Technology shocks and declining productivity have been advanced as important factors driving the Great Depression in the United States, based on real business cycle theory. We estimate an improved measure of technology for interwar manufacturing, using data from the U.S. census reports. There is clear evidence of increasing returns to scale and we find no statistical proof that technology shocks led to changes in hours worked or other inputs. This contradicts a key prediction of real business cycle theory. We find that increasing returns to scale are not due to market power but to labor and capital hoarding.

The frequency of bad harvests and price elasticity of demand are measured using new data on English grain yields 1268–1480 and 1750–1850 and a revised price series. The analysis shows that major harvest shortfalls were a significant component of most historical subsistence crises, as back-to-back shortfalls were of the worst famines. Although serious harvest shortfalls long remained an unavoidable fact of economic life, by c.1800 yields had become less variable and prices less harvest sensitive. By the eve of the Industrial Revolution, England had become effectively famine-free.

We examine the relationships between warfare, taxation, and political change in the context of the political unification of the Italian peninsula. Using a comprehensive new database, we argue that external and internal threat environments had significant implications for the demand for military strength, which in turn had important ramifications for fiscal policy and the likelihood of constitutional reform and related improvements in the provision of nonmilitary public services. Our analytic narrative complements recent theoretical and econometric works about state capacity. By emphasizing public finances, we also uncover novel insights about the forces underlying state formation in Italy.

The First World War radically altered the political landscape of Central Europe. The new borders after 1918 are typically viewed as detrimental to the region's economic integration and development. We argue that this view lacks historical perspective. It fails to take into account that the new borders followed a pattern of economic fragmentation that had emerged during the late nineteenth century. We estimate the effects of the new borders on trade and find that the “treatment effects” of these borders were quite limited. There is strong evidence that border changes occurred systematically along barriers which existed already before 1914.

Bank notes were the largest component of the antebellum money supply despite losses as high as 5 percent in some years. Using a comprehensive bank-level panel of note discounts in New York City and Philadelphia, I explain this contradiction by showing that the secondary market reduced losses by accurately discounting notes based on their individual risk of default. Note discounts were almost exclusively sensitive to those factors which increased a bank's probability of default: specie suspensions, falling bond prices, and undiversified portfolios. Thus, by accounting for a bank's composition and environment, the market protected noteholders and allowed notes to circulate throughout the economy.

The rapid growth of deposits in New York over the late nineteenth century is often attributed to the release of pent-up demand for transactions services. I advance a complementary explanation that emphasizes the market for bank shares. The stock market was important because it generated quotations that signaled depositors about the condition of individual banks as innovations in banking practices allowed confidence to grow. A new database of prices, dividends, and balance sheet items for traded banks and a series of dynamic panel models show that fluctuations in bank prices influenced the course of the expansion.

Today, German machine toolmakers accuse their Chinese competitors of violating patent rights and imitating German technology. A century ago, German machine toolmakers used the same methods to imitate American technology. To understand the dynamics of this catching-up process, we use patent statistics to analyze firms’ activities between 1877 and 1932. We show that German firms deployed imitating strategies in the late nineteenth century and the 1920s to catch-up to their American competitors. The German administration supported this strategy by stipulating a patent law that discriminated against foreign patent holders and by delaying the granting of patents to foreign applicants.

Matching 2,777 R&D firms in surveys conducted by the National Research Council between 1921 and 1938 with U.S. patents reveals that 59 percent of all firms and 88 percent of publicly traded firms patented. These shares are much higher than those observed for modern R&D firms. Industry, firm size and the location of R&D facilities relative to major cities are shown to be important determinants of the propensity to patent. The effect of these factors remained constant across the 1920s and the Depression years suggesting that the tradeoff between patent disclosure and secrecy did not change over time.

New York City historiography holds that Manhattan developed two business centers—downtown and midtown—because the bedrock is close to the surface at these locations, with a bedrock “valley” in between. This article is the first effort to measure the effect of depth to bedrock on construction costs and the location of skyscrapers. We find that while depth to bedrock had a modest effect on costs (up to 7 percent), it had relatively little influence on the location of skyscrapers.

During the air conditioner industry's first four decades, most installations were “commercial comfort” air conditioning systems, purchased by retailers to increase demand for their products. Air conditioning spread unevenly through the commercial sector and across the country. Using data from a variety of sources, I offer a quantitative account of this diffusion, viewed through an interpretive framework that emphasizes differences across geographic markets and industries in the costs and benefits to retailers of installing air conditioning. Correlates of early adoption of commercial air conditioning include electricity rates and consumer income and education levels.

“Someday you guys are going to need to tell me how we ended up with a system like this….we're not doing something right if we're stuck with these miserable choices.” President Bush, to Henry Paulson and Ben Bernanke, after his briefing on September 16, 20081