In 1942 the U.S. Treasury and the Federal Reserve agreed to keep the interest rate on long-term government bonds below a ceiling of 2.5 percent. Assuming rational expectations, the ceiling on long-term interest rates can be viewed as a government commitment to low long-run inflation. The Fed also agreed to buy and sell short-term government bonds at a below-market rate of 3/8 percent. This policy did not result in long-run inflation because it was narrowly confined to 3-month Treasury bills.

Twelve-hour days persisted in British and U.S. iron and steel after most industrial workers worked eight-hour days. When shorter hours finally came, sooner in Britain, they came abruptly. This article presents a model of working hours as public goods; when job attributes are shared there is a collective choice problem. In Britain, a collective bargaining mechanism reconciled the preferences of workers and capital owners and facilitated the move to shorter hours. In the United States immigrants had been willing to work long hours. When immigration was cut off, the government intervened.

Shipping, central to the rise of the Atlantic economies, was an extremely hazardous activity. Between the 1780s and 1820s, a safety revolution occurred that saw shipping losses and insurance rates on oceanic routes almost halved thanks to steady improvements in shipbuilding and navigation. Copper sheathing, iron reinforcing, and flush decks were the major innovations in shipbuilding. Navigation improved, not through chronometers, which remained too expensive and unreliable for general use, but through radically improved charts, accessible manuals of basic navigational techniques, and improved shore-based navigational aids.

“Curse thee, thou quadrant!” dashing it to the deck, “no longer will I guide my earthly way by thee; the level ship’s compass, and the level dead-reckoning, by log and by line; these shall conduct me, and show me my place on the sea.”

Captain Ahab in Moby Dick, Ch. CXIII

Between 1550 and 1730, privileged investors in France—nobles, officers, and wealthy merchants—bought up enormous quantities of land from peasants. The transfer of property has attracted considerable attention from historians, but it has never been satisfactorily explained. The paper invokes the tax exemptions the privileged enjoyed to account for the transfer—an explanation that fits both the chronology of the land sales and the identity of the purchasers. The paper then examines how the tax system throttled growth in the agricultural sector.

The major purpose of this article is to measure factor-saving biases in technical change within the American and British textile sectors during the nineteenth century. This empirical attempt will be made within the context of the historical debate concerning the causes for the superiority of American industrial efficiency as compared with the British.

This paper attempts to explain the reasons for the shift of labor from agriculture in the United States from 1869 to 1899. It focuses on the effects of productivity growth in agriculture and industry, and of increases in the supply of land (safety-valve theory). A two-sector general equilibrium model is used in the analysis. Many of the results hinge on whether the economy is assumed to be open or closed to foreign trade. In order to determine the appropriate specification, each issue is analyzed in terms of its equivalent counterfactual-conditional proposition. An important conclusion is that increases in agricultural productivity and the level of supply of land likely reduced the proportion of workers in agriculture even though the United States economy was open.

During the period 1910–1940 some changes were occurring in the production practices of the Corn Belt. Three of the most important were the substitution of the tractor for horse power, the introduction of hybrid seed corn, and the development of viable mechanical picker-huskers for harvesting corn. This paper examines the background of those innovations, evaluates current assumptions about them, presents data concerning the relative per acre savings or additional income involved in adoption, and notes the possibility that assumptions about the economic rationality involved in corn improvement research, as well as the implications of the “dry hole effect,” may require some revision.

David Greasley and Les Oxley provide an interesting but ultimately unconvincing chalenge to the perspective on the British Industrial Revolution that we have set out in recent articles1. We believe that the issues that they raise are important and deserve a full response. Thus, we take the opportunity to clarify ideas on growth theory and its implications for growth accounting, to review the econometrics of estimating trend growth in an economy undergoing structural change, and to reconsider the persuasiveness of different views of the nature of technological change in the eighteenth and nineteenth centuries.

Recent research indicates the joint stock form was not a superior type of business organization in many countries historically. In Japan, however, its role was more pervasive. From 1896 to 1939 joint stock enterprises accounted for 44 percent of registered businesses and 80 percent of total capital. From 1922 to 1939 these enterprises outperformed other forms and generated 94 percent of aggregate profits. External finance factors, Japan's development phase, industrial structure, public policy, and culture led to high joint stock usage. The private limited liability company, introduced in 1938, did not displace the joint stock form.

Between 1880 and 1910, Japanese exports increased in volume, changed composition, and shifted from leading industrialized countries toward poorer Asian neighbors. Using a new dataset disaggregated by product and trade partner for the universe of Japanese exports, we find extensive margins accounted for 30 percent of export growth, with trade costs and market size associated with successful market entry. There was also considerable persistence in maintaining market presence and exit was rare. These stylized facts provide insight into both the country’s economic development, as reflected in its exported products, as well as the demand conditions of its trade partners.

The behavior of principals and agents in the interwar Soviet economy can be studied through the failed attempt to develop a new aviation-engine technology based on the steam turbine. Some possible approaches to the evaluation of R&D failure are outlined. Soviet R&D agents competed for funding within a command system. Principals funded ventures in a context of biased information and adverse selection. In the presence of sunk costs budget constraints on individual projects were often loose, but were tightened periodically. There is evidence of rent seeking, but not that rents were distributed deliberately as political gifts to loyal agents.

