editing news

I have been an editor at Explorations in Economic History for a year and 9 months now, and was an editor at the European Review of Economic History beforehand. And then, the other day, I got an email asking me to join the Economic Journal as one of their editors. The EJ is one of the grand dames of the economics profession,  a journal I read religiously as a student, and of course the journal that JM Keynes edited... their citation impact scores are going up, and they have more submissions with a historical twist. Kris Mitchener and I have a lot of plans for EEH, and we will do what we can to implement them soon. Nonetheless, I decided to resign from Explorations some time next year, and to take up my duties at the EJ in mid-2015. 

US declaration of independence shelved

after UK courts declared the move unconstitutional. George Washington has now announced that there would be a voluntary, pseudo-declaration on the original date, with no real representation of the colonies or democratic safeguards in place... but there may be some other declaration later.

Well, that is pretty much what the current Catalan government has just done, declaring that they would not continue with plans to hold a referendum on independence. What did they think the Supreme Court would decide after the went for the November 9 referendum? It was clear they would try to block it. Surely, the only principled stand was to say "this is an inherent right of a people; no court can take it away." The only context in which the original decision made any sense was to go ahead with the vote regardless... but no. We'll get a vote organized by "volunteers" with no legal basis, etc. Congratulations to Snr. Mas and his merry gang for throwing away the single best chance of the Catalan people to become independent since 1714. 

Low rents

by government fiat. You don't have to be a genius to figure out that this one is a bad idea. At least, if you had a first college class in economics.

Turns out that in Germany, the easy stuff is still too hard for the political class. Having successfully destroyed the market in housing by freezing rents on old contracts, they are now extending this to new ones... because the new contracts are going up at something approaching the rate of inflation. You couldn't make it up. I can think of no rich, industrialized country in which quality housing is as cheap as in Germany - either to buy or to rent. What will the future bring? In a small piece for the FAZ, I look at the historical experience in Spain and the US.

An embarrassment of riches, doctoral student edition

This year, I have four Ph.D. candidates on the market... and they are terrific. Here are the abstracts of their job market papers:

Vicky Fouka: "Backlash: The Unintended Effects of Language Prohibition in US Schools after World War I"

Can forced assimilation policies successfully integrate immigrant groups? As cross-border migration surges, more countries must grapple with this question. A rich theoretical literature argues that forced integration can either succeed or create a powerful backlash, heightening the sense of cultural identity among the minority. This paper examines how a specific integration policy — namely language restrictions in elementary school — affects integration and identification with the host country later in life. I focus on the case of Germans in the United States during and after World War I. In the period 1917–1923, several US states barred foreign languages from their schools, often targeting German explicitly. Yet rather than facilitating the assimilation of immigrant children, that policy instigated a backlash. In particular, individuals who had two German parents and were affected by these language laws were less likely to volunteer in WWII; they were also more likely to marry within their ethnic group and to choose decidedly German names for their offspring. These observed effects were greater in locations where the initial sense of German identity, as proxied by Lutheran church influence, was stronger. These findings are compatible with a model of cultural transmission of identity, in which parental investment overcompensates for the direct effects of assimilation policies.

Felipe Valencia: The Mission: Economic Persistence, Human Capital Transmission and Culture in South America 

This article documents the positive long-term economic impact of the Jesuit Missions in South America, combining information from historical archives and municipal census data from Argentina, Brazil and Paraguay. Guarani Jesuit Missions (1609-1767) resulted in income levels that are 10% higher today. I stress human capital as the main channel of transmission, finding a 10-15% increase in educational attainment. Results are robust to the inclusion of geographic controls, the usage of placebos (abandoned and Franciscan missions) and instrumental variables estimation. Using historical censuses, human capital appears even higher closer to missionary districts during intermediate times. Such enduring educational differences are consistent with particular cultural mechanisms of occupational persistence—through labor specialization and changes in sectoral employment— and inter-generational knowledge transmission. Additional empirical tests suggest that migration, urbanization and tourism are not driving the results.

Andrea Matranga: Climate change and the Neolithic Revolution: Increased seasonality caused the multiple adoption of agriculture

The Neolithic Revolution saw seven different populations independently abandon nomadic hunting and gathering, in favor of settled agriculture. Plausible explanations exist for each of these parallel archaeological sequences, but none of the proposed theories is applicable across all of them. In this paper, I show that the Neolithic Revolution coincided with a large and global increase in climatic seasonality. I argue that hunter-gatherers in the most affected regions became sedentary in order to store food and smooth their consumption, and that this sedentary lifestyle eventually resulted in their development of cultivation techniques. I construct a model to generate empirical predictions, which I test against a global panel dataset of climatic conditions, and Neolithic adoption dates. I identify a causal link between higher seasonality and earlier adoption of agriculture, and find that this effect manifested itself both in increased probability of invention, and faster geographic spread. These global-scale results are confirmed by a site-level analysis of the domestication of cereals in the Middle East, and their subsequent spread into Europe. The findings of this paper imply that seasonality patterns 10,000 years ago were amongst the major determinants of the present day global distribution of crop productivities, ethnic groups, cultural traditions, and political institutions.

 Jörg Stahl: Capital Gain - The Returns to Locating in the Capital City

In many countries, company headquarters are concentrated to an extraordinary degree in the capital city. Geographic proximity to a country's leading politicians may be beneficial for a number of reasons, including greater opportunities to influence policy makers. In this paper, I examine a unique event – the relocation of the German Federal Government from Bonn to Berlin in 1991. Following reunification, there was a free vote in the German parliament. Berlin won by a narrow margin, an event that could not be anticipated even days before. I then examine the value of being co-located with the government by examining stock returns. Using a Fama-French Multi-Factor framework, I find that firms with operational headquarters in Berlin experienced mean cumulative abnormal returns of about 3 percent within the two days following the relocation decision. These returns were even higher two weeks later, do not seem to be driven by industry composition, and are robust to different model specifications.