This article presents a new series of monthly equity returns for the British stock market for the period 1825-1870. In addition to calculating capital appreciation and dividend yields, the article also estimates the effect of survivorship bias on returns. Three notable findings emerge from this study. First, stock market returns in the 1825-1870 period are broadly similar for Britain and the United States, although the British market is less risky. Second, real returns in the 1825-1870 period are higher than in subsequent epochs of British history. Third, unlike the modern era, dividends are the most important component of returns.

I reexamine Douglass North and Barry Weingast's argument regarding credible commitment and sovereign debt in post-revolution England. The central problem that the architects of the revolution settlement had to solve, I argue, was not the king's frequent reneging on financial commitments (a symptom), but the moral hazard that generated the kings' malfeasance (the underlying cause). The central element of the revolution settlement was thus not better holding kings to their commitments, but better holding royal advisors to account for all consequences of the Crown's policies—through what we now call ministerial responsibility.

Once one of the richest countries in the world, Argentina has been in relative economic decline for most of the twentieth century. The quantitative records of income growth and accumulation date the onset of the retardation to around the time of the Great War, and patterns of aggregate saving and foreign borrowing show that scarcity of investable resources significantly frustrated interwar development. A demographic model of national saving demonstrates that the burdens of rapid population growth and substantial immigration depressed Argentine saving, contributing significantly to the demise of the Belle Époque following the wartime collapse of international financial markets.

Early in 1932 the Federal Reserve System made a serious attempt to reverse the “Great Contraction” throught expansionary open market operations, but abandoned it a few months later. In this paper we offer an interpretation of the episode that throws new light on the Fed's behavior during the Depression. Key are the attitude of private bankers, Britain's abandonment of the gold standard, and the brief open market campaign. To protect bank profits the Fed abandoned the program which set the stage for the complete financial collapse of the United States in early 1933.

Farm foreclosures in the United States during the 1920s and 1930s reached heights never previously or since exceeded. In this paper hypotheses are proposed and tested to account for the cross-state variation in farm foreclosures during the interwar period. Foreclosures are modeled to depend on depressed farm earnings throughout the 1920s and 1930s, optimistic agricultural expansion brought on by World War I, and cross-state variation in mortgage debt structure. The empirical results are consistent with the proposed multiple causal model.

Spain's contribution to the “New Emigration” differed from that of other Southern European countries in that it was oriented to Latin America far more than to the United States, in that it reached massive proportions only after 1900, and in that the various Spanish provinces varied greatly in their emigration rates. Differences in wealth, income, literacy, urbanization, and migratoly tradition best explain these international and interprovincial differences.

New benchmark estimates of Black-White income ratios for 1870, 1900, and 1940 are combined with standard post-World War census data. The resulting time series reveals that the pace of racial income convergence has generally been steady but slow, quickening only during the 1940s and the modern Civil Rights era. I explore the interpretation of the time series with a model of intergenerational transmission of inequality in which racial differences in causal factors that determine income are very large just after the Civil War and which erode slowly across subsequent generations.

“The problem of the twentieth century is the problem of the color line.”

Household budget studies are used to assess working-class demand for manufactures over industrialization. Contrary to demand-side proponents, increased urbanization, enhanced opportunities for women's and children's work, and a declining subsistence sector all retrenched consumption patterns into demand for the products of traditional industries and decreased demand for the products of new manufacturing industries. However, consideration of national expenditure on necessities shows an increasing surplus available for discretionary expenditure between 1801 and 1841. This reflects an increased purchasing power of the middle and upper classes that may have manifested itself as substantially increased demand for domestic manufactures.

This study contributes to a revised picture of nineteenth-century bilateralism. Employing a new disaggregated data set, it argues that bilateral treaties did not implement general free trade, but instead reduced tariffs unevenly through commodity-specific preferences, especially favoring manufactured goods. Gravity model estimates show that specific liberalizations increased exports of corresponding items, but not overall trade. Exporters from countries whose governments used bilateralism strategically to bring down partner tariffs benefitted most. Hence, the network in form and outcome is more properly identified with reciprocal liberalization practiced by the French than with British free-trade ideology.

The use of height data to measure living standards is now a well-established method in economic literature. Although blacks and whites today reach similar terminal statures in the United States, nineteenth-century African American statures were consistently shorter than those of whites. Greater insolation (vitamin D production) is documented here to be associated with taller black statures. Black farmers were taller than workers in other occupations, and, ironically, black youth statures increased during the antebellum period and decreased with slavery's elimination.

By combining new archival and existing data, this article provides estimates of the economic impact of the 1755 Lisbon earthquake, the largest natural catastrophe ever recorded in Europe. The direct cost of the earthquake is estimated to be between 32 and 48 percent of the Portuguese GDP. In spite of strict controls, prices and wages remained volatile in the years after the tragedy. The recovery from the earthquake also led to a rise in the wage premium of construction workers. More significantly, the earthquake became an opportunity to reform the economy and to reduce the economic semi-dependency vis-à-vis Britain.

