Economic history

Ana Paula Franco, Sebastian Galiani, Pablo Lavado, 29 July 2021

Historical institutions can have long-lasting effects on societies and economies. The Inca Road has been a linchpin of the colonial economy in the New World, but its impact on current development has not been studied in great depth. This column examines the impact of the road on today’s educational, development, and labour outcomes. Proximity to the Inca Road increased the average level of educational attainment and decreased stunting among children by 5%. It boosted average hourly wages by 20% and reduced informality by six percentage points. Moreover, these effects were around 40% greater among women.

Rui Esteves, Seán Kenny, Jason Lennard, 20 July 2021

There is little consensus on the macroeconomic impacts of sovereign debt crises, despite the regularity of such events. This column quantifies the aggregate costs of defaults using a narrative approach on a large panel of 50 sovereigns between 1870 and 2010. It estimates significant and persistent negative effects of debt crises starting at 1.6% of GDP and peaking at 3.3%, before reverting to trend five years later. In addition, underlying causes matter. Defaults driven by aggregate demand shocks result in short-term contractions, whereas aggregate supply shocks lead to larger, more persistent losses. 

Alvaro Calderon, Vasiliki Fouka, Marco Tabellini, 20 July 2021

More than 4 million African Americans moved from the South to the North of the United States during the Second Great Migration between 1940 and 1970. This column argues that the Great Migration and support for civil rights are causally linked. It finds that Black in-migration increased demand for racial equality and encouraged pro-civil rights activism in non-Southern counties. These effects were not only driven by Black voters, but also by progressive segments of the white population, who became aware of the brutal conditions prevailing in the South. Mirroring the changes in the electorate, non-Southern Congress members became more likely to promote civil rights legislation, but also grew increasingly polarised along party lines on racial issues.

Dennis Bonam, Andra Isabela Smădu, 18 July 2021

How did past major pandemics affect inflation dynamics? This column estimates the long-run effects of pandemics on trend inflation in Europe using historical data since the 14th century. We find that, following a pandemic event, trend inflation falls steadily below its initial level for nearly a decade. This long-run depressing effect is also observed in major individual European countries – France, Germany, Italy, the Netherlands, and the UK. The authors conclude by discussing why the effects of the COVID-19 pandemic on inflation could play out differently this time around.

Arash Nekoei, Fabian Sinn, 27 May 2021

The international differences in women's status are striking. When and where did those differences first emerge? Is women's status improving everywhere today so that we expect global gender equality eventually? This column uses data from the Human Biological Record to explore women's status over the last 5,000 years. The records show no long-run trend in women's share in recorded history. Historically, women's power has been a side-effect of nepotism: the more important family connections, the higher the women's share. But self-made women began to rise among the writers in the 17th century before a broader take-off in the 19th century. Exploring these captivating and yet unanswered questions teaches us about the future of women and other emancipation movements.

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