Gallman's Annual Output Series for the United States, 1834-1909

This paper presents Robert Gallman's classic, but heretofore unpublished annual series for US national product over the 1834-59 and 1869-1909 periods. The 'Volume 30' series, reported as decadal averages, underlie much of what we know about American income growth and capital formation before 1909. This paper briefly documents Gallman's construction and use of the annual series, offers corrections for minor errors found in the previously circulated versions, compares the series with alternative national product estimates, and explores promising avenues for further research. Most importantly, this paper lays out why Gallman considered his annual 'Volume 30' series unsuitable for business-cycle analysis.

A Historical Test of the Tiebout Hypothesis: Local Heterogeneity from 1850 to 1990

The Tiebout hypothesis, which states that individuals will costlessly sort themselves across local communities according to their public good preferences, is the workhorse of the local public finance literature. This paper develops a test of the Tiebout hypothesis using historical variation in mobility costs. Our extension of the Tiebout model to incorporate such costs yields the following comparative statics: as mobility costs fall, the heterogeneity across communities of individual public good preferences and, under some standard assumptions, of public good provision must (weakly) increase. Given mobility costs have fallen over time, a natural test of the Tiebout hypothesis is to take these predictions to the data here all US counties over the 1850-1990 period. Contrary to the predictions, we find decreasing heterogeneity between counties in policy outcomes (local education spending and total taxes or revenues) and in a wide variety of proxies for public good preferences (age groups, education levels, election outcomes, home ownership, income, race, and religious affiliation). Using the Boston SMSA as a case study, we show that the heterogeneity trends are similar at the municipal and county levels. These results suggest that forces working in opposition to Tiebout sorting have dominated individual location decisions over the past century.

The Diffusion of the Tractor in American Agriculture: 1910-60

This paper examines the impact and diffusion of the gasoline tractor in American agriculture. A key feature of the transition from horses to tractors was a long intermediate stage when both modes of power were used on the same farm. This is largely explained in the technical limitations of early tractors. In addition, we explore how rural markets and institutions adjusted to facilitate diffusion. Our simultaneous-equation regression analysis reveals that farm scale and tractor adoption had positive, independent effects on each other. Finally, we analyze diffusion as a capital replacement problem, which reveals that the shift to the new technology came far sooner than has generally been thought.

Hog Round Marketing, Seed Quality, and Government Policy: Institutional Change in U.S. Cotton Production, 1920-60.

Between 1928 and 1960 U.S. cotton production witnessed a revolution with average yields increasing roughly threefold. In addition, the average staple length of the U.S. crop increased significantly, reversing a long-run downward trend in cotton quality. Underlying these accomplishments were major innovations in cotton marketing, wholesale changes in the varieties grown, and the emergence of a vibrant commercial seed industry. This paper analyzes the key institutional and scientific developments underlying this revolution in biological technologies, pointing to the importance of two government programs—the one-variety community crusade and the Smith-Doxey Act— as catalysts for change.

The Red Queen and the Hard Reds: Productivity Growth in American Wheat, 1800-1940

The standard treatment of U.S. agriculture asserts that, before the 1930s, productivity growth was almost exclusively the result of mechanization rather than biological innovations. This paper shows that, to the contrary, U.S. wheat production witnessed a biological revolution during the 19th and early 20th centuries with wholesale changes in the varieties grown and cultural practices employed. Without these changes, vast expanses of the wheat belt could not have sustained commercial production and yields everywhere would have plummeted due to the increasing severity of insects, diseases, and weeds. Our revised estimates of Parker and Klein's productivity calculations indicate that biological innovations account for roughly one-half of labor productivity growth between 1839 and 1909.

Biological Innovation and Productivity Growth in the Antebellum Cotton Economy

The Cliometrics literature on slave efficiency has generally focused on static questions. We take a decidedly more dynamic approach. Drawing on the records of 142 plantations with 509 crops years, we show that the average daily cotton picking rate increased about four-fold between 1801 and 1862. We argue that the development and diffusion of new cotton varieties were the primary sources of the increased efficiency. These finding have broad implications for understanding the South's preeminence in the world cotton market, the pace of westward expansion, and the importance of indigenous technological innovation.

Hog Round Marketing, Seed Quality, and Government Policy: Institutional Change in U.S. Cotton Production, 1920-1960

Between 1928 and 1960 U.S. cotton production witnessed a revolution with average yields roughly tripling while the quality of the crop increased significantly. This paper analyzes the key institutional and scientific developments that facilitated the revolution in biological technologies, pointing to the importance of two government programs -- the one-variety community movement and the Smith-Doxey Act -- as catalysts for change. The story displays two phenomena of interest in light of the recent literature: 1. an important real-world example of the workings of Akerlof's lemons model and 2. a case where inventors, during an early phase of the product cycle, actually encouraged consumers to copy and disseminate their intellectual property.

Biological Globalization: the other Grain Invasion

Contemporary accounts of the history of globalization place the grain trade in a leading role. Narrowing price gaps for wheat in world markets serve as the key indicator of increasing market integration. And the chief example of an early policy backlash is the rising protectionism of European importers in response to the “Great Grain Invasion” of New World grain in the late nineteenth century. These accounts focus on the important role of falling transportation cost, but neglect other crucial biological innovations that allowed expanding the wheat cultivation in the new lands, what we call the “other grain invasion.” This paper documents that over the 1866-1930 the average distance of world wheat production from the core consumer markets doubled, as the wheat frontier moved on much harsher (colder and more arid) climates. Examining the detailed histories of major producers on the periphery, we show that this move involved, and indeed required extensive experimentation by farmers and crop scientists to find new suitable cultivars that could thrive in the new environments and survive the evolving pest and disease threats. Flows of germplasm and knowledge about breeding occurred not only from center to periphery, but also and importantly within the periphery and from the periphery to the center as an increasing integrated global community of crop scientists emerged over the late nineteenth and early twentieth centuries. Finally, we speculate about why in some regions pioneering plant breeders are heralded as national heroes whereas in others they are sadly under-appreciated.

“THE EMERGENCE OF PREDICTION MARKETS WITHIN BUSINESS FIRMS: A SKEPTICAL PERSPECTIVE FROM AN INTRIGUED ACADEMIC.”

Learning about the recent emergence of prediction markets within business firms has been fascinating and a bit confusing. As an economist who works on historical political stock markets, I believe this intriguing endeavor will be a road worth traveling but one littered with potholes and rocks at unexpected places.  Perhaps my sense that employing prediction markets within firms will be a jarring experience comes from the impression formed by my first exposure to the idea: where higher-ups at Microsoft created a small-stakes market for the programming team designing internal-company software about whether their project manager’s deadline would be met.  I could readily see why the higher-ups wanted this insider information, but creating such a market seemed entirely at odds with employing hierarchal authority (bosses) or scheduling plans (artificial deadlines) in the first place.  Perhaps this sense that prediction markets and business firms do not naturally coexist comes from my professional training