Austrian Economics

[Palumboism]

Wall Street Journal
The Wealthy in Florence Today Are the Same Families as 600 Years Ago

New research from a pair of Italian economists documents an extraordinary fact: The wealthiest families in Florence today are descended from the wealthiest families of Florence nearly 600 years ago.

The two economists — Guglielmo Barone and Sauro Mocetti of the Bank of Italy — compared data on Florentine taxpayers in 1427 against tax data in 2011. Because Italian surnames are highly regional and distinctive, they could compare the income of families with a certain surname today, to those with the same surname in 1427. They found that the occupations, income and wealth of those distant ancestors with the same surname can help predict the occupation, income and wealth of their descendants today.

As they wrote for the economics commentary website VoxEU, “The top earners among the current taxpayers were found to have already been at the top of the socioeconomic ladder six centuries ago.”

Their research was made possible by a fiscal crisis. In 1427, Florence was near bankrupt from an ongoing war with Milan and so the Priors of the Republic conducted a tax census of about 10,000 citizens. They took stock of the name and surname of the head of household, their occupation and their wealth.

About 900 of those surnames are still present in Florence, with about 52,000 taxpayers having those names. The authors note that Italian surnames are especially good for this effort, because they are highly regional.  While not every person with a certain surname in Florence today will be a descendant of the people with that name in 1427, it’s a good bet that most are. To see how these “families” had fared over the intervening six centuries, they compared the surnames against Florence’s 2011 tax records. (As a condition of access to this data, the authors did not publish the surnames.)

They find strong evidence that socioeconomic status is incredibly persistent. The wealthiest surnames in Florence today belong to families that, in 1429, were members of the shoemakers’ guild — at the 97th percentile of income. Descendants of members of the silk guild and descendants of attorneys — both at the 93rd percentile in 1427 — are among the wealthiest families today.

http://blogs.wsj.com/economics/2016/05/19/the-wealthy-in-florence-today-are-the-same-families-as-600-years-ago/

[Griffith]

i'm pretty sure they did raise the base rate a few months back by a 1/4 percent but that still only puts it at 0.5%, which is the same as base rate has been in UK for nearly a decade.

bank of england has also been "indicating" they are going to raise interest rates for past 6 or 7 years but it's still not happened. raising interest rates by any significant margin when there is no real inflation would be a disaster.

The Fed are now indicating they might raises rates in June again...

Maybe not but this constant speculation hurts emerging market currencies.

[Palumboism]