Economic History Association 2005 Daily Schedule
- Session 1A: What Makes Them Pay?
- Session 1B: Leviathan in Debt
- Session 2A: War will get you there
- Session 2B: Credit and Wealth Unterdenlinden
- Session 3A: Fight Now Pay Later, European Finance and War
- Session 3B: Civil Actions
- Session 4A: Bombs, Germs, and Invaders
- Session 4B: Managing Political Uncertainty
- Business meeting
- Dissertation Session
- Plenary Session
- Session 5A: Institutions of Unequal Pay
- Session 5B: Growth and Conflict
- Session 6A: America at work
Friday Afternoon 1:30 - 3:15 pm
Session 1A: What Makes Them Pay?
Chair: William Summerhill (UCLA)
- Michael Bordo (Rutgers U), Chris Meissner (Cambridge U), and Marc Weidenmier (Claremont McKenna College)
- "Original Sin, Good Housekeeping and Empire: The Relation between Currency Risk and Default Risk, 1870-1913"
- Abstract: We study the interaction between currency stability and sovereign risk. When do countries' exchange rate policies have an impact on the expected ability to repay foreign debt? We first assess the relationship between these currency risk and default risk through a number of event studies, and then compare the estimated relationships across a large number of countries and colonies between 1870 and 1913. We find that currency risk does not always make the perceived risk of default higher.
- Discussant: Pierre Sicsic (Banque de France)
- Marc Flandreau (Institut d'Etudes Politiques de Paris) and Clemens Jobst (Institut d'Etudes Politiques de Paris )
- "Clio and the economics of international currencies, 1890-1910"
- Abstract: How much does history matter? The question, it is fair to say, has never been addressed. This paper takes up the challenge by studying the role of path dependency in the late 19th century international monetary system. Using network analysis techniques and a new dataset that maps international monetary relations, we provide a study of the variables that determine the "position" of the various currencies of the world. Specifically, we are able to test the role of contemporary factors vs. historical ones, and find the contribution of the later to be extremely important. To be specific, the fact that London was a sophisticated market way before New York became one, led international bankers to use London as the main place to draw international bills, therefore reinforcing the importance of London. As a result, the US currency, despite the success of the US economy in terms of both size and GDP per head, remained a fairly secondary instrument until very late. It was still on par with the Belgian currency in 1890. An implication of our study is to reinterpret the founding of the Fed in 1913 from the point of view of network theory.
- Discussant: Peter Rousseau (Vanderbilt)
- Marc Weidenmier (Claremont McKenna College) and Kris James Mitchener (Santa Clara University)
- "Supersanctions and Debt Repayment"
- Abstract: Why do sovereign borrowers repay their debts? This paper considers two reasons why nations may have repaid their sovereign debts during the classical gold standard period. We test whether countries repaid because they experienced a persistent decline in trade during and after default (Rose, 2002) or because creditor nations punished defaulters by imposing "supersanctions": military pressure or political control in response to default. Using an augmented gravity model of trade and a new database of nearly 9,000 bilateral trade pairs, we do not find that, in general, trade between creditor and debtor countries fell in response to a default. However, we do find that supersanctions were an important and commonly used enforcement mechanism from 1870-1913. Following the implementation of a supersanction, ex ante default probabilities on new debt issues and yield spreads fell by nearly 50 percent. Conditional on default, the probability that a country would be "supersanctioned" was greater than a one-third chance.
- Discussant: William Summerhill (UCLA)
Session 1B: Leviathan in Debt
Chair: Jean-Laurent Rosenthal (UCLA)
- Farley Grubb (University of Delaware)
- "The Net Asset Position of the U.S. Federal Government, 1784- 1802: Hamilton's Blessing or the Spoils of War?"
- Abstract: In 1790 the Federal Government was 77 million dollars in debt. By 1802 it was still 77 million dollars in debt. These debts were the outstanding liabilities incurred in the fight for independence. Between 1784 and 1802 the Federal Government also acquired an empire of land gained as the spoils of war in the Treaty of Paris granting U.S. independence from Britain. The States who initially claimed these lands ceded a total of 233 million acres of land assets to the Federal Government. These two issues, typically treated as independent in the literature, will be reconnected here by estimating the net asset position of the Federal Government, debt liabilities versus land assets, from 1784 through 1802 to establish the time path of solvency of the Federal Government. This will be used to evaluate whether early Federal financial success was a Hamiltonian miracle or just the spoils of war.
