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on Business, Economic and Financial History |
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Issue of 2020‒03‒02
28 papers chosen by |
| By: | Maylis Avaro (IHEID, Graduate Institute of International and Development Studies, Geneva) |
| Abstract: | This paper provides new evidence on the decline of sterling as an international currency, focusing on its role as foreign exchange reserve asset under the Bretton Woods era. Using a unique new dataset on the composition of foreign exchange reserves of central banks, I show that the shift away from the sterling occurred earlier than conventionally supposed for the countries not belonging to the sterling area. The use of sterling has been described as freely chosen, imposed by the Bank of England or negotiated. I argue that the sterling area was a captive market as the Bank of England used capital controls, commercial threats and economic sanctions against sterling area countries to limit the divestments of their sterling assets. This management of the decline of sterling benefited mostly Britain and the City of London but represented a cost for sterling area countries and the international monetary system. |
| Keywords: | Monetary and financial history; Foreign exchnage; International monetary system |
| JEL: | N24 F31 E58 |
| Date: | 2020–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp03-2020&r=all |
| By: | Scott A. Carson |
| Abstract: | When other measures for economic welfare are scarce or unreliable, the body mass index (BMI) is a biological measure that reflects current net nutrition. This study uses a difference-in-decompositions framework to analyze how women’s BMIs varied with the advent of early 20th century social feminism. Late 19th and early 20th century US economic development improved the relative status of women relative to both men before and after the transition to social feminism. Twentieth century women’s BMIs were higher than 19th century women relative to men with the rise of social feminism. The primary source of female-male across-group variation was height and nativity, indicating there was net nutritional progress for women relative to men associated with changing cumulative net nutrition. The primary source of female-male within-group variation was nativity and socioeconomic status, indicating there was net nutritional progress relative to women born before the transition for women born after the rise of social feminism association with socioeconomic status. |
| Keywords: | BMI variation, economic transitions Oaxaca decompositions |
| JEL: | C10 C40 D10 I10 N30 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8037&r=all |
| By: | James Narron (Executive Office); Donald P. Morgan |
| Abstract: | Money was plentiful in the United Kingdom in 1842, and with low yields on government bonds and railway shares paying handsome dividends, the desire to speculate spread?as one observer put it, ?the contagion passed to all, and from the clerk to the capitalist the fever reigned uncontrollable and uncontrolled? (Francis?s History of the Bank of England). And so began railway mania. Just as that bubble began to burst, a massive harvest failure in England and Ireland led to surging food imports, which drained gold reserves from the Bank of England. Constrained by the Bank Charter Act, the Bank responded by tightening policy. When food prices fell in the spring of 1847 on the prospects for a successful harvest, commodity speculators were caught short and a crisis, one of the worst in British history (Bordo), ensued. In this edition of Crisis Chronicles, we cover the Commercial Crisis of 1847. |
| Keywords: | railway mania; lender of last resort; panic; Federal Reserve |
| JEL: | G1 E5 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:87036&r=all |
| By: | Davide Cantoni; Noam Yuchtman |
| Abstract: | The analysis of historical natural experiments has profoundly impacted economics research across fields. We trace the development and increasing application of the methodology, both from the perspective of economic historians and from the perspective of economists in other subdisciplines. We argue that the historical natural experiment represents a methodological bridge between economic history and other fields: historians are able to use the cutting edge identification strategies emphasized by applied microeconomists; economists across subfields are able to scour history for useful identifying variation; development and growth economists are able to trace the historical roots of contemporary outcomes. Differences in fields suggest differences in scholars' aims of studying historical natural experiments. We propose a taxonomy of three primary motives that reflect priorities in different fields: historians aim to understand causal processes within specific settings. Economists across fields aim to identify "clean" historical events (in whatever context) to test hypotheses of theoretical interest or estimate causal parameters. And, growth and development economists aim to identify past variation that can be causally linked to contemporary outcomes of interest. We summarize important contributions made by research in each category. Finally, we close with a brief discussion of challenges facing each category of work. |
