Industrial Structural Change and Economic Growth in China, 1987–2008

The present paper studies the sources of economic growth and the nature of structural change in the Chinese economy from 1987 to 2008. Using a methodology that evaluates the contribution of an industry to economic growth, the present paper shows that the post‐2000 subperiod marked an increased reliance on the services sector as a source of growth in the Chinese economy. Much of the acceleration in real GDP or aggregate labor productivity growth in China in the post‐2000 subperiod compared to the pre‐2000 period can be traced to an increased contribution from service‐producing and high‐technology exporting manufacturing industries. The evidence indicates that the Chinese economy has been rebalancing toward domestic consumption and shifting its export sector toward high‐technology manufacturing industries.     

Central Bank Balance Sheets and the Transmission of Financial Crises

Central banks usually “park” their foreign exchange reserves in safe or highly liquid foreign assets. The paper illustrates that when central banks invest instead in risky foreign assets, then domestic banking crises can cause a crisis in the market for the foreign asset and vice versa. The paper takes its motivation from Asian central banks’ recent appetite for US government agency-debt securities such as those issued by Fannie Mae and Freddy Mac.     

Monetization and the behavior of velocity in Sweden, 1871–1913

The income velocity of money declined sharply in Sweden between the 1870's and the outbreak of World War I. This decline is explained by a monetization process. An account of this process is given focusing on (a) the growth of commercial banking, (b) changes in wage contracts and in labor markets, and (c) changes in exchange arrangements in the markets for goods. A number of proxy measures of the spreading use of money are presented and included in regressions on velocity. The influence of the monetization variables is compared to the effects of the standard explanatory variables in money demand studies, that is, of real income and interest rates. The econometric results support the view that monetization variables significantly contributed to the fall in velocity. These results question the luxury-good hypothesis of money, suggesting that the standard approach of including real income as an explanatory variable in money demand studies covering long spans of time runs the risk of ignoring important determinants of the secular behavior of velocity.     

Price Fluctuations and Growth Patterns in Singapore's Trade, 1831–1913

Using a newly created trade price index, this paper determines the real growth rate of Singapore's trade during 1831–1913. We find that Singapore's trade grew between 1831 and 1873 at a higher rate than during the later period. An analysis of the terms of trade and purchasing power parity reveals that the growth pattern of Singapore's entrepôt trade changed after 1850 from growth fuelled by transit trade of industrial products to balanced growth between regional imports and exports. This change resulted from the operation of the international monetary system, which enhanced market integration between Britain and Southeast Asia via Singapore.     

The industrial retardation of southern cities, 1860–1880

Industrial retardation of the South is traced to the southern slave plantation with its vested interest in labor, whereas the Midwest joined the manufacturing belt based on the extensive industrial demands derived from the free family farm with its vested interest in land. The analyses focus on 304 cities in the East, Midwest, and South for the period 1860–1880. Industries in the published censuses were given two-digit SIC codes. The results demonstrate that midwestern cities had significantly larger industrial sectors and different specializations than southern cities by 1860. During the 1860s midwestern cities' industrial growth substantially outpaced southern cities, and differences between the two regions' cities continued to grow up to 1880.     

Foreign investment, trade and growth in the United Kingdom, 1870–1913

England will not be able to hold her own against the other nations by the mere sedulous practice of familiar process…. Her chief remaining advantage lies in that unapproached freedom of movement, that viability that gives her much of the strength without the cumbrousness and want of elasticity of a single huge firm extending over the entire land.     

The rise and demise of gedik markets in Istanbul, 1750–1860

Using new evidence uncovered from Istanbul court records, this paper shows that Ottoman markets were capable of spontaneous financial innovation before the introduction of modern financial instruments. At the same time, however, it demonstrates that the impact and sustainability of these innovations depended on the underlying political equilibrium. Gediks—entitlements to usufruct rights over the factors of production used in urban commercial and industrial activity—gradually transformed into liquid assets during the late eighteenth century. This transformation was enabled by the coercive power of Janissary‐infiltrated guilds in response to the financial needs of small‐ and medium‐scale actors operating within the confines of the domestic economy. The entry barriers, which enabled gedik markets to exist in the first place, also limited their use for growth‐promoting purposes and thus set them apart from similar financial instruments that emerged in the West. Gedik markets disappeared as the Janissary–guild coalition declined and better financial instruments emerged during the mid‐nineteenth century.     

