World trade, 1800-2015

Giovanni Federico is Professor
in Economic History at
University of Pisa

Parallels are often drawn between the Great Recession of the past decade and the economic turmoil of the interwar period. In terms of global trade, these comparisons are based on obsolete and incomplete data. In a new EHES Working paper, we re-estimates world trade since the beginning of the 19th century using a new database. The effect of the Great Recession on trade growth is sizeable but fairly small compared with the joint effect of the two world wars and the Great Depression. However, the effects will become more and more comparable if the current trade stagnation continues.

AntonioTena-Jungito is Professor in
Economic history at Universidad
Carlos III de Madrid

The long-run consequences of the slowdown of trade growth since 2007 are still under debate (Boz et al.2014, Costantinescu et al. 2015, Hoekman 2015). Pessimists warn that the Great Recession might be a historical watershed, marking the end of decades of booming world trade and globalisation (The Economist2014). It is clearly still too early to tell, but economic historians are drawing parallels with the backlash against globalisation in the 1930s (Eichengreen 2015) – comparing the boom before 2007 to the growth before World War I, relabelled the ‘first globalisation’ (O’Rourke and Williamson 1999, Bordo et al 2003, Collier and Dollar 2002).

These comparisons are based on obsolete and partial series of trade. They do not take into account recent scholarship, do not cover the first half of the 19th century, and neglect less developed countries. Thus, in new work, we have re-estimated world trade starting from a comprehensive database of trade by country (Federico and Tena-Junguito 2016 EHES Working paper). For each polity (independent countries, colonies, and native territories) we estimate imports and exports, at both current and constant (1913) prices and for both current and at constant (1913) borders. Whenever available, we have used modern estimates of trade or national accounts. Otherwise, we have collected data at current prices from original sources, filling the gaps with interpolations or extrapolations based on trends in nearby or similar polities. We have deflated these series with country-specific price indexes, mostly based on London prices, adjusted for freights and we have converted all data into both current or 1913 dollars. The number of series in the database increases progressively from 10 to about 130 – that is, all the existing ones, with very few and quantitatively negligible exceptions – after 1850. We compute world trade after 1850 as a sum of exports of all polities. We extrapolate the 1850 level with indexes of trade for time-invariant samples, which include 10 polities since 1800, 62 polities since 1823 and 89 since 1830, which account respectively for 55%, 80% and 95% of world trade in 1850. Finally, we link our estimate in 1938 to the series of the United Nations (UNStatistical Yearbook) and of the WTO to get a series of world trade from 1800 to present.


Figure 1 plots the resulting series in log scale to highlight long-run trends. From 1800 to 2007, world exports grew at an impressive 4.22% annual rate (significant at the 1% level), corresponding to a cumulated 6437-fold increase.

Figure 1. The logarithm of wold trade

A combination of visual inspection and statistical testing suggest dividing the series into eight periods, plus the most recent slowdown. Table 1 reports the corresponding yearly rates of change.

World exports started to grow quickly after the end of the French wars. The early rise also reflects the return to normal trading conditions after the shock of the wars, but this effect accounted for less than 7% of the increase of trade until 1865, and for less than 2% of overall growth before World War I. Contrary to conventional wisdom, trade grew faster in 1817-1866 than in 1867-1913, and the difference is significant at the 1% level. If trade had continued to grow as fast as it had before 1867, by 1913 it would have been 55% higher. The outbreak of World War I caused world exports to fall by about a quarter. They returned to the pre-war level in 1924 and continued to grow, up to about a third higher in 1929 than in 1913. At the trough of the Great Depression in 1933, world trade was 30% lower than in 1929 and 5% lower than in 1913. In the next four years, it recovered about two thirds of the lost ground so that by 1937 it was ‘only’ below the 1929 level by a tenth. World trade recovered quite quickly after World War II. By 1950 it was already 10% higher than in 1929 and it grew at breakneck speed during the golden age. Thus, as Figure 1 shows, by the early 1970s the recovery was (almost) complete, and trade was again on its pre-1913 growth path. The growth slowed down markedly in the 1970s but it accelerated again after 1980. World trade has exceeded the pre-1913 growth path since the mid-1990s and its rate of growth was significantly higher in 1950-2007 (5.10) than in 1817-1913 (3.62). The Great Recession caused trade to decline much less than the Great Depression, but seven years after its start there is still no clear sign of a rebound.

These data are for current borders – we estimate that boundary changes had a minimal effect before 1913 and a fairly large one after both world wars. The changes after the treaty of Versailles increased trade by 3.1% relative to the estimate at constant borders in 1924 (6.8% for Europe only) and by 1.5% (2.7%) in 1938 – that is, our series at current borders overvalues the level of trade in interwar years relative to its pre-war level but understates its growth. Lavallée and Vicard (2013) estimate that the border changes of the 1950s (e.g. the division of British India) and of the 1990s (the fragmentation of Soviet Union and of Yugoslavia) accounted for 6.6% of the growth of trade during the Golden Age and for about a sixth of the overall rise from 1950 to 2007. This is equivalent to a third of a point of the growth rate – that is, to about a fifth of the difference between the two globalisations.

In the long run, exports of all polities increased, but not to the same extent. For instance, the UK was by far the largest exporter in 1850 (19% of total at current prices) and still in 1913 (13.7% vs. 12.9% for Germany and 12.8% for the US), but only the 10th largest in 2007 (3.2%). China was the 11th largest in 1850 (2.3% of world exports), sliding to 17th place in 1913 (1.6%), and then rising to second place in 2007 (8.9%, behind Germany’s 9.6%). Most changes are concentrated in the second globalisation – the simple coefficient of correlation between shares by polity is higher between 1850 and 1913 (0.91) than between 1972 and 2007 (0.85). Although there is a lot of noise, a simple division of countries by continent and by level of development highlights the main patterns (Figure 2). Note that we define ‘advanced’ countries as those which had a GDP per capita over half that of Britain in 1870 – i.e., Australia, Belgium, Canada, Denmark, France Germany, Netherlands, New Zealand, Switzerland, UK and the US. The ‘other OECD’ countries are Austria, Greece, Finland, Ireland, Iceland, Italy, Japan, Norway, Portugal, Spain, and Sweden. 