| JEL: | B00 N00 N01 N10 O10 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26754&r=all |
| By: | Leander Heldring (Tilburg University, Department of Economics, Warandelaan 2, 5037 AB Tilburg, The Netherlands and Kensho Technologies, Cambridge, MA, USA) |
| Abstract: | This paper shows that the intensity of violence in Rwanda’s recent past can be traced back to the initial establishment of its precolonial state. Villages that were brought under centralized rule one century earlier experience a doubling of violence during the state-organized 1994 genocide. Instrumental variable estimates exploiting differences in proximity to Nyanza – an early capital – suggest these effects are causal. In other periods, when the state faced rebel attacks, with longer state presence, violence is lower. Using data from several sources, including a lab-in-the-field experiment across an abandoned historical boundary, I show that the effect of the historical state is primarily sustained by culturally transmitted norms of obedience. The persistent effect of the precolonial state interacts with government policy: Where the state developed earlier, there is more violence when the Rwandan government mobilized for mass killing and less violence when the government pursued peace. |
| Keywords: | Violence, States, Rwanda JEL Classification: D73, D74, H70, N4 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:299&r=all |
| By: | Philippe Batifoulier (Centre d'Economie de l'Université de Paris Nord (CEPN)); Nicolas Da Silva (Centre d'Economie de l'Université de Paris Nord (CEPN)); Mehrdad Vahabi (Centre d'Economie de l'Université de Paris Nord (CEPN)) |
| Abstract: | Ce travail a pour objet de relire l’histoire de l’Etat providence français à la lumière de la théorie d’un Etat prédateur. On oppose une approche de la protection sociale portée par l’Etat où la protection est un instrument de la prédation à une approche qualifiée de « La sociale » dominée par un « citizen welfare » et axée sur un auto gouvernement des individus. L’Etat providence est l'aboutissement de la guerre de masse moderne et la politique sociale (notamment la politique de population) est orientée vers les besoins de la guerre. Cependant bien qu’elle soit en partie le résultat de la guerre, la protection sociale trouve aussi ses racines en France dans l’affirmation d’un bien être porté par les citoyens eux-mêmes et non par l’Etat. Les origines de cette exception française remontent à la commune de 1871 et se poursuivent par la création du régime général de sécurité sociale en 1945/1946. On montrera que toute l’histoire de l’Etat-providence français consiste à se réapproprier le bien-être citoyen autogéré par un processus de réformes engagées à partir de 1947. Ce mouvement d'étatisation du "citizen welfare", en plus de constituer une dépossession du pouvoir politique d'auto-gouvernement des citoyens, s'est accompagné de la marchandisation des politiques sociales. |
| Keywords: | Etat providence, La Sociale, Etat prédateur, Marchandisation |
| JEL: | D6 D74 H1 H53 N4 O1 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:upn:wpaper:2020-01&r=all |
| By: | Charles H. Anderton (Professor of Economics and Distinguished Professor of Ethics and Society, College of the Holy Cross, Worcester, MA, USA); Jurgen Brauer (Emeritus Professor of Economics, Augusta University, Augusta, GA, USA and Visiting Professor of Economics, Chulalongkorn University, Bangkok, Thailand) |
| Abstract: | Counting conservatively, and ignoring physical injuries and mental trauma, data show about 100 million mass atrocity-related deaths since 1900. Occurring in war- and in peacetime, and of enormous scale, severity, and brutality, they are geographically widespread, occur with surprising frequency, and can be long-lasting in their adverse effects on economic and human development, wellbeing, and wealth. As such, they are a major economic concern. This article synthesizes very diverse and widely dispersed theoretical and empirical literatures, addressing two gaps: a “mass atrocities gap†in the economics literature and an “economics gap†in mass atrocities scholarship. Our goals are, first, for noneconomists to learn how economic inquiry contributes to understanding the causes and conduct of mass atrocities and possibly to their mitigation and prevention and, second, to survey and synthesize for economists a broad sweep of literatures to serve as a common platform on which to base further work in this field. |
| Keywords: | JEL Classification: B55, D71–D74, D91, F55, H56, J15, K38, P16 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:290&r=all |