- Discussant: Richard Sylla (NYU)
- Chris Rohlfs (University of Chicago)
- "How Much Did the US Government Value its Troop's Lives in World War II?: Evidence From Dollar-Fatality Tradeoffs in Land Battles."
- Abstract: This study uses battle-level data to estimate the rate at which the US Army traded dollars for fatalities in World War II. Using data from 164 engagements, I estimate the effects American and German troops and tanks on mission accomplishment and US battle fatalities. I supplement these data with cost estimates compiled from archived US Army records. I find that the Army could have reduced fatalities by increasing its use of tanks and decreasing its use of ground troops. In 2003 dollars, my preferred estimates suggest that this policy would have cost $1 million to $2 million per life saved. This figure appears roughly similar to soldiers' own willingness-to-pay to avoid fatality risk.
- Discussant: Robert Margo (Boston University)
- Graham Brownlow (Auckland University of Technology)
- "Democratic Deficits and Fiscal Subventions: Economic Policy and Institutional Responses to Terrorism in Northern Ireland, 1969-1990."
- Abstract: This paper examines how terrorism influenced Northern Ireland's economic policy and its institutional framework. Direct rule, an institutional consequence of political conflict, implied a "democratic deficit" because it replaced political voice with technocratic administration. However, this "deficit" was compensated for in part by the creation of an alternative institutional framework centred on social partnership. Recourse to fiscal subvention in the early 1970s was viewed as a way of protecting the local economy from political violence and global slowdown. Likewise, Thatcherite reforms were postponed for similar reasons, and it was only once the issue of discrimination had been tackled that an institutional/policy convergence, including privatisation and union reform, could occur. The economic and institutional effects of political violence were contingent on preceding and underlying features of the economy, polity and society. In this sense path dependence is arguably relevant to understanding the institutional and economic effects of terrorism.
- Discussant: Avner Greif (Stanford)
Friday Afternoon 3:30 - 4:40 pm
Session 2A: War will get you there
Chair: Alan Olmstead (UCD)
- Thomas Weiss (University of Kansas) and Alka Gandhi (Lycoming College)
- "War and American Tourism"
- Abstract: This paper examines the impact of war on the long term rise of American tourism. The industry went from one confined to the elite of American society to what some have described as mass tourism. The rise in travel, both domestically and overseas, appears to have come about largely from several upsurges rather than a steady growth. So while the long term rise in average incomes contributed to the growth in tourism, other factors affecting the supply of tourist services and facilities, or unusual influences on demand, were of greater importance. Among the factors that could have influenced both supply and demand is war and its aftermath. In this paper we describe the ways in which the Civil War and World War I shaped the history of American tourism, and we quantify their impact.
- Discussant: Michael Haupert (UW-Lacrosse)
- Alan Taylor (UC Davis) and Reuven Glick, (Federal Reserve Bank of San Francisco)
- "Collateral Damage: The Economic Impact of War, 1870-2000"
- Abstract: Conventional wisdom in economic history suggests that wars can be enormously disruptive on economic activity, and especially international trade. Yet there is very little known, empirically, even about the forward causality, in large samples. We undertake the largest study to date, covering all known bilateral trade data and all known wars since the 1870s. Using the gravity model, we examine the contemporaneous and lagged effects of international conflict on the trade of belligerent nations, allies, and neutrals, controlling for other determinants of trade. We find large and persistent impacts of wars on trade, and hence on national and global economic welfare. Through a rough accounting we find that such costs can be of an order of magnitude similar to the "direct" costs of war, such as lost human capital and excess government spending on materiel. Case studies of the key examples, WWI and WWII, illustrate our argument.