Fig 2a. Shares by continent

Figure 2 b Shares by level of development

In the early 1830s, Europe accounted for 62% of world exports and the advanced countries for about a half. The latter share increased by ten points in the 1850s and then remained around 60% until the war, while the share of Europe was drifting slightly downwards to 56%. The two world wars and the Great Depression caused substantial changes in shares, which were, however, largely reversed during the Golden Age. In 1972 Europe still accounted for 52% of world exports and the ‘old rich’ for 57%. In contrast the changes after 1972 have been large and (so far) permanent. The share of Asia rose from about a sixth to a third, at the expense of all other continents. Europe fared comparatively better than others. Until the early 1990s, the fall in the share of ‘old rich’, from 56% to about 40% of world exports, was compensated by the relative increase of exports from the ‘other OECD’ countries – most notably Japan. In the last 15 years, exports from the advanced countries decreased further to slightly over a third, the other OECD countries returned to a sixth, their level for the 1970s and the ‘rest of Asia’ (mostly China) jumped to a quarter of the world market.

Summing up, the effect of the Great Recession on long-term growth of trade is sizeable but so far fairly small in comparison with the joint effect of the two world wars and the Great Depression. However, the effects are going to become more and more comparable if the current stagnation of trade continues.

The working paper can be downloaded here: http://www.ehes.org/EHES_93.pdf

References

Boz, E, M Bussière and C Marsilli (2015) “Recent slowdown in global trade: Cyclical or structural” in Hoekman, B (ed), The great trade slowdown: a new normal?, CEPR eBook.
Bordo, M, A M Taylor and J G Williamson (2003) Globalization in historical perspective, Chicago and London: University of Chicago Press.

Collier, P and D Dollar (2002) Globalization, growth and poverty, World Bank and Oxford University Press: Washington and Oxford.

Constantinescu, C, A Mattoo and M Ruta (2015) “The global trade slowdown cyclical or structural?”, World Policy Research Working Paper 7158, World Bank.

Eichengreen, B (2015) Hall of mirrors: The Great Depression, the Great Recession and the uses – and misuses of history, New York: Oxford University Press.

Federico, G and A Tena-Junguito (2016) “A new series of world trade, 1800-1938” EHES Working paper, n.93.

Hoekman, B(2015) The great trade slowdown: a new normal? CEPR eBook.

O’Rourke, K and J G Williamson (1999) Globalization and history. The evolution of the nineteenth Atlantic economy MIT Press Cambridge (Mass)

Lavallée, E and V Vicard (2013) ‘National Borders Matter...Where One draws The Lines Too’Canadian journal of economics 46 pp. 135-163.

The Economist (2014) “A troubling trajectory”, The Economist, 13 December.

UN Yearbook (ad annum) Yearbook of international trade statistics, New York: United Nations

Spanish Land Reform in the 1930s: Economic Necessity or Political Opportunism?

Spanish land reform, involving the break-up of the large southern estates, was a central question in Spanish politics during the first decades of the twentieth century. However, the historical debate on this issue has been hampered by the absence of information on access to land. A new EHES working paper is the first that provides quantitative evidence to explain long-run changes in the numbers and regional distribution of landless peasants. 

This new evidence points in the direction that, like in many other European countries, many landless peasants got access to land thanks to the changes in relative prices and the forces of structural change. However, this dramatic change was less intense in Southwestern provinces than in the rest of the country.

Juan Carmona, Assosicate professor in

Economic History, Carlos III Madrid

Land reform is a very important issue in Development Economics and is subject to substantial debate. The basic idea of this growing literature is that large estates with hired labour should be replaced by small or middle-sized farms which are more efficient and socially equitable. However, major disagreement persists on how to conduct this modification of land ownership. On the one hand, many academics and policymakers support a land reform policy based on direct government confiscations and land re-distribution arguing that the free operations of land and tenancy markets in developing countries are not efficient. In a sharp contrast, others prefer ‘market-oriented reforms’ expecting that a well-functioning land market will generate a ‘spontaneous’ redistribution of land from inefficient to efficient producers (Deininger, 2003). This kind of market-based land redistribution took place in Europe during the last decades of the nineteenth and first of the twentieth centuries when large estates declined as well as the share of hired workers in the active farm population (Van Zanden 1991).

James Simpson, professor in
Economic History, Madrid

The Spanish historical experience is very illuminating for the current and the historical debate because attempts were made to implement both types of reforms. Spain underwent a classical market-oriented land reform during the last decades of the eighteenth century and the first half of the nineteenth century with the so-called Liberal land reforms (Carmona and Rosés, 2012). For many contemporary observers, this reform did not solve the main problems of the Spanish countryside (Carrión, 1932).

Joan Rosés, professor in Economic
History at LSE

Consequently, from the early decades of the twentieth century, there were political demands for a new reform to redistribute land from large landowners to poor, landless peasants, which culminated in legislation during the Second Republic (Malefakis, 1970). Practically half of the country was under this land redistribution policy albeit its effective implementation failed. However, the economic rationale for carrying out this controversial Republican land reform have not discussed in the literature. In particular the question of why market forces, which had been supposedly effective in breaking up large estates in other western European economies but not in Spain, has been totally ignored.

The European historical experience teaches us that the main determinant for the surge of small-medium farms was the increase in the ratio between wages and land prices. Before the Liberal reforms, institutional constraints allowed only a part of the total available land to be traded, and hence, land supply was quasi-fixed and inelastic. In this situation, any demand shift would result in large upsurges in land rents and decreasing land access. Because Liberal reforms expanded significantly the amount of land that could be bought and sold (the cultivated area increased from 11.4 million hectares in 1800 to 16 million in 1860), the shift in land demand of mid-nineteenth century only resulted in slightly land prices increases. From 1890 in 1931, the cultivated land grew again from 16 to 22 million hectares but land demand shifted downwards due to several concomitant factors including increasing foreign competition in agrarian markets, rural out-migration, and the action of the Engel’s law. Accordingly, the relative price of land decreased substantially as the following graph shows.

Acces to land: Average family and male days of work necessary for buying the mean plot, 1908-1931
(unweighted provinvcial average)

Like in other European countries, Spain experienced a substantial change in the composition of its agrarian workforce between 1860 and 1930. The number of landless workers halved from about two million to less than one million, while the numbers of farm tenants and owners increased from 1.6 to 2.2 million people. Accordingly, the relative amount of landless peasants declined from 56 to 30 percent of the agrarian workforce. The fact is that more than half of the provinces under the land reform act had also experienced a substantial reduction in the ranks of landless workers. It should be noted that there are two main ways that this fall in landless workers could take place: (1) hired labour moved up the farm ladder to become tenants or owner-occupiers (genuine land reallocation), or (2) they left the countryside in search of employment in cities or abroad. The following graph presents new evidence on this issue during the two decades before the Second Republic (1910-1930).