| By: | MariÌ a AngeÌ lica Bautista (University of Chicago, Harris School of Public Policy); Felipe GonzaÌ lez (Pontificia Universidad CatoÌ lica de Chile, Instituto de EconomiÌ a); Luis R. MartiÌ nez (University of Chicago, Harris School of Public Policy); Pablo Muñoz (University of California Berkeley, Department of Economics); Mounu Prem (Universidad del Rosario, Department of Economics) |
| Abstract: | We study whether exposure to the military dictatorship of Augusto Pinochet in Chile (1973-1990) affected political attitudes and behavior, exploiting the plausibly exogenous location of military bases shortly before the coup that brought Pinochet to power. We show that residents of counties housing military bases both registered to vote and voted “No†to Pinochet’s continuation in power at higher rates in the crucial 1988 plebiscite that bolstered the democratic transition. Counties with military bases also experienced substantially more civilian deaths during the dictatorship, suggesting that increased exposure to repression is an important mechanism driving the larger rates of political participation and regime opposition. Evidence from survey responses and elections after democratization shows that military presence led to long-lasting support for democracy without changing political ideologies or electoral outcomes. |
| Keywords: | dictatorship, repression, democratization, human rights JEL Classification: D72, N46 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:298&r=all |
| By: | Rafael Galvão de Almeida (Cedeplar-UFMG) |
| Abstract: | Research in political business cycles is part of a larger program related to the economic analysis of politics with a macroeconomic focus, named New Political Macroeconomics. This article explores the historical evolution of the political business cycle literature, starting from the early writers on the topic (Kalecki, 1943; Åkerman, 1947). It then highlights the importance of Nordhaus (1975) for the theory. Elaborating the first theoretical model with empirical verification for the political business cycle, Nordhaus transformed a problem that was usually seen as microeconomic into a macroeconomic issue. Research flourished for a while, but the model underwent criticism because of its assumptions about voters, lack of definitive empirical verification, and because it did not conform to the tenets of rational expectations, thus causing interest in PBC models to wane. The latter went through a comeback after adapting to rational expectations (Rogoff, Siebert, 1988), and the formalization of conditional political business cycle models “solved” the problem of empirical verification, by arguing that political business cycles need specific conditions to happen. The paper concludes by reaffirming the importance of political business cycle models in creating a tradition that allowed the analysis with macroeconomic tools the issues of collective decision-making, previously a domain solely microeconomic. |
| Keywords: | political business cycle; political economy; public choice; new political macroeconomics; William Nordhaus |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td618&r=all |
| By: | Saurabh Singhal (UNU-WIDER; Food and Agricultural Organization of the United Nations) |
| Abstract: | This paper provides causal evidence on early-life exposure to war on mental health status in adulthood. Using an instrumental variable strategy, the evidence indicates that early-life exposure to bombing during the American war in Vietnam has long-term effects. A one percent increase in bombing intensity during 1965-75 increases the likeli- hood of severe mental distress in adulthood by 16 percentage points (or approximately 50 percent of the mean) and this result is robust to a variety of sensitivity checks. The negative effects of war are similar for both men and women. These findings add to the evidence on the enduring consequences of conflict and identify a critical area for policy intervention. |
| Keywords: | Early-life, mental health, conflict, Vietnam JEL Classification: I1, I15, H56, I31, N35, O12 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:270&r=all |
| By: | N. Gregory Mankiw |
| Abstract: | The introductory economics course, often called Econ 101, is where most economists get their start and where many students receive their only exposure to the field. This essay discusses the course’s evolution. It first looks back at how economics was taught at Harvard in the 19th century, based on a textbook by Professor Francis Bowen. It then looks ahead at how the introductory course may change as pedagogical tools improve, as society confronts new challenges, and as the field accumulates new knowledge. |
| JEL: | A2 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26702&r=all |
| By: | Kessel Akerman, Ariel; Weller, Leonardo; Pessoa, Joao Paulo |
