Search

This paper mines the experience of the nineteenth-century capital markets to propose an alternative interpretation of international defaults. The standard view—that sovereign default entails exclusion from markets—was often contradicted by reality: in some cases lending ceased, but in others it continued. This paper claims that lenders' responses to default stem from the additional knowledge about borrowers that is acquired during default episodes. Lending is modelled in a costly-state-verification environment where sovereigns have private information about their investment projects (good or bad). After default, lenders audit projects and interrupt lending only if the project is believed to be a ‘bad’ one. [ABSTRACT FROM AUTHOR]

Are the effects of the Neolithic revolution still impacting on incomes across the world today? I find strong support for this proposition using new, country-specific estimates of the timing of the agricultural transition and provide evidence that the differences are due to how technological diffusion is accounted for. A correction for world migrations since 1500 significantly improves the fit. Transition year also helps to explain income in 1500 itself, and an alternative measure of pre-modern development, state history, has similar ability to predict income in 1500 and 1997. [ABSTRACT FROM AUTHOR]

A severe collapse of fixed capital formation distinguished the onset of the Great Depression from other investment downturns between the world wars. Using a model estimated for the years 1890–2000, we show that the expected profitability of capital measured by Tobin's q, and the uncertainty surrounding expected profits indicated by share price volatility, were the chief influences on investment levels, and that heightened share price volatility played the dominant role in the crucial investment collapse in 1930. Investment did not simply follow the downward course of income at the onset of the depression: rather, its slump helped to propel the wider collapse. [ABSTRACT FROM AUTHOR]

The causes of unemployment incidence in interwar Britain have been the subject of much debate since Benjamin and Kochin claimed that it was due largely to generous unemployment benefits. We use the records for 30,000 workers from the New Survey of London Life and Labour (1929–31) to estimate the determinants of unemployment incidence. We find no significant effects of the benefit–wage ratio on the unemployment probability for adult males when we allow for skill and industry effects. Separate regressions for younger males and for females also fail to reveal significant effects from unemployment benefits on the pattern of unemployment incidence. [ABSTRACT FROM AUTHOR]