|
on Business, Economic and Financial History |
|
Issue of 2020‒08‒24
forty-six papers chosen by |
| By: | Sascha O. Becker; Jared Rubin; Ludger Woessmann |
| Abstract: | This paper surveys the recent social science literature on religion in economic history, covering both socioeconomic causes and consequences of religion. Following the rapidly growing literature, it focuses on the three main monotheisms—Judaism, Christianity, and Islam—and on the period up to WWII. Works on Judaism address Jewish occupational specialization, human capital, emancipation, and the causes and consequences of Jewish persecution. One set of papers on Christianity studies the role of the Catholic Church in European economic history since the medieval period. Taking advantage of newly digitized data and advanced econometric techniques, the voluminous literature on the Protestant Reformation studies its socioeconomic causes as well as its consequences for human capital, secularization, political change, technology diffusion, and social outcomes. Works on missionaries show that early access to Christian missions still has political, educational, and economic consequences in present-day Africa, Asia, and Latin America. Much of the economics of Islam focuses on the role that Islam and Islamic institutions played in political-economy outcomes and in the “long divergence” between the Middle East and Western Europe. Finally, cross-country analyses seek to understand the broader determinants of religious practice and its various effects across the world. We highlight three general insights that emerge from this literature. First, the monotheistic character of the Abrahamic religions facilitated a close historical interconnection of religion with political power and conflict. Second, human capital often played a leading role in the interconnection between religion and economic history. Third, many socioeconomic factors matter in the historical development of religions. |
| Keywords: | religion, economic history, Judaism, Christianity, Islam, economic development, education, persecution, political economy, finance, specialization, trade |
| JEL: | Z12 N00 J15 I25 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8365&r=all |
| By: | Scott A. Carson |
| Abstract: | When other measures for economic welfare are scarce or unreliable, the use of biological measures are now standard in economics. This study uses late 19th and early 20th century BMI, statures, and weight to assess how net nutrition accumulated to women and men during US economic development. Throughout the late 19th and early 20th centuries, female and male BMIs, statures, and weight remained constant over time. Unskilled laborers’ BMIs were higher, their statures were taller, and their weights heavier than workers in other occupations. Women and men from the Northeast and Middle Atlantic had higher BMIs and shorter statures, while their counterparts from the South were taller and had lower BMIs, indicating that it was superior Southern cumulative net nutrition associated with lower BMIs. |
| Keywords: | BMI variation, stature, economic transition, Oaxaca Decompositions |
| JEL: | C10 C40 D10 I10 N30 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8447&r=all |
| By: | de la Croix, David; Schneider, Eric B.; Weisdorf, Jacob |
| Abstract: | This paper reconsiders the fertility of historical social groups by accounting for singleness and childlessness. We find that the middle class had the highest reproductive success during England's early industrial development. In light of the greater propensity of the middle class to invest in human capital, the rise in the prevalence of these traits in the population could have been instrumental to England's economic success. Unlike earlier results about the survival of the richest, the paper shows that the reproductive success of the rich (and also the poor) were lower than that of the middle class, once accounting for singleness and childlessness. Hence, the prosperity of England over this period can be attributed to the increase in the prevalence of middle-class traits rather than those of the upper (or lower) class. |
| Keywords: | fertility; marriage; childlessness; European marriage patter; industrial revolution; evolutionary advantage; social class |
| JEL: | J12 J13 N33 |
| Date: | 2019–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:100923&r=all |
| By: | Maurice Obstfeld (Peterson Institute for International Economics) |
| Abstract: | Fifty years ago, Harry G. Johnson published "The Case for Flexible Exchange Rates, 1969," its title echoing Milton Friedman’s classic essay of 1953. Though somewhat overlooked today, Johnson’s reprise was an important element in the late 1960s debate over the future of the international monetary system. In this Working Paper, Obstfeld lays out the historical context in which Johnson’s “Case†was written and read and then examines Johnson’s main points and sees how they stand up to nearly five decades of experience with floating exchange rates since the end of the Bretton Woods system. He also reviews the most recent academic critiques of exchange rate flexibility and asks how fatal they are to Johnson’s basic argument. He concludes that the essential case for exchange rate flexibility still stands strong. |
| Keywords: | Monetary policy, natural rate of interest, Phillips curve, current account, capital flows, policy spillbacks |
| JEL: | E52 F32 F41 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp20-12&r=all |
| By: | Morgan Kelly; Joel Mokyr; Cormac Ó Gráda |
| Abstract: | For contemporaries, Britain’s success in developing the technologies of the early Industrial Revolution rested in large part on its abundant supply of artisan skills, notably in metalworking. In this paper we outline a simple process where successful industrialization occurs in regions that start with low wages and high mechanical skills, and show that these two factors strongly explain the growth of the textile industry across the 41 counties of England between the 1760s and 1830s. By contrast, literacy and access to capital have no power in predicting industrialization, nor does proximity to coal. Although unimportant as a source of power for early textile machinery, Britain’s coal was vital as a source of cheap heat that allowed it over centuries to develop a unique range of sophisticated metalworking industries. From these activities came artisans, from watchmakers to iron founders, whose industrial skills were in demand not just in Britain but across all of Europe. Against the view that living standards were stagnant during the Industrial Revolution, we find that real wages rose sharply in the industrializing north and collapsed in the previously prosperous south. |
| Keywords: | Skilled labour; Power sources; Market integration; Standard of living; Industrial Revolution; Great Britain |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:202016&r=all |
| By: | Sergio Petralia; ; |