| Abstract: | Was the International Monetary Fund (IMF) susceptible to political pressure from the United States and its Western allies during the Cold War? To answer this question, we construct a new database containing the number of conditions applied to over 500 IMF loans since 1970 and analyze how the distance from a borrowing country to its closet communist neighbor affected the IMF conditionality. We show that the fund imposed fewer conditions on loans to countries geographically closer to the communist bloc. Results are stronger when neighboring communist countries were not part of the Warsaw Pact. This pattern persisted during the 1990s, when the fund helped former communist countries in their transition to market economies. However, we find no strong evidence of such discretionary treatment by the IMF after 2001, when the containment of communism had ceased to be the West’s top priority. |
| Date: | 2020–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:vxbw9&r=all |
| By: | Kouame,Wilfried Anicet Kouakou |
| Abstract: | Although low tax morale hits developing countries hardest, little is known about its determinants in those countries. This paper examines the impact of trust in public institutions and the neighborhood on individual tax morale in four African countries: Algeria, Ghana, Morocco, and Nigeria. First, the paper provides theoretical foundations of such a relationship. Further, the paper uses the World Value Survey to estimate the effects of trust in public institutions and the neighborhood on individual tax morale. The identification strategy employs the instrumental variables method and relies on historical data on the slave trade and the literature on the cultural heritage of trust. The paper finds that trust in public institutions and the neighborhood are largely associated with tax morale in the African countries under consideration. The findings are robust to an alternative identification strategy, additional controls, and a falsification test. |
| Keywords: | Tax Law,Educational Sciences,International Trade and Trade Rules,Culture in Sustainable Development,Literature&Folklore,Culture and Cultural Practice,Artisans,Arts&Music,Cultural Policy,Cultural Heritage&Preservation |
| Date: | 2019–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8968&r=all |
| By: | Ethan Ilzetzki; Carmen M. Reinhart; Kenneth S. Rogoff |
| Abstract: | On the twentieth anniversary of its inception, the euro has yet to expand its role as an international currency. We document this fact with a wide range of indicators including its role as an anchor or reference in exchange rate arrangements—which we argue is a portmanteau measure—and as a currency for the denomination of trade and assets. On all these dimensions, the euro comprises a far smaller share than that of the US dollar. Furthermore, that share has been roughly constant since 1999. By some measures, the euro plays no larger a role than the Deutschemark and French franc that it replaced. We explore the reasons for this underperformance. While the leading anchor currency may have a natural monopoly, a number of additional factors have limited the euro’s reach, including lack of financial center, limited geopolitical reach, and US and Chinese dominance in technology research. Most important, in our view, is the comparatively scarce supply of (safe) euro-denominated assets, which we document. The European Central Bank’ lack of policy clarity may have also played a role. We show that the euro era can be divided into a “Bundesbank-plus” period and a “Whatever it Takes” period. The first shows a smooth transition from the European Exchange Rate Mechanism and continued to stabilize German inflation. The second period is characterised by an expanding ECB arsenal of credit facilities to European banks and sovereigns |
| JEL: | E5 F3 F4 N2 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26760&r=all |
| By: | Angel de la Fuente; Pep Ruiz Aguirre |
| Abstract: | En este trabajo se describe la construcción del módulo sectorial de la base de datos RegData FEDEA-BBVA. En el nuevo módulo, las series regionales de empleo (ocupados y asalariados), VAB a precios corrientes y constantes, salarios medios y remuneración de asalariados de RegData se desagregan en seis grandes sectores: i) agricultura y pesca, ii) minería, energía y agua, iii) industrias manufactureras, iv) construcción, v) servicios de mercado o destinados a la venta, excluyendo la sanidad, educación y servicios sociales privados y vi) servicios públicos o no destinados a la venta más sanidad, educación y servicios sociales, tanto privados como públicos. Se construye también una desagregación tentativa del sector de servicios de mercado en tres subsectores. Las series cubren un período de más de seis décadas, entre 1955 y 2018, lo que permitirá realizar análisis sectoriales de largo plazo a nivel regional. |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaeee:eee2020-08&r=all |
| By: | Thiemo Fetzer (University of Warwick); Stephan Kyburz (Center for Global Development) |
