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on Business, Economic and Financial History |
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Issue of 2008‒06‒07
eleven papers chosen by |
| By: | Guilllaume Daudin, Matthias Morys and Kevin H. O'Rourke |
| Abstract: | This paper surveys the causes and consequences of late 19th century globalization, as well as the anti-globalization backlash of that period. |
| Date: | 2008–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp250&r=his |
| By: | Kevin H. O'Rourke, Leandro Prados de la Escosura and Guilllaume Daudin |
| Abstract: | This paper surveys the rise and fall of the European mercantilist system, and the transition to the modern, well-integrated international economy of the 19th century. It also surveys the literature on the links between trade and economic growth during the period, and on the economic effects of empire. |
| Date: | 2008–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp249&r=his |
| By: | John H. Munro |
| Abstract: | This is a substantially revised version of an earlier Working Paper (posted in 2002, with a different title), based on much new data and other information. It re-examines Earl Hamilton’s famous 1929 thesis on ‘Profit Inflation’ and the ‘birth of modern industrial capitalism’: namely, that the inflationary forces of the Price Revolution era produced a widening gap between prices and wages, thus providing industrial entrepreneurs with windfall profits, which they reinvested in larger-scale, more capital intensive forms of industry. Hamilton’s analyses of price and wage data for 16th- and 17th-century Spain, France, and England led him to conclude that: Spain had enjoyed virtually no ‘profit inflation’, since wages had generally kept pace with prices; and that early-modern England had experienced the greatest degree of such ‘profit inflation’. Such a contrast in their national economic experiences helps to explain, in Hamilton’s view, why Spain subsequently ‘declined’, while England became the homeland of the modern Industrial Revolution. A major reason for the significance and fame of the Hamilton thesis was its enthusiastic endorsement by John Maynard Keynes, in his Treatise of Money, published the following year, in 1930. Subsequently, the Hamilton ‘profit inflation’ thesis was subjected to severe attacks: by John Nef (1936-37) and David Felix (1956). But they had to rely on the same dubious and indeed often untrustworthy price and wage data for England and France (and of course on Hamilton’s data for Spain, which was of much higher quality). Both rightly noted that the proper comparison had to be made between industrial wages and industrial prices, not the price level in general. Since industrial prices generally rose less than did the overall price level (heavily weighted with foodstuffs), they found much less evidence for ‘profit inflation’ than had Hamilton. Nef developed a counter thesis to argue that sharply rising raw material costs, especially for wood and charcoal, forced industrialists to devise new furnace technologies to burn coal instead of wood or charcoal: changes that not inly reduced such costs but resulted in much larger-scale, more capital-intensive forms of industry. In this revised paper, I offer new data to demonstrate that neither the ‘energy’ nor the new furnace technologies took place until after the 1640s. This study is based on newer sets of price and wage indices that appeared after their publications: those by Phelps Brown and Hopkins for England (which I have modified, after using their data sheets in the LSE Archives), and for this version, additional price date for England. For the southern Netherlands, I have utilized Herman Van der Wee Consumer Price Index. My analyses of both industrial prices and industrial wages suggest that, for England, there is more evidence for potential ‘profit inflation’, in some industries, than Nef or Felix had been willing to concede. But the major discovery was that the Antwerp region continuously experienced, over the 16th and 17th centuries, the contrary phenomenon: what Keynes had called ‘Profit Deflation’ (for him, a truly negative force), in that industrial wages rose faster than industrial prices. And yet indisputably the southern Netherlands had a much more industrialized and more rapidly growing economy than did England, at least until the Revolt of the Netherlands (1568-1609). The concept of ‘profit inflation’ is not, therefore, a useful analytical tool, if based only on labour costs. This study concludes with a brief examination of the effects on inflation on two other factor costs: land, in terms of real rents, and capital, in terms of real interest rates, which did fall with inflation. In all likelihood both such costs did lag behind industrial prices in early-modern England and the Low Countries (and contrary to Eric Kerridge’s 1953 assertions on English rents), though real interest rates lagged more than did real rents. While disputing the Nef thesis, I do analyse the forms and nature of other new, larger-scale industries in this era (mining, metallurgy shipbuilding). I also provide a new appendix on the role of coinage debasements, as an another important monetary factor in determining regional differences in inflation rates; and this contradicts the almost universal assumption that debasements were irrelevant. |
