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on Business, Economic and Financial History |
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Issue of 2011‒03‒12
thirteen papers chosen by |
| By: | Yochanan Shachmurove (Department of Economics, University of Pennsylvania and The City College of The City University of New York) |
| Abstract: | The economic history of the United States is riddled with financial crises and banking panics. During the nineteenth-century, eight major such episodes occurred. In the period following World War II, some believed that these crises would no longer happen, and that the U.S. had reached a time of everlasting financial stability and sustainable growth. The Savings and Loans Crisis of the 1980s, the 2001 dot-com bust and the 2007 housing bubble that led to the current global financial crises demonstrate that these phenomena are still reoccurring. Regulators and policy makers should keep aware of the recurrence of such crises. |
| Keywords: | Financial Crises; Financial Regulations and Reforms; Banking Panics; Banking Runs; Nineteenth and Twentieth Century Crises; Bankruptcies; Federal Reserve Bank; Subprime Mortgage; Troubled Asset Relief Program (TARP); Collateralized Debt Obligations (CDO); Mortgage Backed Securities (MBO); Glass-Steagall Act; J.P. Morgan Chase; Bear Stearns; Augustus Heinze; Timothy Geithner; Paul Volcker. |
| JEL: | E0 E3 E44 E5 E6 N0 N1 N2 G0 G18 G38 |
| Date: | 2011–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:11-006&r=his |
| By: | Jones, Eric |
| Abstract: | National averages conceal powerful interactions underlying English economic development in the seventeenth and eighteenth centuries. The simplest operational divisions are north, south and London. Initially industry and business culture predominated in the south but this culture was seduced by the gentry lifestyle and entrepreneurship redirected towards producing food and transporting it to London. The twin attractions of landed society and the London food market caused manufacturing to atrophy: the south deindustrialised. In the north a business culture expanded, capital having come into the hands of small farmers in Lancashire and Cheshire during the sixteenth-century rise in food prices. Entrepreneurship and skills were also fostered by religious independence, accompanied by only limited conspicuous consumption. Four main industries developed: metal working (especially clock- and watchmaking), cheese making, salt production and cotton manufacturing. But the mechanisation of cotton lagged because it was unacceptable to throw large numbers of hand spinners out of work. The technical challenge was minor compared with clock- and watchmaking, from which skills were borrowed by cotton manufacturers once demand began to expand fast. |
| Keywords: | industrialisation; de-industrialisation; regional change; business culture; agriculture; landed estates; clock- and watchmaking; cotton mechanisation. |
| JEL: | N13 |
| Date: | 2011–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29247&r=his |
| By: | Haupert, Michael; Murray, James |
| Abstract: | Over the course of the 20th century American wages increased by a factor of about 100, while the wages of professional baseball players increased by a factor of 450, but that increase was neither smooth nor consistent. We use a unique and expansive dataset of salaries and performance variables of Major League Baseball pitchers that spans over 400 players and 60 years during the reserve clause era to identify factors that determine salaries and examine how the importance of various factors have changed over time. We employ a Markov regime-switching regression model borrowed from the macroeconomics literature which allows regression coefficients to switch exogenously between two or more values as time progresses. This method lets us identify changes in wage determination that may have occurred because of a change in the league's competitiveness, a change in the relative bargaining power between players and teams, or other factors that may be unknown or unobservable. We find that even though Major League Baseball was a tightly controlled monopsony with the reserve clause, there was a significant shift in salary determination that lasted from the Great Depression until after World War II where players' salaries were more highly linked to their recent performance. |
| Keywords: | Major League Baseball; Salary determination; Markov-Regime switching |
| JEL: | J31 C23 C22 |
| Date: | 2011–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29094&r=his |
| By: | L. Randall Wray |