| Abstract: | Can institutionalized transfers of resource rents be a source of civil conflict? Are cohesive institutions better in managing distributive conflicts? We study these questions exploiting exogenous variation in revenue disbursements to local governments together with new data on local democratic institutions in Nigeria. We make three contributions. First, we document the existence of a strong link between rents and conflict far away from the location of the actual resource. Second, we show that distributive conflict is highly organized involving political militias and concentrated in the extent to which local governments are non-cohesive. Third, we show that democratic practice in form having elected local governments significantly weakens the causal link between rents and political violence. We document that elections (vis-a-vis appointments), by producing more cohesive institutions, vastly limit the extent to which distributional conflict between groups breaks out following shocks to the available rents. Throughout, we confirm these findings using individual level survey data. |
| Keywords: | conflict, ethnicity, natural resources, political economy, commodity prices JEL Classification: Q33, O13, N52, R11, L71 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:271&r=all |
| By: | James Narron (Executive Office); Thomas Klitgaard |
| Abstract: | Sometimes the world loses its bearings and the best alternative is a timeout. Such was the case during the Panic of 1857, which started when a prestigious bank in New York City collapsed, making all banks suddenly suspect. Banks, fearing a run on their gold reserves, started calling in loans from commercial firms and brokers, leading to asset sales at fire-sale prices and bankruptcies. By mid-October, banks in Philadelphia and New York suspended convertibility, meaning they would not allow gold to be withdrawn from their vaults even while all other banking services continued. Suspension then swept the nation as part of a defensive strategy, supported by local business interests, to prevent the Panic from spreading. While the suspensions appeared successful and few banks ended up failing, President Buchanan was outraged by what he viewed as yet another corrupt banking practice. He proposed making suspension a ?death sentence? for banks as a draconian incentive to encourage safer banking practices. In this edition of Crisis Chronicles, we describe the Panic of 1857 and explain why businesses pushed for national suspension to save themselves. |
| Keywords: | panic 1857 suspension banking specie gold bank new york |
| JEL: | N2 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:87065&r=all |
| By: | van der Wel, M. |
| Abstract: | The crises of this century have stressed how intertwined macroeconomics and finance are in practice. This intertwinement was absent in most economic models. This led to calls for economists to step out of their specialized silos. Since then, the literature of macro-finance, which studies the relationship between asset prices and economic fluctuations, has been developed. In this inaugural address, I argue for a prominent role of econometrics to study the macro-finance interaction. Key elements such as mixed frequencies and the selection of factors can be incorporated using recent econometric advances. I discuss some of the results, such as estimation of continuous-time equilibrium models for macroeconomic and financial series, as well as characteristics of trading on financial markets after macroeconomic news releases. Finally, I discuss the outstanding challenges, which include developing a yield curve model based on macroeconomic foundations, modeling how financial markets anticipate news releases, and developing a macro-finance model for European bond markets taking into account the large heterogeneity across the continent. |
| Keywords: | Macro-Finance, Econometrics, Financial Econometrics, Fixed Income, Time Series Econometrics, Term Structure of Interest Rates, macro-economie, economische crises, econometrische modellen, financiering, obligaties, tijdreeksen |
| JEL: | C58 |
| Date: | 2020–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:ems:euriar:124748&r=all |
| By: | Lueger, Tim |
| Abstract: | Over the past two decades, there have been numerous attempts in economic theory to model the historical regime of a Malthusian trap as well as the transition to growth in one coherent framework, or in other words, a unified growth theory. However, in most of these models, an important effect suggested by Malthus has been frequently omitted. By including what he had called "the great preventive check" in the traditional Malthusian model which is based on the principle of population, the principle of diminishing returns and the principle of labor division, the transition can be modelled in a very simple dynamic macroeconomic framework. The aim of this paper is to first construct and calibrate the suggested classical model and to eventually employ a conventional VAR-Method to provide evidence of the above principles using country-specific annual historical data on crude birth rate, crude death rate and GDP per capita growth rate. As a result, it is argued that emerging economies follow a universal macroeconomic pattern of development. A decreasing death rate is succeeded by a decreasing birth rate which at the same time induces GDP per capita to rise sustainably. The correspondingly advanced microeconomic theory suggests that increasing life expectancy tends to create a demographic structure that is much less prone to overpopulation. |
