Monetary Capacity: some background

New voxeu column and accompanying CEPR discussion paper, covering my work in co-authorship with Roberto Bonfatti, Adam Brzezinski, and K. Kivanç Karaman.

The paper touches a number of themes across economic history, historical political economy, and macro/monetary economics; but here’s a 1-sentence summary: we argue that monetary and fiscal capacity and, by extension, markets and states have a symbiotic relationship. And we provide causal evidence, too. If this peaked your curiosity, please have a look at the column and the paper itself.

In this short post, I’ll give some background about this work which makes more sense to be in a blog post than elsewhere.

We have been working in this paper for a long time – more than three years – and it feels great that we finally have a working paper. It’s worth pointing out our new paper is related to prior work by Kivanç Karaman and co-authors, as well as my own such as this piece, briefly summarized here.

For a long time, I’ve had the greatest admiration for Kivanç Karaman and the exciting work he has done, some of which with the equally impressive Sevket Pamuk, including the work they did in starting off a literature (which has since grown greatly) on empirical measures of historical state capacity. If you asked me who’s my favorite young economist in the world – and if I really can only pick one – then I’d have to answer it’s Kivanç. Whatever you do, do yourself a favor and read his work (you can thank me later!).

Our current work is in some sense the intersection of his research program with mine, and it has been wonderful working with him as well as my long-time friends and collaborators Adam Brzezinski and Roberto Bonfatti, who both also provided critical input and without whom the current paper would also not have been possible.

Introducing “highlights”: Ridolfi on premodern France and Jongman on the Roman empire

From now on there will be once in a while posts written by others in this blog. These will be written both by young scholars and by more senior, established scholars.

The idea is that these scholars will write short essays about the main conclusions (and possibly policy implications) from their overall work. Scholars will write about their work overall: the forest, not the trees. Speculation about future work and general considerations about the state of the field are welcome. Hence the logic is different (and a complement, not a substitute) from that of blogs such as EHES’s Positive Check or EHS’s The Long Run, where people write about one specific paper at the time.

Consistent with this policy, the two inaugural posts will be written by:

• Leonardo Ridolfi, who recently wrote an excellent PhD thesis which builds estimates for French real wages and GDP over the long run. This is an exciting development: those of you who have read this blog’s very first post will know that we previously didn’t have estimates for premodern France. This absence has been largely a sad heritage of the French academia’s aversion to quantitative history since the third generation Annales School. It is significant that it was an Italian, working at an Italian institution, that has finally done this. And Ridolfi has done an excellent job, going back to 1250.
• Willem M. Jongman, a well-known scholar of the economic history of antiquity. I first realized how outstanding his work was when I first heard him speak at the LSE, and read this chapter in the Cambridge History of Capitalism, Re-constructing the Roman economy. He will write about what have we learned in the last 15 years, and future projects.