- Discussant: Sukkoo Kim (Washington U)
Session 2B: Credit and Wealth Unterdenlinden
Chair: Ken Snowden (UNC)
- Timothy Guinnane (Yale University)
- "Regional Banks for Micro-credit Institutions: 'Centrals' in the German Cooperative System before the First World War"
- Abstract: Nineteenth-century Germany's thriving rural credit cooperatives restricted their operations to a small geographic area, and made long-term loans that were funded by short-term deposits. To address the lack of diversification and the liquidity problems inherent in these policies, cooperative leaders created a set of "Central banks", regional banking institutions owned and controlled by their member cooperatives. Critics of the rural cooperatives thought the Centrals' only purpose was to provide a conduit for state aid. This paper uses primary source material, published reports, and contemporary discussions to consider what the Centrals actually did. State aid played only a small role in the Centrals' development. The Centrals doubtless contributed to the success of the system, although by locking up capital in the rural sector they might have reduced the pace of Germany's structural transformation.
- Discussant: Kenneth A. Snowden (UNC)
- Fabien Dell (DIW, Berlin, Germany and Paris-Jourdan, France)
- "Top Incomes in Germany over the Twentieth Century"
- Abstract: The paper presents new homogeneous series on top income and wealth shares in Germany (1891 to 1998. The general pattern is consistent with recent results for France: the secular decline in income inequality is for the most part an accidental, capital income phenomenon. Very top incomes were badly hurt by the major shocks of the period from 1914 to 1945 and never fully recovered afterwards. Since 1945, top income shares have been relatively stable, with no rise during recent years (unlike in the U.S.). The role of the war episodes in shaping the share of top incomes remains ambiguous: the striking pattern before WWII is how WWI and, later, Nazi power brought top income shares to rise quickly within a few years before they fell in the chaos which followed both conflicts. The striking result after WWII is that German top incomes are more concentrated within the top decile than in other industrialized countries.
- Discussant: Richard Sutch (UCR)
Saturday Morning 8:00 - 9:30 am
Session 3A: Fight Now Pay Later, European Finance and War
Chair: Steve Quinn (TCU)
- Philip Hoffman (Caltech)
- "Why is it that Europeans Ended up Conquering the Rest of the Globe? Prices, the Military Revolution, and Western Europe's Comparative Advantage in Violence"
- Abstract: Data from England, France, and Germany show that the relative price of artillery, handguns, and gunpowder declined between the fourteenth century and the eighteenth century. Prices fell relative to the cost of factors of production, and the price decline suggests that the military sector of western European economies experienced sustained technical change before the Industrial Revolution; claim in accord both with physical evidence of military output per soldier or sailor and with qualitative evidence from the research historians have done on the late medieval and early modern military revolution. The price data and the physical measures of productivity shed new light on this revolution and point to a potential political explanation for why Western Europe developed a comparative advantage in violence over the rest of the world.
- Discussant: Steve Quinn (TCU)
- Ann Carlos (U of Colorado), Larry Neal (U of Illinois) and Kirsten Wandschneider (Middlebury College)
- "The Origins of National Debt: The Financing and Re-financing of the War of the Spanish Succession"
- Abstract: Financing the War of the Spanish Succession (1702-1713) left each of the then great powers of Europe (Austria, Britain, France, and Spain) with unprecedented burdens of government debt. The competitive experiments in dealing with the amassed debt that followed over the next decade left Britain alone as holding the key to success in convincing a large and diverse number of individuals to hold onto their claims. We argue this was due to British institutions that allowed individuals to trade their claims with each other rather than being forced to redeem them from the government directly. We support our argument by analysis of the thousands of individuals who had acquired various forms of the British government's debt over the course of the War of the Spanish Succession when that debt was largely consolidated into the capital stock of the Bank of England, the East India Company, and the South Sea Company in 1723.
- Discussant: Oscar Gelderbloom (Utrecht)
- Peter Temin (MIT) and Hans-Joachim Voth (U Pompeu Fabra and NYU)
- "Credit Rationing And Crowding Out During The Industrial Revolution: Evidence From Hoare's Bank, 1702-1862."
- Abstract: Why was growth so slow during the British Industrial Revolution? More than a decade ago, Williamson proposed "crowding-out" driven by numerous wars as a mechanism. Little empirical evidence existed to support it. We argue that examinations of interest rates are misguided because the private loan market, because of the usury laws, balanced through quantity rationing. Using a unique set of observations on lending volume at a London goldsmith bank, Hoare's, we document that almost all loans are made at the maximum legal rate and the adverse impact of wartime financing on private credit markets. Whenever public borrowing rose above trend, private lending declined markedly. We conclude that there is considerable evidence that government borrowing, especially during wartime, crowded out private credit, and that the magnitude of the effect is important enough to explain at least partly why British growth during the period 1750-1850 was relatively slow.