| Date: | 2018–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:97403&r=all |
| By: | Lara Cockx; Giulia Meloni; Jo Swinnen |
| Abstract: | Spirits represent around 50% of global alcohol consumption. This sector is much less studied than other alcohol beverages such as wine or beer. This paper reviews the economic history of spirits and analyses recent trends in the spirits markets. The technology to produce spirits is more complex than for wine or beer. Distillation was known in ancient Chinese, Indian, Greek and Egyptian societies, but it took innovations by the Arabs to distil alcohol. Initially this alcohol was used for medicinal purposes. Only in the middle ages did spirits become a widespread drink and did commercial production and markets. The Industrial Revolution created a large consumer market and reduced the cost of spirits, contributing to excess consumption and alcoholism. Governments have intervened extensively in spirits markets to reduce excessive consumption and to raise taxes. There have been significant changes in spirits consumption and trade over time. Over the past 50 years, the share of spirits in global alcohol consumption increased from around 30% to around 50%. In the past decades, there was strong growth in emerging markets, including in China and India. The spirits industry has concentrated, but less so than e.g. the brewery industry. Recent developments in the spirits industry include premiumization, the growth of craft spirits and the introduction of terroir for spirits. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ete:licosp:649086&r=all |
| By: | Johannes Buggle; Mathias Thoenig; Thierry Mayer; Seyhun Orcan Sakalli |
| Abstract: | In this paper we estimate the push and pull factors involved in the outmigration of Jews facing persecution in Nazi Germany from 1933 to 1941 when migration was banned. Our empirical investigation makes use of a unique individual-level dataset that records the migration history of almost the entire universe of Jews living in Germany over the period. Our analysis highlights new channels, specific to violent contexts, through which social networks affect the decision to flee. We first estimate a structural model of migration where individuals base their own migration decision on the observation of persecution and migration among their peers. Identification rests on exogenous variations in push and pull factors across peers who live in different cities of residence. Then we perform various counterfactual policy experiments in order to quantify how migration restrictions in destination countries affected the fate of Jews. For example, removing work restrictions for refugees after the Nuremberg Laws (in 1935) would have led to 27% increase in Jewish migration out of Germany. |
| Keywords: | Refugees, Migration Policy, Antisemitism, Nazi Germany |
| JEL: | F22 N40 F50 D74 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:20.01&r=all |
| By: | Lueger, Tim |
| Abstract: | In spite of two centuries of extensive debate, a consistent framework of the classical theory of population on which economists can universally agree has not been established. This means that either the theory lacks consistency or it has been misunderstood in important ways. This paper attempts to settle this issue by arguing that the latter was the case, revealing prevailing misconceptions. Since a large amount of these misconceptions most probably arose from the lack of a consistent nomenclature, the paper intends to clarify the classical theory of population by employing unambiguous definitions of the principle of population, the Malthusian trap, positive checks and preventive checks to population. The classical theory of population can then be applied to analyze the transition from economic stagnation to economic growth. As a result, numerous current theories trying to explain the transition to growth that are based on an increase of pro- duction will prove secondary when compared to the great preventive check. |
| Date: | 2018–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:96492&r=all |
| By: | Rajashri Chakrabarti; Matthew Mazewski |