The evolution of the number of landless peasants and their determinants 1910-1930 (percentage change)

This evidence not only confirms dramatic changes in the composition of Spain’s agrarian workforce but also underlines substantial regional differences, particularly among these provinces to be affected by the Republican land reform act and the rest of the country. Broadly speaking, all land reform provinces had lower levels of labour reallocation from the countryside to the cities due to their higher costs of migration and that their urban labour demand was comparatively limited. The situation was even worse in Western Andalusia (Cadiz, Cordova, Huelva and Seville) and Estremadura (Badajoz, Caceres and Salamanca), where scarce farm labour migration was also accompanied by low levels of genuine land reallocation.

What could explain this workers’ limited access to land in South-Western Spain? It is difficult to argue that this was caused by institutional failure since these regions were integrated into the Spanish land market and had the same laws that were in force in the rest of Spain. To make the situation more puzzling, the nearest region, Western Andalusia, had a substantial market relocation of land from landowners to peasants. Therefore, we are more inclined to think that natural resource endowments constrained land access. The absence of irrigation, the very seasonal character of labour demand, and the use of new labour-saving machinery made these regions more suitable for larger estates than for small-medium family farms.

This blog post was written by:
Juan Carmona (Department of Social Sciences of Universidad Carlos III de Madrid),
Joan R Rosés (Department of Economic History, London School of Economics)
James Simpson (Department of Social Sciences of Universidad Carlos III de Madrid).

The working paper can be downloaded here: http://www.ehes.org/EHES_90.pdf


References 
Carmona, J, and J.R.Rosés, 2012. ‘Land markets and agrarian backwardness (Spain, 1904-1934)’, European Review of Economic History, vol. 16(1), pages 74-96.
Carrión, P., 1932. Los latifundios en España: su importancia, origen, consecuencias y soluciones. Madrid: Gráficas Reunidas.
Deininger, K., 2003. ‘Land Markets in Developing and Transition Economies: Impact of Liberalization and Implications for Future Reform’. American Journal of Agricultural Economics 85(5), 1217-1222.
Malefakis, E., 1970. Agrarian Reform and Peasant Revolution in Spain. New Haven: Yale University Press.
Van Zanden, J,L. 1991. ‘The First Green Revolution. The Growth of Production and Productivity in European Agriculture’. Economic History Review 44 (1): 215–239.

A city of trades: Spanish and Italian Immigrants in Late Nineteenth Century Buenos Aires, Argentina

Blanca Sánchez Alonso is professor in 
Economic History at Universidad 
CEU-San Pablo, Madrid

Buenos Aires at the end of the 19th century was a vibrant city. As a political and commercial hub of Argentina, it was a magnet for immigrants from the Old World with a growing demand for unskilled labour.

A large scholarship has studied immigration to Buenos Aires and to Argentina during the era of mass migration (Moya 1998, Baily 1999).  However, we lack, so far, detailed quantitative knowledge on the impact of these flows on labour market. In particular, we are interested in comparing the relative performance of the native workers vis-à-vis the Italian and Spanish immigrants, the largest two immigrant groups, throughout the era of mass migration in Argentina.

Leticia Arroyo Abad is
assistant professor at Middlebury
College

Buenos Aires in 1895 is an extreme case in immigration; the influx of immigrants was so important that only one-third of the male labour force was of Argentinean origin. In 1895, Buenos Aires had nearly 664,000 inhabitants, more than half were foreigners.

Using a new dataset combining individual level census data and a wide array of skilled and unskilled wages, a new EHES working paper looks at labour market participation, human capital, and wealth to assess the performance of Argentineans, Italians, and Spaniards. By classifying the different occupations according to the 1950 IPUMS classification used for the US census, we are able to analyse the labour market in terms of skill composition and skill return.

Male occupation composition by nationality

The findings point at complex effects of immigration on the urban labour market.  (We restrict our analysis to adult males given the data constraints on female wage data). Native workers enjoyed, on average, higher wages than Italians and Spaniards. The labour market rewarded literacy as we observe higher wages rates in more skilled occupations with a higher share of literate workers. Yet, we do not observe systematic native skill upgrading throughout the skill range. In contrast, one distinctive characteristic of the labour market was the relative concentration in different occupations by nationality. Argentines dominated the higher skilled occupations while the Spaniards concentrated in the retail sector and the Italians in the artisan sector.

Male average wages by occupation and nationality

To explain this distribution, we look at the individual characteristics to find that variation in literacy is not consistent with this clustering. Both Spaniards and Italians enjoyed relatively high literacy rates. Following the migration literature, we explore the role of networks as catalysts for integration in the host economy. Ethnic associations played an important role serving as hubs of information and networking and thus decreasing the costs of integration to the new economy. A comparison between the extent and history of local associations shows that the Italian community had a deeper and long-established network in Buenos Aires.

Literacy by occupational group

Overall, this study contributes to our understanding of the performance of labour markets in the presence of large immigrant flows. Buenos Aires at the end of the 19th century welcomed thousands of immigrants. Between 1887 and 1895, these immigrants explain 70% of the total population growth. In this flexible labour market, immigrant workers found their niche based on their skills and aided by the existing networks. With older and deeper network power, Italians had the first mover advantage, a benefit that allowed them to succeed in their adopted country.

This blog post was written by: Leticia Arroyo Abad and Blanca Sánchez-Alonso, Department of Economics, Middlebury College, Vermont, USA and Blanca Department of Economics, Universidad CEU-San Pablo, Madrid, Spain.

The authors thank Timothy J. Hatton and Javier Silvestre for very useful comments and suggestions. This paper also benefited greatly from discussion in the Economic History Seminar of the Universitat de Barcelona and the XI Conference of the European Historical Economics Society (Pisa).