- Discussant: Francois Velde (Chicago Fed)
Session 3B: Civil Actions
Chair: Naomi Lamoreaux (UCLA)
- Zorina Khan (Bowdoin College)
- "Creative Destruction: Technological Change and Resource Reallocation during the American Civil War"
- Abstract: This paper provides the first systematic investigation in the nature of invention and innovation in the Civil War. Second, this study investigates the extent and nature of the indirect effects of military conflict in terms of technological change. Third, the analysis is relevant to current discussions of the extent to which the Civil War was a "total war" in the sense of the fraction of resources that were diverted into war-related activities. The conclusions are based on results from a panel of over 8000 patents that were filed between 1790 and 1870. A sample of 1200 Civil War inventors was matched with the manuscript censuses of 1860 and 1870 in order to capture changes that occurred in their individual circumstances before and after the war, including occupation, wealth and the rate and direction of their inventive activity. The preliminary results suggest that the Civil War was indeed a landmark event in the technological life of the nation, but the conflict fell somewhat short of being a total war.
- Discussant: Ross Thomson (Vermont)
- John James (University of Virginia) and David Weiman (Barnard College, Columbia University)
- "Towards a More Perfect Monetary Payments Union"
- Abstract: A neglected dimension of Reconstruction is the formation of a more integrated national payments architecture, based on the circulation of bank drafts and deposits through the emerging national correspondent banking system anchored in New York. The change in the payments system depended on complementary innovations in transportation-communications and wholesale trade sectors, but also Civil War banking and monetary policies. Our empirical analysis examines the "domestic exchange" market in regional centers, where banks bought and sold clearing balances held in New York banks. In this market the spot price of New York funds could deviate from par (equal to 1) within bounds set by currency shipping costs. With data from several Midwestern and Southern cities, we describe and date the market's maturation, evidenced by the standardization of exchange transactions. With quantitative evidence, we document the declining trend in exchange rate volatility and assess the impacts of the forces of continuity (railroad freight rates) and change (national bank note issues).
- Discussant: Angela Redish (UBC)
- Chulhee Lee (Seoul National University)
- "Health, Information, and Migration: Geographic Mobility of Union Army Veterans, 1860-1880"
- Abstract: This paper explores how injuries, sickness, and geographical mobility of Union Army veterans experienced while in service affected their post-service migrations. Wartime wounds and illnesses significantly diminished the geographical mobility of veterans after the war. Geographic moves while carrying out military missions had strong positive effects on their post-service geographic mobility. Geographic moves while in service also influenced the choice of destination among the migrants. The farther into the South a veteran had traveled while in service, the higher the probability that he would migrate to the South. Furthermore, these migrants to the South were more likely to settle in a state they had entered while in service. This study suggests that the Civil War reduced the probability of migration by damaging their health. On the other hand, it stimulated their geographic mobility by sending them to distant regions. I discuss the mechanisms through which medical events and mobility while in service affected post-service migration and the roles of different types of information in migration decisions.
- Discussant: Joseph Ferrie (Northwestern University)
Saturday Morning 10:00 - 11:30 am
Session 4A: Bombs, Germs, and Invaders
Chair: Alex Field (Santa Clara)
- Edward Miguel and GÃ©rard Roland (UC Berkeley)
- "The Long Run Impact of Bombing Vietnam"
- Abstract: We investigate the impact of U.S. bombing on later economic development in Vietnam. The Vietnam War featured the most intense bombing campaign in military history. We use a unique U.S. military dataset containing bombing intensity at the district level (N=585). We compare the heavily bombed districts to other districts, controlling for baseline demographic characteristics and district geographic factors. U.S. bombing does not have a statistically significant impact on long-run population density, poverty rates, infrastructure, or literacy in the 1990s. This finding is consistent with the view that institutions and geography are more important than initial stocks of physical and human capital for long run economic growth.