| Abstract: | The pervasive diffusion of electricity-related technologies at the beginning of the 20th century has been studied extensively to understand the transformative potential of General Purpose Technologies (GPTs). Most of what we know, however, has been investigated in relation to the diffusion of their use. This article provides evidence on the county-level economic impact of the technological adoption of Electrical & Electronic (E&E) technologies in the 1920s in the United States (US). Thus focusing on the impact of a GPT on technological adopters, i.e. those who are able to develop, transform and complement it. It is shown that places with patenting activity in E&E technologies grew faster and paid higher wages than others between 1920 and 1930. This analysis required constructing a novel database identifying detailed geographical information for historical patent documents in the US since 1836, as well as developing a text-mining algorithm to identify E&E patents based on patent descriptions. |
| Keywords: | Disruptive Technological Change, General Purpose Technologies, Historical Patent Documents, Technological Adoption |
| JEL: | O33 O31 O30 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2033&r=all |
| By: | Schmidt, Reinhard H. |
| Abstract: | This paper provides an account of the history of Deutsche Bank in the style of a narrative. Since more than 120 years, Deutsche Bank has been the most important German bank. Its history has been shaped by crises and efforts to overcome them. Moreover, throughout its history, the development of Deutsche Bank has been closely related to that of the German financial system, and as the paper tries to demonstrate, Deutsche Bank had a stronger influence on the character of that system than any other German institution. The paper focuses on three additional aspects of the bank's history, which have repeatedly changed over time: (1) its degree of internationalization, (2) the extent to which Deutsche Bank has focused on investment banking (as opposed to commercial banking) and (3) the consistency of its business model. |
| JEL: | G21 N24 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ibfpps:0120&r=all |
| By: | Gadd, Carl-Johan (Department of Economic History, School of Business, Economics and Law, Göteborg University) |
| Abstract: | From the mid-16th to the early 20th century, Swedish farms were divided in three cadastral categories: tax, crown and exempt land. In 1700, each category made up for about a third of the farms, but precise information on regional variations is lacking. In this paper, an estimate is made of the distribution of land according to cadastral categories in the Swedish counties in 1700. The approach is to sum, for each county, the land that was converted from crown land into tax land between 1701 and 1824. Combined with data on the situation in 1825, this allows for a reconstruction of the distribution of land according to cadastral category in the 22 counties in 1700. In 1700, tax land dominated in northern and north-central Sweden. Crown land was the largest category in Götaland and was particularly large in Sweden’s southeastern and southernmost counties. The exempt land was most extensive in the three counties surrounding Stockholm and three formerly Danish counties in the very south. It is well known that the proportion of tax land had decreased sharply, in the country as a whole, between 1560 and 1700. However, the comparability of the figures for the two points of time has been questioned, since Sweden’s area expanded in the 17th century. The present study shows that the 17th-century redistributions of land between the social classes were the main cause of the decline in tax land, while the expansion of the Swedish territory had less effect on the ownership structure as a whole. The decline of tax land had been especially sharp in the three counties that surround Stockholm. |
| Keywords: | agriculture; history; Sweden; land ownership; cadastral categories; tax land; crown land; exempt land; 16th century; 17th century; 18th century |
| JEL: | N53 Q15 |
| Date: | 2020–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunhis:0027&r=all |
| By: | Bertocchi, Graziella; Bozzano, Monica |
| Abstract: | This chapter reviews the growing body of research in economics which concentrates on the education gender gap and its evolution, over time and across countries. The survey first focuses on gender differentials in the historical period that roughly goes from 1850 to the 1940s and documents the deep determinants of the early phase of female education expansion, including pre-industrial conditions, religion, and family and kinship patterns. Next, the survey describes the stylized facts of contemporaneous gender gaps in education, from the 1950s to the present day, accounting for several alternative measures of attainment and achievement and for geographic and temporal differentiations. The determinants of the gaps are then summarized, while keeping a strong emphasis on an historical perspective and disentangling factors related to the labor market, family formation, psychological elements, and societal cultural norms. A discussion follows of the implications of the education gender gap for multiple realms, from economic growth to family life, taking into account the potential for reverse causation. Special attention is devoted to the persistency of gender gaps in the STEM and economics fields. |
| Keywords: | education; gaps; Gender |
| JEL: | J1 N3 O1 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14082&r=all |
| By: | Clark, Gregory; Cummins, Neil; Curtis, Matthew |
| Abstract: | A conclusion of the European Fertility Project in 1986 was that pretransition populations mostly displayed natural fertility, where parity-dependent birth control was absent. This conclusion has recently been challenged for England by new empirical results and has also been widely rejected by theorists of long-run economic growth, where pre-industrial fertility control is integral to most models. In this study, we use the accident of twin births to show that for three Western European–derived pre-industrial populations—namely, England (1730–1879), France (1670–1788), and Québec (1621–1835)—we find no evidence for parity-dependent control of marital fertility. If a twin was born in any of these populations, family size increased by 1 compared with families with a singleton birth at the same parity and mother age, with no reduction of subsequent fertility. Numbers of children surviving to age 14 also increased. Twin births also show no differential effect on fertility when they occurred at high parities; this finding is in contrast to populations where fertility is known to have been controlled by at least some families, such as in England, 1900–1949, where a twin birth increased average births per family by significantly less than 1. |
| Keywords: | economic growth; economic history; family planning; fertility; natural fertility |
| JEL: | N33 N31 |
| Date: | 2020–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105090&r=all |
| By: | Alberto Alesina; Marlon Seror; David Yang; Yang You; Weihong Zeng |
| Abstract: | Can efforts to eradicate inequality in wealth and education eliminate intergenerational persistence of socioeconomic status? The Chinese Communist Revolution in the 1950s and Cultural Revolution from 1966 to 1976 aimed to do exactly that. Using newly digitized archival records and contemporary census and household survey data, we show that the revolutions were effective in homogenizing the population economically in the short run. However, the pattern of inequality that characterized the pre-revolution generation re-emerges today. Almost half a century after the revolutions, individuals whose grandparents belonged to the pre-revolution elite earn 16 percent more and have completed more than 11 percent additional years of schooling than those from non-elite households. In addition, individuals with pre-revolution elite grandparents hold different values: they are less averse to inequality, more individualistic, more pro-market, and more likely to see hard work as critical to success. Through intergenerational transmission of values, socioeconomic conditions thus survived one of the most aggressive attempts to eliminate differences in the population and to foster mobility. |
