Iberometrics VIII

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Does a small cost share reflect a negligible role for energy in economic production? Testing for aggregate production functions including capital, labor, and useful exergy through a cointegration-based method
(2017) Santos, Joao; Domingos, Tiago; Sousa, Tânia; St. Aubyn, Miguel
Neoclassical models disregard the role of energy in production, equating a factor's output elasticity with its cost share, but failing to explain growth without a residual term. In contrast, ecological economics acknowledges energy's importance in production, regardless of its cost share. The aggregate production function (APF) concept, central to neoclassical theory, is also disputed. We apply cointegration analysis to test for APFs between output, capital, and labor. We investigate the inclusion of energy inputs, measuring energy's capacity to generate productive work (useful exergy). Plausible APFs must verify cointegration and Granger-causality between output and inputs; and non-negative output elasticities. This method recognizes cases where: a) plausible APFs don't exist; b) energy impacts growth directly; c) energy impacts growth indirectly, through other inputs. We apply the method to Portugal (1960-2009), considering standard and quality-corrected capital and labor measures. Plausible APFs are rarely obtained for capital-labor models. When they are, the residual growth component is large, and output elasticities disagree with historical cost shares. However, the residual is virtually eliminated for capital-labor-energy models with two cointegration relationships: a) a capital-labor APF, with output elasticities matching historical cost shares; b) a function estimating capital from useful exergy. These models reconcile energy's significance in production with cost-share neoclassical assumptions.
Open Access
Public borrowing and crowding out in Spain (1768-1808)
(2017) Milhaud, Cyril
This paper aims at providing quantitative and qualitative evidence of a crowding out effect due to war borrowing at the end of eighteenth-century Spain. In the second section, I examine the two key links in the crowding out argument. First, did the Spanish government's issuance of debt to finance warfare result in higher real interest rates? Second, did it cause a reduction of private investment? Annual data for long-term interest rates and for government borrowing allow examination of the first link in the crowding out argument. Then, using original annual data on the volume of long-term private credit that we collected from the mortgage registry of Madrid (Contaduría de Hipotecas de Madrid), we examine the second link of the argument. In the third section, this paper analyses structural changes in the long-term private capital market. We argue that the dramatic increase in public borrowing at the end of the eighteenth century to finance warfare crowded out ecclesiastical institutions and shut down large part of the private credit market for long-term annuities for the decades to come. We also show that the withdrawal of ecclesiastical institutions in the 1790s came along with the rise of private obligations.
Open Access
Fiscal, monetary and exchange rate policy in Spain, 1874-1913
(2017) Roldán Marín, Alba
Este artículo pretende trazar una visión general de los mecanismos de transmisión de los instrumentos de política macroeconómica (política fiscal, cambiaria y monetaria) en una economía nacional durante el patrón oro clásico. Presento los resultados empíricos basados en un modelo SVAR. El análisis SVAR señala que los ajustes del tipo de cambio y la política monetaria y fiscal, entendidas como instrumentos de política, jugaron un papel importante en las recuperaciones que siguieron a las caídas del PIB durante el periodo1874-1913. Frente a los grandes impactos económicos, las rigideces del sistema monetario imposibilitaban las recuperaciones, particularmente en los países de la periferia. Ninguna de estas políticas se hubiera podido llevar a cabo dentro del patrón oro habiendo sido el impacto de las fluctuaciones del ciclo mucho mayor. Mi análisis arroja nueva luz sobre el funcionamiento de la política macroeconómica en España durante el patrón oro clásico. El nivel del tipo de cambio fue clave ya que ayudó a mejorar los términos de intercambio, promoviendo exportaciones e incrementando los precios mientras Occidente sufría problemas de deflación. Los resultados del trabajo aportan nueva evidencia en el debate centro-periferia para el periodo conocido como patrón oro clásico.
Open Access
The influence of values in age at first marriage and marital fertility: an analysis in rural Spain at micro level (1880-2009)
(2017) Marco Gracia, Francisco J.
This paper analyzing the way some group values and individual values affected age at first marriage (both of men and women) and marital fertility during the First and Second Demographic Transition. For that purpose, three statistical regressions from microdata of individuals have been realized in nine rural localities of Aragon. Analyzed values are political environment at local level (in terms of electoral results of the polarized 1936 and 1982 elections), political tendency of individuals (political participation), religious values (church assistance) and family values (demographic transmission of behavior). Results show a change of tendency, from the predominance of group values to individual’s, and prove that conservative environments fostered an older age at first marriage and a higher fertility.