- Discussant: Loren Brandt (Toronto)
- Maristella Botticini (Boston University and Universita' di Torino)
- "The Black Death of 1348 and Wealth Distribution and Accumulation in Florence, 1250-1450"
- Abstract: Between 1348 and 1350, a sudden demographic shock brought death and devastation of unknown proportions in Europe. The plague spread like a fire in most regions of Europe and killed about one-third of the population. Both the historical epidemiology of the pestilence (whether or not a bubonic plague), and its economic effects have been the subject of a vast literature. In this paper, I contribute to this debate by focusing on three issues: What was the effect of the Black Death of 1348 on marriage markets and dowry values in the city and countryside of Florence? Why did urban and rural marriage markets react in different ways to the same demographic shock? Given that dowries can be used as proxy for family wealth, what were the short-term and long-term effects of the plague on per capita wealth and wealth inequality?
- Discussant: John Munro (Toronto)
- Hein A. Klemann (Erasmus University Rotterdam)
- "Did the German occupation (1940-1945) ruin Dutch industry?"
- Abstract: Until recently, when anything was written about the Dutch economy during the German occupation, it was about exploitation and destruction, resulting in impoverishment and hunger. In this paper the question will be, how industry developed during the occupation period and what the actual situation was after liberation. Reason for this question is that complete new calculations of all macroeconomic statistics for the period 1938-1948 gave quite different impressions of the economic development. From these new calculations it became clear that Dutch industrial production did not decline before the end of 1941. The first year and a half of the German occupation was the best Dutch industry experienced in a decade. Until 1942 industry was booming, what resulted in important investments that in an older historiography were completely ignored.
- Discussant: Peter Lindert (UCD)
Session 4B: Managing Political Uncertainty
Chair: George Grantham (McGill)
- Aurora GÃ³mez Galvarriato (Centro de InvestigaciÃ³n y Docencia EconÃ³micas) and Aldo Musacchio (Harvard University)
- "Stock Prices, the Stock Market, and the Costs of the Mexican Revolution"
- Abstract: This paper explores the costs of the Mexican Revolution by looking at the evolution of the prices of more than a hundred different companies quoted in the Mexican stock exchange. Historians and economic historians have long argued that the Mexican Revolution had negligible effects on economic growth in Mexico (Womack, 1978; Haber, Maurer, and Razo, 2003). We build stock indices for the market and for the different type of sectors in which traded companies operated. We measure the effects of the Mexican Revolution in two ways. First, we analyze the varying number of companies quoted in the stock exchange with hazard models (and other survival techniques) that allows us to determine the probability of survival of companies according to the financial information that we have for each of them (before and after the revolutionary period). Second, we also look at the change in the institutional characteristics of the Mexican stock market and its consequences in penetration and integration with stock markets in other countries. We see how the revolution affected the structural relation between the Mexican market and that of the United States using error correction models.
- Discussant: Maurico Drelichman (UBC)
- Eugene White (Rutgers University) and Kim Oosterlinck (Universite Libre de Bruxelles)
- "The Nazi Squeeze on the Capital Markets in Occupied France"
- Abstract: Most studies of war finance have focused on how belligerent powers have funded hostilities by using their own resources. Although incurring huge expenses, warring governments are usually assumed to attempt some optimization of revenue generation on behalf of their population. However, war finance in France during World War II was quite different. The collapse of the Third Republic left Berlin in control of a powerful industrial economy. This paper examines the methods used by the German occupation to extract financial resources from France. It provides a contrast to other studies of war finance, which have not focused on how capital markets were exploited in occupied countries. To pay for occupation costs, German imports of French goods, and other indemnities and requisitions, bond finance was the preferred mechanism for raising funds; when it failed, inflationary finance was employed. Effective bond finance required capital controls on the equities market; these were strengthened in 1942 when bond prices softened. The burden imposed on the French economy was unsustainable and contributed to the rapid shrinkage of the economy. We assess the combination of policies employed by the occupation authorities, although the optimal rate of extraction would also depend on German policies at home and in the rest of occupied Europe.
