Business, Government & the International Economy

- June 2025
- Article
Integral Outside: The Financial Curb Market, the Electric Telegraph, and the Politics of Pricing in Second Empire France

By: Charlotte Robertson

Financial markets in nineteenth-century France were far more complex than an analysis of the official Bourse or its state-authorized brokers would suggest. Most financial transactions occurred on an illegal yet tacitly tolerated curb market called the coulisse, which played a vital role in expanding market liquidity during the Second Empire while also attracting controversy as a site of complex speculative activity. Existing historiography attributes the 1859 suppression of the Paris coulisse to aggravated competition between state-authorized brokers and coulissiers following the market downturn of 1857–58. Based on police, ministerial, prefectoral, and judicial archives, I present an alternate account that stresses the twin roles of financial innovation and the telecommunications revolution in breaching the limits of the state’s tacit toleration for the coulisse. I emphasize the lesser known coulisse in Marseille, suppressed at the height of a bull market in 1855, to formulate an alternative explanation of the 1859 suppression of its counterpart in Paris. I conclude that the rising importance of the curb markets in both cities reflected the robust, short-term options market developing among coulissiers. Public attention given to the coulisse price lists—distributed via newly opened telegraph lines—challenged the legitimacy of official brokers as authoritative sources of price information and compromised the political interests of the Bonapartist state, which proved decisive in the crackdown.
- June 2025
- Article
Integral Outside: The Financial Curb Market, the Electric Telegraph, and the Politics of Pricing in Second Empire France

By: Charlotte Robertson

Financial markets in nineteenth-century France were far more complex than an analysis of the official Bourse or its state-authorized brokers would suggest. Most financial transactions occurred on an illegal yet tacitly tolerated curb market called the coulisse, which played a vital role in expanding market liquidity during the Second Empire while...
- May 2025
- Case
The Global Strategic Maple Syrup Reserve

By: Sophus A. Reinert, Mattias Fibiger and Sue Jia
- May 2025
- Case
The Global Strategic Maple Syrup Reserve

By: Sophus A. Reinert, Mattias Fibiger and Sue Jia
- May 2025
- Article
Argentina’s Disinflation: An International and Historical Perspective

By: Rafael Di Tella, Franco Nuñez and Pablo Ottonello
- May 2025
- Article
Argentina’s Disinflation: An International and Historical Perspective

By: Rafael Di Tella, Franco Nuñez and Pablo Ottonello

About the Unit

The BGIE Unit conducts research on, and teaches about, the economic, political, social, and legal environment in which business operates. The Unit includes scholars trained in economics, political science, and history; in its work, it draws on perspectives from all three of these disciplines.

The following demonstrates one way of classifying the approaches the Unit takes to learning and teaching.

The Unit examines the “rules” and policies established by government and other non-business institutions that affect business in the United States.
The Unit turns to history to understand the origins of today’s business environment as well as some of the alternatives that have emerged from time to time.
The Unit examines other countries’ business environments and their historical development.
The BGIE group is deeply interested in the impact of globalization and the way rules are emerging to govern international economic transactions as globalization proceeds.

Recent Publications

Integral Outside: The Financial Curb Market, the Electric Telegraph, and the Politics of Pricing in Second Empire France

By: Charlotte Robertson

June 2025 |
Article |
Journal of Modern History

Financial markets in nineteenth-century France were far more complex than an analysis of the official Bourse or its state-authorized brokers would suggest. Most financial transactions occurred on an illegal yet tacitly tolerated curb market called the coulisse, which played a vital role in expanding market liquidity during the Second Empire while also attracting controversy as a site of complex speculative activity. Existing historiography attributes the 1859 suppression of the Paris coulisse to aggravated competition between state-authorized brokers and coulissiers following the market downturn of 1857–58. Based on police, ministerial, prefectoral, and judicial archives, I present an alternate account that stresses the twin roles of financial innovation and the telecommunications revolution in breaching the limits of the state’s tacit toleration for the coulisse. I emphasize the lesser known coulisse in Marseille, suppressed at the height of a bull market in 1855, to formulate an alternative explanation of the 1859 suppression of its counterpart in Paris. I conclude that the rising importance of the curb markets in both cities reflected the robust, short-term options market developing among coulissiers. Public attention given to the coulisse price lists—distributed via newly opened telegraph lines—challenged the legitimacy of official brokers as authoritative sources of price information and compromised the political interests of the Bonapartist state, which proved decisive in the crackdown.

