The Transformation of American Law, 1780–1860

It is commonly believed that New Institutional Economics, particularly the theoretical innovations of Douglass North over the past 20 years and more, has lent scientific legitimacy to economic history. Yet, North is a prisoner of a very peculiar conception of historical development which is no more scientific than rival theories. Two particular aspects of his work underline this point. First, his presentation of class struggles and institutions as contractual relations, understood in economic terms, is highly questionable. Second, it remains to be seen whether or not his recent acceptance of the relevance of ideology is convincing: his account of Soviet stagnation and the crises of Muslim societies leads him into an idealist or culturalist deadlock.     

Real exchange rate and export performance in Argentina, 2002–2008

Between 2002 and 2008, Argentina experienced a phase of very high and sustained economic growth. During this period, macroeconomic policy aimed to preserve a stable and competitive real exchange rate (SCRER). There is controversy on whether the SCRER policy was a key factor fostering growth and, even more, on whether it helped promote the expansion of tradable activities and exports. We use a methodology to detect episodes of export surges among Argentina’s export industries and find that labor-intensive industries—especially low- and medium-technology manufactures—experienced the highest proportion of export surges within this period. We also find that between 1980 and 2015, the highest proportion of surges in total exports occurred during the 2003–8 period. The performance of export of services was also particularly dynamic during this period. This evidence suggests that the SCRER policy was instrumental for export surges in Argentina during 2002–8.     

Real wages,productivity and economic growth in the G7, 1960–2002

Abstract

This paper investigates empirical real wage and productivity dynamics in the G7 countries using annual data for 1960–2002. The findings suggest that the level of labor productivity is positively related to GDP growth in all countries, and real wages are positively related to growth in some of them. The results tend to confirm the ‘profit paradox’. This postulates a positive relationship between economic growth and the aggregate profit share, and suggests that the frequent support of business interests for deflationary economic policies is a puzzle.     

Divorce and the Birth Control Pill in the US, 1950–85

This paper explores the relationship between the advent of the birth control pill and divorce rates. Women using the pill can decide when and whether to have children and whether to maintain their attachment to the labor force. This ability may increase women's autonomy, making divorce more feasible. The pill's effects are identified through a quasi-experiment exploiting differences in the language of the Comstock anti-obscenity statutes approved in the late 1800s and early 1900s in the United States. Empirical evidence from state-level data on US divorce rates 1950 to 1985 shows that sales bans of oral contraceptives have a negative impact on divorce. These findings are robust to alternative specifications and controls for observed (such as women's labor force participation) and unobserved state-specific factors, and time-varying factors at the state level. Results suggest that the impact of women's control of hormonal contraception on their autonomy is important in divorce decisions.     

Profit rate in the US, 1949–2007: a Markov switching assessment

The article investigates the growth in the general profit rate in the US during the 1949–2007 period with a Markov switching model. The evidence is consistent with a long swing with means displaying opposite signs under the two regimes (increasing or declining) and high degree of persistence within each regime. The results for this nonlinear approach reinforce previous empirical evidence that does not provide support for a systematic and declining tendency in profit rate as advanced in the Marxian literature.     

Stolper-Samuelson-Rybczynski in the Pacific: Real wages and real exchange rates in the Philippines, 1956–1978

The paper attempts to explain movements of real wages in the Philippines in terms of the standard trade-theoretic Stolper-Samuelson-Rybczynski model. In view of the factor intensities in the Philippines, commodities are aggregated into two composite goods — traded and non-traded — whose relative price — the so-called ‘real exchange rate’ — is shown to have been an important determinant, with changes in relative factor supplies of less importance in determining real wages. A conventional two-sector model is set out, which distinguishes between the short and long run effects in terms of the ‘quasi-fixity’ of sector specific capital. A simple regression model is estimated and seems to provide a fairly good explanation of what has hitherto appeared to be a puzzling feature of post-war Philippines economic performance — high growth rates of output and employment, accompanied by declining real wages (in turn being associated with a rising incidence of poverty) in at least two periods.     

The Role of Real Wages,Productivity, and Fiscal Policy in Germany's Great Depression 1928–1937

We study the behavior of output, employment, consumption, and investment in Germany during the Great Depression of 1928–1937. In this time period, real wages were countercyclical, and productivity and fiscal policy were procyclical. We use the neoclassical growth model to investigate how much these factors contribute to the depression. We find that real wages, which were significantly above their market clearing levels, were the most important factor for the economic decline in the depression. Changes in productivity and fiscal policy were also important for the decline and recovery. Even though our analysis is limited to a small number of factors, the model accounts surprisingly well for the depression in Germany. Journal of Economic Literature Classification Numbers: E13, E32, E62, N14, O47.     