| Abstract: | The Queen of England famously asked her economic advisers why none of them had seen "it" (the global financial crisis) coming. Obviously, the answer is complex, but it must include reference to the evolution of macroeconomic theory over the postwar period—from the "Age of Keynes," through the Friedmanian era and the return of Neoclassical economics in a particularly extreme form, and, finally, on to the New Monetary Consensus, with a new version of fine-tuning. The story cannot leave out the parallel developments in finance theory-with its efficient markets hypothesis-and in approaches to regulation and supervision of financial institutions. This paper critically examines these developments and returns to the earlier Keynesian tradition to see what was left out of postwar macro. For example, the synthesis version of Keynes never incorporated true uncertainty or "unknowledge," and thus deviated substantially from Keynes's treatment of expectations in chapters 12 and 17 of the General Theory. It essentially reduced Keynes to sticky wages and prices, with nonneutral money only in the case of fooling. The stagflation of the 1970s ended the great debate between "Keynesians" and "Monetarists" in favor of Milton Friedman's rules, and set the stage for the rise of a succession of increasingly silly theories rooted in pre-Keynesian thought. As Lord Robert Skidelsky (Keynes's biographer) argues, "Rarely in history can such powerful minds have devoted themselves to such strange ideas." By returning to Keynes, this paper attempts to provide a new direction forward. |
| Keywords: | Efficient Markets Hypothesis, Keynesian Economics, Orthodoxy, Heterodox Economics, Minsky, Uncertainty, Rational Expectations, New Classical, New Monetary Consensus, Monetary Theory of Production, Effective Demand, Special Properties of Money, the End of Laissez-Faire, Financial Instability Hypothesis |
| JEL: | A2 B15 B22 B50 E11 E12 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_652&r=his |
| By: | Marco Piatti (QUT); Benno Torgler (QUT) |
| Abstract: | 20 years ago, William Baumol provided an interesting wish list that outlined his hopes for the future of economics over the next hundred years. Impatiently, this paper puts his wish list to the test by comparing the characteristics of publications that appeared in the American Economic Review before Baumol’s contribution in 1991 (1984 to 1988) and those published 20 years later (2004 to 2008), and by looking at the Job Openings for Economists between 1991 and 2009. Focusing on issues such as the role of mathematics, the short-run orientation of macroeconomics, the emphasis of economic history versus the history of economic ideas, as well as a more concrete menu of wishes for applied economics, we observe that this was not just a wish list, but is in many ways a list that offers an accurate picture of what has changed over time and what has happened in recent years. |
| Keywords: | American Economic Review, William Baumol, Mathematics, Macroeconomics, Applied Economics, Job Openings |
| JEL: | B41 A20 A10 |
| Date: | 2011–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:qut:dpaper:264&r=his |
| By: | Ambec, Stefan; Cohen, Mark A. (Resources for the Future); Elgie, Stewart; Lanoie, Paul |
| Abstract: | Twenty years ago, Harvard Business School economist and strategy professor Michael Porter stood conventional wisdom about the impact of environmental regulation on business on its head by declaring that well-designed regulation could actually enhance competitiveness. The traditional view of environmental regulation held by virtually all economists until that time was that requiring firms to reduce an externality like pollution necessarily restricted their options and thus by definition reduced their profits. After all, if profitable opportunities existed to reduce pollution, profit-maximizing firms would already be taking advantage of those opportunities. Over the past 20 years, much has been written about what has since become known simply as the Porter Hypothesis (PH). Yet even today, we find conflicting evidence and alternative theories that might explain the PH, and oftentimes a misunderstanding of what the PH does and does not say. This paper provides an overview of the key theoretical and empirical insights into the PH to date, draws policy implications from these insights, and sketches out major research themes going forward. |
| Keywords: | Porter Hypothesis, environmental policy, innovation, performance |
| Date: | 2011–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-11-01&r=his |
| By: | Florian Ploeckl |
| Abstract: | Urbanization has been extensively used as a proxy for economic activity. The urban status of settlements is usually determined by an ad hoc population size household. This paper proposes a new threshold, taking into account the effect of local agricultural endowments. The new population threshold is a population size, such that for smaller settlements these endowments influence their size, while for larger they do not. This results in an endogeneous, data based threshold. The idea is practically shown for Saxony in the 19th century. The relevance of a different classification is demonstrated in four particular examples, the development of urbanization over time, Gibrat’s law, the impact of geography on town locations and the spatial relationship between towns and villages. The resulst demonstrate that the underlying classification scheme matters for the conclusions drawn from urban data. |
| Keywords: | Towns, villages, geography, definition, classification, town size |
| JEL: | N93 B49 O13 R12 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:536&r=his |
| By: | Karol Jan Borowiecki (Department of Economics, Trinity College Dublin) |
