Economic History Review最新文献

Railways were an important driver of global economic growth in the nineteenth and early twentieth centuries. Whilst their role is well documented in industrial economies, we know less about their macro-economic impact in developing countries. In this paper, we first estimate the aggregate growth impact of Indian railways, one of the largest networks in the world in the early twentieth century. Then, we compare their impact in India to four emerging Latin American economies (Argentina, Brazil, Mexico, and Uruguay) and the Cape colony. Using growth accounting techniques common to the cross-country estimates, we argue that the aggregate growth impact of Indian railways was significant, increasing Indian gross domestic product (GDP) per capita by 13.5 per cent by 1912. We also find that the growth impact of Indian railways was similar to Brazil and Mexico, but smaller than Argentina and the Cape. Compared with the latter, India had a smaller size of railway freight revenues in the economy and lower wages to fares leading to lower passenger time savings. Railways were the most important infrastructure driver of economic growth in India during the first era of globalization from 1860 to 1912, but they contributed less than in richer and more dynamic developing economies.

We examine the Netherlands around the Second World War, where the occupying Nazi regime overhauled the country's corporate tax regime and introduced a profit tax of 55 per cent. We estimate that the new tax regime cost investors at least 300 million guilders, an amount equivalent to 5 per cent of Dutch GDP in 1940. We demonstrate that the tax introduction changed the financing of Dutch businesses. In particular, we find strong evidence that debt financing increased because it provides a tax shelter. The changes in taxation also led to an after-tax reduction in the cost of debt, which had large real effects on firm investment. After the end of the war, firms with more leverage had higher capital expenditures.

This paper employs quantitative and qualitative methods to examine the link between banking competition, branching and financial distress during the interwar period in Europe, focusing on Italy as a case study. Regression analysis and a systematic review of printed sources show that banks experiencing distress had opened scores of branches and operated in areas with harsher competition. Poor managerial choices led banks to have higher operational costs, pushing them to more remunerative but riskier activities. The 1920s saw a profound transformation of the Italian banking system, with extensive branch expansion and cut-throat competition for deposits. This paper argues that these changes in the structure of the banking system rendered it more fragile when the international crisis hit. Available evidence on other European countries suggests that Italy was not an isolated case. The study contributes to the literature on banking crises during the Great Depression and the effects of banking competition on financial stability.

We investigate corporate bond returns for the period 1838–1939 by compiling a unique new database of 201 000 monthly observations of bonds traded on the Brussels Stock Exchange. The value-weighted annualized total rate of return, net of coupon defaults and taxes, is 4.35 per cent in nominal terms and 2.81 per cent in real terms. Estimates of average returns show that corporate bonds outperformed equities during the entire nineteenth century. We find that the risk-adjusted performance of corporate bonds based on Sharpe ratios exceeds that of equities and sovereign bonds during the corporate bond market's first centennial.

We trace the long-term performance of the UK art market across a broad set of crises: world wars, economic recessions, financial crises, inflationary periods, and changes in monetary policy. By means of digitalized historical auction archives, we construct art price indices from the early twentieth century onwards and disclose that annual art auction value grew, in real terms, more than seven-fold over this period. The arithmetic annual real return and risk amount to 3.6 per cent and 20.1 per cent, respectively. Art returns plummeted at the onset of wars, but turned positive in the second half of wars when they outperformed stocks, suggesting that art was seen as a safe haven in times of political turmoil. During wars, smaller – and thus more transportable – paintings obtained higher returns. Art returns are sensitive to economic and financial crises, with the largest slumps occurring during the Great Depression, oil crisis, recessions of the early 1980s and early 1990s, and the Great Recession. We also document changes in art preferences for paintings’ sizes, schools, liquid art, and artists’ nationalities across crises. Art enters a broad optimal asset portfolio both in non-crisis periods and during war times.