Before the 1930s Building and Loan Associations (B&Ls) were the leading residential mortgage leaders in the U.S. When severely distressed during the housing crisis of the 1930s, B&Ls frequently took years to liquidate. These delays in resolution resulted from the unique B&L contract that encouraged borrowing members to prolong dissolution and gave them shared control over the timing of liquidation. We estimate a hazard model of dissolution using a new dataset of New Jersey B&Ls and find that the probability of liquidation rose 37% when the share of non-borrowing members rose above two-thirds. The severe restriction on liquidity suffered by non-borrowers was instrumental to the rapid transition from the traditional B&L to the modern Savings & Loan industry during the 1930s housing crisis.

This paper discusses the effects of the real exchange rate (RER, defined as the price of the foreign currency in units of the domestic currency, adjusted by price levels) on the diversification and technological intensity of the export structure. Based on a North-South Ricardian model of trade with a continuum of goods, in which comparative advantage depends on the RER and leads and lags in innovation and diffusion of technology, two hypotheses are suggested and tested. The first one is that a higher RER allows for a higher diversification of exports. The second hypothesis is that this diversification implies an upgrading in the technological intensity of exports. We find favorable evidence for the two hypotheses from a panel data study, including 111 counties in the period 1962–2008. These results suggest that a competitive RER should be considered a relevant variable in the process of economic development as it encourages the transformation of the pattern of specialization

Foreclosures led to severe disruptions in home mortgage lending during the recent Great Recession and the Great Depression of the 1930s. It is difficult to measure these impacts in the modern market where origination, funding and servicing are separated within complex lending structures, but during the 1930s local building & loans (B&Ls) combined all three functions. We measure the impact of foreclosures on new mortgage lending using a panel of all B&Ls in 4 states. The foreclosure overhang explains about 30 percent of the drop in new mortgage lending by B&Ls as the housing crisis intensified between 1930 and 1935.

, and numerous seminar and conference participants for helpful comments. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w24663.ack NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

The Great Depression of the 1930s involved a severe disruption in the supply of home mortgage credit. This paper empirically identifies a mechanism lying behind this credit crunch: the impairment of lenders’ balance sheets by illiquid foreclosed real estate. With data on hundreds of building and loans (B&Ls), the leading mortgage lenders in this period, we find that the overhang of foreclosed real estate explains about 30 percent of the drop in new lending between 1930 and 1935.

Institutions and their quality are central concepts in the recent development and institutional economics literatures. Our hypothesis is that inadequate contract enforcement has hindered investment and, in consequence, indirectly has had a negative effect on Uruguay's long-term growth performance. We first review the main concepts and the approaches to define and measure the quality of contract enforcement. We then introduce one measure that has the advantages of being measurable into the past and not depending on subjective judgments; namely, the "contract intensive money" (CIM) indicator proposed by Clague et al. (1999). Using our long series for the CIM indicator, and extending key macroeconomic variables backwards to 1870, we are able to estimate a structural model to explore the plausibility of our hypothesis. In the estimation, based on the seemingly unrelated regressions (SUR) method, we find support for the thesis that the quality of contract enforcement influences growth through its impact on investment. Put differently, our results suggest that poor contract enforcement played a significant role at the root of Uruguay's underperformance, and in its experience of (relative) long-run decline.

This article discusses the evolution of the total and social public expenditure in Uruguay during the 20 th century. It analyzes the growth path of the social public expenditure and the extent up to which it could be preserved from the cyclical economic downturns and the fiscal constraints of the Public Sector. The paper finds a low long-run elasticity of public spending to GDPleading to a slow growth of social public expenditure and a remarkable procyclical pattern of total and social public expenditure. It also shows that social spending, especially education expenditure, has often been used as an instrument to curb budget deficits. No distinctive «fiscal regimes» for the period could be identified.