| Date: | 2020–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:bri:uobdis:20/722&r=all |
| By: | Bertrand Augé (IRMAPE - Institut de Recherche en Management et Pays Emergents - ESC Pau, ITEM - Identités, Territoires, Expressions, Mobilités - UPPA - Université de Pau et des Pays de l'Adour); Augé Bertrand; Farid Makhlouf (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour); Youssef Errami (IRMAPE - Institut de Recherche en Management et Pays Emergents - ESC Pau); Frédéric Dosquet (CREG - Centre de recherche et d'études en gestion - UPPA - Université de Pau et des Pays de l'Adour) |
| Abstract: | Ce papier propose une analyse de 605 discours délivrés par les Présidents de la République française (de Valéry Giscard d'Estaing à Emmanuel Macron) sur le thème de l'immigration sur une période de 1975 à 2018. L'apport de notre contribution se veut double. Tout d'abord, nous développons une analyse du concept d'immigration, depuis son apparition dans le vocabulaire à la fin du XIXe siècle jusqu'au début des années 1960. Puis, nous explorons la structure des données de 605 discours en mettant en oeuvre une procédure de classement par taille sur les discours individuels, les mots de chaque discours étant classés en fonction de leur fréquence. L'analyse des discours et de la littérature consacrée à l'immigration doit nous permettre de démontrer la place réelle de cette thématique en France : fait-elle l'objet d'une politique publique spécifique ou s'agit-il d'une variable d'ajustement électorale ? Les résultats montrent qu'il y a une régularité entre les forces politiques qui se sont succédées à la tête de l'exécutif ainsi que dévoilent l'immigration est associée aux problèmes économiques, sociaux et politiques de chaque mandat. |
| Keywords: | Mots-clés : Discours,Présidents,France,Immigration,analyse textuelle |
| Date: | 2020–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02903068&r=all |
| By: | Bleynat, Ingrid; Challú, Amílcar; Segal, Paul |
| Abstract: | Historical wage and incomes data are informative both as normative measures of living standards, and as indicators of patterns of economic development. We show that, given limited historical data, median incomes are most appropriate for measuring welfare and inequality, while urban unskilled wages can be used to test dualist models of development. We present a new dataset including both series in Mexico from 1800 to 2015 and find that both have historically failed to keep up with aggregate growth: per worker GDP is now over eight times higher than in the nineteenth century, while unskilled urban real wages are only 2.2 times higher, and median incomes only 2.0 times. From the perspective of inequality and social welfare, our findings confirm that there is no automatic positive relationship between economic growth and rising living standards for the majority. From the perspective of development, we argue that these findings are consistent with a dual economy model based on Lewis’s assumption of a reserve army of labour, and explain why Kuznets's predicted decline in inequality has not occurred. |
| Keywords: | inequality; living standards; Kuznets curve; Mexico |
| JEL: | D31 N36 O15 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105215&r=all |
| By: | Morgan Kelly; Cormac Ó Gráda |
| Abstract: | Disputes over whether the Scientific Revolution contributed to the Industrial Revolution begin with the common assumption that natural philosophers and artisans formed radically distinct groups. In reality, these groups merged together through a diverse group of applied mathematics teachers, textbook writers and instrument makers catering to a market of navigators, gunners and surveyors. From these “mathematical practitioners” emerged specialized instrument makers whose capabilities facilitated industrialization in two important ways. First, a large supply of instrument and watch makers provided Britain with a pool of versatile, mechanically skilled labour to build the increasingly complicated machinery of the late eighteenth century. Second, the less well known but equally revolutionary innovations in machine tools—which, contrary to the Habbakuk thesis, occurred largely in Britain during the 1820s and 1830s to mass produce interchangeable parts for iron textile machinery—drew on a technology of exact measurement developed for navigational and astronomical instruments. |
| Keywords: | Scientific Revolution; Industrial Revolution; Instruments; Mathematics; England; France; China; Islamic world |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:202017&r=all |
| By: | Michael D. Bordo; Joseph G. Haubrich |
| Abstract: | Does the yield curve’s ability to predict future output and recessions differ when interest rates are low, as in the current global environment? In this paper we build on recent econometric work by Shi, Phillips, and Hurn that detects changes in the causal impact of the yield curve and relate that to the level of interest rates. We explore the issue using historical data going back to the 19th century for the United States and more recent data for the United Kingdom, Germany, and Japan. This paper is similar in spirit to Ramey and Zubairy (2018), who look at the government spending multiplier in times of low interest rates. |
| Keywords: | low interest rates; policy; predictive content of the yield curve |
| JEL: | E32 G01 N10 |
| Date: | 2020–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwq:88522&r=all |
| By: | Ashworth, J.; Goodhart, C. A. E. |
| Abstract: | Currency usage began a long trend decline in the decades after World War II. This was expected to continue, and even accelerate, owing to payment technology innovations. Surprisingly, however, such usage as a percentage of GDP stopped falling and has increased quite sharply in recent years in most countries, with Sweden the major outlier. We examine to what extent this may have been due to increasing interest elasticity, nearing the zero lower bound, and also to rising tax evasion, as indirect taxes rise. We also show how currency holdings increased temporarily as the financial crisis struck in 2008. |
| Keywords: | currency; interest elasticity; financial crisis; Grey economy; tax evasion |
| JEL: | E40 E49 E63 H26 N10 N20 |
| Date: | 2020–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105303&r=all |
| By: | Oosterlinck, Kim; Ureche-Rangau, Loredana; Vaslin, Jacques-Marie |
| Abstract: | According to North and Weingast (1989), institutions that protect bondholders' rights lower borrowing costs for the state and are therefore beneficial to both the state and the bondholders. In this paper we argue that such institutions may be so strong that bondholders can exploit them for their own benefit, not the state's. To prove this point, we focus on the (non-)conversion of French bonds during the second quarter of the 19th century. At the time, France was able to convert its bonds. In other words, the state could ask bondholders to choose between redemption at par or a new bond with a lower coupon. Even though improvements in French credit meant the state could benefit from converting its debt as early as May 1825, no conversion took place before March 1852. Had it occurred at the first date, the French state would have saved the equivalent of 2.7 years of debt service. Our analysis shows that the institutions prevailing at the time gave large bondholders the power to veto any conversion. |
