The impact of new borders on trade: World War I and the economic disintegration of Central Europe

This paper investigates the impact of changes in national border demarcation on economic integration. It treats the national breakups in Central Europe due to WWI as a natural experiment, which allows for evaluating the particular effect of new national borders. A gravity model of trade is used to analyze goods-specific trade among Central European regions. The main results are, first, that the treatment effect of new borders is large. Second, decomposing the border effect provides evidence of a border before border for parts of Germany that became separated even before WWI. Third, the analysis indicates a high level of economic integration before WWI among Polish regions that became politically unified only after the war. --

The course of the great depression: a consistent business cycle dating approach

This study dates business cycles in 10 European countries, the United States, and Japan between 1925 and 1936. The aim is to establish a consistent dating of the world economic crisis, which is a precondition for understanding the sharp economic decline in many countries during the interwar period. Three approaches were applied that are common in business cycle dating. First, a deskriptive analysis infers on recessions based on the two-consecutive quarters approach often associated with the US National Bureau of Economic Research. Second, the time series is decomposed into trend and cycle using the Hodrick-Prescott (1980) filter. The third approach is to use Markov-regime switching models, which was proposed by Hamilton (1989) for such purposes. The results of confirm that the Great Depression was a global phenomenon, not limited to the US or Germany. Business cycle comovement in the interwar period is at a level comparable to the post-WWII period. This finding points at the contribution of international business cycle integration to the course of the decline in single countries. --

Endogenous Borders? The Effects of New Borders on Trade in Central Europe 1885-1933

A large literature on “border effects” in the wake of McCallum (1995) documents the massive impact of borders on trade. However, all these studies suffer from an identification problem. “Border effects” are usually identified from cross-sectional variation alone. We do not know how trade would change in response to a change in borders – the “treatment effect” of borders on trade – simply because trade flows across “future” borders are typically not documented. Nor can we rule out that there is “reverse causation”: that borders run along pre-existing trade patterns rather than shape trade flows. We exploit a natural experiment from history to explore this issue: the many dramatic border changes that were imposed and codified by the peace treaties in 1919 across Europe. We follow Ritschl and Wolf (2008) and implement Ashenfelter’s difference-in-difference estimator in levels on a large, new data set on sub-national trade flows. This allows us to trace the effects of changing borders over time and produces two key results: first, new borders have a large effect on trade. However second, the “treatment effects” of borders tend to be significantly smaller than the pure cross-sectional effects. This is so, because most of the 1919 border changes followed a pattern of trade relations across the region that was clearly visible already before 1914. Borders shape trade, and trade shapes borders.border effects, treatment effects, European history

a consistent business cycle dating approach

This study dates business cycles in 10 European countries, the United States, and Japan between 1925 and 1936. The aim is to establish a consistent dating of the world economic crisis, which is a precondition for understanding the sharp economic decline in many countries during the interwar period. Three approaches were applied that are common in business cycle dating. First, a deskriptive analysis infers on recessions based on the two-consecutive quarters approach often associated with the US National Bureau of Economic Research. Second, the time series is decomposed into trend and cycle using the Hodrick-Prescott (1980) filter. The third approach is to use Markov-regime switching models, which was proposed by Hamilton (1989) for such purposes. The results of confirm that the Great Depression was a global phenomenon, not limited to the US or Germany. Business cycle comovement in the interwar period is at a level comparable to the post- WWII period. This finding points at the contribution of international business cycle integration to the course of the decline in single countries

World War I and the economic disintegration of Central Europe

This paper investigates the impact of changes in national border demarcation on economic integration. It treats the national breakups in Central Europe due to WWI as a natural experiment, which allows for evaluating the particular effect of new national borders. A gravity model of trade is used to analyze goods-specific trade among Central European regions. The main results are, first, that the treatment effect of new borders is large. Second, decomposing the border effect provides evidence of a “border before border” for parts of Germany that became separated even before WWI. Third, the analysis indicates a high level of economic integration before WWI among Polish regions that became politically unified only after the war