The institutionalisation of political economy in Italy and Spain (1860–1900): a comparative approach

Abstract

The process of institutionalisation of political economy has become of increasing interest in tracing the evolution of economic thought. This paper presents a comparison of the development of these processes in Italy and Spain, through the analysis of the presence of political economy in some institutions in both countries between 1860 and 1900: universities, economic associations, economic journals and national parliaments. This essay aims at supplying new insights to the consolidation of economics as a scientific and socially appreciated field of knowledge, and exploring the influence of the form of institutionalisation on the economic ideas diffused in a particular country.     

Persistence,mean reversion and non-linearities in the US housing prices over 1830–2013

The objective of this study is to provide a direct estimate of the degree of persistence of measures of nominal and real house prices for the US economy, covering the longest possible annual sample of data, namely 1830–2013. The estimation of the degree of persistence accommodates for non-linear (deterministic) trends using Chebyshev polynomials in time. In general, the results show a high degree of persistence in the series along with a component of non-linear behaviour. In general, if we assume uncorrelated errors, non-linearities are observed in both nominal and real prices, but this hypothesis is rejected in favour of linear models for the log-transformation of the data. However, if autocorrelated errors are permitted, non-linearities are observed in all cases, and mean reversion is found in the case of logged prices, though given the wide confidence intervals, the unit root null hypothesis cannot be rejected in these cases.     

Real and nominal effective exchange rates in MENA countries: 1970–2004

The main purposes of this article are 3-fold. First, we construct measures of real and nominal effective exchange rates for 14 Middle East and North African countries over the 1970–2004 period. Second, we test the validity of the Purchasing Power Parity (PPP) by applying the ADF and KPSS tests to the real effective exchange rates. Finally, we employ the bounds testing approach to cointegration and error-correction modelling to show that nominal devaluation leads to real devaluation in the short-run as well as in the long-run in many of the countries.     

Innovation,imitation and multinationalisation in a North–South model: a theoretical note

We consider a dynamic general equilibrium product variety model of international product cycle with endogenous rate of imitation in the South; and find that a policy of strengthening intellectual property rights (IPR) protection in the South lowers the rate of product innovation, rate of multinationalisation and South–North relative wage if multinationalisation [or, foreign direct investment (FDI)] is the channel of production transfer. These results are significantly different from those obtained in the exogenous imitation model of Lai (J Dev Econ 55(1): 133–153, 1998). So a stronger IPR protection policy adopted by the South may not be interpreted as an incentive to encourage Northern FDI in the South and to raise the rate of innovation in the North.      

The time structure of production in the US, 2002–2009

The US time structure of production during the 2002 through 2009 business cycle is characterized empirically using industry-level input-output data. An industry’s total industry output requirement (TIOR) is proposed as a metric for “roundaboutness”. I find that the time structure of production lengthened following the Federal Reserve’s 2002 expansionary deviation from the Taylor rule and then contracted during the Great Recession. Value added growth in the most-roundabout of US industries accelerated relative to that of the least-roundabout industries. Heading into the Great Recession, value-added growth in the most-roundabout industries contracted early and turned negative in 2007 while value-added growth in the least-roundabout industries remained positive until 2009. The stylized facts of the time structure of production are consistent with Austrian Business Cycle Theory.     

A tale of two Ginis in the US, 1921–2012

Following a methodology by Jantzen and Volpert (2012), we use IRS Adjusted Gross Income data for the US (1921–2012) to estimate two Gini indices representing inequality at the bottom and the top of the income distribution, and to calculate the overall Gini as a function of the parameters underlying the two indices. A steady increase in the overall Gini since the Second World War actually hides two different periods of distributional changes. First, the increase in inequality from the mid 1940s to the late 1970s is driven by rising inequality at the bottom of the income distribution that more than offsets a decrease in inequality at the top. The implication is that middle-income earners gained relative to high-incomes, and especially relative to low-income earners. Second, the rise in the Gini after 1981 is driven by rising inequality at the top. Third, top-driven inequality follows a U-shaped trajectory consistent with Piketty and Saez (2003, 2006). Fourth, the welfare effects of the different distributional changes behind increasing inequality can be evaluated in light of the Lorenz-dominance criterion by Atkinson (1970): we argue that the rise in inequality since 1981 is much more likely to be associated with a social welfare loss net of compensating growth.     

An empirical investigation of interregional production relations and comparative advantage in US manufacturing, 1960–70

Hypothesized differences in mean changes in shares of European Community (EC) import markets over the period 1976-84 are tested for each of 36 less-developed countries. Means are calculated for cases in which MFN tariffs are re-established and for cases in which duty-free treatment is restored under the EC generalized system of preferences. They are compared with means for cases in which tariffs remained constant. We attempt to control for both product-specific and cyclical influences on imports. In contrast to some previous results, our findings suggest that denial (restoration) of preferential treatment, i.e. a tariff increase (decrease), has its expected negative (positive) effect.     