Open Access
Tracing the evolution of agglomeration economies: Spain, 1860-1991
(2017) Beltrán Tapia, Francisco J.; Díez Minguela, Alfonso; Martínez Galarraga, Julio
This article attempts to quantify how the effect of agglomeration economies on population growth has evolved over time. Using district population in Spain between 1860 and 1991, recorded approximately every decade, this article examines whether initial population affects subsequent population growth. Our results show that, while the relationship between these two variables hardly existed during the second half of the 19th century, this link increased significantly between 1910 and 1970, although this trend was abruptly interrupted by the Civil War and the autarkic period that followed. The intensity of this relationship debilitated in the 1970s, a process that continued during the 1980s as rural out-migration diminished and de-industrialisation hit traditional manufacturing sectors. Our findings also stress that agglomeration economies were stronger in medium-size districts, especially from 1960 onwards, thus suggesting that congestion costs began to mitigate the benefits arising from agglomeration economies in the largest locations.
Open Access
The urban-rural height gap in late nineteenth-century Catalonia
(2017) Ramón Muñoz, Ramón; Ramón Muñoz, Josep Maria
This paper aims to explore whether and to what extent there was a gap in biological living standards between rural and urban areas. It focuses on the north-eastern Iberian region of Catalonia by making use of a new and large dataset (more than 16,000 observations) based on military records for the cohort of males born in the year 1890 and enlisted in the year 1911. By combining individual heights with information at municipal level, we conclude that the 1890 cohort of conscripts living in villages and towns up to 5,000 inhabitant s were shorter than those that resided in towns and cities with more than 20,000 people. We also show that the relationship between height and population size may vary depending on the geographical area under study. This might suggest the existence of a qualified rural height penalty in late nineteenth-century Catalonia.
Open Access
Growth, inequality and extraction in Ibero-American democratizations
(2017) Ducoing, Cristián; Torregrosa Hetland, Sara
Will democracy improve the distribution of economic welfare? Do dictatorships leave long-run legacies behind? In this paper we explore four Ibero-American countries with some common historical traits, but also different contexts: Spain, Portugal, Brazil, and Chile. The two Iberian nations suffered long periods of autocratic regime in the 20th Century, while our south American cases had relatively later and shorter dictatorships. We intend to assess the extent to which democratization brought about improvements in societal welfare, combining indicators of inequality and economic performance. We propose the applicability of the concept of Inequality Extraction Ratio, initially suggested for ancient societies but adapted by Milanovic (2013b) to the analysis of contemporary economies. Our hypothesis is that democratizations, while probably not able to achieve reductions in inequality, could have promoted decreases in relative extraction.
Open Access
Escaping Europe: health and human capital of Holocaust refugees
(2017) Blum, Matthias; Rei, Claudia
The large-scale persecution of European Jews during the Second World War generated massive refugee movements. We study the last wave of Holocaust refugees with a newly compiled dataset of mostly Jewish passengers from several European countries traveling from Lisbon to New York between 1940 and 1942. We find most countries experienced substantial losses in human and health capital, especially from women. In spite of the unique circumstances of this historical setting, this episode of migration displays well-known selection features: early migrants were taller than late migrants, a large migrant stock reduces migrant selectivity, and economic barriers to migration apply.
Open Access
From convergence to divergence: Portuguese demography and economic growth, 1500-1850
(2017) Palma, Nuno; Reis, Jaime
We construct the first time-series for Portugal ’s per capita GDP for 1500-1850, drawing on a new and extensive database. Starting around 1550 there was a highly persistent upward trend of per capita income, which accelerated after 1700 and peaked 50 years later. At that point, per capita incomes were high by European standards. But as the second half of the eighteenth century unfolded, a phase of economic decline was initiated. This continued into the nineteenth century, and Portugal found itself as one of the most backward European economies precisely at the dawn of the era of modern economic growth.
Open Access
The long memory of poverty: the Historical Unsatisfied Basic Needs and the geographic patterns of standards of living in Argentina (and Spain) in the last 100 years
(2017) Martínez, Alejandra Agustina; Nicolini, Esteban A.
Regional inequality in living standards is a major social problem in the very top of most of the political agendas worldwide. However, their origins and ultimate causes are far from clear. In this paper we propose a new strategy to measure living standards in the long run based on the Unsatisfied Basic Needs approach (the Historical UBN – HUBN). Using data on education and housing from census and Statistical Yearbooks from the end of the 19th and beginning of the 20th century we present a description of population’s standards of living in Argentina and Spain (with some notes to Uruguay) with an unprecedented high level of spatial disaggregation. The first finding of this paper is that the correlation among the different dimension of our HUBN and between the HUBN and other contemporaneous variables linked with standards of living (like average incomes or inequality) are usually the expected ones suggesting that the HUBN is capturing relatively well some dimension of poverty levels. The second finding of the paper is that the geographic distribution of the standards of living one hundred years ago is remarkably similar to the one dominant nowadays. This very high levels of persistence suggests that regional inequality of standards of living is extremely resilient to policy interventions and reinforces the hypotheses related with geographic determinants and/or strong levels of path dependence.

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