The working paper can be downloaded here: http://www.ehes.org/EHES_88.pdf

References
Baily, Samuel L. (1999). Immigrants in the Land of Promise: Italians in Buenos Aires and in New York City, 1870 to 1914. Ithaca. New York: Cornell University Press.
Borjas, George J. (2003). “The labor demand curve is downward sloping: Reexamining the impact of immigration on the labor market”. Quarterly Journal of Economics 118, 4, pp. 1335–1374.
Hatton, Timothy J. and Williamson. Jeffrey G. (1998). The Age of Mass Migration. Causes and Economic Impact. New York: Oxford University Press.
Moya, José C. (1998) Cousins and Strangers. Spanish Immigrants in Buenos Aires, 1850-1930. Berkeley: University of California Press.
Ottaviano, Gianmarco  and Giovanni Peri. (2012). "Rethinking the Effect Of Immigration On Wages," Journal of the European Economic Association, 10(1): 152-197.

FRESH Meeting on the Economic History of Education

The Frontier Research in Economic and Social History (FRESH) Meeting took place at the

University of Barcelona

University of Barcelona from December 3-4, 2015. Two keynote lectures and 16 presentations focused on the workshop theme “Economic History of Education” and constituted a dense and inspiring program.

The meeting started off with a very inspiring keynote by David Mitch (UMBC Maryland) giving an overview on how the field of “Economic History of Education” had developed during the last 50 years. The keynote’s guiding idea was to contrast the “Economic History of Education” with the developments in financial economic history. When Francesco Cinnirella (ifo Institute) concluded the meeting with the second keynote, focusing on the developments in the field during the past decade and outlining the open topics in the field, it was encouraging to see that most of the topics outlined had been addressed by one of the 16 contributions during the meeting.

How institutions might shape the supply and demand of education was addressed in several papers. In the presentation on “Does centralization foster human capital accumulation? Quasi-experimental evidence from Italy’s Liberal Age”, Gabriele Cappelli (University of Tuebingen) discussed a reform in early 20^th century Italy that allowed municipalities to introduce school autonomy. Nuno Palma (University of Groningen) investigated how growing up under a more or a less autocratic regime in Portugal in the early 20^th century affected literacy in his presentation on “A tale of two regimes: educational achievement and institutions in Portugal, 1910-1950”. A lively debate evolved after the presentation on whether Portugal in the early 20^th century could still be understood as a developing country making the use of height as a measure of living standards viable. Giovanni Prarolo’s (University of Bologna) presentation on “Eight Centuries of Exposure to Pre-Industrial Politico-Economic Institutions and Current Socio-Economic Development. Disaggregated Analysis for Italy” evolved around the question whether pre-industrial institutions in Italy might explain tax evasion today which gave way for further presentations on the matter of persistence.

Felipe Valencia (University of Bonn) presented his paper on “The Mission: Human Capital Transmission, Economic Persistence and Culture in South America” which investigates whether the missions of the Jesuit order in South America had long run-effects on educational outcomes and income.

Piotr Kory (University of Warsaw) and Izabela Korys (National Library of Poland) equally concentrated on long-run effects, by looking at the consequences of the Polish partitions on book reading as a measure of social cohesion in today’s Poland in their presentation on “Literacy, education and development in Polish regions. Do we really observe the long-term effects of partitions?”.

The presentation by Paola Azar (Universitat Autonoma de Barcelona) on “Efficiency gains and fiscal effort Evidence for public education spending (1970 – 2010)” shifted the focus to the financing of education in Latin America. Dacil Juif’s (University of Wageningen) presentation on “The Human Capital of Iberian Jews and Other Minorities during the Inquisition Era” added the aspect of religion to the process of human capital acquisition by using data from the Inquisition’s trials to measure the human capital level of Jews as compared to other parts of the Spanish population.

University of Barcelona

Four presentations evolved around the topic of inequality in education. Jabrane Amaghouss (Cadi Ayyad University) looked at the interplay of inequality in education and economic growth in his presentation on “The Dynamics of the Reduction of Educational Inequalities in Africa”. Marc Goni (University of Vienna) looked at how the provision of schools was affected by the institution of school boards in his presentation “Landed Elites and Education Provision in England and Wales. Evidence from School Boards (1870-1899)”. Julio Martínez-Galarraga (Universitat de Barcelona)  relatedly looked at how the (re-)distribution of land through the Spanish Reconquista affected human capital accumulation in the presentation on “Land access inequality and education in pre-industrial Spain”. Finally, Myung Soo Cha (Yeungnam University) looked at the consequences of land inequality on human capital from the Korean perspective in his presentation “Land Inequality and Human Capital Accumulation in Korea, 1910-2010”.  

Chiara Martinelli (Central Library, Council of the European Union) presented a new dataset on industrial schools in Italy and described the enlargement of industrial and artistic industrial schools in her presentation on “Did Industrial Workers Attend Industrial Schools? A Dataset on Industrial and Artistic Industrial Schools in Italy”.

My (Ruth Maria Schueler, Ifo Institute) presentation shifted the focus to the non-cognitive outcomes of education in the presentation “Nation Building and Social Capital in Prussia: The Role of Education” by investigating whether a higher share of state funds in educational expenditures succeeded in aligning Prussian voters with the state’s ideology.

Finally, a last set of papers evolved around the topics of health and fertility.

Anastasia Driva (University of Munich) investigated the effects of a health reform in Imperial Germany on mortality in the presentation “Compulsory Health Insurance and Mortality”. Maarit Olkkola (UPF and National Institute for Health and Welfare) looked at a special form of birth care in Finland in her presentation on “Poor Cognition – Early-life Socioeconomic Status and Cognitive Abilities in Adulthood. The Helsinki Birth Cohort Study 1934–1939”. Finally, Philipp Ager (University of Southern Denmark) investigated the interplay of agricultural income and fertility.

Not only the range of topics within the field of the “Economic History of Education” which was covered by the presentations was showing an encouraging development in the field, many presentations at the same time also introduced new datasets.

The conference dinner at the seashore of Barcelona nicely complemented the dense program and the local organizers Alfonso Herranz-Loncán and Sergio Espuelas Barroso ensured a smooth sequence of the workshop. Martin Uebele (University of Groningen) represented the FRESH board.  

This blog post was written by Ruth Schüler, Junior Economist and Doctoral Student at Ifo Institute Munich

The Rise of the Middle Class, Brazil (1839-1950)

This blog post was written by Maria Gomez Leon,

researcher in Economic History at 

University of Groningen

The rise of the middle class during the process of economic development has become a major research topic. This has been fuelled by the expansion of this social group in Latin America during the last decade. The Brazilian case is extra interesting due to the country’s recent economic growth accompanied by decreasing inequality, the reduction of absolute poverty and the rise of a new middle class. 