Land Grabs,Power, and Gender in East and Southern Africa: So,What's New?

When land grabs are viewed from a gendered and historical lens, critical questions arise concerning three domains of inquiry about what is arguably “new,” “foreign,” and “large-scale?” They highlight historical continuities from the colonial past elite and male capture and gendered micro-political land grabs unabated over long periods of time, which once aggregated across Sub-Saharan Africa, are large-scale in themselves. This contribution reflects on feminist political-ecological research on gender and land in Kenya, Mozambique, and Madagascar and provides windows into negotiations and contestations in processes of land grabs. It analyzes what is new, while considering relations of power and knowledge that shape different ways land grabs are named and, therefore, the kinds of actions that are subsequently prescribed. Land grabs are occurring in spite of strong laws and policies, illustrating the critical role of power relations in shaping them.     

Combinations of technology in US patents, 1926–2009: a weakening base for future innovation?

In combinatorial models of innovations, new technologies are built from combinations of pre-existing technological components. Researchers learn which components work well together by observing previously successful combinations and the pool of ideas can be ‘fished out’, i.e. exhausted, if it is not ‘restocked’ by the discovery of novel connections. We first show US patents have made increasingly less novel connections among technological constituents since the 1950s, and that the number of technological fields to which these connections are applicable has stopped growing since the 1980s. We then estimate the parameters of an ideas production function, and find parameter estimates consistent with technology fields being fished out if not continually restocked by the discovery of novel connections between technological components. We use the ideas production function to estimate the number of new patent applications induced by each patent granted between 1926 and 2001, and show this number has trended downward since the 1940s.     

Wage bargaining and induced technical change in a linear economy: Model and application to the US (1963–2003)

In a simple one-sector, two-class, fixed-proportions economy operating at full capacity, wages are set through generalized axiomatic bargaining à la Nash (1950). As for choice of technology, firms choose the direction of factor-augmenting innovations to maximize the rate of unit cost reduction (Kennedy, 1964, Funk, 2002). The aggregate environment resulting by self-interested decisions made by economic agents is described by a two-dimensional dynamical system in the employment rate and output/capital ratio. The economy converges cyclically to a long-run equilibrium involving a Harrod-neutral profile of technical change, a constant rate of employment of labor, and constant input shares. The type of oscillations predicted by the model matches qualitatively the available data on the United States (1963–2003). Institutional change, as captured by variations in workers’ bargaining power, has a positive effect on the rate of output growth but a negative effect on employment.     

Markups in the Euro area and the US over the period 1981–2004: a comparison of 50 sectors

This article provides estimates of price–marginal cost ratios or mark-ups for 50 sectors in eight Euro area countries and the US over the period 1981–2004. The estimates are obtained applying the methodology developed by Roger (J Polit Econ 103:316–330, 1995) on the EU KLEMS March 2007 database. Five stylized facts are derived. First, perfect competition can be rejected for almost all sectors in all countries; markup ratios are generally larger than 1. Second, average markups are heterogeneous across countries. Third, markups are heterogeneous across sectors, with services having higher markups on average than manufacturing. Fourth, services sectors generally have higher markups in the euro area than the US, whereas the pattern for manufacturing is the reverse. Fifth, there is no evidence that there is a broad range change in markups from the 1980s to the 1990s.     

The behaviour of the US consumer price index 1913–2003: a study of seasonality in the monthly US CPI

This article analyses the seasonality in the monthly consumer price index (CPI) over the period January 1913 to December 2003. We examine three types of month effects: if the mean of monthly CPI changes of the entire data set, and of a given month were significantly different from zero; if the mean of monthly CPI changes of a given month was different from the mean of the other months; and if the variance of the monthly CPI changes for a given month was different from the variance of the other months. The mean of monthly CPI changes for the entire data set (0.27%) was found to be significantly greater than zero. The means of monthly changes show a downward trend from September to December. When the data are sliced into three sub-periods, we find an increasing trend in the means and medians of monthly changes but a decreasing trend in the SDs of the monthly changes. The mean of monthly CPI changes during the republican presidencies (0.15%) was significantly lower than during the democratic presidencies (0.38%).     

Wealth,volume and stock market volatility: case of Hong Kong (1993–2001)

This article attempts to answer the question of whether the gain and loss in property market speculations and rate of information flow play a significant role in stock market volatility in Hong Kong. To test for our wealth–volume–volatility hypothesis, two different measures of volatility: absolute (absolute value of SD from mean with monthly dimension) and conditional (EGARCH) are used and results are compared. In both measures, we find evidence of a statistical presence of a wealth effect on stock market volatility, particularly in the investment of luxury class of property in Hong Kong. To account for this result, we apply the prospect theory, house money effect and the newly developed conditional confidence theory. Although we fail to establish a volume–volatility relationship in our estimation, we offer additional dimensions to the explanation of our observation.