- Discussant: George Grantham (McGill)
- Gabriela Recio (UCSD)
- "Revolution, Lawyers and Firms: The Brewer Business Community in Mexico, 1920-1940"
- Abstract: The Mexican Revolution (1910) brought important changes in the business community. First, they were forced to manage their companies amidst the violence and the lack of transportation and banking services. Second, they had to adapt to a different environment where the state acquired rights to petroleum, water and subsoil minerals. In addition, they were faced with new legislation that was passed to protect workers and to redistribute land. Lawyers were important agents in helping companies adjust to the new rules of the game set forth by the post-revolutionary regimes. By analyzing the legal counsel that business lawyers offered entrepreneurs, this paper analyzes the effect that the Revolution had on the country's brewing companies.
- Discussant: Juliette Levy (UCR)
Saturdary Afternoon: 1-2pm
Saturdary Afternoon: 2-4 pm
Saturday Afternoon: 4:30-6:00 PM
Chair: Roger Ransom (UCR)
- Robert H Bates (Harvard)
- "Contemporary State Failure In Historical Perspective"
- Niall Ferguson (Harvard)
- "The Economics of 'Destructivity': Reassessing Military Performance in the World Wars"
Sunday Morning 8:30 - 10:15 am
Session 5A: Institutions of Unequal Pay
Chair: Gavin Wright (Stanford)
- William A. Sundstrom (Santa Clara University)
- "Unequal Opportunities: Segregation, Monopsony, and Racial Wage Discrimination in the Twentieth Century"
- Abstract: This paper draws on insights from the recent theoretical literature on labor-market search and monopsony to offer a new interpretation of historical labor-market discrimination against African-Americans. I argue that racial wage discrimination was profitable in segregated markets because job search costs created monopsony power for employers. This framework ties together a number of historical facts in a way that is consistent with the assumption of profit-maximizing behavior by firms. For example, it helps explain why racial wage differentials were greater in skilled occupations, and why black unemployment rates exceeded white unemployment rates. Although the emphasis of the paper is on reinterpreting and synthesizing the existing historical literature, I also analyze census and other data to provide evidence in support of the argument.
- Discussant: Carolyn Moehling (Yale)
- Thomas Geraghty (University of North Carolina) and Thomas Wiseman (University of Texas Austin)
- "Wage Strikes in 1880s America: A Test of the War of Attrition Model"
- Abstract: This paper tests how well the game-theoretic "war of attrition" model fits characteristics of wage strikes that occurred during the 1880s in the Northeastern and Midwestern United States. We relate the probability that workers were victorious in such strikes to the magnitude of the wage increase or wage cut over which the parties fought, and to measures of the costs of continuing disputes faced by the workers and firms involved. To carry out these tests, we rely on an extraordinarily rich source of quantitative data on strikes, the Third Annual Report of the Commissioner of Labor: Strikes and Lockouts (1886). We find that the "war-of-attrition" framework describes 1880s wage strikes better than do alternative strike models.
- Discussant: Michael Huberman (Montreal)
- Lee Alston (University of Colorado), Jeffery A. Jenkins (Northwestern University) and Tomas Nonnenmacher (Allegheny College)
- "Who Should Govern Congress? The Salary Grab of 1873 and the Coalition of Reform"
- Abstract: The "Gilded Age" following the Civil War spawned incredible riches for entrepreneurs. Some of these entrepreneurs attempted to use the political system to sustain, augment or even create their wealth. According to the press, bribery was rampant in Congress, culminating with the CrÃ©dit Mobilier scandal. On the heels of the CrÃ©dit Mobilier scandal Congress passed a 50% salary raise for themselves. The press dubbed the pay increase the "Salary grab." The bribery in Congress galvanized a reaction amongst some Congressmen to reform Congress. We analyze the voting behavior of individual Congressmen on several reform issues: the investigation of the CrÃ©dit Mobilier scandal; the salary grab; the abolition of the franking privilege; and civil service reform. The votes on these measures cut across party lines. We collected data on the wealth of individual Congressmen along with their educational attainment. The "coalition of reform" consisted of elite Congressmen, both highly educated and wealthy. Though the coalition never succeeded it re-emerged in a similar guise with the progressive movement.