Retail revolution and the village shop,c. 1660–1860

Village shops have been largely overlooked in the recent literature on British retailing in the eighteenth and nineteenth centuries, which has sought to redefine the parameters and timing of retail transformation. While urban shops have been explored in detail, often in ways that highlight their role in a parallel transformation in consumption patterns, little attempt has been made to look inside village shops or examine the character and practices of rural retailers. This article addresses this lacuna and offers fresh insights into the shifting position of village shops in these broader economic, business, and social changes. Taking a long view of the period c. 1660–1860, it draws on a wide range of sources to examine the stock sold and the degree of specialization exhibited by village shops, and the changing trading practices of village shopkeepers, including the provision of credit, the pricing of goods, and marketing activities. In doing so, the article highlights both long‐term continuities and important innovations of the type that also characterize urban shops, and argues that village shops, while central to rural social and economic networks, were also intimately bound into broader retail systems.     

Independent invention in Italy during the Liberal Age, 1861–1913

This article examines the phenomenon of independent invention in Italy during the Liberal Age (1861–1913). It makes use of a new dataset comprising all patents granted in Italy in five benchmark years: 1864–5, 1881, 1891, 1902, and 1911. The following exercises are carried out. First, an examination is undertaken of the shares of independent, corporate, and foreign inventions and their evolution over time and across industries. Second, by exploiting the peculiarities of Italian patent legislation, which was characterized by relatively cheap fees and a flexible renewal scheme, the relative quality of independent and corporate patents is assessed. The results indicate that in Italy independent inventors made an important contribution to technological change in terms of number of patents, but the quality of their patents was significantly lower than that of firms and of foreign patentees.     

Competition in the Rhine delta: waterways,railways and ports, 1870–1913

Rhine transport was not an absolute condition for German industrialization. Railways proved to be efficient, and in the 1840–1870 period were essential for the industrialization of the Ruhr area. The key questions addressed in this article are: why did inland navigation not disappear from the Rhine region (as it did elsewhere), even recovering after the 1870s? And why did it have an unassailable competitive advantage from the 1890s onwards? Political developments leading to the liberalization of Rhine shipping and the canalization of the river created the opportunity to increase the scale of shipping. This gave it competitive advantages when it came to bulk transport. This article uses new data on freight rates in the Rhine delta to demonstrate the course of Rhine competitiveness. Furthermore, it identifies the institutional conditions, and the technological and organizational improvements, that were the basis of this growing competitiveness. The conclusion is that the element of German international trade that went by the Rhine correlated with the cost of Rhine shipping when compared to that of railway transport. As a consequence of the recovery of Rhine shipping, the port of Rotterdam became stronger than its Belgian neighbour, Antwerp.     

Coping with regional inequality in Sweden: structural change,migrations, and policy, 1860–2000

In many countries, regional income inequality has followed an inverted U‐shaped curve, growing during industrialization and market integration and declining thereafter. By contrast, Sweden's regional inequality dropped from 1860 to 1980 and did not exhibit this U‐shaped pattern. Accordingly, today's regional income inequality in Sweden is lower than in other European countries. We note that the prime mover behind the long‐run reduction in regional income differentials was structural change, whereas neoclassical and technological forces played a relatively less important role. However, this process of regional income convergence can be divided into three major periods. During the first period (1860–1940), the unrestricted action of market forces, particularly the expansion of markets and high rates of internal and international migration, led to the compression of regional income differentials. During the next period (1940–80), regional convergence was even more intense. In this period, institutional arrangements favoured the reduction of productivity differentials across industries and successive governments aided the reallocation of the workforce from declining to thriving regions and economic sectors. During the last period (1980–2000), when regional incomes diverged, internal migration and structural change slowed. Furthermore, the development of knowledge‐intensive service industries favoured economic growth in the main metropolitan areas.