| Keywords: | gold and silver, money, coinage, Price Revolution, Profit Inflation, prices, nominal and real wages, masons |
| JEL: | B2 E2 E3 J3 N N3 O O5 |
| Date: | 2008–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-320&r=his |
| By: | Nikolaus Wolf |
| Abstract: | This paper asks whether Germany was ever an economically integrated area. I explore thegeography of trade costs in a new data set of about 40,000 observations on regional tradeflows within and across the borders of Germany over the period 1885 - 1933. There are threekey results. First, the German Empire before 1914 was a poorly integrated economy, bothrelative to integration across the borders of the German state and internally. Second, thisinternal fragmentation had its origins in administrative borders within Germany, in ageographical barrier that divided Germany roughly along natural trade routes into east andwest, and in a considerable cultural heterogeneity within Germany prior to 1919. Third,internal integration improved along with external disintegration in the wake of the war, partlydue to border changes along the lines of ethno-linguistic heterogeneity and again with theGreat Depression. By the end of the Weimar Republic in 1933, Germany was reasonably wellintegrated. |
| Keywords: | Aggregation Bias, Border Effects, Economic Integration, Germany |
| JEL: | F15 N13 N14 N90 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0870&r=his |
| By: | Pierre-Cyrille Hautcoeur |
| Abstract: | Certaines statistiques sont développées dans un mouvement cohérent qui inclut à la fois objectifs de gestion administrative, projet politique et projet intellectuel. Ce fut le cas en particulier de la statistique de la justice criminelle qui se développa en France dès les années 1820 et évolua avec la criminologie et la politique pénitentiaire tout au long du XIXème siècle. Nous étudions la statistique officielle de la justice civile et commerciale, en particulier sa partie consacrée aux faillites, et montrons que bien que de bonne qualité techniquement, cette statistique déclina parce qu'aucun usage réel n'en fut fait : son usage à des fins de gestion administrative fut rapidement remis en cause, probablement non sans lien avec l'absence de véritable usage politique (c'est-à-dire législatif), lui-même affaibli par l'absence de théories économiques ou sociologiques capables d'utiliser efficacement ces statistiques pour expliquer des phénomènes économiques ou sociaux significatifs.###[english_abstract: Some statistics are developed within a consistent intellectual, political and administrative project, as was the case of criminal statistics which appeared and developed with criminology during the XIXth century, particularly in France and Belgium. We examine the official statistics of civil and commercial justice, and particularly those of bankruptcy, which were created by the same administration as the criminal statistics in the same period (in the 1830s). We show that the statistics were well done, but that they were unable to attract users in spite of an early use by the justice administration as a management device. Neither members of Parliament nor social scientists used them, probably because they weren't developed in order to answer adequate questions that would have been embedded in a clear and developing scientific framework. This led to a decline of these statistics, in spite of the fact the data they contained provide interesting insights on XIXth century's society and economy.]### |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2008-30&r=his |
| By: | Shih-tse Lo; Dhanoos Sutthiphisal |
| Abstract: | Scholars have long noted the significant impact of general purpose technologies (GPTs) on the economy. However, limited attention has been paid to exploring how they are employed to generate inventions in downstream sectors (crossover inventions), and what factors may facilitate such diffusion. We study these issues by examining the introduction of one of the widely regarded GPTs -- electrical technology -- in the late 19th century U.S. We find that knowledge spillovers between industries (inter-industry spillovers and learning-by-using) had little influence on the geography of crossover inventions as well as the speed and productivity of inventors at making them. Instead, appropriate human capital and an environment promoting inventions in general played a more important role. |
| JEL: | N0 O3 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14043&r=his |
| By: | Bensassi, Sami |
