In the middle of the nineteenth century, a handful of societies began creating and enforcing impersonal rules, rules that treat everyone the same, on a broad scale. The existing institutional literatures, while appreciating the importance of impersonal rules for the rule of law, have not understood how they contribute to economic and political development through rules that are enforced but not followed: default rules. The conceptual importance of impersonal default rules is drawn out and then applied to better understand both economic and political development in the late nineteenth and early twentieth centuries.

This paper investigates the impact of the abolition of the civil service exam on local governance in early twentieth-century China. Before the abolition, local elites collected surtaxes that financed local public goods, but they were supervised by the state and could lose candidacy for higher status if they engaged in corrupt behavior. This prospect of upward mobility (POUM) gave them incentives to behave well, which the abolition of the exam removed. Using anti-elite protests as a proxy for the deterioration of local governance, we find that prefectures with a higher POUM experienced more incidents of anti-elite protests after the abolition.

We use data from marriage records in Murcia, Spain, in the eighteenth century to study the role of women in social mobility in the pre-modern era. Our measure of social standing is identification as a don or doña, an honorific denoting high, though not necessarily noble, status. We show that this measure, which is acquired over the lifecycle, shows gendered transmission patterns. In particular, same-sex transmission is stronger than opposite-sex, for both sons and daughters. The relative transmission from fathers versus mothers varies over the lifecycle, and grandparents may affect the status of their grandchildren.

We study the impact of non-pharmaceutical interventions (NPIs) on mortality and economic activity across U.S. cities during the 1918 Flu Pandemic. The combination of fast and stringent NPIs reduced peak mortality by 50 percent and cumulative excess mortality by 24 to 34 percent. However, while the pandemic itself was associated with short-run economic disruptions, we find that these disruptions were similar across cities with strict and lenient NPIs. NPIs also did not worsen medium-run economic outcomes. Our findings indicate that NPIs can reduce disease transmission without further depressing economic activity, a finding also reflected in discussions in contemporary newspapers.

During the nineteenth century, U.S. manufacturers shifted away from the “hand labor” mode of production, characteristic of artisan shops, to “machine labor,” which was increasingly concentrated in steam-powered factories. This transition fundamentally changed production tasks, jobs, and job requirements. This paper uses digitized data on these two production modes from an 1899 U.S. Commissioner of Labor report to estimate the frequency and impact of the use of inanimate power on production operation times. About half of production operations were mechanized; the use of inanimate power raised productivity, accounting for about one-quarter to one-third of the overall productivity advantage of machine labor. However, additional factors, such as the increased division of labor and adoption of high-volume production, also played quantitatively important roles in raising productivity in machine production versus by hand.

I use new evidence from servant contracts, 1610–1890, to estimate male farm wages and the length of the work year in Japan. I show Japanese laborers were surprisingly poor and could only sustain 2–3 adults relative to 7 adults for the English. Japanese wages were the lowest among pre-industrial societies and this was driven by Malthusian population pressures. I also estimate the work year and find peasants worked 325 days a year by 1700, predating the “industrious” revolution in Europe. The findings imply Japan had a distinct labor-intensive path to industrialization, utilizing cheap labor over a long work year.

Black and white Americans tend to have different names today. This divide was long in the making. I show that the racial divergence in naming patterns was a gradual and continuous process spanning the nineteenth and twentieth centuries. I then exploit the migration of households from the South to determine if place matters for name choices. Children born after their households moved receive names that are less black or more white than their older siblings, a difference that widens with time spent outside the South. This may reflect the cultural assimilation of households rather than a response to economic incentives.

We study the effects of domestic conflict and external shocks on Spanish trade policy in the interwar period. Our account mobilizes a new granular dataset on exports and imports, and good-country level information on tariffs, trade agreements, and quotas. Into the Depression, the mainstay of policy was the tariff. The establishment of the Second Republic in 1931 was a turning point in policymaking. The new regime initiated bilateral trade negotiations. The Republic’s dilemma was to find countries willing to exchange market access. In a daunting international environment, the Spanish case offers a poignant reminder of the perils of going against the grain.

This article provides an overview of wealth inequality in Germany during 1300–1850, introducing a novel database. We document four alternating phases of inequality decline and growth. The Black Death (1347–1352) led to inequality decline, until about 1450. Thereafter, inequality rose steadily. The Thirty Years’ War (1618–1648) and the 1627–1629 plague triggered a second phase of inequality reduction. This distinguishes Germany from other European areas where inequality grew monotonically. Inequality growth resumed from about 1700, well before the Industrial Revolution. Our findings offer new material to current debates on the determinants of inequality change in western societies, past and present.

I use newly-developed data on Africa to estimate the effects of the international slave trades (circa 1500–1850) on the institutional structures of African economies and societies (circa 1900). I find that: (1) societies in slave catchment zones adopted slavery to defend against further enslavement; (2) slave trades spread slavery and polygyny together; (3) politically centralized aristocratic slave regimes emerge in West Africa and family-based accumulations of slave wealth in East Africa. I discuss implications for literatures on long-term legacies in African political and economic development.