This article presents new estimations of per capita GDP in colonial times for the two pillars of the Spanish empire: Mexico and Peru. We find dynamic economies as evidenced by increasing real wages, urbanization, and silver mining. Their growth trajectories are such that both regions reduced the gap with respect to Spain; Mexico even achieved parity at times. While experiencing swings in growth, the notable turning point is in 1780s as bottlenecks in production and later, the independence wars reduced economic activity. Our results question the notion that colonial institutions impoverished Latin America.

This article constructs new measures of worktime for Europe, North America, and Australia, 1870–1913. Great Britain began with the shortest work year and Belgium the longest. By 1913 certain continental countries approached British worktimes, and, consistent with recent findings on real wages, annual hours in Old and New Worlds had converged. Although globalization did not lead to a race to the bottom of worktimes, there is only partial evidence of a race to the top. National work routines, the outcome of different legal, labor, and political histories, mediated relations between hours and income.

This article examines the Confederate cotton bonds floated in Europe in March 1863 and traded on the London market. Over a 27 March 1863 to 17 June 1865 sample we isolate two, nonreversed, “turning points” that follow news of Confederate defeat at Gettysburg and Vicksburg in July 1863 and the fall of Atlanta in September 1864.

Up until the mid-nineteenth century Russia had an enserfed peasantry, a mere 1,000 or so miles of railways, and a small, almost insignificant market sector. When serfdom was abolished (1861) and the expansion of railroads started to occupy a prominent place in development policy toward the end of the nineteenth century, Russia was launched on a transformation from a state of preindustrial and pre-capitalistic backwardness into a path of modernization and industrialization.

Through a detailed reconstruction of 1933 GDP for the two provinces in China's most advanced region, the Lower Yangzi, I show that their per capita income was 55 percent higher than China's average, and they had experienced a growth and structural change between 1914–1918 and 1931–1936 comparable to contemporaneous Japan and her East Asian colonies. This article highlights the unique political institution of early-twentieth-century Shanghai as a city state, with its rule of law and secure property rights laying the foundation for economic growth in the Lower Yangzi with long-term impact throughout East Asia.

By the 1700s Europeans dominated the gunpowder technology, which was surprising, because it had originated in China and been used with expertise throughout Eurasia. To account for their dominance, historians have invoked competition, but it cannot explain why they pushed this technology further than anyone else. The answer lies with a simple tournament model of military competition that allows for learning by doing. Political incentives and military conditions then explain why the rest of Eurasia fell behind Europeans in developing the gunpowder technology. The consequences were huge, from colonialism to the slave trade and even the Industrial Revolution.

In 1904 the Roosevelt Corollary to the Monroe Doctrine proclaimed that the United States would intervene in the affairs of unstable Central American and Caribbean countries that did not pay their debts. We find that the average sovereign debt price for countries under the U.S. “sphere of influence” rose by 74 percent in response to the pronouncement and actions to make it credible. We use this policy change to show that the United States subsequently acted as a regional hegemon and provided the global public goods of increased financial stability and peace. Reduced conflict spurred export growth and better fiscal management, but debt settlements were driven primarily by gunboat diplomacy.

The rise of the new economic history has provoked a vigorousdebate on methodology. At issue is the validity of the effort of econometric historians or cliometricians, as practitioners of the new work are sometimes called, to apply the mathematical models of economics to the study of history. Some older historians have attacked the use of such models on the ground that they violate the empirical character of the discipline. In this view, the models employed by the cliometricians represent an unwarranted intrusion of speculation into an area of research previously limited to the careful collection and presentation of facts. The most severe criticism has been directed at the propensity of the new economic historians to deal with questions of the counterfactual-conditional type, that is, with questions which ask how the development of the economy would have been altered by the absence of one or more of its observed features. It has been asserted that the models which underlie the answers to such questions are “figments” and that they cannot be verified. Consequently counterfactual models are held to be a direct threat to the integrity of economic history as an empirically confirmed description of the economic development of nations.

The members of the Association must be sick to death of “The Achievements of the Cliometric School.” The health of a field, it is said, is inversely proportional to the percentage of essays on method, by which standard cliometrics itself was sick to death in childhood and is only just now recovering. The few essays on method appearing nowadays are usually commissioned, lack revolutionary fervor, and have become as predictable as sportswriting: gee whiz, how extraordinary has been the growth of cliometrics; cliometrics, of course, is gravely limited by its attachment to neoclassical economics; do not be alarmed by counterfactuals. Essays on method, like articles on the sportspage, irritate the players (nobody loves a critic), flatter the owners (in whose pay he sometimes labors), and hearten the loyal fen (with the written equivalent of the chant “We're number one”). They foreshadow the post-season banquets and their awards: Most Valuable Scholar, Best Book Reviewer (Golden Glove), or, in another mode, Best Historian in a Supporting Role, and Farce of the Year.