| Keywords: | Conversions; France; institutions; Sovereign debts |
| JEL: | G12 G14 N23 N43 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14071&r=all |
| By: | Rossi, Enrico |
| Abstract: | In the last two decades, a renewed interest in property rights have challenged the accepted interpretation of property rights as “bundle of rights” over the use of things and have rehabilitated the old classical interpretation of property rights as exclusive (absolute) dominium over things rooted in the right to exclude. This paper provides a three-dimensional framework for the study of property rights and shows that, historically, the reason for this dual nature of property rights derives from the fact that properties can either be treated as personal property, or capital. While the classical approach is consistent with the former interpretation, the neoclassical (“bundle of right”) approach is consistent with the latter. By reinterpreting the dual nature of property rights as a dichotomy between capital and personal property the work makes two main contributions to the debates in the legal and economic literature. First, it re-evaluates and justifies the interpretation of property rights as a “politically-embedded” bundle of right provided by legal realist, old progressive and institutional economists at the turn of the twentieth century. Second, it reassesses the conclusions reached by the Coasean legacy in law and economics; the paper shows that transaction costs are necessary and sufficient to explain the emergence and the form of legal institutions only in pure capitalistic societies, but cannot explain the emergence and the nature of legal institutions whenever personal properties are involved. Additional normative assumptions explaining the origin and the legitimacy of value judgments are needed to understand and explain the dual nature of property rights and to make sense of the decisions to employ personal properties as capital (or vice versa). This highlights the often neglected (but decisive) role played by the rationality assumption in legitimizing the normative conclusions reached by Coasean law and economics (and welfare economics more generally). It also highlights that the normative power of transaction costs is always institution determined (socially-embedded), never institution-determining |
| Keywords: | property rights; capital; personal property; possession |
| JEL: | J1 R14 J01 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105840&r=all |
| By: | Bindler, Anna L; Hjalmarsson, Randi |
| Abstract: | This paper evaluates how the introduction of professional police forces affected crime using two natural experiments in history: the 1829 formation of the London Metropolitan Police (the first police force ever tasked with deterring crime) and the 1839 to 1856 county roll-out of forces in England and Wales. The London Met analysis relies on two complementary data sources. The first, trial data with geocoded crime locations, allows for a difference-in-differences estimation that finds a significant and persistent reduction in robbery but not homicide or burglary. A pre-post analysis of the second source, daily police reports of both cleared and uncleared crime incidents, finds a significant reduction in all violent crimes but offsetting changes in uncleared (decrease) and cleared (increase) property crimes. These (local) reductions in crime are not just due to crime displacement but represent true decreases in overall crime. Difference-in-difference analyses of the county roll-out find that only sufficiently large forces, measured by the population to force ratio, significantly reduced crime. The results are robust to controlling for spill-over effects of neighboring forces. |
| Keywords: | crime; deterrence; economic history; institutions; Police |
| JEL: | H0 K42 N93 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14068&r=all |
| By: | Johnston, Lauren A. |
| Abstract: | The first pandemic of the 21st century has brought Pyrrhic attention to one of the era’s greatest megatrends – population ageing. Today rich countries are disproportionately affected but increasingly the world’s elderly are residents of developing countries. In rich and poor countries alike, a policy approach that explicitly accounts for the interdependence of economic and demographic change – an economic demography transition approach - has never been more pressing. Thanks partly to the tragedy of history’s greatest Malthusian stagnation, that of mid-20th century China, Chinese policymakers implemented draconian population control measures alongside dramatic economic reforms from around 1980. This paper elaborates China’s consequential and ongoing economic demography transition strategy within the economic and development policy discourse. Amid epochal demographic, public health, and geo-economic change, this economic demography perspective is timely, unique and useful in extrapolation across all economies. |
| Keywords: | Population ageing,Economic Demography,Demographic Transition,China |
| JEL: | J11 J18 N35 O20 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:593&r=all |
| By: | Felix Kersting; Iris Wohnsiedler; Nikolaus Wolf |
| Abstract: | We revisit Max Weber’s hypothesis on the role of Protestantism for economic development. We show that nationalism is crucial to both, the interpretation of Weber’s Protestant Ethic and empirical tests thereof. For late nineteenth-century Prussia we reject Weber’s suggestion that Protestantism mattered due to an “ascetic compulsion to save”. Moreover, we find that income levels, savings, and literacy rates differed be-tween Germans and Poles, not between Protestants and Catholics, using pooled OLS and IV regressions. We suggest that this result is due to anti-Polish discrimination. |
| Keywords: | Max Weber, protestantism, nationalism |
| JEL: | N13 N33 O16 Z12 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8421&r=all |
| By: | Hardik A. Marfatia (Northeastern Illinois University); Rangan Gupta (University of Pretoria); Stephen M. Miller (University of Nevada, Las Vegas) |
| Abstract: | This paper examines the effect of fiscal policy on financial markets over a long span of 125 years. Unlike existing studies that mainly focus on monetary policy shocks and model-based identification of fiscal policy shocks, we use a time-varying parameter model to study the effect of fiscal policy with much cleaner and direct identification of fiscal policy shocks. In addition, we extend our analysis by measuring the response volatility in these markets and separately study the effects of good and bad components of volatility. We find significant time-variation in the response of stock and bond market returns and volatility. The overall response of the stock market exceeds that of bond markets, with more pronounced effects in the pre-1950 period than in the last six decades. Fiscal consolidation generates long-term benefits that positively affect financial markets in the latter part of the 20th century, thus providing new insights into the dynamic role of fiscal policy. |
