French reserves policy during the interwar years has been heavily criticised because of its consequences for other countries. This article presents new monthly data on the Bank of France's foreign reserves currency composition between 1928 and 1936, and identifies the motivations behind reserves policy. The Bank of France's aim was to limit the risk of capital loss on its foreign portfolio. The determining factor in its portfolio allocation decisions was the credibility of reserves currencies on the exchange market. Credibility issues explain both the sale of pounds against dollars during 1929 and 1930 and the massive conversion of foreign holdings into gold from 1931 on. However, due to the huge volume of its reserves, the Bank also had to consider the effects of its own actions on the market. Its cooperative attitude towards sterling in the months before British devaluation can be explained through its market position. The Bank of France's portfolio choice was that of a large player in a low-credibility international monetary system.

Despite a stream of information from recent research, as well as analytical interpretations, we still lack a general picture of pre-1914 multinational banking based on a unifying empirical approach comparable to that recently developed by financial economists for the wave of banks' multinational expansion in the late twentieth century. The main purpose of this article, based on a unique dataset covering the foreign branches of British, French and German banks from 1880 to 1913, is to test in a similar theoretically-driven fashion the determinants of multinational banking during the first globalisation. The empirical strategy is based on an augmented gravity model in which geography and institutions interact with economic factors in determining the patterns of multinational banking. Contrary to what has emerged from recent studies on present multinational banking, I find that the ‘fundamentals’ of pre-1914 foreign branching cannot easily be fitted into a gravity-like model, and that no unifying pattern of foreign expansion can be inferred from the data.

This article compares the effects of weather shocks on agricultural production in Britain, France and Germany during the late nineteenth century. Using semi-parametric models to estimate the non-linear agro-weather relationship we find that weather shocks explain between one third to two thirds of variations in agricultural production. Given the large size of the agricultural sector during this period, the high variance of agricultural production and the cyclical nature of weather shocks, the agro-weather relationship transmitted large effects on macroeconomic fluctuations over much of the period.

This article examines the impact of endowments, property rights and political conflict on the diffusion of cream separators in late nineteenth-century Ireland. Favourable endowments, access to finance and owner-occupancy promoted the spread of cream separators, while in areas with more small farms political conflict slowed down the diffusion of separators as well as of cooperatives. The structure of property rights and political conflict help explain why Irish agriculture was less successful than Danish agriculture during this period.

In this article we analyse the differences between the wages of skilled and unskilled workers in the period 1870–1930 for five countries with different levels of development and economic integration: the USA, France, the UK, Italy and Spain. We have constructed a ratio of skilled to unskilled wages (the skill premium) in the industrial sector for all these countries with the exception of the USA, for which data were already available. We study the impact of globalisation, technological and structural change and labour movements on the skill premium growth rate. The main conclusion we obtain is that the globalisation variables (migration and trade) explain only part of this growth. Technological and structural change also had an impact on the skill premium growth rate. The main responses of governments to globalisation were trade and migration policies. But as trade and migration were and are not the only sources of inequality growth, other policies had and have to be implemented.

This article challenges the conventional view that the gold standard was stabilized by quasi-automatic central bank intervention and/or private arbitrage whenever the spot exchange rate reached the ‘gold points’. New archival evidence on the central bank of Austria–Hungary between 1896 and 1913 documents the use of sophisticated instruments such as foreign exchange forward and repo (sale-repurchase) contracts and a quest for market dominance both with respect to reserves held and the share in market turnover. The resulting change in the working of the foreign exchange market is shown to have supported the conduct of monetary policy, underlining the importance of market micro structure in the design and conduct of monetary policy. The picture that emerges is that of a much more ‘modern’ approach to exchange rate stabilization during the classical gold standard than is traditionally recognized.

This article explores the means by which warfare influences domestic commodity markets. It is argued that England during the French Wars provides an ideal testing ground. Four categories of explanatory variables are taken as likely sources of documented changes in English commodity price disintegration during this period: weather, trade, policy and wartime events. Empirically, increases in price dispersion are related to all of the above categories. However, the primary means identified by which warfare influenced domestic commodity market integration was through international trade linkages and the arrival of news regarding wartime events.