- Discussant: Robert McGuire (Akron)
Session 5B: Growth and Conflict
Chair: Frank Lewis (Queens)
- Marjolein 't Hart (University of Amsterdam)
- "War and an economic miracle. The Dutch Republic in comparative European perspective, c. 1570-1700"
- Abstract: This paper studies the actual consequences of the expenses caused by warfare in the Dutch Republic during a prolonged period of time (ca. 1570-c. 1700). In placing the findings in a comparative setting (generally seventeenth-century Europe) it analyzes how the war-sums were spent and what the consequences were of those transactions. In the line of the New Institutional Economy which explains economic performance by existing institutions, the paper aims to complement this theory by relating economic performance to those institutions that are linked directly to warfare. It is expected that much of the Dutch war-related expenses did not entail capital-destruction at all. On the contrary, much of the war-costs contributed directly or indirectly to the overall efficiency of the settings of the Dutch Republic that harbored a miraculous economic growth.
- Discussant: Daniel Bogart (UCI)
- Duol Kim (UCD) and Ki-Joo Park (Naksungdae Institute of Economic Research)
- "Colonialism, Warfare, and Industrialization: Manufacturing Productivity of Colonial Korea, 1913 - 1945"
- Abstract: This paper examines the consequences of military investments by the Japanese government on the industrialization of colonial Korea. Unlike other colonial economies, Korea experienced a rapid industrialization during its colonial period. Many scholars have argued that the industrialization of colonial Korea mainly occurred from 1930 to 1945 as a result of Japanese military projects in Manchuria and China. However, recent studies emphasize expansion of manufacturing production before 1930. We explore these two hypotheses by measuring manufacturing productivity. Our estimation confirms that the manufacturing productivity started to grow faster from 1930. However, the level of productivity growth before 1930 shows that the industrialization before 1930 had gone beyond a simple expansion of traditional producers. This result sheds new light on the nature of the industrialization during the colonial period and impact of colonial legacies on the Korean economic growth since the 1960s.
- Discussant: Frank Lewis (Queens University)
- Mary MacKinnon (McGill) and Chris Minns (Trinity College, Dublin)
- "The First World War and the Emergence of National Markets in Canada"
- Abstract: The First World War caused major disruptions for the Canadian economy in terms of factor mobility and diversion of resources. European immigration and British capital imports stopped, and over a quarter of military-aged men served in the armed forces. The war appears to have had long-term effects on regional wage and price structures within Canada, and relative to the northern U.S. This paper uses federal government records listing expenditures across the country by the armed forces to study changes in supply patterns and prices by region over 1914-23. We also compare government purchase prices with reported retail prices for Canadian and northern U.S. cities. Distribution networks within Canada underwent substantial transformation as a result of wartime demand.
- Discussant: David Jacks (Simon Frazer)
Sunday Morning 10:30 - 12:15 pm
Session 6A: America at work
Chair: Susan Carter (UCR)
- Marina Adshade (Dalhousie University) and Ian Keay (Queen's University)
- "Enabling the Visible Hand: Female Labour Force Participation and Industrial Concentration in the Early 20th Century"
- Abstract: This paper investigates the relationship between the adoption of a new organizational structure, associated with the movement towards more concentrated industries, and the movement of women into the workforce. Input demand equations derived from generalized Leontief cost functions are estimated using industry specific data from a sample of Ohio manufacturing industries in the period 1923 to 1937. By disaggregating the data by both gender and type of employment we find that female clerical workers were substitutes for the physical capital and that technology adoptions saved on the employment of capital, male labour, and female production labour, and increased their use of female clerical labour. This evidence suggests that technological change may have been biased in favour of female clerical labour. In order to test the hypothesis that firms reorganized in order to take advantage of the increase in skilled workers, we divide the sample into three groups of industries, identified by their degree of vertical integration, and find that industries that were fully integrated took advantage of the availability of skilled female workers in the way characterized by the change in organizational structure described in the model. The preliminary results presented in this paper are consistent with the view that U.S. manufactures responded to the increase in educated female labour in a way in which simultaneously expanded the demand for those workers.