| Keywords: | Fiscal Policy; Time-Varying impact; Financial returns and risks |
| JEL: | E5 C32 G14 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2020-12&r=all |
| By: | Toft, Maren; Friedman, Sam |
| Abstract: | In this article we demonstrate that those from working-class backgrounds face a powerful ‘class ceiling’ in elite occupations. Examining how class origin shapes economic returns in the Norwegian upper class (3.8% of the population), we first find that the income advantage enjoyed by those from privileged backgrounds increases sharply as they ascend the income distribution in both elite business and cultural fields. Second, we show that those from economically upper-class backgrounds enjoy the highest pay advantage in all upper-class destinations. Finally, we demonstrate the profound propulsive power provided by parental wealth. Our results indicate that this is the most important single driver of the class-origin income gap in virtually every area of the Norwegian upper class. These findings move forward an emerging literature on class-origin pay gaps beyond mean estimates to reveal the distinct ‘pay-off’ to class privilege in the very highest income-earning positions. |
| Keywords: | class ceiling; elites; income inequality; wealth |
| JEL: | N0 |
| Date: | 2020–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105198&r=all |
| By: | Alina K. Bartscher (University of Bonn); Moritz Kuhn (University of Bonn, CEPR, and IZA); Moritz Schularick (Federal Reserve Bank of New York and University of Bonn, CEPR); Ulrike I. Steins (University of Bonn) |
| Abstract: | This paper studies the secular increase in U.S. household debt and its relation to growing income inequality and financial fragility. We exploit a new household-level dataset that covers the joint distributions of debt, income, and wealth in the United States over the past seven decades. The data show that increased borrowing by middle-class families with low income growth played a central role in rising indebtedness. Debt-to-income ratios have risen most dramatically for households between the 50th and 90th percentiles of the income distribution. While their income growth was low, middle-class families borrowed against the sizable housing wealth gains from rising home prices. Home equity borrowing accounts for about half of the increase in U.S. household debt between the 1970s and 2007. The resulting debt increase made balance sheets more sensitive to income and house price fluctuations and turned the American middle class into the epicenter of growing financial fragility. |
| Keywords: | household debt, inequality, household portfolios, financial fragility |
| JEL: | E21 E44 D14 D31 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:015&r=all |
| By: | Giuseppe De Arcangelis (Department of Social Sciences and Economics, Sapienza University of Rome); Rama Dasi Mariani (CEIS, University of Rome Tor Vergata; Department of Social Sciences and Economics, Sapienza University of Rome); Federico Nastasi (Department of Social Sciences and Economics, Sapienza University of Rom) |
| Abstract: | Between 1870 to 1914 the Argentine economy performed spectacularly with a yearly average real growth rate of 5.94 per cent. Increased resource endowment in both land and labor, via migration, and openness to trade have been considered the two main drivers of this success. In this paper we underline the central role of Argentine immigration in contributing not only to increase resource endowments, but also to lower trade costs boosting exports and imports. By considering Argentine bilateral trade and migration from eight European countries (Austro-Hungarian Empire, Belgium, France, Germany, Italy, Spain, Switzerland and United Kingdom) we use a migration-augmented gravity model to estimate the contribution of the massive inflows of Europeans. In particular, we find that the main pro-trade effect was on imports: an increase of 10 per cent of migrants from one country could increase imports up to 8 per cent from the same trade partner. To overcome the typical endogeneity problem our study proposes migration to the US from the same countries as a instruments that could capture the same push (but not Argentine pull) factors triggering European out-migration. |
| Keywords: | Gravity Model, Migration and Imports, China-shock based Instrumental Variable |
| JEL: | F22 N76 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:saq:wpaper:11/20&r=all |
| By: | Dragosch, André |
| Abstract: | In this paper we analyse income formation patterns throughout the German industrialisation process (1860-1913) through the analysis of different financial flows. Similar to Neuburger & Stokes (1974), we make use of flow statistics originally estimated by Eistert (1970) with regard to four different types of financing, i.e. bills of exchange credit, lombard credit, current account credit, and securities credit which together comprise the total flow of credit provided by the banking system. We also enlarge the data set of Eistert (1970) and Eistert & Ringel (1971) by making use of different sources in order to allow for a representative statistical analysis. To our knowledge, we have compiled the first dataset on German financial flows spanning from 1860 to 1913. Our goal is to provoke a fundamental discussion about the suitability of stock vs. flow statistics - a question which has been disregarded for too many years. Moreover, we would like to shed more light on the question whether a qualitative differentiation of the different types of financing is needed in order to make more precise estimations of the influence of finance on real economic activity in general and non-agricultural income formation in particular. This paradigm derives from the theory of disaggregated credit formalised by Werner (1997) which is amongst others advocated by Eistert & Ringel (1971) as well. Statistical analysis will be conducted by utilising the General-to-Specific (Gets) approach presented in Sucarrat & Escribano (2012). Contrary to Neuburger & Stokes (1974), we have found a significantly positive relation between current account credit flows and non-agricultural output among other findings. Besides, the results might lend further support to the theory of disaggregated credit and might have implications for renowned models of income formation especially the IMF Polak (1957) model (for developing economies). |
| JEL: | N13 N23 O11 O42 C32 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ibfpps:0719&r=all |
| By: | Chiswick, Barry R. (George Washington University); Halenda Robinson, RaeAnn (George Washington University) |
| Abstract: | Rates of labor force participation in the US in the second half of the nineteenth century among free women were exceedingly (and implausibly) low, about 11 percent. This is due, in part, to social perceptions of working women, cultural and societal expectations of female's role, and lack of accurate or thorough enumeration by Census officials. This paper develops an augmented free female labor force participation rate for 1860. It is calculated by identifying free women (age 16 and older) who were likely providing informal and unenumerated labor for market production in support of a family business, that is, unreported family workers. These individuals are identified as not having a reported occupation, but are likely to be working on the basis of the self-employment occupation of other relatives in their households. Family workers are classified into three categories: farm, merchant, and craft. The inclusion of this category of workers more than triples the free female labor force participation rate in the 1860 Census, from 16 percent to 56 percent, which is comparable to today's rate (57 percent in 2018). |