| Abstract: | This paper concerns the recent development of large international firms in the logistics and transport industry. Our work is based on an historic comparison of the American and French market for logistics and transport activities along the twentieth century. We retrace three important period, the first period from the end of the first world war to the seventies is marked by the growing competition between rail transport and road haulage, and by the equally growing regulation in the various freight transport activities. The second period form the end of the seventies to the middle of the nineties is a turning point period for the transport sector: international trade become more liberalized, deregulation of the transport sector occurs, new technologies are diffusing, and many shippers are adopting just in time form of organization. We show that as a consequence of these transformations, in a third period running from the middle of nineties through these days, many transportations firms react by adopting a new form of organization more internationalized and more integrated. |
| Keywords: | History of firms Logistics Freight transport Business models |
| JEL: | F23 L92 L22 |
| Date: | 2008–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8945&r=his |
| By: | Trevon D. Logan |
| Abstract: | This is the first paper to document the effect of health on the migration propensities of African Americans in the American past. Using both IPUMS and the Colored Troops Sample of the Civil War Union Army Data, I estimate the effects of literacy and health on the migration propensities of African Americans from 1870 to 1910. I find that literacy and health shocks were strong predictors of migration and the stock of health was not. There were differential selection propensities based on slave status - former slaves were less likely to migrate given a specific health shock than free blacks. Counterfactuals suggest that as much as 35% of the difference in the mobility patterns of former slaves and free blacks is explained by differences in their human capital, and more than 20% of that difference is due to health alone. Overall, the selection effect of literacy on migration is reduced by one-tenth to one-third once health is controlled for. The low levels of human capital accumulation and rates of mobility for African Americans after the Civil War are partly explained by the poor health status of slaves and their immediate descendants. |
| JEL: | I1 I2 J1 J2 N3 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14037&r=his |
| By: | Sebastian Edwards |
| Abstract: | In this paper I analyze the role of openness and globalization in Latin America's economic development. The paper is divided into two distinct part: I first (Sections II through IV) provide an analysis of 60 years of the region's economic history, that go form the launching of the Alliance for Progress by the Kennedy Administration in 1961, to the formulation and implementation of the market-oriented reforms of the Washington Consensus in the 1990s and 2000s. I conclude that Latin America's history has been characterized by low growth, high inflation and recurrent external crises. In Section V I deal formally with the costs of crises, and I estimate a number of variance component models of the dynamics of growth. I find that external crises have been more costly in Latin America than in the rest of the world. I also find that the cost of external crises has been inversely related to the degree of openness. |
| JEL: | F21 F30 F32 N26 O40 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14034&r=his |
| By: | Mangatchev, Ivan |
| Abstract: | The aim in this article is to compare the effect of the financial collateral arrangements under Directive 2002/47 EC. The starting point is the definitions of these contracts provided by the FCD. The financial collateral arrangements have his historical roots in Roman law. Their effect introduces new legal framework in EU secured transaction legislation. For appropriate understanding of their legal nature a comparative examination between two secured transactions is needed. The conclusions of the article summarize the ideas which may useful in future amendments of the Directive 2002/47 EC. |
| Keywords: | financial collateral arrangements; secured transactions; netting |
| JEL: | K0 K12 N2 K11 N40 K22 G15 F36 G21 |
| Date: | 2008–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8902&r=his |
| By: | D Blanchflower; Alex Bryson |
| Abstract: | This paper investigates the demise of unionisation in British private sectorworkplaces over the last quarter century. We show that dramatic union decline hasoccurred across all types of workplace. Although the union wage premium persistsit is quite small in 2004. Negative union effects on employment growth andfinancial performance are largely confined to the 1980s. Managerial perceptions ofthe climate of relations between managers and workers has deteriorated since theearly 1980s across the whole private sector, whether the workplace is unionised ornot. |
| Keywords: | trade unions, employment growth, financial performance, industrialrelations |
| JEL: | J51 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0864&r=his |