Between 2001 and 2010, Brazil’s GDP per head recorded an average annual growth of 2.4 per cent. Meanwhile, over the same period, 35 million previously poor people entered the middle class, enlarging the size of this class from 38 per cent of the population in 2002 to 53 per cent in 2012. Comparable episodes of rapid economic growth took place in Brazil in the past. Yet, little is known about the evolution of inequality and the presence of a middle class in Brazil over longer periods of time. Did a middle class exist in pre-industrial Brazil? How did it evolve until modern times?

In a recent EHES working paper, The Rise of the middle class, Brazil (1839-1950), I investigate the emergence and evolution of the middle class in Brazil between the mid-nineteenth and mid-twentieth centuries and its connection with inequality. To this purpose Brazil’s income distribution is explored from two dimensions: inequality and polarisation. From the inequality perspective, the paper gets into the debate on whether or not Brazil suffered from persistent inequality from the colonial era by providing a new continual series on Gini estimations. Then, from the polarisation dimension, it contributes by presenting a new middle class index (MCI), based on polarisation measures, which is applied to assess the evolution of the middle class in terms of income and also in terms of status. Notably, to calculate both inequality and polarisation, I use a self-constructed social table involving information on active population structure (by profession) and the income linked to these professional categories, taking into account differences in gender (male or female), condition (free or slave) and area (urban or rural). The investigation aims to fill the gap in the literature on Brazil’s income distribution before the mid-twentieth century as well as provide new insights on when the middle class emerged in Brazil and if there was any connection between the rise of the middle class and inequality.

This work yielded many interesting results. To begin with, results on inequality do not support the idea of persistent inequality in Brazil rooted in the colonial era (Bértola et al, 2012), while they do coincide with the hypothesis of low inequality levels associated with low income values (Milanovic, Lindert and Williamson 2010; Prados de la Escosura 2007). The figure below reflects this idea by showing that my Gini coefficients range between 0.2 and 0.35. It also shows a long-run decline in inequality until 1913, which was interrupted by a short-lived increase during the 1860s, followed by a reduction and a sharp increase from 1913 onwards.

Brazil’s inequality: Gini coefficients

The figure below suggests that low Gini values are quite plausible given the low income levels exhibited in Brazil, especially during the nineteenth century. This figure shows Brazil’s Inequality Possibility Frontier (the maximum attainable inequality for Brazil given its overall income) with the maximum Gini ranging between 0.3 and 0.6. My estimates remained below this frontier, starting from 0.2 at the beginning of the period and growing later from 1913 once GDP per head had begun to increase.

Brazil’s Inequality Possibility Frontier (1850-1950)   

Initially, these inequality trends might be interpreted as supportive of the presence of a middle class over the period, especially up to 1913 (when Gini coefficients were falling) with a reversal thereafter. The alternative interpretation, however, could be that low inequality values in the nineteenth century, since they pointed to low income levels, might have prevented the emergence of the middle class. The opposite could have happened during the twentieth century, when high inequality values could have been linked to an early phase of economic growth in a Kuznetsian sense (that is, to the transitional process from the traditional sector to a modern one), allowing for the appearance of different social groups. 

Ambiguous interpretations can be solved by applying polarisation measures to infer the presence of the middle class. In particular, I propose to use a new middle class index defined as the ratio between tri-polarisation and bipolarisation (further developed in section 3 of the paper). The method allows me to assess the evolution of the middle class evolution in terms of both income and status. Results from the MCI (Figure 3) suggest that the middle class in terms of income arose in the late nineteenth century, when the decline of the slave system led to a more competitive social order. Still, its emergence, in terms of both income and status, should be placed during the first three decades of the twentieth century, in a context of the expansion of industry and modernisation. Yet, between 1930 and 1950, still in a context of urbanisation and growth but increasing inequality and social repression, the middle class started to decline in terms of both income and status.  

Brazil 1839-1950: Middle Class index (according to status and income) 5- year moving averages. 

In summary, substantial social structural change occurred in Brazil over the period under review. The decline of slavery (started in the 1850s), the reduction of inequality (during the late nineteenth century), and the process of modernisation and urbanisation (from the early twentieth century) were crucial factors for the emergence of the middle class. Interestingly, during the early twentieth century, the increase in inequality linked to the increase in wage differences (associated, in turn, with productivity differences) did not impede, but rather fostered the rise of the middle class. Yet, from the 1930s the continuous increase in inequality, along with a low social cohesion, frustrated the consolidation of the middle class and the eradication of absolute poverty.

These results have relevant policy implications for recent theories on the emergence of the middle class in emerging economies in contraposition to their decline in Southern-European countries (after the last global financial crisis) and its connection with inequality. In the short-run: Is inequality when associated with modernisation unavoidable/ favorable to the emergence of the middle class? However, in the long-run: Does inequality impede the consolidation of the middle class even in the presence of economic growth? Another interesting question arising from this research would be the comparison of the rise of the middle class in other transitional economies in the past.

Working paper available here http://www.ehes.org/EHES_91.pdf

References:

Bértola, L., Castelnovo, C., Reis, E., & Willebald, H. (2012). Income Distribution in Brazil in 1870-1920. XVII Jornadas Anuales de Economía, Banco Central del Uruguay, Montevideo.

Milanovic, B., Lindert, P. H., & Williamson, J. G. (2010). Pre-industrial Inequality. The Economic Journal, 121(551), 255–72.

Prados de la Escosura, L. (2007). Inequality and Poverty in Latin America: A Long-Run Exploration. In T. Hatton, K. O'Rourke, & A. M. Taylor (Eds.), The New Comparative Economic History (pp. 291-315). Cambridge, Mass: MIT press.

10th SOUND Economic History Workshop

The 10th SOUND Economic History Workshop took place in Lund, Sweden on the 26-27 November 2015. The two intense days included two keynote presentations and 17 presentations by young scholars.  (You’ll find the blog post on the 9^th SOUND workshop, Copenhagen last year, here.) 

The two keynote speakers were Joan Roses from the LSE, who spoke on the topic of “Regional Inequality in Europe: A long-run view, 1900-2010” on the Thursday, and Karine van der Beek from Ben-Gurion University who spoke on “The relationship between human capital and technological change in 18th century England”. Both keynotes were in my mind exemplary in that they gave engaged introductions to the key debates in their respective fields – regional perspectives on economic development, the role of human capital or not during the first industrial revolution. Hearing directly from leading researchers in different fields how they think about their previous and current research, as well as their reflections on debates they are engaged in (was human capital really important for Britain’s industrial revolution?) is always enlightening, and for someone who works neither on regional perspectives nor the British industrial revolution, both talks were fascinating and rewarding.