| Keywords: | women, labor force participation, occupational attainment, unpaid workers, unreported family workers, 1860 Census |
| JEL: | N31 J16 J21 J82 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13424&r=all |
| By: | Maé Geymond (Centre d'Economie de la Sorbonne) |
| Abstract: | In this paper, we combine the Varieties of Capitalism and the global value chain approaches, considering the interaction between lead firms' global strategies and national capitalism, to show how local pharmaceutical employment results from this interaction. Our analysis is grounded in the comparison between France and Quebec. The first part presents the relevant differences in both historical and institutional elements. Second, after highlighting the similarities that can be attributed to global dynamics, we detail the mechanisms by which local institutions shape the global value chain implantation, giving different forms to the employment structure and dynamcis. We show that France is clearly oriented towards manufacturing activity because of industrial history and market features, whereas Quebec has a commercial specialty and an outsourced R&D as a result of high prices and the global organization of research |
| Keywords: | political economy; varieties of capitalism; industrial organization; local government; multinational firms |
| JEL: | L65 P52 P16 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:20011&r=all |
| By: | Bekkers, Eddy; Francois, Joseph; Nelson, Doug R; Rojas-Romagosa, Hugo |
| Abstract: | This paper assesses the utility of economic theory of rational trade wars to predict such events or to prescribe courses of action to control their consequences. Trade wars are fundamentally political events whose causes are almost completely political and whose consequences are to a significant degree also political. Contemporary economic theory has developed during a uniquely peaceful and liberal period in world history, affecting how economists have thought about trade conflicts, leaving the profession unprepared to provide serious analysis or advice. |
| Keywords: | general equilibrium trade models; International Political Economy; optimal taxation; trade wars |
| JEL: | F13 F14 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14079&r=all |
| By: | Aghion, Philippe; Jaravel, Xavier; Persson, Torsten; Rouzet, Dorothee |
| Abstract: | What makes countries engage in reforms of mass education? Motivated by historical evidence on the relation between military threats and expansions of primary education, we assemble a panel dataset from the last 150 years in European countries and from the postwar period in a large set of countries. We uncover three stylized facts: (i) investments in education are associated with military threats, (ii) democratic institutions are negatively correlated with education investments, and (iii) education investments respond more strongly to military threats in democracies. These patterns continue to hold when we exploit rivalries in a country’s neighborhood as an alternative source of variation. We develop a theoretical model that rationalizes the three empirical findings. The model has an additional prediction about investments in physical infrastructures, which finds support in the data. (JEL: N30, N40, I20, H56). |
| JEL: | I20 H56 N30 N40 |
| Date: | 2019–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:87655&r=all |
| By: | Maé Geymond (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Panthéon-Sorbonne) |
| Abstract: | In this paper, we combine the Varieties of Capitalism and the global value chain approaches, considering the interaction between lead firms' global strategies and national capitalism, to show how local pharmaceutical employment results from this interaction. Our analysis is grounded in the comparison between France and Quebec. The first part presents the relevant differences in both historical and institutional elements. Second, after highlighting the similarities that can be attributed to global dynamics, we detail the mechanisms by which local institutions shape the global value chain implantation, giving different forms to the employment structure and dynamics. We show that France is clearly oriented towards manufacturing activity because of industrial history and market features, whereas Quebec has a commercial specialty and an outsourced R&D as a result of high prices and the global organization of research. |
| Abstract: | Dans ce papier, nous combinons Variété des Capitalismes et chaîne globale de valeur, pour faire apparaître comment l'emploi pharmaceutique local résulte de l'interaction entre stratégies globales et capitalismes nationaux. Notre analyse s'appuie sur une comparaison France-Québec. La première partie présente les différences majeures des cadres historico-institutionnels. Ensuite, après avoir souligné les similarités liées aux dynamiques mondiales, nous détaillons les mécanismes par lesquels les institutions locales influencent l'implantation de la chaîne globale de valeur, donnant des formes différentes à l'emploi. Tandis que la France est clairement orientée vers l'activité de production du fait de l'histoire industrielle et des caractéristiques du marché, le Québec dénote par sa spécialisation commerciale et sa R&D externalisée, en lien avec le haut niveau des prix et l'organisation de la recherche mondiale. |
| Keywords: | political economy,varieties of capitalism,industrial organization,local government,multinational firms,économie politique,variété des capitalismes,organisation industrielle,gouvernement local,firmes multinationales |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-02900915&r=all |
| By: | Robert Stelter (Max Planck Institute for Demographic Research, Rostock, Germany); David De la Croix; Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany) |
| JEL: | J1 Z0 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2020-030&r=all |
| By: | Accominotti, Olivier |
| Abstract: | In May to July 1931, a series of financial panics shook central Europe before spreading to the rest of the world. This article explores the role of cross-border banking linkages in propagating the central European crisis to Britain and the US. Using archival bank-level data, the article documents US and British banks’ exposure to central European frozen credits in 1931. Central European lending was mostly done by large and diversified commercial banks in the US and by small and geographically specialized merchant banks/acceptance houses in Britain. Differences in the organization of international bank lending explain why the central European crisis disturbed few US banks but endangered many British financial institutions. |
| JEL: | N24 |
| Date: | 2019–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:87788&r=all |
| By: | Bindler, Anna L; Hjalmarsson, Randi |