| Abstract: | The relationship between conflict and artistic output is ambiguous. This paper proposes an explanation for the contradiction in research, which we term the war-art puzzle. We employ a global sample of 115 prominent classical composers born after 1800 and link their annual productivity with the incidence of wars. We construct age-productivity profiles and find that the impact of wars on creative production is markedly heterogeneous - composers’ productivity was significantly higher during defensive or victorious international wars and lower during intra-state conflicts, offensive or lost international wars. the long-run. |
| Keywords: | productivity, conflict, war, innovation, composer |
| JEL: | D24 D74 J24 F51 O31 N40 Z10 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep0711&r=his |
| By: | Heinrich August Winkler |
| Abstract: | First Annual Ralf Dahrendorf Memorial Lecture, London School of Economics, 7 October 2010 |
| Date: | 2011–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:leqsxx:p0030&r=his |
| By: | Mario Cimoli; Giovanni Dosi; Roberto Mazzoleni; Bhaven Sampat |
| Abstract: | An essential aspect of "catching up" by developing countries is the emulation of technological leaders and the rapid accumulation by individuals and organizations of the knowledge and capabilities needed in order to sustain processes of technical learning. The rates and patterns of development of such capabilities are fundamentally shaped by the opportunities that indigenous organizations have to enter and operate in particular markets and technology areas. However, knowledge accumulation is also influenced by the governance of intellectual property rights (IPRs). The purpose of this work - prepared for a volume of the Initiative for Policy Dialogue, Columbia University, Intellectual and Property Rights Taskforce - is to offer an assessment of such influences in the long term, beginning with the early episodes of industrialization all the way to the present regime. The historical record is indeed quite diverse and variegated. However if there is a robust historical fact, it is the laxity or sheer absence of intellectual property rights in nearly all instances of successful catching up. We begin by reviewing a few theoretical arguments that economists have formulated on the effects of a system of patent protection. We will then review the historical evidence on the roles of patents in economic development. Next we discuss the changes in the IPR regime that have taken place roughly over the last third of a century in the United States. The reason for focusing on the United States is that doing so will outline the broad template of patent policy reform that has been adopted by policy makers in many other countries as a result of a varying mix of external pressures, myopia, corruption and ideological blindness. The final part of this essay, explores the likely impact of harmonization of international patent laws - including TRIPS - on developing countries. |
| Keywords: | Intellectual Property Rights, Catching-up, Imitation, Development, TRIPS |
| Date: | 2011–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2011/06&r=his |
| By: | Karol Jan Borowiecki (Department of Economics, Trinity College Dublin) |
| Abstract: | In this paper we explore whether, and to what extent, the incidence of war affects the migration intensity of 164 prominent classical composers born after 1800. We model the aggregate stock of composers in a country and find that periods of war correspond negatively with the number of artists. We also find that conflict-induced migration intensity is considerably higher for composers than for the overall population and demonstrate that the share of composers in the overall population drops due to the incidence of war. We further find that the observed outmigration substantially diminishes the country’s creative potential in the long-run. |
| Keywords: | migration, refugee, conflict, war, geographic concentration, composer |
| JEL: | D74 F51 J61 Z10 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep0811&r=his |
| By: | Iván Mauricio Durán |
| Abstract: | Este artículo analiza el papel que ha desempeñado la Federación Nacional de Cafeteros en el funcionamiento de la política económica del país, especialmente en lo concerniente a la política cambiaria. El estudio se centra en el período 1923-1973 y concluye que este grupo influyó significativamente sobre la política cambiaria colombiana, incluso en contra de los intereses de otros grupos económicos poderosos. |
| Date: | 2011–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:col:000418:008065&r=his |
| By: | Alcides Gómez Jiménez |
| Abstract: | Este trabajo se propone dar una contextualización histórica que ayude a comprender la dinámica de la acumulación de capital a largo plazo, cuando hay cambios en los regímenes de acumulación. Esta temática se abordará en tres secciones: en la primera se hará una lectura histórica de la hegemonía mundial durante el siglo XX, estableciendo un paralelo entre la crisis hegemónica mundial del Reino Unido a inicios del siglo pasado y la actual crisis hegemónica estadounidense. La segunda parte busca mostrar la relación entre las crisis económicas y la crisis de la hegemonía mundial. Por último en la tercera parte se tratará de demostrar que los cambios en los regímenes de acumulación no sólo están asociados a las crisis económicas sino también a las revoluciones tecnológicas y a las (re)formas sociales e institucionales que éstas presuponen. |
| Date: | 2011–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:col:000418:008013&r=his |