First day keynote address by Joan Rosés, LSE

The paper presentations were no less interesting. It was a refreshingly hardcore economic history program, full of quantitative studies of well-defined issues. I noted that among the 17 presentations, 10 included the year span of the study, while another four included periodizations (“interwar period”, “19^th century”, “pre-industrial Europe”, “late-Victorian Briain”). All the studies were empirical and most of them brought forward new data, or used old data in thoroughly new ways. The way it should be in economic history, if you ask me.

The morning session of the first day included Oisín Gilmore (University of Groningen) on “Working Time in Industry (1870-2000): A new dataset”, Andrea Papadia (LSE) on “Fiscal Capacity, Tax Composition, Decentralization and the Cyclicality of Government Revenues in the Interwar Period”, and Karol Borowiecki (University of Southern Denmark) on “The Role of Immigrant Artists on the Development of Artistic Clusters in Major U.S. Cities: 1850 to the Present”. Oisin’s study relates to the well-known studies of Michael Huberman of working hours c. 1870–1910, and points out that actually, when it comes to work-time reduction in Europe, most of the action is around 1920, after Huberman’s data ends but before Maddison’s data begins. As someone working on the eight-hour day legislation in Sweden in 1920, naturally I was very sympathetic to this presentation. Andrea’s presentation concerned measuring “fiscal capacity” in the interwar years, looking at tax revenues and their volatility. One of the discussions around this paper was the classical one about how to capture causality in a historical case, how well the instruments work, etc. I think that by now it’s not really an economic history workshop if you don’t have this discussion about at least one of the papers! Karol’s presentation looked at the immigration of different type of artists to the US – actors, composers, etc. – where they ended up in the US, and what kind of labor economics effects their arrival had on native-born artists in these locations.

The second session was a very pan-Scandinavian one, including Edda Torsdatter Solbakken from Statistics Norway on “The distribution of tax and wealth in the early 19th century”, Cristina Victoria Radu from University of Southern Denmark on “The effect of serfdom on labor markets”, and Ewa Axelsson from Umeå University on the saw mill industry in northern Sweden 1880-1910. Edda Torsdatter Solbakken’s paper exploits a peculiar 19^th century wealth tax design in Norway. To fund the setting up of a national central bank, a wealth tax was introduced, but without comprehensive investigations into the actual wealth of citizens. One might therefore suspect that some powerful citizens might have understated their own wealth to pay less tax, and this is the research question of the presented paper. Cristina Victoria Radu’s paper looks at a Scandinavian historical reform of another kind: the abolition of one kind of serfdom in early 18^th century Denmark and then the re-introduction of another version of it. Radu uses the temporal variation in workers’ freedom to estimate the effects on wages of serfdom. Ewa Axelsson presented not a paper per se but her dissertation work, on the environmental and social effects of the saw mill industry’s domination in a region in northern Sweden during industrialization in the late 19^th century and early 20^th century. For example, companies had voting rights in Swedish municipalities during this period, so in quite a few of the municipalities in this region, a majority or near majority of votes were held by sawmill companies: a fascinating historical case for political economy analysis. I might be biased since I’m Scandinavian, but I thought that this was a superb session, with three extremely interesting studies of various forms of inequality and power in 18^th-19^th century Scandinavia.

The Thursday afternoon session included again three presentations, all which introduced novel datasets: Chiara Martinelli from Università di Firenze on “Industrial and artistic industrial schools in Italy - A new provincial dataset”, presented for the first time very detailed maps on the location industrial and artistic schools in Italy. Kristoffer Collin from Gothenburg University talked about the wage structure during the First Industrial Revolution in Sweden, with a paper based on new data on industrial wages from 1860–1879. Lastly, Alexander Donges from University of Mannheim presented a paper on patenting activity during Germany’s Early Industrialization, arguing that railway construction was a leading sector and that technology transfers were crucial in Germany’s early industrialization. Donges presented a novel dataset of German patents for the period before 1877.

Unfortunately I missed the conference dinner, at an Italian restaurant in downtown Lund, so I can’t give you a restaurant review. But from what I heard the food was good, and from the somewhat later than scheduled timing of arrivals the morning after, I infer that people had fun too. J

Second day keynote lecture by Karine van der Beek, Ben-Gurion University 

After Karine van der Beek’s keynote, Friday’s first paper session included Kathryn E. Gary from Lund University speaking on ”Women’s wages in pre-industrial Europe: Evidence from Scandinavia”, Brian Varian from the LSE speaking on “The revealed comparative advantages of late-Victorian Britain”, and Jason Lennard from Lund University speaking on “A Short Monetary History of Ireland, 1840-1921”. Kathryn Gary presented work on early modern wages in Sweden and Denmark based on new archival research, bringing forth new information about the extent of women’s work in this period (for example, surprisingly widespread employment of women as building workers in 17^th century Sweden), as well as on wage differentials. Brian Varian’s paper concerned late-19^th century British exports and their competitiveness, building on extensive statistical work. Jason Lennard’s paper, co-authored with Sean Kenny also from Lund University, likewise brought forward much new data, in this case on monetary aggregates for 19^th century and pre-independence Ireland. Overall, a session heavy on new data, very encouraging!

The session after lunch started with myself, Erik Bengtsson from Lund University, talking about “Capital shares and income inequality: Evidence from the long run”, a paper co-authored with Daniel Waldenström of Uppsala University. Then came Cristián Ducoing from Umeå University, with a paper called “A Sustainable Century? Genuine Savings in developing and developed countries, 1900-2000”, and the final presentation of the session was Henric Häggqvist from Uppsala University on “Was It All Protectionism? – The Structure of Swedish Tariffs 1780–1830”. (Henric has since defended his dissertation successfully, so congratulations Dr. Häggqvist!) Without having a headline, I think this session could still be summed up as a kind of “historical macro” session: Cristián’s presentations and my own were both oriented to historical national accounts in different ways (mine from the income side, Cristián’s from the expenditure side), and Henric’s concerned new estimates of tariffs and trade for different goods in Sweden from 1780 to 1830.