A set of historical national accounts for the province of Holland in 1510/14 is estimated, including estimates of the size and composition of the labour force. This evidence shows that the economy of Holland was already very modern at the beginning of the sixteenth century, the result of a transformation of its economic structure between 1350 and 1500, and that structural transformation and per capita growth between 1510/14 and the beginning of the nineteenth century were limited. These results are confirmed by independent evidence about the long term development of real factor prices (rents and wages).

In this paper we try to isolate and measure the respective importance of political and economic aspects in two critical episodes of France interwar. We do this by separating expectations of taxation and of devaluation that are implicitly included in the prices of various categories of French and foreign bonds. Concerning the 1924–26 crisis, we show first that there was no expectation of a government default; second that the rise of interest rates in 1925 results from expectations of a capital levy; third that no hyperinflation was ever expected. After stabilisation, we show that the markets expected an appreciation of the franc up to 1931 and a devaluation afterwards.

This article presents a quantitative test of the oft-repeated view that Italy's backward and poor South suffered from low ‘social capital’, a tendency to defect from co-operative engagements. The problem with such assertions is that they run the risk of taking as evidence in favour of the hypothesis the very observations that need to be explained. The analysis carried out in this work tries to break out of this impasse by analysing the conditions under which it was ex ante welfare-improving for farmers in early twentieth century Italy to join an unlimited liability rural co-operative bank which would give them access to cheaper credit, but also exposed them to the risk of their neighbours’ defection. These ‘co-ops’ are a prime testing ground for the cultural explanation in that they spread rapidly throughout Northern Italy in the late nineteenth century, but never gained a similar popularity in the South. I estimate the switching function for these co-ops in different parts of the country to test whether Northern and Southern farmers faced significantly different choice sets when making the decision to join. Identical choice sets but differential responses would of course favour the cultural explanation of the South's backwardness. The results suggest that for the same parameter values, the choice sets for North and South were indeed different.

I argue that Spain's long-term economic stagnation in the seventeenth century and beyond was the result of a process triggered by the windfall acquisition of precious metals from American mines, and driven by the consolidation of absolutist rule and the peculiar privilege structure of Spanish society in the sixteenth century. American treasure allowed the Spanish monarchs to command large amounts of credit and pursue an expansive imperial policy unlike that of any other Early Modern nation; when the cost of the Empire increased and mineral rents fell, the Crown increased the fiscal pressure while allowing skilled human capital to migrate into the tax-sheltered but largely unproductive nobility. I first provide evidence on the role of the silver windfall and the acquisition of nobility titles in the sixteenth century; of particular interest is a new data series of nobility lawsuits constructed from the population of cases housed at the Archive of the Royal Chancery Court in Valladolid. I then develop a unified theoretical framework that explains imperial policy as an optimal response given the existing institutions and the natural resource windfall, recreates the rent-seeking path followed by the Spanish Crown when mineral rents proved insufficient, and accounts for the long-term economic backwardness that Spain experienced in the following centuries as the result of an institutional lock-in.

This article analyses the effects of globalisation on wage inequality in a group of eight now-developed countries during the century prior to 1970, using the same dependent variable and methodology as research on the impact of globalisation since 1970. The results suggest that the impact of globalisation on wage inequality before 1970 was confined largely to the effects of the pre-1914 mass migrations in the United States and Canada. Powerful domestic forces – expanding native supplies of skilled labour, the growth of new skill-intensive industries, and fluctuations in the level of aggregate demand – were the main influences on wage inequality for most of the period.

The purpose of this article is to present new evidence on living standards during the Spanish industrialisation process by means of secular trends in height. The data pertain to Elche, a town in the Valencia region of southeastern Spain that witnessed early and rapid industrial development in the context of Spain's delayed industrialisation and experienced strong immigration during the twentieth century. Thus, the relationship between biological standards of living and industrialisation and urbanisation is explored. The data suggest that the first stages of industrialisation in the late nineteenth century did not bring much improvement to workers' living conditions. The consequences to health and nutrition of Spain's Civil War and its aftermath are also examined. Finally, we comment on the process of general convergence in height that took place at the end of the period considered.

