentralized finance. Under decentralization, adverse shocks harden budget constraints and permit replacement of inefficient incumbents by new entrepreneurs. Under centralization, by contrast, the government is more likely to refinance inefficient incumbents, soften budget constraints, and block entry. Industrialization then generates concentrated rents and a higher risk of conflict. I interpret late imperial Russia as a historically revealing case of this mechanism. Rather than treating Russia as the sole object of interest, the paper uses it to motivate a general theory of industrialization under monopoly. |
| Keywords: | industrialization, soft budget constraints, centralized finance, incumbent protection, political conflict |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:fubsbe:342461 |
| By: | Brüggemann, Kai |
| Abstract: | This article argues that Keynes's inquiry into probability constitutes a theory of rational choice under uncertainty that is distinct from the subjective probability approach. Ramsey's theoretical treatment, in contrast to Keynes's, anticipates the mathematization of economic theory by introducing the possibility of numerically precise expressions of expectations under uncertainty. His essay reveals how this approach relies on idealized formalizations, most notably illustrated through the analogy between decision-making and betting. In doing so, Ramsey's account aims to provide a descriptive analysis of human behaviour under uncertainty. Both analyses indicate the limits to the mathematical inquiry of decisions under uncertainty by exposing the limits of induction. While this issue remains largely absent from Ramsey's analysis, it is constitutive of Keynes's account. Thus, although both approaches seek to develop concepts of rational choice under conditions of incomplete knowledge, the normative issues arising from the epistemic conception of uncertainty central to Keynes's analysis remain excluded from Ramsey's inquiry. Contrasting the two accounts reveals how distinct analyses of the economy can be traced back to different epistemic standpoints on uncertainty in decision-making. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cessdp:343056 |
| By: | Tihana Škrinjarić (Bank of England) |
| Abstract: | This paper develops a house price-at-risk framework for the UK. The model allows me to track and decompose different parts of the distribution of house price growth. The analysis covers both the national level, and nine English regions, along with Wales, Scotland, and Northern Ireland. I employ a comprehensive set of variables and indicators that could help to explain house price dynamics. My main findings are that since the 1970s, the most important predictors for the tail of the distribution have been transaction growth, changes in mortgage rate, credit to GDP gap, and financial stress. I utilise several forecasting horizons and demonstrate that this framework can be applied to forecast downside risks to house price growth and the probability of negative growth up to two years ahead. At the regional level, the analysis reveals considerable variation in the estimated coefficients for mortgage interest rates, with supply-inelastic regions showing higher values than other areas. Finally, I find that an increase in the housing supply in most regions is associated with subsequent easing of price pressures in regional markets. |
| Keywords: | House price dynamics;financial stability;quantile regression;sub-national house price growth |
| JEL: | C22 E32 E44 E58 G01 G28 |
| Date: | 2026–06–26 |
| URL: | https://d.repec.org/n?u=RePEc:boe:boeewp:023315 |
| By: | Gustavo De Souza; Andrew J. Fieldhouse; Karel Mertens; Ishan B. Nath; Valerie A. Ramey |
| Abstract: | This paper provides the first causal estimates of the global social returns to U.S. public R&D. We use a narrative identification strategy to quantify the effects of exogenous shocks to U.S. R&D appropriations on the dynamic TFP response of 69 foreign economies from 1980–2019. A U.S. R&D appropriations shock equal to 1 percent of the federal R&D capital stock raises foreign TFP by approximately 1 percent after 12 years. This response is driven primarily by nondefense rather than defense R&D and is concentrated in non-OECD economies. These patterns are most consistent with diffusion occurring through openly accessible scientific content, capital-embodied trade, and technological leapfrogging by economies further from the global frontier. A back-of-the-envelope calculation suggests that the global social returns to U.S. public nondefense R&D are roughly twice as large as the domestic returns, meaning the U.S. captures about half of these productivity benefits. |
| JEL: | E62 F62 O33 O38 O47 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35517 |
| By: | Bolouri, Armin A.; Lohse, Tim; Qari, Salmai |