Keywords: Financial Markets; History; Communication Technology; Knowledge Dissemination; France

Citation

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Liz Truss and the Thatcher Legacy: Markets and Fiscal Dominance in the United Kingdom

By: Rafael Di Tella

May 2025 |
Teaching Note |
Faculty Research

Citation

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The Global Strategic Maple Syrup Reserve

By: Sophus A. Reinert, Mattias Fibiger and Sue Jia

May 2025 |
Case |
Faculty Research

Citation

Educators

Argentina’s Disinflation: An International and Historical Perspective

By: Rafael Di Tella, Franco Nuñez and Pablo Ottonello

May 2025 |
Article |
Quarterly Review - Federal Reserve Bank of Minneapolis

Keywords: Inflation and Deflation; Economy; Argentina

Citation

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Brazil's Messias? The Lava Jato Corruption Scandal, the Recession, and the Rise of Bolsonaro

By: Rafael Di Tella and Jose Liberti

May 2025 |
Teaching Note |
Faculty Research

Teaching Note for HBS Case 719-069.

Citation

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High Stakes: A Framework for Geopolitical Risk Management

By: Meg Rithmire and David Fagan

2025 |
Report |
Faculty Research

This report provides a data-based assessment of how U.S. companies perceive geopolitical risk and articulates a recommended decision-making process and framework to manage such risk. The research reflected in the report indicates that various concerns related to China are most prominent in reshaping the global business landscape and the presentation of risk for U.S. companies. The primary source of risk for businesses is the transformation of China’s political economy under the People’s Republic of China (PRC) to focus on security, to which the U.S. has responded with enhanced laws and regulations, as well as rhetorical instruments (such as Congressional statements) that can heighten reputational risk for businesses. Our recommendations are that companies exposed to China and US-China competition adopt a governance framework that is well-informed, holistic, enduring, authoritative, and tailored to review strategic and national security risks in a structured way.

Keywords: Globalization; International Relations; Business or Company Management; Risk Management

Citation

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Tracking the Short-Run Price Impact of U.S. Tariffs

By: Alberto Cavallo, Paola Llamas and Franco Vazquez

2025 |
Working Paper |
Faculty Research

This paper examines the short-run impact of the 2025 U.S. tariffs on consumer prices using a unique integration of high-frequency retail pricing data, product-level country-of-origin information, and detailed tariff classifications. By linking daily prices from major U.S. retailers to Harmonized System (HS) codes and import origins, we construct custom price indices that isolate the direct effects of tariff changes across product categories and trading partners. Our analysis reveals rapid pricing responses, though their magnitude remains modest relative to the announced tariff rates and varies by country of origin. Both imported and domestic goods are affected, suggesting broader pricing and supply chain spillovers. These findings offer timely evidence for policymakers, businesses, and consumers navigating the immediate consequences of trade policy changes.

Keywords: Tariffs; Trade; Price; Inflation and Deflation

Citation

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Extractive Taxation and the French Revolution

By: Tommaso Giommoni, Gabriel Loumeau and Marco Tabellini

2025 |
Working Paper |
Faculty Research

We study the fiscal determinants of the French Revolution, exploiting plausibly exogenous variation in the salt tax—a large source of royal revenues and one of the most extractive forms of taxation of the Ancien Régime. Implementing a Regression Discontinuity design (RDD), we find that parts of France subject to a higher salt tax experienced more revolts against the monarchy between 1750 and 1789. These effects already appear in the 1760s, but become stronger over time and peak in the 1780s. Combining the RD model with variation in local weather conditions during the 1780s, we document that droughts amplify the effects of the salt tax on revolts by increasing wheat prices and activating latent discontent. Then, we connect the discontent generated by the salt tax to the French Revolution. First, we provide evidence that riots spread across space through a process of contagion that is stronger in high tax areas. Second, we show that areas burdened by a higher salt tax report more complaints against the salt tax in the list of grievances collected by the king in the spring of 1789. Third, we document that legislators representing areas with a higher salt tax are more likely to demand the end of the monarchy and to support the death penalty for the king.

Keywords: Extractive Taxation; Regime Change; French Revolution; State Capacity; Taxation; History; Government Administration; Attitudes; Public Opinion

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