Economic history

Caroline Fohlin, Thomas Gehrig, Marlene Haas, 07 May 2015

The story of the run-up to the Global Crisis is, unfortunately, not an entirely new one. This column argues that regulators would do well to read up on the ‘Panic of 1907’. What quelled rumours and panicky behaviour back then still applies – maintaining market liquidity through measures that encourage transparency.

Dora L. Costa, Matthew E. Kahn, 27 April 2015

Newspapers report good and bad news, but the reporting doesn’t always match reality. This column presents evidence from turn-of-the-century America that news reports of typhoid tracked mortality patterns, but the reporting was biased. Spikes in death rates led to bigger jumps in media coverage when death rates were low. This could be due to the idea that deviations from Kahneman and Tversky’s ‘reference points’ are more newsworthy, or due to the possibility that bad news is more valuable to readers when things seem to be going well.

Francesco Bianchi, 22 April 2015

During the Great Recession, the possibility that the US might enter a second Great Depression was a real concern. This column argues that until early 2009, financial markets behaved in a manner consistent with the early years of the Great Depression. The large stock-market fall saw growth stocks outperforming value stocks. This pattern ended March 2009, arguably in light of robust policy interventions. These dynamics suggest that poor performance of growth stocks during regular times may be compensated by superior performance in crises.

Thorvaldur Gylfason, 16 April 2015

Whereas some argue there is no need to revise the US constitution, others believe that its inherent flaws are in the core of the US’ decreasing power. This column reviews four alleged flaws of the US constitution. There is a striking similarity in method and substance between current proposals for constitutional reform in the US and the post-crash constitutional reform process in Iceland presently held captive by parliament..

Morgan Kelly, Cormac Ó Gráda, 28 March 2015

The Little Ice Age is generally seen as a major event in European history. Analysing a variety of recent weather reconstructions, this column finds that European weather appears constant from the Middle Ages until 1900, and that events like the freezing of the Thames and the disappearance of English vineyards have simpler explanations than changing climate. It appears instead that the European Little Ice Age is a statistical artefact, where the standard climatological practice of smoothing what turn out to be white noise data prior to analysis gives the spurious appearance of irregular oscillation – a Slutsky Effect.

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