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Archive for the ‘Economic History’ Category

The Spread of Manufacturing to the Periphery 1870-2007: Eight Stylized Facts

This is a joint paper with Kevin H. O’Rourke and Jeffrey G. Williamson.

Abstract: This paper documents industrial output growth around the poor periphery ( Latin America, the European periphery, the Middle East and North Africa, Asia, and sub-Saharan Africa] between 1870 and 2007. We provide answers to the following questions: When and where did rapid industrial growth begin in the periphery? When and where did peripheral growth rates exceed those in the industrial core? When was the high-point of peripheral industrial growth? When and where did it become widespread? When was the high-point of peripheral convergence on the core? How variable was the growth experience between countries? And how persistent was peripheral industrial growth?

This paper can be downloaded from the IIIS or the NBER.

Categories: Economic History

From Great Depression to Great Credit Crisis: Similarities, Differences and Lessons

This is a joint work with Miguel Almunia, Barry Eichengreen, Kevin O’Rourke and Gisela Rua.

Abstract: The Great Depression of the 1930s and the Great Credit Crisis of the 2000s had similar causes but elicited strikingly different policy responses. While it remains too early to assess the effectiveness of current policy, it is possible to analyse monetary and fiscal responses in the 1930s as a natural experiment or counterfactual capable of shedding light on the impact of current policies. We employ vector autoregressions, instrumental variables, and qualitative evidence for 27 countries in the period 1925–39. The results suggest that monetary and fiscal stimulus was effective — that where it did not make a difference it was not tried. They shed light on the debate over fiscal multipliers in episodes of financial crisis. They are consistent with multipliers at the higher end of those estimated in the recent literature, and with the argument that the impact of fiscal stimulus will be greater when banking systems are dysfunctional and monetary policy is constrained by the zero bound.

This paper is published in Economic Policy 62: 219-265. It can be downloaded from here.

The effectiveness of fiscal and monetary stimulus in depressions

This is a VOXEU column together with Miguel Almunia, Barry Eichengreen, Kevin H. O’Rourke and Gisela Rua.

There is one important source of information on the effectiveness of monetary and fiscal stimulus in an environment of near-zero interest rates, dysfunctional banking systems and heightened risk aversion that has not been fully exploited: the 1930s. This column gathers data on growth, budgets and central bank policy rates for 27 countries covering the period 1925-39 and shows that where fiscal policy was tried, it was effective.

Find the rest of this column here.