On cognitive functions interrupted (and the growth of two retail corporations in the US)

October 26, 2009

I haven’t been able to write much since the equivalent of a permanent shock affected my production function as well as its slope (break ups are always hard, being the dumpee is even worse, in the long run we are all dead).

I’m slowly regaining use of my cognitive functions. For I don’t want to leave Ben alone in this blog any longer, I thought of posting two maps showing the growth of two retail corporations in the US: Wal Mart (1962-2006) and Target (1962-2008).

This might interest fans of urban and regional economics (or not). Anyway, I promise that the quality of my contributions to this awesome blog will increase. Just have a little faith on me.

Murphy A. (2009) The smartest boys in the alley, early derivatives on the London stock market

October 24, 2009

Murphy, Anne L. (2009) Trading options before Black-Scholes: a study of the market in late seventeenth-century London. Economic History Review, 62/1: 8-30.

Picture 10

The ledger of the financial broker Charles Blunt contains the details of some 1,500 transactions realized between 1692 and 1695, about a third of which regard the then novel trade in equity options (p.9). The technique had arisen in the 1620s in the commodity market and was proving very useful in the decade following the Glorious Revolution, when some 100 joint-stock companies were floated in London  (p.10). During the boom of the early 1690s, it is likely that “several thousand derivatives were transacted each year”.

Read the rest of this entry »

Market in everything

October 21, 2009

;) MR

During a class this morning, I came across a surprising mention in a 1626 list of commodities exported from New Amsterdam (Manhatten to be precise) to the old one. Along side the usual 7246 beaver furs and a host of other stuff were “34 ratte vellehiks” (rat furs).

Not only is it quite disgusting to imagine some elegant woman of 17th century Amsterdam wearing a rat hat or carrying a rat purse, but one ought to wonder: weren’t there any rats in the Netherlands during the Golden Age or were rat production costs too high?

Seurot F. (2002) Something rotten in the state of medieval banking

October 20, 2009

Seurot, François (2002) “Les crises bancaires en Italie au Moyen Age: un essai d’applicationn de la théorie de Minsky-Kindleberberger”, paper presented at the XIX Journée d’économie monétaire et bancaire, 21p.


This paper is available online (pdf).

Following a long tradition, Minsky and Kindleberger [1996] have based their analysis of financial crises in the early modern and modern periods on their vision of credit as intrinsically unstable and thus naturally prone to crashes. Their model is based on five steps:

  1. An exogenous shock modifies the incentive system the economy is based upon.
  2. These new incentive channel credit toward a given sector and produces a localized economic boom.
  3. Euphoria leads to the overestimation of the ROI and to overtrading.
  4. Fundamentals are reconsidered and credit dries up.
  5. Torschlusspanik, or bank rush (p.1). Read the rest of this entry »

A’Hearn B. (2005) The not-so-mighty finance

October 16, 2009

A’Hearn, Brian (2005) Finance-led divergence in the regions of Italy. Financial History Review, 12/1: 7-41.


After the unification, the Italian South did not catch up with the North, on the contrary they engaged on a divergent path as the per capita income gap increased from 15-25% to 55% in the first 50 years (p.7). This continuing disparity may be explained by the sore state of the southern banks which could have been unable to support and finance local development (finance-led growth argument; p.9). However, initial evidence seems not to support this hypothesis, as the share of the Mezzogiorno in the banking activity of the country was in line with the relative economic weight of the region (p.10). Read the rest of this entry »


October 12, 2009

I was reading the papers and I spotted two interesting articles (from le Monde, in French):

The Belgians seem afraid to go through the 1585 blockade of Antwerp all over again as the Dutch are taking too long to flood a polder giving access to the harbour (some say in order to benefit the port of Rotterdam which would suffer from its neighbour’s competition).

An while China is inventing new way to bring modernity to its countryside, Russia has to deal with the heritage of 70 years of communist rule (did I ever stress how important EH was for our every day life?). The Russian government has decided to pull the plug on nearly 300 mono-cities, these towns built in the hinterland around a single industry and often a single factory (such as Togliatti, near the Volga, home-base of the the car manufacturer Avtovaz and its 100,000 workers). It a perfect illustration of the evils of government-led allocation of resources. I feel for the millions of people that will be left behind (specially because many of them had been forced to move to these places by Stalin, not mentioning that some of them are former gulags camps), but you cannot avoid rationality too long and geography is certainly one of the most stubborned things around.

Saint Catherine of the week

October 11, 2009

Saint Catherine by Roger van der WeydenSaint Catherine by Roger van der Weyden