Technological change is often measured by economists and economic historians through productivity growth, but this article argues that technological change and productivity change are conceptually different. This proposition is demonstrated by considering the diffusion of technologies first within industries, and second across industries. In both cases, economic growth reaches higher levels when the technology becomes diffused, not when it is being generated via major technological breakthroughs. This emerges through high ratios of patents (as a measure of technological change) to industrial production when countries undergo their industrial revolutions. Finally I compare across countries, to show that leader countries developed the technologies before they developed education systems to extend them, whereas some catching-up countries probably drew on their depth of human capital to absorb new technologies from the leaders.

This article presents econometric evidence of integration in rural and urban wages in Russia's Northwest in the late tsarist era. Using the Autoregressive Distributed Lag (ARDL) approach to co-integration and error correction modelling, we show the flexibility of the rural wage in response to the lagged rural/urban wage ratio. Applying the model developed by Boyer and Hatton (1994) and Hatton and Williamson (1991a, 1991b, 1992), we show the similarity of the wage gap in northwest Russia in the late tsarist era to that during industrialisation in the US, England and Western Europe. Although our evidence does not necessarily describe countrywide trends, it does support for an industrialising region the more positive view of the degree and nature of late tsarist economic growth. Growth was not slowing down, and there is little evidence of constraints on migration by traditional agrarian institutions.

This article surveys cliometric research on the development of the French economy, with special emphasis on the fiscal and monetary history of the Revolution, the alleged retardation of the French economy in the nineteenth century, and the question of agricultural productivity in the early modern and industrial age.

Although mortality in Britain showed a long term decline from as early as the eighteenth century, it stagnated in the nineteenth century under the pressures of urbanisation and industrialisation. This paper examines the economic factors which lay behind the resumption of the mortality decline in Britain 1870–1914. A framework of analysis is developed which distinguishes factors in the physical environment (like population density) which affected mortality directly, from price and income movements which affected decisions about expenditure on sewers, water supplies, food, medical staff. A regression analysis of mortality in a sample of 36 towns in England and Wales suggests increases in the incomes of households and town council tax revenues were instrumental in the decline of mortality. This allowed extra spending not only on food, as McKeown emphasised, but also on a wide range of health-enhancing goods and services. The major improvement in the physical environment was the housing stock which rose faster than the population whilst its quality and dimensions were increasingly regulated by central and local government.

We analyse the Swedish general elections that took place in spring and autumn 1887. Our aim is to discover which groups of voters supported free trade and which protectionism. We find that while capital owners and wage earners consistently favoured free trade, in the spring election only the largest farmers supported protectionism. By autumn, political preferences among smallholders and middling farmers had shifted in favour of protectionism too. As these groups were not specialised in the production of import-competing goods, we assume that the political landslide in the autumn elections can be attributed to a loss of trust in the government.

We provide the first econometric study of foreign exchange market intervention for the UK during the sterling crises from 1964 from 1967. We use daily data on spot and forward dollar/sterling exchange rates and reserve movements which allows a more precise description of the loss of credibility during four currency crises. Reserve losses are consistent with exchange rate crises. External assistance given to sterling throughout this period shored up the reserves and allowed the sterling peg to be maintained.

The objective of this article is to study how people change their behaviour when taxes change. I follow the revenue from gift, inheritance and estate taxes in Sweden over more than a century. Second, I focus on a unique episode during the second half of the 1940s when gifts and gift tax revenue exploded. I have access to aggregate tax revenue data since 1884. Moreover, I have constructed a rich micro-data set of all gifts reported during the period 1942–9 in one county. A first main result is that gifts, inheritances and estates were never important sources of tax revenue. Tax revenue as a share of GDP and total government revenue had already reached peaks in the 1930s. The role of these taxes has instead primarily been equity and to provide integrity for other tax bases. Second, expectations were important. Gift tax revenue during the 1940s started to increase long before a new estate tax and increased wealth taxation were decided and implemented. The increase began even before the legislative process started. Third, economic power and economic control were important. Parents gave to their children to avoid taxes, but only when the expected gain became large enough and in ways that left them with as much economic power as possible.