Economic history

David Jacks, John Tang, 21 October 2018

Foreign goods and workers are regularly blamed when the national economy is performing poorly. Economic theory suggests that trade and migration are substitutes – one can import cheaper products from a trade partner, or one can import the foreign workers themselves to narrow the difference in international factor prices. Yet, empirically this is not obvious. Based on available long-run data for international trade and migration since the late 19th century for the US and Canada, this column finds that during the interwar period, trade and immigration did in fact appear to be substitutes.

Alexandra de Pleijt , Alessandro Nuvolari, Jacob Weisdorf, 20 October 2018

While technological progress has typically been seen as increasing the demand for skilled workers since the beginning of the 20th century,  technological change has historically been associated with ‘de-skilling’. This column explores how the advent of the steam engine affected human capital formation in industrialising England. More steam engines per person are found to be associated with lower shares of unskilled workers. The results run contrary to the workshop-to-factory argument of skilled workers’ downward mobility, pointing instead to a farm work-to-factory transition. 

Felipe Valencia Caicedo, 20 October 2018

Though volumes have been written about Jesuit Missions in South America, very little is known about their long-term economic legacy. Using a novel dataset, this column argues that the 17th century Guarani Jesuit Missions had long-lasting positive effects on education and income. It also suggests cultural and occupational mechanisms that might be driving the persistent effects observed. 

Claudio Borio, Piti Disyatat, Mikael Juselius, Phurichai Rungcharoenkitkul, 18 October 2018

Has the decline in real (inflation-adjusted) interest rates over the last 30 years been driven by variations in desired saving and investment, as commonly presumed? And is this a useful way of thinking about the determination of real interest rates more generally, at least over long horizons? This column finds that this is not the case by systematically examining the relationship between several saving-investment drivers and market real interest rates (as well as estimates of natural rates) since the 1870s and for 19 countries. By contrast, a clear and robust role for monetary policy regimes emerges. The analysis has significant implications for the notion of monetary neutrality and policymaking.

Stephan Heblich, Stephen Redding, Daniel Sturm, 13 October 2018

Over the last two centuries, transportation innovations have drastically changed urban landscapes. This column explores how the mid-19th century transport revolution shaped the urban agglomeration of London. The results show Greater London’s population would have been 30% lower in 1921 without the railway network. The findings and the quantitative urban models employed highlight the role of modern transport technologies in sustaining dense concentrations of economic activity.

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