| Abstract: | We document persistent gender gaps favoring females in jury convictions and judge sentences in nearly 200 years of London trials, which are unexplained by case characteristics. We find that three sharp changes in punishment severity locally affected the size and nature of the gaps, but were generally not strong enough to offset their persistence. These local effects suggest a mechanism of taste-based discrimination (paternalism) where the all-male judiciary protected females from the harshest available punishment. |
| Keywords: | crime; discrimination; Gender; Gender Gap; History; sentencing; verdict |
| JEL: | J16 K14 K40 N33 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14067&r=all |
| By: | Eugen Dimant; Tim Krieger; Daniel Meierrieks |
| Abstract: | Does U.S. military aid make the United States safer? To answer this question, we collect data on 173 countries between 1968 and 2014. Exploiting quasi-random variation in the global patterns of U.S. military aid, our paper is the first to provide causal estimates of the effect of U.S. military aid on anti-American terrorism. We find that higher levels of military aid led to an increased likelihood of the recipient country to produce anti-American terrorism. For our preferred instrumental-variable specification, doubling U.S. military aid increases the risk of anti-American terrorism by 4.4 percentage points. Examining potential transmission channels, we find that more U.S. military aid leads to more corruption and exclusionary policies in recipient countries. Consistent with a theoretical argument developed in this paper, these results indicate that the inflow of military aid induces rent-seeking behavior, which in turn encourages terrorism by groups that suffer from reduced economic and political participation as a consequence of rent-seeking. These groups direct their dissatisfaction against the United States as the perceived linchpin of an unfavorable status quo in the recipient country. |
| Keywords: | U.S. military aid, anti-American terrorism, transnational terrorism, instrumental variable estimation |
| JEL: | D74 F35 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8411&r=all |
| By: | Scholtyseck, Joachim |
| JEL: | N00 N01 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ibfpps:0619&r=all |
| By: | Afees A. Salisu (Centre for Econometric & Allied Research, University of Ibadan, Ibadan, Nigeria); Juncal Cunado (Economics Department, University of Navarra, Spain); Kazeem Isah (Centre for Econometric & Allied Research, University of Ibadan, Ibadan, Nigeria); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa) |
| Abstract: | We attempt to predict the exchange rate returns of BRICS countries with the global oil price using large historical datasets for over a century extending from September 1859 to April 2020. We formulate a predictive model that accounts for the salient features of the predictor and the predicted series in line with the recent literature. We establish, with the aid of asymmetry, that oil price is a good predictor of exchange rate returns for all the net oil-importers (India, South Africa and China) and one of the two net oil-exporters (Russia). We also demonstrate with compelling in-sample and out-of-sample forecast results that accounting for the role of asymmetry is crucial for the oil-based model to beat the benchmark (historical average) model. |
| Keywords: | Oil price, Exchange rate return, BRICS, Asymmetry, Predictability, Forecast evaluation |
| JEL: | C22 C53 F31 Q47 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:202064&r=all |
| By: | Goodhart, C. A. E.; Ashworth, Jonathan |
| Abstract: | Over the past decade the media have regularly reported on the imminent death of cash amid rapid innovation in payment technologies. However, cash in circulation has actually been growing strongly in many counties. Perhaps unsurprisingly given Coronavirus-related health concerns, there have been renewed calls to abandon cash and some observers have argued the virus will accelerate its demise. Data thus far suggest, however, that currency in circulation has actually surged in a number of countries. While the economic shutdowns and increased use of online retailing are currently diminishing cash's traditional function as a medium of exchange, it seems that this is being more than offset by panic driven hoarding of banknotes. |
| Keywords: | coronavirus; Covid-19; currency usage; payment technologies; hoarding in panics |
| JEL: | E40 E41 E49 E63 N10 |
| Date: | 2020–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105311&r=all |
| By: | Héloïse Berkowitz (TSM - Toulouse School of Management Research - UT1 - Université Toulouse 1 Capitole - CNRS - Centre National de la Recherche Scientifique - TSM - Toulouse School of Management - UT1 - Université Toulouse 1 Capitole); Antoine Souchaud (NEOMA - Neoma Business School) |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02874945&r=all |
| By: | Buscha, Franz (University of Westminster); Gorman, Emma (University of Westminster); Sturgis, Patrick (London School of Economics) |
| Abstract: | Social mobility—the extent to which social and economic position in adulthood is facilitated or constrained by family origins—has taken an increasingly prominent role in public and policy discourse. Recent studies have documented that not only who your parents are, but also where you grow up, influences subsequent life chances. We bring these two concepts together to study trends in social mobility in England and Wales, in three post-war generations, using linked Decennial Census data. We estimate rates of occupational social class mobility by sex and region of origin. Our findings show considerable spatial variation in rates of absolute and relative mobility as well as how these have changed over time. While rates of upward mobility increased in every region between the mid-1950s and the early 1980s, this upward shift varied across different parts of the country, and tailed off for more recent cohorts. We also explore the role of domestic migration in understanding these temporal and spatial patterns, finding that those who stayed in their region of origin had lower rates of upward mobility compared to those who moved out, although this difference also narrowed over time. While policy discussion has focused almost entirely on national-level trends in social mobility, our results emphasise the need to also consider persistent spatial inequalities. |
| Keywords: | intergenerational mobility, social mobility, regional economics, spatial mobility |
| JEL: | J62 J61 J21 I24 I26 R12 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13437&r=all |
| By: | Brodeur, Abel; Gray, David; Islam, Anik; Bhuiyan, Suraiya Jabeen |
| Abstract: | The goal of this piece is to survey the emerging and rapidly growing literature on the economic consequences of COVID-19 and governmental responses, and to synthetize the insights emerging from a very large number of studies. This survey (i) provides an overview of the data sets used to measure social distancing and COVID-19 cases and deaths; (ii) reviews the literature on the determinants of compliance and effectiveness of social distancing; (iii) summarizes the literature on the socio-economic consequences of COVID-19 and governmental interventions, focusing on labor, health, gender, discrimination and environmental aspects; and (iv) discusses policy proposals. |
| Keywords: | COVID-19,coronavirus,employment,lockdowns |
| JEL: | E00 I15 I18 J20 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:601&r=all |
