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Economic Foundations of the Territorial State System

The contemporary world is organized into a system of territorial states in which
rulers exercise authority inside clearly dened boundaries and recognize the author-
ity of other rulers outside those boundaries. We develop a model to explain how the
major economic and military developments in Europe starting in the 15th century
contributed to the development of this system. Our model rationalizes the system
as an economic cartel in which self-interested and forward-looking rulers maintain

Backlash: The Unintended Effects of Language Prohibition in U.S. Schools after World War I

Can forced assimilation policies successfully integrate immigrant groups? This paper examines how a specific assimilation policy – language restrictions in elementary school – affects integration and identification with the host country later in life. After World War I, several U.S. states barred the German language from their schools. I find that affected individuals were less likely to volunteer in WWII and more likely to marry within their ethnic group and to choose decidedly German names for their offspring.

Reprisals Remembered: German-Greek Conflict and Car Sales During the Euro Crisis

Limited attention and selective memory are key behavioral factors identified in the literature on cognitive biases and economic outcomes. We investigate how events trigger selective recall and thus change economic behavior. Following public disagreement between German and Greek politicians, Greek consumers drastically reduced their purchased of German automobiles - especially in areas affected by German reprisals during World War II.

A Tale of Two Crises: Greece and Iceland

In the fall of 2008, Iceland suffered a severe shock when its largest banks collapsed. The size of the shock was enormous relative to the size of the economy The Icelandic government immediately began addressing the difficult problems that arose, entering into an IMF program in November 2008. In the fall of 2010, the newly elected government of Greece announced that its predecessor had misreported and hidden the true magnitude of the prospective fiscal deficit (over 15 percent of GDP) for the fiscal year then in progress.  Greek government debt was already over 100 percent of GDP.

Copyright and Creativity – Evidence from Italian Operas

This paper exploits variation in the adoption of copyright laws within Italy – as a result of Napoleon’s military campaign - to examine the effects of copyrights on creativity. To measure variation in the quantity and quality of creative output, we have collected detailed data on 2,598 operas that premiered across eight states within Italy between 1770 and 1900. These data indicate that the adoption of copyrights led to a significant increase in the number of new operas premiered per state and year.

Social Institutions and Economic Growth: Why England Rather than China Became the First Modern Economy

This paper highlights the crucial impact of social institutions on the historical process leading to the modern economy. Social institutions that insure risk-takers and limit violent responses to economic changes influence investment in generating and implementing individually-risky, growth-enhancing new knowledge. The model allows for the possibility that even when social institutions are designed by the elite, social and cultural norms impact their form and that institutional forms matter, particularly due to institutions' unforeseen consequences.

The Clan and the City: Sustaining Cooperation in China and Europe

Over the last millennium, the clan and the city have been the locus of cooperation in China and Europe respectively. This paper examines - analytically, historically, and empirically - the cultural, social, and institutional co-evolution that led to this bifurcation. We highlight that groups with which individuals identify are basic units of cooperation. Such groups impact institutional development because intra-group moral commitment reduces enforcement cost implying a comparative advantage in pursuing collective actions.

Economic Policy Reform in Brazil and Turkey

At the turn of the century, the economies of both Brazil and Turkey encountered very serious difficulties; both countries resorted to IMF adjustment programs. The problems that were encountered, and the policy measures taken to address them, are analyzed. Thereafter, the lessons from the two crises are set forth. First, tighter fiscal and monetary policy may in fact be followed by more rapid economic growth. Second, even when the situation is dire, appropriate economic policy reforms can fundamentally alter the economic prospects of an economy.

Dispute Resolution Mechanisms in the Telecom Sector: Relating International Practices to Indian Experience

This paper analyzes the impact of the changing telecom environment on the nature of disputes that arise in this sector. It focuses on the need to resolve disputes in an efficacious, expeditious and transparent manner to ensure unhindered growth of the telecom sector. The paper draws upon several country specific examples to show how this subject is receiving increasing attention and has in fact become a significant feature of regulatory initiative.


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