ranking departments in German-speaking lands...

Once upon a time, a journalist had a good idea... that man was Oliver Störbeck, back then working for Handelsblatt, the German business newspaper. He wanted a ranking of German economics departments by research output, a league table of the kind we use internationally to see which place really scores in terms of papers. And the HB produced one, which caused quite a stir when they first did it in the 2000s. Interestingly, it is for "Greater Germany" -- Germany, Switzerland, Austria, i.e. all the places where German is spoken.

Störbeck at some point left, and is now working for Reuters in London. HB continues to produce a ranking, and they tinkered with the weights and scores. It is now compiled by an institute over at the ETH in Zurich, which runs a database of all publications by professors in the relevant departments. Over time, the weight on top publications declined... you can now get the same points for a few field journal papers combined as for a top general interest journal.

You can see the latest results here. Zurich ends up in third place overall, with 17 professors (while Munich and Bonn have 29 and 27 contributing to their score). Of course, you can play with the data a bit yourself, and find the ranking you like (and makes you look good). Try clicking on the A+ column, and the ranking changes. If you do it by top publications, you see that Zurich is where it belongs - at No. 1...

Debt miracle

Jaume's and my piece on our debt paper is now out over on VOXEU:

Debt miracle: Why the country that borrowed the most industrialised first

Jaume Ventura, Hans-Joachim Voth 27 July 2015

Is debt really that bad? This column looks at the towering debts, rapid tax hikes, and constant state of war that led to Britain’s Industrial Revolution, showing that the devil is in the detail when assessing sovereign debt. When we consider the dangers of debt in today’s world, we should keep an eye on its potential benefits as well.

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Towering debts, rapidly rising taxes, constant and expensive wars, a debt burden surpassing 200% of GDP. What are the chances that a country with such characteristics would grow rapidly? Almost anyone would probably say ‘none’.

And yet, these are exactly the conditions under which the Industrial Revolution took place in Britain. Britain’s government debt went from 5% of GDP in 1700 to over 200% in 1820, it fought a war in one year out of three (most of them for little or no economic gain), and taxes increased rapidly but not enough to keep pace with the rise in spending.

Democracy...

After the Greek vote, it is perhaps time to remember why direct democracy isn't always such a brilliant thing (and why most countries' constitutions have clear limits on what people can and cannot vote on). Robin Osborne's brilliant Athens and Athenian Democracy reminds us of the famous episode towards the end of the Peleponnesian war, when Athenian democracy didn't exactly cover itself in glory. In 406 BC, an Athenian fleet defeated its Spartan opponents at the Arginusae Islands; a storm afterwards made it hard for the victors to pick up survivors. What did the Athenian assembly do? It decided to put the generals in charge to death:

"... the insistence on the people's right to do what they wanted regardless of normal procedures (and common justice) was not so much a return to old ways but a travesty of them." (Osborne p. 278)

It was the last sea battle that Athens won.

The tragedy in Greece is that the people who voted "no" have no idea what is about to hit them; you just cannot put decisions such as these to a referendum, given the complete lack of clarity and information about the consequences. 

Speed at Explorations - mid-year update

... isn't everything, but it is a start. Kris Mitchener and I have been running EEH since 2013/14. Here is how turnaround speed has evolved:


For 2015, we are now down to less than 6 weeks to first decision. While desk rejects enter here, we feel that this is nonetheless a meaningful measure of turnaround time -- better to know quickly than to wait for months... The second-round (and N-round) time is also fast; it took more than 11 weeks after the first round (not counting author resubmission time) in 2012. This year, final decisions only added 4.3 weeks to the total. Put another way, time to final decision is now less than time to first decision was in 2011, 2012, or 2013.

Brainwashing for the long run

PNAS has just published Nico Voigtländer's and my paper on Nazi indoctrination and anti-Semitism. Here is the abstract:

Attempts at modifying public opinions, attitudes, and beliefs range from advertising and schooling to “brainwashing.” Their effectiveness is highly controversial. In this paper, we use survey data on anti-Semitic beliefs and attitudes in a representative sample of Germans surveyed in 1996 and 2006 to show that Nazi indoctrination––with its singular focus on fostering racial hatred––was highly effective. Between 1933 and 1945, young Germans were exposed to anti-Semitic ideology in schools, in the (extracurricular) Hitler Youth, and through radio, print, and film. As a result, Germans who grew up under the Nazi regime are much more anti-Semitic than those born before or after that period: the share of committed anti-Semites, who answer a host of questions about attitudes toward Jews in an extreme fashion, is 2–3 times higher than in the population as a whole. Results also hold for average beliefs, and not just the share of extremists; average views of Jews are much more negative among those born in the 1920s and 1930s. Nazi indoctrination was most effective where it could tap into preexisting prejudices; those born in districts that supported anti-Semitic parties before 1914 show the greatest increases in anti-Jewish attitudes. These findings demonstrate the extent to which beliefs can be modified through policy intervention. We also identify parameters amplifying the effectiveness of such measures, such as preexisting prejudices.

and there is a bit of news coverage here... [and a piece on VOX]

IAS Distinguished Lecture

I was in Hongkong the other day, at the invitation of James Kung, who has one of the most interesting research agendas in Chinese economic history that I know. I was delivering an IAS Distinguished Lecture on the Divergence between Europe and China after 1500. They kindly put up a video of the talk:

https://www.youtube.com/watch?v=GKMnLdDKpt0

when debt is beautiful

debt is awful, debt is bad, debt is too high for growth... sounds familiar? Well, you'll be forgiven if you thought this was about Herr Schäuble and the Greeks, or some such fun topic. Actually, it is much more boring. It's about a paper Jaume Ventura and I finally put into circulation. In it, we ask the simple question -- why did the country that piled up the biggest debt mountain in history manage to industrialize regardless?