| By: | Brzezinski, Adam; Chen, Yao; Palma, Nuno Pedro G.; Ward, Felix |
| Abstract: | We exploit a recurring natural experiment to identify the effects of money supply shocks: maritime disasters in the Spanish Empire (1531-1810) that resulted in the loss of substantial amounts of monetary silver. A one percentage point reduction in the money growth rate caused a 1.3% drop in real output that persisted for several years. The empirical evidence highlights nominal rigidities and credit frictions as the primary monetary transmission channels. Our model of the Spanish economy confirms that each of these two channels explain about half of the initial output response, with the credit channel accounting for much of its persistence. |
| Keywords: | DSGE; financial accelerator; Local projection; minimum-distance estimation; Monetary shocks; Natural Experiment; Nominal Rigidity |
| JEL: | E43 E44 E52 N10 N13 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14089&r=all |
| By: | Lin, Hwan C. |
| Abstract: | This is an independent investigation by a Taiwanese-American scholar, spanning a period of three months. It was inspired by Taiwanese people’s deepened worries about whether Taiwan’s President Ing-wen Tsai was truly awarded a PhD in law 35 years ago (1984) at the London School of Economics and Political Science (LSE). It proceeded with difficulties, such as information asymmetries and data protection of personal data. The Freedom of Information Act (FOIA) of the United Kingdom was helpful to some extent, however. The investigator contacted numerous university staff from the libraries, Diploma Production Office, and Data Protection and Compliance, among others. The investigator also flew to the U.K. this August, visiting the LSE Library for reviewing the mysterious, tardy doctoral thesis that President Tsai submitted recently (June 2019). The report concludes that President Tsai was not awarded a doctoral degree in 1984 and that she was at best a doctoral candidate without passing an oral examination at that time. However, recently, LSE unduly endorsed Tsai’s doctoral degree by issuing an unwarranted statement on October 8, reminiscent of the Gaddafi scandal that just happened about a decade ago. |
| Keywords: | None |
| JEL: | Z0 |
| Date: | 2019–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101939&r=all |
| By: | Karim Khan (Pakistan Institute of Development Economics, Islamabad); Sadia Sherbaz (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | Violence creates chaos or uncertainty, destabilises social and political structure, deters investment, and retards economic prosperity. In order to curtail violence, the society needs a social order which comprises a set of formal and informal institutions. The social order is aimed at structuring economic, social and political interactions. In this study, we examine what such a set of institutions implies for the mitigation of violence. We take four indicators of political violence, i.e. civil wars, inter-state wars, ethnic violence, and terrorism. In addition, we aggregate civil wars, inter-state wars and ethnic violence in order to get major episodes of the political violence. We find that for ethnic violence, terrorism, and major episodes of political violence, informal institutions are more efficient in decreasing violence. Also, they enhance the efficacy of formal institutions in mitigating these types of violence. In case of civil wars and interstate wars, formal institutions are more effective; however, if the level of formalisation is not accompanied by commiserate informal support, then the formal institutions become ineffectual. Moreover, the results show that there is complementarity between formal and informal institutions in reducing violence; giving credence to the idea that without institutional reforms, violence cannot be prevented in modern societies. |
| Keywords: | Violence, Social Order, Formal and Informal Institutions, Ethnic Violence, Civil Wars, Inter-State Wars, Terrorism, Major Episodes of Political Violence |
| JEL: | D74 H13 H56 N40 O17 O43 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2020:174&r=all |
| By: | Vlados, Charis (Democritus University of Thrace, Department of Economics); Chatzinikolaou, Dimos (Democritus University of Thrace, Department of Economics) |
| Abstract: | The evolution of institutions is a theoretical field of increasing interest today. Socio-economic development in the institutional approach results mainly from the historical unfolding and quality of institutions. This paper aims to highlight Daron Acemoglu’s institutional approach, which appears to be gaining prominence gradually, and propose a new theoretical perception of the developmental process of the Greek socio-economic system. It first analyses Acemoglu’s theoretical contribution, it then compares the ‘Acemoglian’ to other approaches and suggests that the analysis of inclusive and extractive institutions based on historically-significant virtuous and vicious circles has value for the Greek case. While several studies tend to focus on the macroeconomic and macro-financial symptoms of the Greek crisis, an evolutionary approach of the deeper institutional dynamics seems to offer a required reposition. We describe and recommend the development and underdevelopment process in terms of an ‘institutionally adaptive socio-economic system’ and ‘competitiveness web’. These findings indicate that development takes place over historically-significant periods, through complex processes of selection and diffusion of institutional restructurings, and that civil societies are responsible for the political forces who represent them, at least in democratic regimes. In the case of Greece, the proposal to utilise an approach of an ‘institutionally adaptive socio-economic system’ can give a repositioned theoretical perception, especially nowadays when the institutional and evolutionary socio-economic analytical classes seem to be gaining interest and prominence. |
| Keywords: | Daron Acemoglu; Greek crisis; why nations fail; socio-economic development; institutionally adaptive socio-economic system; institutional innovations; competitiveness web |
| JEL: | B15 B52 F63 |
| Date: | 2020–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:ris:duthrp:2020_005&r=all |
| By: | Chiaruttini, Maria Stella |
| Abstract: | When in 1860 Southern Italy was annexed to the Kingdom of Italy, it suddenly found itself within a larger national market characterised by high levels of public debt, a new currency and increased competition in banking. Monetary problems, the depreciation of public bonds and the loss of pre-eminence of the Southern public banks to the advantage of the Piedmontese National Bank, the predecessor of the Bank of Italy, are increasingly often taken as evidence of the harmful effects of financial integration on the Southern economy. This paper, focusing on the banking side of the story, argues, on the contrary, that the South benefited significantly from its integration with the North and that the relative underdevelopment of its credit markets was not due to a policy of 'internal financial colonialism' pursued by Northern capitalists with the backing of the Italian state, but to different economic conditions and the long-lasting impact of the poor banking policies implemented under the Bourbons. |
| JEL: | E50 F36 G21 G28 N23 P51 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ibfpps:0320&r=all |