The course of the great depression: a consistent business cycle dating approach

This study dates business cycles in 10 European countries, the United States, and Japan between 1925 and 1936. The aim is to establish a consistent dating of the world economic crisis, which is a precondition for understanding the sharp economic decline in many countries during the interwar period. Three approaches were applied that are common in business cycle dating. First, a deskriptive analysis infers on recessions based on the two-consecutive quarters approach often associated with the US National Bureau of Economic Research. Second, the time series is decomposed into trend and cycle using the Hodrick-Prescott (1980) filter. The third approach is to use Markov-regime switching models, which was proposed by Hamilton (1989) for such purposes. The results of confirm that the Great Depression was a global phenomenon, not limited to the US or Germany. Business cycle comovement in the interwar period is at a level comparable to the post-WWII period. This finding points at the contribution of international business cycle integration to the course of the decline in single countries

The impact of new borders on trade: World War I and the economic disintegration of Central Europe

This paper investigates the impact of changes in national border demarcation on economic integration. It treats the national breakups in Central Europe due to WWI as a natural experiment, which allows for evaluating the particular effect of new national borders. A gravity model of trade is used to analyze goods-specific trade among Central European regions. The main results are, first, that the treatment effect of new borders is large. Second, decomposing the border effect provides evidence of a 'border before border' for parts of Germany that became separated even before WWI. Third, the analysis indicates a high level of economic integration before WWI among Polish regions that became politically unified only after the war

Endogenous Borders? Exploring a Natural Experiment on Border Effects

A large literature documents the impact of borders on trade. However, in all these studies border effects are identified from cross-sectional variation alone. We do not know the "treatment effect" of borders nor can we rule out reverse causation. In this paper we exploit the border changes imposed across Europe by the peace treaties in 1919-20 as a natural experiment. We estimate the effects of borders on trade with a difference in difference approach and find that the "treatment effects" of borders are much smaller than the pure cross-sectional effects. We find strong evidence that border changes occurred systematically along pre-existing trade frictions

Endogenous borders?: the effects of new borders on trade in Central Europe 1885-1933

A large literature on border effects in the wake of McCallum (1995) documents the massive impact of borders on trade. However, all these studies suffer from an identification problem. Border effects are usually identified from cross-sectional variation alone. We do not know how trade would change in response to a change in borders - the treatment effect of borders on trade - simply because trade flows across future borders are typically not documented. Nor can we rule out that there is reverse causation : that borders run along pre-existing trade patterns rather than shape trade flows. We exploit a natural experiment from history to explore this issue: the many dramatic border changes that were imposed and codified by the peace treaties in 1919 across Europe. We follow Ritschl and Wolf (2008) and implement Ashenfelter's difference-in-difference estimator in levels on a large, new data set on sub-national trade flows. This allows us to trace the effects of changing borders over time and produces two key results: first, new borders have a large effect on trade. However second, the treatment effects of borders tend to be significantly smaller than the pure cross-sectional effects. This is so, because most of the 1919 border changes followed a pattern of trade relations across the region that was clearly visible already before 1914. Borders shape trade, and trade shapes borders

Analysis of the Aspergillus fumigatus Proteome Reveals Metabolic Changes and the Activation of the Pseurotin A Biosynthesis Gene Cluster in Response to Hypoxia

The mold Aspergillus fumigatus is the most important airborne fungal pathogen. Adaptation to hypoxia represents an important virulence attribute for A. fumigatus. Therefore, we aimed at obtaining a comprehensive overview about this process on the proteome level. To ensure highly reproducible growth conditions, an oxygen-controlled, glucose-limited chemostat cultivation was established. Two-dimensional gel electrophoresis analysis of mycelial and mitochondrial proteins as well as two-dimensional Blue Native/SDS-gel separation of mitochondrial membrane proteins led to the identification of 117 proteins with an altered abundance under hypoxic in comparison to normoxic conditions. Hypoxia induced an increased activity of glycolysis, the TCA-cycle, respiration, and amino acid metabolism. Consistently, the cellular contents in heme, iron, copper, and zinc increased. Furthermore, hypoxia induced biosynthesis of the secondary metabolite pseurotin A as demonstrated at proteomic, transcriptional, and metabolite levels. The observed and so far not reported stimulation of the biosynthesis of a secondary metabolite by oxygen depletion may also affect the survival of A. fumigatus in hypoxic niches of the human host. Among the proteins so far not implicated in hypoxia adaptation, an NO-detoxifying flavohemoprotein was one of the most highly up-regulated proteins which indicates a link between hypoxia and the generation of nitrosative stress in A. fumigatus