| Abstract: | Using cross-country data for 167 countries with broad post-World War II coverage and historical extensions to earlier periods, we quantify how deficits, taxes, and civilian spending respond to increases and decreases in military spending. On average, deficit financing dominates: a 1 percent-age point (pp) increase in military spending (as share of GDP) is associated with 62% deficit financing, 20% higher taxation, and 18% reductions in civilian spending. The composition shifts with intensity, as larger armaments are accompanied by deeper civilian cuts. Fiscal space systematically moderates these patterns: low-debt countries rely primarily on borrowing-funding a 1 pp increase by 75% deficits, 11% taxation, and 14% cuts-whereas high-debt countries adjust more through taxation (33%) and civilian spending cuts (26%). Armaments and disarmaments are asymmetric. Disarmaments only partially reverse prior fiscal expansions, sustaining elevated civilian spending as a peace dividend: a 10 pp decline in the military share raises the civilian share by 5 pp, whereas a symmetric increase reduces it by less than 2 pp. By quantifying these adjustment patterns jointly across fiscal instruments, countries, and episodes of armament and disarmament, we provide an integrated global perspective that connects insights from the literatures on war finance, fiscal space, and ratchet effects. We conclude by discussing implications for the current wave of rearmament. |
| Keywords: | Military Spending, Budget Composition, Fiscal Space, Guns versus Butter, Peace Dividend |
| JEL: | H56 H63 H11 D72 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:fubsbe:342440 |
| By: | Buchner, Martin; Rose, Julian; Johannesson, Magnus; Malan, Mandy; Ankel-Peters, Jörg |
| Abstract: | The publication of contradictory replications often sparks persistent disputes between replicators and original authors. We investigate whether experts converge toward consensus in the prominent debate between Acemoglu, Johnson, and Robinson (AJR, 2001) and Albouy (2012). We recruited 352 experts, including many senior and highly cited economists, primarily from the pool of scholars citing one of the debate articles. We find no consensus on whether the AJR results hold after Albouy's replication, indicating no prevailing interpretation of the debate more than a decade later. Our study demonstrates a potential approach to assessing scientific consensus formation in replication debates and contested literatures. |
| Keywords: | replication, scientific consensus, scientific credibility, expert survey, institutions and growth |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifsowp:342507 |
| By: | Peter A. Diamond |
| Abstract: | Public pension systems are long-term social contracts operating under persistent economic, demographic, and political uncertainty. Periods of turbulence, marked by financial shocks, changes in longevity, and shifting labour markets, test the capacity of pension institutions to adapt while maintaining adequacy, equity, and legitimacy. Building on earlier joint work on pension economics and reform with Nicholas Barr, this chapter analyses the role of automatic and semi-automatic adjustment mechanisms in public pension design. Drawing on comparative experience from Sweden, Canada, and the United States, we examine mechanisms for maintaining financial balance, the incorporation of life expectancy into retirement age and benefit design, and the accumulation and drawdown phases of defined contribution pensions. We argue that well-designed automatic mechanisms can discipline political decision-making and improve resilience, but only if they are proportionate, transparent, and attentive to distributional and intergenerational consequences. In turbulent times, good pension design does not eliminate the need for political choice; rather, it structures that choice so that adjustment can occur without repeated crises. |
| Keywords: | national pensions, automatic indexing |
| JEL: | H55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12951 |
| By: | Michael D. Bordo; Cécile Bastidon |
| Abstract: | We propose stress tests based on an original International Monetary System (IMS) model with regime switchings. The model is calibrated for nine reference currencies from the beginning of the Classical Gold Standard to the present. Regime switchings in currency dominance are related to combinations of conditions on a multidimensional environment variable that includes five classes of shocks: technology; development; monetary, financial and fiscal institutions; democracy and conflicts; and the regulatory environment. We provide an original database of events for these five classes of shocks, which is used for calibration. The calibration highlights the important role of the democracy and conflicts component in regime switchings. The calibrated model is then used to perform stress tests on the current prospects of currency dominance for a broad set of scenarios. A salient result from the scenarios we tested is that the dominance of the US dollar is at most marginally affected. No other currency emerges as a major player, suggesting strong inertia in the system’s current centripetal dynamics. |
| JEL: | C3 C82 E42 F33 G15 N2 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35647 |