LSE Cliometrics Group Lent 2010

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Monday 25th January

Speaker: John A. James (University of Virginia)
Title: 'Panics and the disruption of private payments networks: The United States in 1893 and 1907' (with James McAndrews and David F. Weiman)
Abstract: The periodic financial crises which hit the United States before the establishment of the Federal Reserve System were often severe enough to occasion collective action on the part of the banking system. In order to relieve pressures on reserves, three times in the postbellum period, 1873, 1893, and 1907, banks in many or most cities declared periods of suspension or restrictions of cash payments at par in which they temporarily restricted or denied altogether the redemption of their deposit liabilities in cash. In this paper we examine the nature of two of these payments system disruptions, those of 1893 and 1907, and their impact on liquidity and real economic activity. After 1893 New York banks began to assume an even more integral role in mediating long-distance payments and in supplying banks with central-bank like services. In the aftermath of the 1907 panic the apparent vulnerability of the national payments system to panics and suspensions in New York spawned a reform movement to create the Federal Reserve, which then nationalized the clearing-settlement functions of New York banks.
Full paper: Download from here.

Speaker: Ali Coskun Tuncer (LSE)
Title: 'International financial control as a "Good Housekeeping Seal of Approval": An analysis of bond spreads'
Abstract: One of the main characteristics of the classical gold standard era was continuous capital flows from core countries to the peripheries in the form of sovereign debt. In the last quarter of the nineteenth century, as a result of accumulated debts, peripheral countries faced with difficulties to meet the interest and capital payments of their debt. Most heavily indebted borrowers faced with moratoria, and creditors adopted different kind of sanctions to deal with them. One of the sanctions imposed to debtor countries was to establish international financial control organisations (IFCs), which were to be administered by the representatives of the creditors. IFCs were assigned with the task of administering and collecting specific tax revenues. Moreover, in some cases they implemented monetary and fiscal reforms in the debtor countries. This paper, by relying on the Ottoman and Greek cases, discusses the role of IFCs around the controversial question of "what guided investor decisions during the classical gold standard era". By relying on a time series analysis of historical bond spreads, the paper concludes that international financial control exercised by the representatives of the creditors on the Ottoman and Greek finances was an important determinant of the sovereign risk.

Speaker: Eoin McLaughlin (National University of Ireland, Maynooth)
Title: 'Solving the Irish 'land question': Land reform and the Irish economy, 1870-1939'
Abstract: This paper is a study of state funded land purchase as a solution to the Irish 'land question', a name given to problems associated with the land ownership structure in Ireland in the late nineteenth century. The paper argues that state intervention in the agricultural land market acted as a negative check on long term agricultural productivity. The 'land question' emerged as a central issue in Irish politics and political economy in the late nineteenth century, with various attempts made to ameliorate and solve it. The 'land question' is something which has attained significance in the wider Irish historiography as it is seen as a key component in the development of Irish national and political identity. A number of perceived solutions to the 'land question' saw the direct involvement of the state in landlord-tenant contractual relationships and the introduction of long-term state funded lending schemes. This paper judges the relative efficacy of these solutions, which effectively amounted to the subsidisation of the entire Irish agricultural sector.

Speaker: Peter Lindert (UC Davis)
Title: 'Revealing failures in the history of school finance'
Time: 2 PM
Location: NAB 114 (1st Floor, New Academic Building)
Full paper: Download from here.

Speaker: Tom Nicholas (Harvard Business School)
Title: 'Real estate prices during the Roaring Twenties and the Great Depression' (with Anna Scherbina)
Abstract: Using unique data on real estate transactions, we construct nominal and CPI-adjusted hedonic price indices for Manhattan from 1920 to 1939. The CPI-adjusted index falls during the recession that followed WWI, rises to a local peak in 1926 and declines again following the collapse of the Florida real estate bubble. It subsequently recovers to reach its highest value in late 1929 before falling by 74 percent at the end of 1932 and hovering around that value until 1939. A typical property bought in the beginning of 1920 would have retained only 41 percent of its initial value two decades later.
Full paper: Downloaded from here.

Speaker: Kiril Kossev (University of Oxford)
Title: 'Did foreign money boost domestic productivity? International capital investment and industrial productivity performance of South East Europe during the interwar period'
Abstract: This paper presents an assessment of the contribution of foreign capital flows to productivity performance of the industrial and services sectors for the economies of South East Europe in the interwar period. A new, firm-level, dataset of Bulgarian and Yugoslavian firms is used to examine the productivity performance at firm and sectoral level, but also test theories about foreign investment effects on host countries. It uses the methodology of propensity score matching and difference-in-differences estimation to control for possible endogeneity of the foreign investment decision. The initial results suggest statistically significant productivity advantages for firms with FDI over the interwar period.