This research examines whether an alternative exchange rate policy could have mitigated Germany’s recession from April 1930 to May 1932, when Heinrich Brüning was Reichskanzler of the Weimar Republic. Using an open-economy dynamic model as our analytical framework, we examine the arguments against adopting the devaluation policy. Our counterfactual analysis suggests that a widely held belief—that floating the Reichsmark would have led to high inflation—is unwarranted. Despite Germany’s high foreign debt, floating the Reichsmark would have led to less of a decline in both real GDP and employment for the country during the Great Depression.

This article uses new linked full-count census data for Canada to document intergenerational occupational mobility from 1871 to 1901. We find significant differences among Canadian regions and language groups, with linguistic minorities experiencing notably lower rates of intergenerational mobility. International comparisons place Canada midway between other economies in the Americas and the most mobile European societies. Decompositions of overall mobility show that the Canadian experience shared the New World feature of high mobility from manual occupations, but also the Old World feature of greater persistence in white-collar jobs.

In 1942 more than 110,000 persons of Japanese origin living on the U.S. West Coast were forcibly sent away to ten internment camps for one to three years. This paper studies how internees’ careers were affected in the long run. Combining Census data, camp records, and survey data, I develop a predictor of a person’s internment status based on Census observables. Using a difference-in-differences framework, I find that internment had long-run positive effects on earnings. The evidence is consistent with mechanisms related to increased mobility due to re-optimization of occupation and location choices, possibly facilitated by camps’ high economic diversity.

This study looks at the valuation of U.K. investment trusts for the 50 years following their appearance as companies in the 1880s. Based on a large and unique dataset compiled from primary sources, our calculations reveal a huge variation between the ordinary share prices of investment trusts and their underlying net asset “fundamental” values. This mismatch is a well-known puzzle in modern financial markets and has attracted a large volume of research because it casts doubt on the concept of market efficiency. We investigate possible explanations for this pricing puzzle and shed light on U.K. investor behavior before the 1930s.

This study reveals the operation of the triangular settlement system for Asia’s silver absorption over the 1850s–60s, which contributed to the stabilization of the pre-1870 global monetary system. First, we demonstrate that the triangular settlement system among Britain, India, and China was established based on exchange operations. Second, we validate the bullion point method for Asia’s settlement analysis and devise the triangular silver point mechanism. Third, through reconstructing silver points and comparing the arbitrage profits with the silver trade, we found that silver was imported into Asia from Britain through both the bilateral and triangular settlement systems.

U.S. military production during World War II increased at an impressive rate and led to large declines in unit costs. However, the literature has focused on elucidating detailed mechanisms behind this relationship, using small datasets on specific products. Here we take a step back and, looking at an unprecedently large collection of data, we show that both exogenous technological progress and endogenous effects from increasing production experience were important, in roughly similar proportions. The demand for military products was largely exogenous, and the correlation between production, cumulative production, and time was weak, limiting issues of reverse causality and multicollinearity.

We study the decisions of state-chartered banks to join the Fed in its first decade. Ours is the first study to combine state regulatory environment characteristics and individual bank characteristics to explain Fed membership choice. Regulatory environments that reduced the benefit of discount window access or increased the regulatory cost of joining the Fed led to fewer banks joining. Individual bank characteristics that affected the magnitude of benefits from accessing the discount window (either passing on liquidity risk reduction to respondents or reducing the member bank’s own seasonal liquidity risk) were even more important in determining which banks joined.

I believe that, through the Federal Reserve Banks, … the better shall we be equipped to cope with the problems ahead of us, of helping ourselves and of helping the world; I believe it to be the duty of every bank in the country to contribute its share in equipping our nation for this task; … I firmly believe that the future will belong to those banks—national or state—that are members of the Federal Reserve System.

—Paul Warburg, Speech at the New York State Bankers’ Association Convention, 9 June 1916

This paper investigates whether high borrowing costs deterred investment in sanitation infrastructure in late nineteenth-century Britain. Town Councils had to borrow to fund investment, with considerable variation in interest rates across towns and over time. Panel regressions, using annual data from more than 800 town councils, indicate that higher interest rates were associated with lower levels of infrastructure investment between 1887 and 1903. Instrumental variable regressions show that falling interest rates after 1887 stimulated investment and led to lower infant mortality. These findings suggest that Parliament could have expedited mortality decline by subsidizing loans or facilitating private borrowing.

New data are used to construct a time series of real GDP in Germany for the period 1500–1850 using an indirect output estimation technique that relies on wages, prices, and sectoral employment. Until the mid-seventeenth century, real GDP per capita moved inversely with population. The eighteenth century saw a modest rise in output per head. From the late 1810s, economic growth gradually accelerated. The results shed new light on the reversal of fortunes in early modern Europe and the transition from a Malthusian regime to modern economic growth.

A novel series of interest rates paid by the Corporation of London shows that interest rates in London declined by 350 basis points during the seventeenth century. The decline followed a similar pattern in Europe. Records from the Corporation’s archive provide evidence for financial development: an increase in the number and volume of debt instruments, an increase in the number of lenders, and the development of a secondary market. Econometric analysis establishes that increasing the debt instruments’ liquidity contributed to the convergence of interest rates between London and Amsterdam.