| Abstract: | Even the most casual observer of American politics knows that today?s Republican and Democratic parties seem to disagree with one another on just about every issue under the sun. Some assume that this divide is merely an inevitable feature of a two-party system, while others reminisce about a golden era of bipartisan cooperation and hold out hope that a spirit of compromise might one day return to Washington. In this post, we present evidence that political polarization?or the trend toward more ideologically distinct and internally homogeneous parties?is not a recent development in the United States, although it has reached unprecedented levels in the last several years. We also show that polarization is strongly correlated with the extent of income inequality, but only weakly associated with the rate of economic growth. We offer several tentative explanations for these relationships, and discuss whether all forms of polarization are created equal. |
| Keywords: | Inequality; DW Nominate; Dyfunctionality; Polarization |
| JEL: | H00 E2 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:86954&r=all |
| By: | Kose, M. Ayhan; Sugawara, Naotaka; Terrones, Marco E. |
| Abstract: | The world economy has experienced four global recessions over the past seven decades: in 1975, 1982, 1991, and 2009. During each of these episodes, annual real per capita global GDP contracted, and this contraction was accompanied by weakening of other key indicators of global economic activity. The global recessions were highly synchronized internationally, with severe economic and financial disruptions in many countries around the world. The 2009 global recession, set off by the global financial crisis, was by far the deepest and most synchronized of the four recessions. As the epicenter of the crisis, advanced economies felt the brunt of the recession. The subsequent expansion has been the weakest in the post-war period in advanced economies as many of them have struggled to overcome the legacies of the crisis. In contrast, most emerging market and developing economies weathered the 2009 global recession relatively well and delivered a stronger recovery than after previous global recessions |
| Keywords: | Global economy; global expansion; global recession; global recovery; synchronization of cycles |
| JEL: | E32 F44 N10 O47 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98608&r=all |
| By: | Robert Breunig; Anthony Wiskich; Chris Wokker |
| Abstract: | Using data for the 2005-2017 period, we consider the effects of resource rents on the sub-components of Freedom House’s measures of Political Rights and Civil Liberties. Higher resource rents lead to a deterioration in Political Pluralism and Participation, but do not affect other sub-components. We also consider the relationship between resource rents and aggregate measures of Political Rights and Civil Liberties between 1975 and 2015. We find no evidence that resource rents affect Political Rights or Civil Liberties. We demonstrate why our results contrast with previous literature. |
| Keywords: | Resource rents, human rights, state stability, civil liberties |
| JEL: | C33 D72 D73 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-16&r=all |
| By: | Jason Appleson (Risk Group); Andrew F. Haughwout; Eric Parsons (Credit and Payments Risk Group) |
| Abstract: | In our recent post on the state and local sector, we argued that structural problems in state and local budgets were exacerbated by the recession and would likely restrain the sector?s growth for years to come. The last couple of years have witnessed threatened or actual defaults in a diversity of places, ranging from Jefferson County, Alabama, to Harrisburg, Pennsylvania, to Stockton, California. But do these events point to a wave of future defaults by municipal borrowers? History?at least the history that most of us know?would seem to say no. But the municipal bond market is complex and defaults happen much more frequently than most casual observers are aware. This post describes the market and its risks. |
| Keywords: | municipal bonds; defaults |
| JEL: | D1 H00 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:86825&r=all |
| By: | Andres Castro (Max Planck Institute for Demographic Research, Rostock, Germany) |
| JEL: | J1 Z0 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2020-008&r=all |
| By: | Asani Sarkar; Helene Lee (Markets Group) |
| Abstract: | At the onset of the financial crisis in the summer of 2007, news that Barclays had borrowed from the Bank of England (BoE) received wide media coverage. This information triggered concerns that the BoE?s lending facility may have become stigmatized, prompting market participants to interpret borrowing from the BoE as a sign of financial weakness. If such stigma discouraged borrowing, of course, it would defeat the purpose of the facility. We review the history of the BoE?s lending facilities and experiences with stigma, both historically and in the recent period. We also compare the BoE?s and the Fed?s lending facilities, and conclude that bilateral lending by central banks may tend to become stigmatized to some extent, no matter how the lending facility is structured. |
| Keywords: | UK discount window stigma |
| JEL: | E5 G2 N2 F00 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:87155&r=all |