Traditionally, thinking about this fell into two camps - those who thought that it happened despite all that debt, and those who thought that it didn't matter at all. The first school - let's call them crowding-outers - looked at lots of evidence showing that government borrowing slowed industrial growth and expansion. Peter Temin and I actually wrote a paper about it, which one seminar participant called the "most beautiful piece of evidence in favor of crowding out" (published in Explorations in Economic History, link here). The second school of thought argues for Ricardian equivalence - people know the debt has to be temporary, and hence they will undo its effects through savings decisions, etc. Robert Barro wrote a beautiful paper with these features.

What do we do? We argue that debt was good - under the (particular) circumstances of the British IR. Here is the abstract and the paper:

Why did the country that borrowed the most industrialize first? Earlier research has viewed the explosion of debt in 18th century Britain as either detrimental, or as neutral for economic growth. In this paper, we argue instead that Britain’s borrowing boom was beneficial. The massive issuance of liquidly traded bonds allowed the nobility to switch out of low-return investments such as agricultural improvements. This switch lowered factor demand by old sectors and increased profits in new, rising ones such as textiles and iron. Because external financing contributed little to the Industrial Revolution, this boost in profits in new industries accelerated structural change, making Britain more industrial more quickly. The absence of an effective transfer of financial resources from old to new sectors also helps to explain why the Industrial Revolution led to massive social change – because the rich nobility did not lend to or invest in the revolutionizing industries, it failed to capture the high returns to capital in these sectors, leading to relative economic decline.

I think the beauty here is that the paper offers a unified explanation for a number of features - painstakingly unearthed over the last 30 years by NFR Crafts, Bob Allen, Nick Harley, Charles Feinstein and others -- that are hard to reconcile otherwise in standard growth models:

• growth was slow (despite rapid technological change)
• over short horizons, there was crowding out - but Britain industrialized first regardless
• structural change was rapid
• wage growth lagged output growth; counting urban disamenties, workers probably shared none of the gains of industrialization for the first 70 years or so
• financial intermediation played no role in financing the new industries
• rates of return on capital remained high and even rose for half a century - there is no evidence of capital chasing high returns, driving down rates of return in consequence 

Hello new job

I am starting as one of the Joint Managing Editors of the Economic Journal at the end of this week. Due to logistical constraints, I will also continue as editor at Explorations until October, when Ran Abramitzky takes over... 

and that's why...

you want the data of articles posted for replication purposes... Have a look at

http://web.stanford.edu/~dbroock/broockman_kalla_aronow_lg_irregularities.pdf

where two grad students found out through Sherlock-Holmes-style sleuthing that a study published in Science was actually (probably) made up 100%. The claim of the paper was that exposure to a gay canvasser changed people's minds about gay rights enormously and lastingly; but it seems that the data were actually taken from a national survey and doctored. More detail here.

Over the years (...) I have pushed for a data replication (and posting) policy at every journal where I was an editor. At Explorations, we are finally doing it for over a year now. I think that I failed at the European Review of Economic History, where we always agreed it was a good idea but then never got round to it. It seems that the Journal of Economic History is going to start requiring replication files in the near future (the policy is on the books for almost a year). Now, it's the Economic History Review that is also still missing from the list (actual implementation score 1:3; policy score 2:2). [update 2-6-2015: one of the editors wrote to me saying that, well, you know, the Review is a journal of economic and social history, and hence, it may not be appropriate to have a one-size fits all policy, such as one that may allow actual replication, but they remain open to discuss this in the future... (in case you missed it - this is sort of polite British parlance for forget it, we think people should not post their data or share anything - imagine someone else might actually want to use it! or that it was actually forged, and cannot be replicated! better to keep it all hush-hush, like in the good old days.)]

If you ask me, in a field that prides itself on its datawork, it is nothing short of amazing that this has been taking so long (relative to the general interest journals in economics), and that half the field is not even going to do the basics. Next time you ask yourself why economic history isn't getting as much respect as you would like... think about this kind of thing, and be embarrassed.

FAZ

has an oddly flattering article about me and my research in the Monday edition... sadly, it's gated. 

Congrats...

to my PhD student Vicky Fouka, who will be joining the Stanford Political Science Department in the coming fall (and because the polisci market closes earlier, she had to turn down her Boston interviews, including at several top-5 departments). Her job market paper is called "Backlash: The Unintended Effects of Language Prohibition in US Schools after World War I"; I think it will become an instant classic in cultural economics. Here is the abstract:

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.