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Topics in Macro and Monetary History

Paper Session

Friday, Jan. 5, 2018 12:30 PM - 2:15 PM

Marriott Philadelphia Downtown, Meeting Room 403
Hosted By: Cliometric Society
  • Chair: Michael Haupert, University of Wisconsin-La Crosse

Silverback Bankers: Bank Officer Tenures and Bank Behaviors Across Two Centuries

Howard Bodenhorn
Clemson University


In July 2013 the Wall Street Journal reported that 34% of independent directors at Russell 3000 companies had served on their respective boards for 10 years or more (Lubin 2013). Twenty-eight directors had served more than 40 years. Opinions about the effectiveness of long-tenured directors were mixed, and firms and investors have concerns with long director tenures. With the exception of a growing literature on the effects of CEO age on firm performance, relatively little is known about the connection between the length of director service and firm operating decisions or profitability. This paper employs historical data on the tenure of bank directors, presidents, and chief operating officers (cashiers) to explore the causes and consequences of long service. In the period after 1850, longer service is associated with greater service on other corporate and charitable boards. In addition, men who report their principal employment as manufacturer or merchant also served longer terms than farmers as bank directors. It appears that the most valuable and valued board members were those whose outside connections provided insights into borrowers’ credit worthiness and those whose connections might be used to cultivate new customers.

The Impact of World War II on the Growth of United States Potential Output

Alexander J. Field
Santa Clara University


Robert Gordon has argued that the case is “overwhelming” for the “economic miracle interpretation of World War II along every conceivable dimension…”. In particular, he argues that the experiences of wartime production – learning by doing and process innovation – laid the supply foundations for output and productivity growth in the postwar period. Gordon’s claims have formed the basis of the conventional wisdom for decades. They are not novel and, as this paper will show, they are almost certainly wrong. The learning achieved in the extraordinary, and never to be repeated mass production of ships, aircraft, and military hardware between 1942 and 1945 had little relevance for the postwar period. The disruptions of war retarded a strong prewar trajectory of productivity advance. Aggregate TFP and labor productivity growth was substantially lower across the war years than it had been between 1929 and 1941. Within US manufacturing, productivity advance between 1941 and 1948 was negative, and substantially lower between 1949 and 1973 than it had been in the interwar period.

Optimum Currency Areas and European Monetary Integration: Evidence From the Italian and German Unification

Roger Vicquery
London School of Economics


Recent events have sparked renewed research interest in international monetary integration and currency areas. This paper provides new empirical evidence on the predictive power and endogeneity of the Optimum Currency Areas (OCA) framework, by analyzing the wave of European monetary integration occuring between 1852 and the establishment of the international gold standard. This period witnessed to the creation of two national monetary unions lasting to this day, Italy and Germany, as well as monetary integration around Britain and France.
I estimate the ex-ante optimality of various monetary arrangements, relying on a newly collected dataset allowing to proxy the assymetry of shocks across European regions. My findings support the predictive power of the OCA framework. In particular, I find that, opposite to Germany, Italian pre-unitary states did not form an OCA at unification. I argue that this might have contributed to the arising of the Italian "Southern Question".
I then explore a possible channel through which monetary integration might aggravate regional inequality, by investigating the endogenous effects of monetary integration. Looking at the Italian monetary unification, I find evidence in support of Krugman's (1993) pessimist view on the endogenous effects of monetary integration, where integration-induced specialization and factor mobility increase the risk of asymmetric shocks and regional hysteresis phenomenons.
On the other hand, the experience of the Italian and German unification does not seem to be characterized by the OCA endogeneity theorized by Frankel and Rose (1998).
Michael Bordo
Rutgers University
Steven Nafziger
Williams College
Larry Neal
University of Illinois
JEL Classifications
  • N1 - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
  • E0 - General