Economic history

Jeremiah Dittmar, Ralf R Meisenzahl, 26 April 2016

Throughout history, most states have functioned as kleptocracies and not as providers of public goods. This column analyses the diffusion of legal institutions that established Europe’s first large-scale experiments in mass public education. These institutions originated in Germany during the Protestant Reformation due to popular political mobilisation, but only in around half of Protestant cities. Cities that formalised these institutions grew faster over the next 200 years, both by attracting and by producing more highly skilled residents.

Giovanni Federico, Antonio Tena-Junguito, 18 April 2016

The slowdown of global trade growth since the Global Crisis has raised concerns across the world. This column puts recent changes into perspective by presenting evidence on the export/GDP ratio and a rough measure of the gains from trade back to 1830. It shows that the interwar period was marked by a reversal of globalisation that makes recent trends look like a small blip. 

Alex Cukierman, 30 March 2016

The quantity theory of money implies that sustained inflation requires a sustained increase in the money supply. It does not, however, imply that the reverse is also true. This column explores and illustrates this issue by comparing inflation in the US following the collapse of Lehman Brothers with Germany’s hyperinflation experience after WWI. A key factor explaining the vastly different inflation experiences is how the monetary expansion translated into demand. The Fed’s base expansion did not translate into demand for goods and services, whereas the German monetary expansion was motivated by the government’s hunger for seigniorage revenues.

Olivier Gergaud, Morgane Laouénan, Étienne Wasmer, 12 March 2016

Historical accounts often assert that notable individuals matter for the growth of particular cities. This column uses a new database of 1.2 million people from 2,000 cities since 800CE to show that some types of ‘notable’ individuals have made a difference. Specifically, the presence of many entrepreneurs and artists is associated with faster long-term growth, but the association does not hold for notable military, political or religious figures.

Stefan Gerlach, Peter Kugler, 01 March 2016

The Swiss franc was created in 1850, but the Swiss National Bank wasn’t founded until 1907. The interim was a period of free banking, marked by two successive phases: one of free, unregulated note issue; and then one of strictly limited banking freedom. This column studies the Swiss banking market over this time. The number of banks is found to play an important role in determining the long-run money demand, and in the monetary adjustment process. Further, problems with harmonisation and common regulation created the incentives for monopolisation and centralisation.

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