Author: Vincent Geloso

During the month of July, I posted a working paper that was written by myself, Vadim Kufenko and Klaus Prettner on the role of demographic change in measuring income convergence across provinces in Canada. We argued that wide differences in household minimized differences in income per adult equivalent relative to differences in per capita income (at least until the 1990s). You can consult the paper here.

The paper was submitted to Economics Bulletin and it has been accepted for publication. It will be available online soon.

Thank you to those who provided comments.

I have a new working paper fresh out of the oven. My co-authors (John Moore and Philip Schlosser) are myself are seeking comments. Basically, this is part of a series of papers on the economic history of the United States from 1890 to 1940 for which we obtained funding.

In fact, it is the first paper of that series and questions the use of tax data for the measurement of inequality during the era from the late 1910s to the 1940s. We argue that this is a crucial period in our understanding of inequality in America. The period from the end of the Great War to the beginning of the Second World War is marked by a high level of inequality that falls thereafter, reaching the trough in the 1970s. After that point, inequality increases dramatically up to the present time and returns to 1920s-like level. This is Thomas Piketty’s U-Curve of Inequality

We argue that the tax data overestimates inequality in the 1920s and underestimates it in the 1930s. This changes the left-side of the U-Curve. We argue that this tail is flatter than what Piketty, Emmanuel Saez and Gabriel Zucman have claimed. It looks more like a J-curve or even a steady linear increase thereafter.

The paper can be consulted here on Academia or here on SSRN. The abstract can be found below:

Abstract: In this paper, we question the level of inequality in the 1920s as presented in recent works by Piketty (2014, 2015), Piketty and Saez (2003) and Atkinson, Piketty and Saez (2011). Their work purports to observe a U-shaped curve of the evolution for inequality over time; it falls from the 1920s to the 1960s and increases thereafter. The implicit assumption is that we are now returning to 1920s-like inequality. We argue that it is quite likely that they dramatically overstate the level of inequality observed in the 1920s which materially affects any narrative of the evolution of inequality thereafter.

I am pleased to announce that Palgrave Macmillan has accepted to publish my book (Du Grand Rattrapage au Déclin Tranquille) as part of its “Studies in Economic History”. The book will come out under the title of Rethinking Canadian Economic Growth and Development since 1900: The Case of Quebec. 

The book was translated by Jordan Arseneault from Concordia University and I have made updates to respond to some serious (and less serious) criticisms made against my claims. I have expanded numerous statistical sections to provide a richer portrait of Quebec’s relative standing in Canada. The most important additions have been made to the topic of education between 1900 and 1975.

The book will likely come out in March 2017. Stay tuned!

In the meanwhile, I invite you to consult the list of titles in economic history at Palgrave.

Did Quebec experience economic growth (per capita) during the first decades of the 19th century? That question has been often debated in Quebec. In a recent paper co-authored with Mathieu Bédard, I argue that given the pronounced price deflation of the era and the increase in the money supply (faster than population growth), historians should discard entirely the possibility of negative growth. From this, we believe that historians should be able to assess likely results and attempt to construct estimates of living standards using either wage series and conjectural income estimates (à la Easterlin, Gallman, Lindert and Williamson).

The paper can be consulted here on SSRN and here on Academia. The abstract is below:

Generally, the historical literature presents the period from 1817 to 1851 in Lower Canada (modern day Quebec) as one of negative economic growth. This period also coincides with the rise of free banking in the colony. We study the effects of free banking on economic growth using theoretical and empirical validations. Using the Equation of Exchange, we propose that given the increase in the stock of money and the reduction in the general price level, there must have been a positive rate of growth of income per capita during the period. Our theoretical discussion should conclusively end any debate over whether or not Lower Canada enjoyed a positive rate of economic growth. The only question remaining is why it was slower than that of the United States and the rest of Canada.

I have a new working paper out there. It concerns privatisation in Serbia. More precisely, it concerns the process of privatisation in Serbia and how it can be co-opted by rent-seeking actors. Alongside Vladan Ivanovic, Vadim Kufenko, Boris Begovic and Nenad Stanisic, we argue that the process of privatisation was designed to allow rent-seekers to continue to extract rents through stripping former public firms of their assets.

I wish to thank my co-authors for inviting me to help on this paper. Institutions matter in economics, the manner in which they are designed (and emerge) is even more important.

The abstract is below and the paper can be found here:

Normally, privatisation is seen as beneficial. In the case of Serbia, the results are disappointing. This paper considers the failure of privatisation in Serbia – a latecomer in the matter – where privatisation was partly a result of exogenous pressures. In Serbia, a sizeable number of privatised firms were bought by bureaucrats and politicians and all firms were subjected to a period of supervision. We argue that this process of privatisation was designed to allow rentseekers to conserve their privileges through asset stripping and that this explains the failure. In order to do so, we perform empirical analysis of the determinants of liquidation, merger and bankruptcy of privatised firms from 2002 to 2015. We construct a novel data set from primary sources, free of the ‘survivorship bias’ and containing proxies for various types of owners, indirect signs of asset stripping strategy and a broad range of controls. Our results indicate that firms owned by politicians face significantly higher risks of bankruptcy, especially after the end of supervision