- Discussant: Mary Yeager (UCLA)
- Martha J. Bailey (Vanderbilt University) and William J. Collins (Vanderbilt University)
- "The Wage Gains of African-American Women in the 1940s"
- Abstract: The weekly wage gap between black and white female workers narrowed by 15 percentage points during the 1940s, primarily during World War II. We employ a semi-parametric technique to decompose changes in the distribution of wages, based on Census data. We find that changes in worker characteristics (such as education, occupation and industry, and region of residence) can account for a significant portion of wage convergence between black and white women, but that changes in the wage structure, including large black-specific gains within regions, occupations, industries, and educational groups, made the largest contributions. The single most important contributing factor to the observed convergence was a sharp increase in the relative wages of service workers (where black workers were heavily concentrated) even as black women moved out of domestic service jobs. We also use individual, retrospective work histories to shed light on women's job transitions during th e 1940s.
- Discussant: Gillian Hamilton (Toronto)
- Price Fishback (University of Arizona) Shawn Kantor (University of California, Merced) and Todd Sorensen (University of Arizona)
- "The Impact of the New Deal on the Diffusion of Tractors in the 1930's"
- Abstract: The mechanization of the American farm in the first half of the 20th century had profound impacts on both the agricultural sector and the US economy as a whole. In this paper we explore what role New Deal agricultural policies had in the adoption of tractors on American farms during the 1930s. The literature suggests that by providing farmers with access to cheap credit, the Farm Credit Administration (FCA) may have increased the rate of mechanization. The Agricultural Adjustment Administration (AAA) also put cash into the hands of credit constrained farmers, but at the same time decreased the scale of farming. We develop a simple behavioral model exploring the impact of these policies on the capital adoption choice of a representative farmer. Predictions are tested empirical using instrumental variables. We find evidence that FCA spending increased the diffusion of tractors, while the AAA decreased adoption.
- Discussant: Paul Rhode (UNC)
Session 6B: All Quiet on the Western Front?
Chair: Lee Craig (NC State)
- Stephen Broadberry (University of Warwick) and Mark Harrison (University of Warwick)
- "The Economics of World War I: A Comparative Quantitative Analysis"
- Abstract: We draw on the experience of the major combatant countries in World War I to analyse the role of economic factors in determining the outcome of the war and the effects of the war on subsequent economic performance. We demonstrate that the degree of mobilisation for war can be explained largely by differences in the level of development of each country, leaving little room for other factors that feature prominently in narrative accounts, such as national differences in war preparations, war leadership, military organisation and morale. We analyse the effects of the war on subsequent growth performance in terms of the scale of destruction of physical and human capital. Although there was some rebound after the war, it was not enough to undo the negative effects of the capital destruction and the damage to the international institutional framework caused by the war.
- Discussant: Rose Razaghian (Yale)
- Albrecht Ritschl (Humboldt University of Berlin)
- "The Pity of Peace. The German Economy at War, 1914-1918 and Beyond"
- Abstract: Economic history has displayed little interest in the economics of World War I. This paper looks into the seemingly uninteresting economics of World War I on the German side, and argues that the German war economy was more stable than previously thought. Conventional wisdom has maintained that war profiteering led to redistribu-tion of incomes towards capital and thus contributed to revolution in 1918/19. We find no evidence of such redistribution once all industries are taken into account. War finance appears to have been hardly more inflationary than in Britain, although money circulation grew faster. We also find that the decline in output was less dramatic than previous research would suggest. We argue that the roots of the later difficulties lay, not in the effects of the war on the German economy nor in the harshness of the peace agreements but rather in the incompleteness of the Allied victory against Germany.
- Discussant: Christoph Buchheim (Mannheim)
- Byron Lew (Trent University) and Marvin McInnis (Queen's University)
- "Guns and Butter: World War I and the Canadian Economy"
- Abstract: The Canadian economy was particularly disrupted by the First World War, but the substantial impact of this shock has not been fully explored in economic histories of Canada. Of all the countries mobilized during the War, both European and non-European, Canada seemed to benefit most from the wartime boom and experienced the deepest post-war recession. During the war several sectors expanded dramatically, prairie grains ("butter") and chemicals/munitions ("guns"). We note the elastic response both of output and of the allocation of factors of production to these booming sectors and their contribution to GDP growth. Agricultural prices remained inflated immediately after the War, and the reallocation of factors was delayed. When world agricultural supplies finally adjusted and prices fell, the impact on the Canadian economy was all the stronger leading to a tremendously sharp decline in output unmatched prior to the Great Depression in its length and depth.
- Discussant: Lee Craig (NC State)