The final session included two presentations: Alexandra López Cermeño from Universidad Carlos III de Madrid on “The localisation of big cities: destiny or chance? United States 1930-2010”, and Leonard Kukic from the LSE on “Socialist growth revisited: Insights from Yugoslavia”. Alexandra López Cermeño focused on the role of universities in generating local spillo-vers and urban economic growth using up-to-date econometric techniques. , Leonard Kukic on the other hand took a novel approach to the general discussion about the efficiency of planned economies in the post-war period, showing for Yugoslavia that TFP was not the most quantitatively significant cause of Yugoslav failure. Rather, he finds that, labour frictions were a major constraint on socialist growth.

To sum up, I thought that this was a really great workshop. Good keynotes held by senior scholars who also participated in discussions of the papers in helpful and critical ways, 17 purposeful and focused presentations and lots of good discussion, with a plenty of participation and comments, made for a very stimulating experience. Kudos to the SOUND organizers Kerstin Enflo (Lund) and Jacob Weisfdorf (University of Southern Denmark), and especially to the local organizers, PhD students Thor Berger and Hana Nielsen!

Lastly, special thanks to financiers Handelsbankens Forskningsstiftelser for making this workshop possible. 

This blog post was written by Erik Bengtsson,
postdoc in Economic history at Lund University

Did monetary forces cause the Hungarian crises of 1931?

Flora Macher is a PhD student at
London School of Economics

Financial crises are a “hardy perennial” and while their recurrence never fails to cause substantial economic loss, on the positive side, researchers of financial history have a long record of episodes that they can use as a comparative reference when they are analyzing the one crisis just occurring. 

A recent EHES working paper by Flora Macher illustrates that there is a clear parallel between the recent sub-prime crisis and a financial crisis of the Great Depression era. The example shows that financial crises are a “hardy perennial” not only in a sense that they never cease to return but also that they always seem to arise from the same human folly.

US politicians, in their drive to increase their popularity, advocated the increase in home ownership in the 1990s and early 2000s and thus chose to promote mortgage lending. For almost a decade, everything seemed perfectly fine, in fact, more than fine. The period was an economic miracle: the fiscal side was solid, monetary conditions were easy, and everybody, even those without income could buy a house. The catch was that unfunded liabilities were accumulating in the financial system and before anyone could identify their existence, the housing bubble blew up and the well-known sub-prime crises started to unfold.

Hungary underwent almost exactly the same events on its march to the Great Depression. In the years leading to the crisis of 1931, Hungarian authorities used the banking system for populist measures catering to the needs of their constituency and helping them to maintain their political power. The only difference from today was that Hungarian policy-makers tried to win over the public not by raising home ownership but by providing subsidies to the agricultural sector.

Hungary was on the losing side after World War I; it suffered significant territorial losses and incurred reparations obligations based on the Peace Treaty of Versailles. Economic, social, and political turmoil followed in the years after the war. Since domestic capital fled or was obliterated and foreign financiers avoided the country, authorities had to resort to the central banks’ printing press to finance the ever increasing expenses of social demands. The subsequent hyperinflation could not be ended by domestic means as the domestic public was unwilling and unable to finance the government deficit through increased taxation. Eventually, Hungary rid its economy from the hyperinflation through a foreign loan arranged by the League of Nations in 1924. (Bácskai 1999) Nonetheless, the stabilization loan was conditional upon the League’s long-term surveillance which demanded a balanced government budget, forbade government borrowing and required full commitment to a legislatively set gold parity through an independent central bank that refrained from financing government debt and constrained its liquidity provision to the economy. Under these circumstances, fiscal and monetary policy had no room whatsoever to yield to domestic social demands.

Nevertheless, domestic political pressures were substantial. The stability of the government was dependent on the support of landed interest. (Romsics 1991) Large landowners’ demands were a top priority for the administration as the aristocracy retained a powerful role in shaping Hungarian politics, and Prime Minister Bethlen himself belonged to this class. The interests of small landowners and farm laborers, who made up over half of the workforce, also had to be satisfied in order to maintain social stability, which rested on very shaky grounds due to widespread poverty. (Ungváry 2013) Under these conditions, economic fragility and rising unemployment had to be avoided.

Since the short leash set by the League and the international creditors behind the reconstruction loan did not allow policy-makers to spend on domestic political interests, authorities had to find a channel through which they could still address the political pressure but, at the same time, not invite the criticism of international institutions and keep foreign capital flowing in. The banking system, enjoying the backing of the monetary and the fiscal authority, hence became a strange guarantor of domestic, and especially agricultural interests. The central bank developed a strong positive bias towards the rediscount of agricultural bills even during a period of restrictive monetary policy to ensure lending to this sector. The government provided substantial guarantees for farm lending. These were indirect means of support from the authorities to the financial system through which banks could inject “stimulus” into the economy and satisfy the political constituency of the ruling regime.

The flipside of this arrangement was that the financial system was assuming all the risk for the economic stimulus, a role that the authorities themselves were unable to pursue. As a result of the policies of indirect stimulus, the banking system became excessively exposed to the agricultural sector.

The share of agricultural lending in total lending (click to enlarge)

However, when in 1930 the country experienced an agricultural crisis, approximately 50-60% of banks’ equity was wiped out by defaults within months. Thus by the end of 1930, the financial system was already highly vulnerable to shocks and eventually experienced a collapse in July-August 1931. Years of recession and long-term slow economic growth was the outcome of meddling with the banking system and then seeing it fall apart. The post-crisis recession lasted until mid-1932 and the four years of crawling recovery afterwards only landed Hungary’s economy at 1926 levels by the end of 1936.

Domestic national income, million pengős (click to enlarge)

Although the US sub-prime episode and the Hungarian debacle of 1931 can be traced back to the same political folly, there is a significant difference in how the two crises were managed once the events were unfolding. Hungarian authorities responded by reinforcing conservative fiscal and monetary measures: monetary policy restrictions, constraints on the flow of capital, and austerity in government spending. The US followed the same route in the fiscal arena and cut back on government spending. In the monetary field, however, US authorities implemented counter-cyclical measures and started on a path of monetary easing that is still the determining policy action today. The US economy fell into a recession in 2009 but within two years it recovered and by today it is 10% above its pre-crisis size.

Comparing the US sub-prime crisis with Hungary’s 1931 events suggests that even though humans will never cease to indulge themselves to short-term gain, we do still improve on how we clean up the mess once a tragedy of excesses has occurred. The new, unorthodox monetary policy actions of today’s central banks are an intriguing experiment with money supply in a modern economy. While its long-term impact is still unclear, in the short-term, it has proved much more effective than the crisis responses to the 1931 calamities.

