• Carlos Charotti Ramirez

Student thesis: Phd


This thesis consists of three chapters on empirical macroeconomics. The first chapter, American Treasure and the Decline of Spain, analyses why Spain became one of the world's wealthiest countries around 1500 and then, two centuries later, a backwater. We rely on a synthetic control methodology to study the long-run impact of the influx of silver from the New World since 1500 on the economic development of Spain. Compared to a synthetic counterfactual, the price level increased by up to 200% by the mid-seventeenth century. Spain's GDP per capita outperformed other European nations for around a century, but by 1750, its GDP per capita was 40% lower than it would have been if Spain had not been the first-wave receiver of the American treasure. The second chapter, the macroeconomics of government investment, studies the macroeconomic effect of an exogenous change in public investment in a developing country. In particular, I focus on two central questions: what is the impact on the output of an increase in a government's investment in infrastructure? And what are the main channels that explain the total effect on output? To answer these questions, I use the infrastructure investment made in Paraguay by the Itaipu Binacional hydroelectric dam as a quasi-natural experiment. Using a synthetic control methodology, it can be concluded that the cumulative multiplier for the baseline estimation is 1.7. Furthermore, the main variables explaining the public investment's effect are the total factor productivity or (residual) (9%), the capital-output stock ratio (31%), and the quality-adjusted labour factor (60%). The results are robust to placebo and robustness tests. In Chapter Three, entitled The Bank of England as a Lender of Last Resort, we provide and describe new data related to the discount activity of the Bank of England during the nineteenth century. We focus on the Bank of England's (BoE) role during the crisis of 1836-37 and whether it followed Bagehot's principles to provide emergency liquidity to the private sector. Our novel high-frequency data from the BoE's archives indicate that the Bank provided ample liquidity to merchants and banks affected by the US crisis. We provide evidence that their primary purpose was to protect the stability of the money market and the economy during the crisis.
Date of Award1 Aug 2023
Original languageEnglish
Awarding Institution
  • The University of Manchester
SupervisorAkos Valentinyi (Supervisor) & Nuno Palma (Supervisor)

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