It is lovely to see attention to this critical episode in the Great Depression. Isabel Schnabel repeats the familiar argument that bank behavior was a primary cause of the German crisis. We have argued elsewhere that the German crisis clearly began as a currency crisis, not a banking crisis. The purpose of this comment is to examine the data that Schnabel's article brings to bear on this question and evaluate the evidence it presents in support of its hypotheses.

The article uses recent exchange-rate data to explore the progressive integration of early eighteenth-century, West European financial markets. The process climaxed in 1719 and 1720 with the Mississippi Bubble in Paris, the South Sea Bubble in London, and the insurance bubbles in Hamburg and throughout Holland. Only Paris failed to integrate permanently into the new multinational network.

This Article summarizes the main findings of a detailed. study of the changing occupational and industrial structure of Mexico's non-agricultural labor force from 1895 to 1930 and from 1930 to 1950, based on a comparison of population censuses, especially those of 1895, 1930, and 1950. Structural changes in Mexico's labor force have never been adequately studied, and the results of the present research shed considerable new light on Mexico's development. The findings also suggest important paradoxes and discontinuities in the early stages of industrialization that merit systematic recognition in models and measurements of structural change over the course of development.

Malthusian models occupy a central position in the interpretation and analysis of long-term economic and demographic change in preindustrial societies. The models are logically plausible and attractive, but ultimately they will have to be confronted with systematic evidence before being accepted. In this paper results are reported that cast some doubt on these models in the case of prefamine Ireland. The results indicate that the evidence supporting Malthusian views is not strong, and that the modus operandi of the nexus between economic and demographic variables is probably far more complex than is implied in standard Malthusian models.

The rate of urban growth in the United States reached its highestlevel in the twenty years before 1861. Nevertheless in the five preceding decades, 1790 to 1840, those coming just before the railroad age, the cities of the nation grew at a remarkably rapid rate. It is true that during one 10-year period of relatively slow growth, 1810–1820, the city population increased at a pace slightly below that for the total population. But in the other four decades, 1790–1800, 1800–1810, 1820–1830, and 1830–1840, the rate of increase in the number of people living in cities was almost double that for the whole population and exceeded the urban growth rate attained in any post-Civil War decade. This study makes available detailed statistics on urban population changes from 1775 to 1840, directs attention to the differing contributions to urbanization made by four city groups, and notes some of the influences affecting urban population expansion in the years before the railroad became a dominant influence.

In 1829 Zachariah Allen, a lifelong resident of Providence, Rhode Island, published his book, The Science of Mechanics. Neither the title nor a casual glance at the contents of the book suggests that it contains material of major interest to economists or economic historians. Allen's book was intended as a manual for American mechanics and manufacturers. It summarized that portion of the industrial arts of its day which the author considered most useful and relevant for the edification of his American readers. The book contains elementary tables of conversion, arithmetic and geometric rules and formulas, a good deal of simple physics, and extensive descriptions of the workings of machinery—especially water wheels, steam engines, and millwork generally. In particular, Allen attempted to summarize much of what he had learned during a recent tour of the major manufacturing districts of England and France, so as to bring Americans up to date on the “latest improvements in mechanical invention in those countries.’ Unobtrusively placed in the back of this book, however, is a chapter, “Comparative View of the Relative Advantages Possessed by England, France and the United States of America as Manufacturing Nations,’ which records his more strictly economic impressions of his tour, taken in 1825. His observations in this short chapter, often trenchant and occasionally pungent, invite comparison with some of the better known European travelers to the United States. Anyone who can write, as Allen does (p. 355), that “An industrious New-England mechanic commonly appears to take pleasure in his business; but the French mechanic is rather inclined to make a business of his pleasures,’ is obviously entitled to a sympathetic hearing.

No source of agricultural distress in the post-bellum South was more frequently alluded to by nineteenth-century observers than the “overproduction” of cotton. The anonymous author of the opening quotation was merely expressing, in characteristically metaphorical terms, a widely-held view that was to persist for years among southern reformers. Even writers who conceded the peculiar advantages for cotton culture derived from the South's climate and soils often argued nevertheless that crop diversification was the order of the day.

Defense of a historical survey of the business corporation in this country seems hardly necessary. Students of its place in the present economy, even students of the well-recorded “trust” movement of the 1890's and later decades, need this background, if only to test the hypothesis, not infrequently encountered, that the business corporation of pre-Civil War days was largely confined to the fields of banking, insurance, and public utilities.

This article offers a new interpretation of the low level of investment in Germany during the interwar period. Earlier contributions attributed the slow expansion of capital stock either to excessive wages due to state intervention and unionization or to the high cost of capital. These hypotheses are tested by estimating a cointegration model of investment. Counterfactual simulations demonstrate that lower wages would have lowered investment still further and that high interest rates acted as the main brake on investment during the second half of the 1920s.