The blog post was written by Flora Macher, LSE
The working paper is downloadable here: http://www.ehes.org/EHES_86.pdf

A closer look at the long-term patterns of regional income inequality in Spain: the poor stay poor (and stay together)

The publication of the 2010 Eurostat Regional Yearbook provides evidence to portray regional (NUTS2) income inequality in the European Union. Several features stand out. First, the wealthiest region, Inner London, has a per-capita GDP that is 3.24 times greater than the EU-27 average. Besides, Inner London’s per-capita GDP is 12 times that of Severozapaden (Bulgaria), the poorest region. Nevertheless, regional disparities do not just correspond to extreme cases, since a total of 68 regions have income levels less than 75% of the EU-27 average. In addition, the geography of regional inequality in Europe follows a well-defined and persistent spatial pattern, in which wealthy regions are clustered around a continental axis that stretches from the north to the centre of Europe (or the blue banana). These differences and their implications, have become a serious concern for economists and policymakers, and have fuelled the study of regional inequality.

From an economic history perspective it is worth noting the efforts to construct regional GDP estimates (Rosés and Wolf, forthcoming), thereby enabling researchers to make further progress in the study of long-run trends. That has also been the case of Spain. For a rather small territorial scale, province (NUTS3), novel per-capita GDP estimates allow us to create a decadal-dataset beginning in 1860 and ending in 2010. With these data, our aim is to analyse the long-run evolution of regional income inequality in Spain in terms of convergence and dispersion, and also evaluate aspects related to the income distribution, e.g. modality, mobility, spatial clustering. For this, a new EHES working paper by  Alfonso Díez-Minguela, Julio Martinez-Galarraga and Daniel A. Tirado makes use of various exploratory tools: kernel density estimates, boxplots, transition probability matrices, Shorrocks indices, Kendall’s τ, Moran’s I and LISA maps.

We begin our analysis looking at the long-run evolution of regional per-capita GDP inequality. In this sense, Williamson (1965) conjectured that along the process of economic development regional disparities exhibited an inverted U-shaped pattern, with increasing inequality in the early stages, mainly late 19th century, and convergence thereafter. Our results confirm this hypothesis for Spain 1860-2010. As figure 1 illustrates, there was an upswing in regional income inequality, measured with a population-weighted coefficient of variation (WCV), from 1860 to 1920. From then on, convergence across Spanish provinces prevails. However, this downward trend came to a halt in the last decades of the 20th century, and it might be reversing. Moreover, the U-shaped pattern has also been found in other European countries (i.e. Britain, France, Italy, Portugal) though not in Sweden and Belgium.

Figure 1. Regional (NUTS3) income inequality (WCV), Spain 1860-2010 (1860=1)

In Spain, during the early stages of modern economic growth, roughly 1860-1930, market integration was underway and modern technologies were becoming more widespread. With the advent of industrialisation, some Spanish provinces (Barcelona, Vizcaya) specialized in manufacturing, and thus regional inequality increased. Regional disparities were mainly due to the presence of a small group of rich provinces and a large majority of poor ones. This, in turn, stretched the upper tail of the distribution. Regional inequality thus reflected a small group of wealthy provinces and a majority of (relatively homogeneous) poor ones. However, this was compatible with moderate but sizeable mobility in income distribution insofar as the ranking of provinces underwent some changes. Furthermore, from a geographical perspective, relative income levels had a limited relationship with the location of territories within Spain. Spatial clustering, although statistically significant, was not very high, due mainly to the limited number of wealthy provinces. This would be consistent with the presence of poles with few non-contiguous dynamic provinces. 

Since the 1930s, regional disparities gradually declined. Even more, this coincided with the appearance of bimodality in the distribution, which came about not only due to a lessening of the differences between rich and poor, but also to the homogenisation of rich and poor. From 1930 to 2010 regional mobility declined, whereas spatial clustering increased. In this respect, Figure 2 shows the degree of spatial clustering (in terms of per-capita GDP) in 2000. To identify the geographic position of rich (poor) provinces and the degree of spatial autocorrelation, the figure presents Local Indicators of Spatial Association (LISA) of regional income inequality. In the map, blue coloured provinces illustrate the clusters with low per-capita GDP, while red ones reflect those that exhibit high levels.

Figure 2. Spatial clustering. LISA map, 2000

In short, although differences between rich and poor provinces decreased, their relative positions remained fairly stable. Therefore, in terms of policy-making, there are two main features that characterise regional economic inequality in Spain since the Civil War (1936-39). Firstly, there is a quasi-non-existent mobility in class or rank, i.e. provinces have somewhat retained their 1940 relative positions. Hence, the historical trajectories cannot be labelled as an American Dream or Nightmare on Elm Street. Quite the opposite, a marked stability is observed between 1920 and 2010. Secondly, there is a high degree of spatial correlation. This was already present in the previous period (1860-1930), but it has consolidated during the second half of the 20th century. Consequently, a map with ‘two Spains’ arises, where wealthy provinces are located in the north-east while the poorest ones cluster in the south. Bearing this in mind, spatial polarisation becomes a major concern. 

As a result, there appears to be little prospect of improvement for low-income regions that are located further away from the dynamic nodes. Regional policies, mainly applied during the late 20th century, might have had a short-term impact on relative income levels, but they have been unable to alter the long-term dynamics. In addition, the rise of an economic cluster in the north-east of the Iberian Peninsula may be a sign of the crucial and growing relevance of European markets. Interestingly, the centre of gravity has been gradually shifting from the south-west to the north-east. Greater openness and the accession to the EU have strengthened this movement. In recent years the relative poverty of the southern and western Spanish provinces has increased and the spatial polarization of income today is more striking than ever. European economic integration can only reinforce this tendency. Therefore, in the case of Spain, further European political and economic integration calls for the design of territorial cohesion policies aimed at counteracting the structural elements of economic regional inequality highlighted above.

References:

Rosés, J.R. and Wolf, N. (forthcoming). The economic development of Europe’s regions: a quantitative history since 1900 (New York: Routledge).

Williamson, J.G. 1965. ‘Regional inequality and the process of national development: a description of the patterns’. Economic Development and Cultural Change 13:4, Part II, 3-84.

This blog post was written by: Alfonso Díez-Minguela, Julio Martinez-Galarraga and Daniel A. Tirado (Universitat de València)

The working paper can be downloaded here: http://www.ehes.org/EHES_87.pdf