Home

Welcome! I am Stefan Nikolić Lecturer in Economics at Loughborough University.

🎓 I hold a PhD in Economics from the University of York.

📖 My research examines spatial inequalities in economic performance. I combine historical data and economic methods to explore why some areas are more economically developed than others.

I codirect The Centre for South-East European Economic History.

🧑‍🎓 Get in touch if you're interested in pursuing a PhD in Economics with a focus on economic history or long-term development.

✉️ s.nikolic@lboro.ac.uk . You can find my CV here.

Google Scholar ORCID LinkedIn Loughborough Twitter WEast

Accepted for publication

‘Vanishing Borders: Ethnicity and Trade Costs at the Origin of the Yugoslav Market’ (with David Chilosi)

Accepted for publication in The Journal of Economic History

EHES working paper; QPE working paper

This article exploits the creation of a paradigmatic multi-ethnic state, Yugoslavia, to examine whether the effect of ethnic identity on trade costs persists when borders change. We rely on a panel of over 550,000 inter-urban price gaps spanning the area of Yugoslavia before and after Yugoslav unification of 1918. Controlling for transport costs and import tariffs, we find a large but transitory border effect. Ethno-religious differences initially significantly increased trade costs, but their negative influence vanished over time, too. The decline began about twelve years before unification, involved also city-pairs that were not divided by the border, and was particularly marked in places where Yugoslav unification enjoyed strong support. These patterns support the hypothesis that Yugoslav nationalism fostered trust across ethno-religious boundaries. Our results show that political movements can change patterns of ethnic identification of traders swiftly.

JEL Codes: F14, F15, F52, N7, N9, Z12, Z13

Keywords: border effect, ethnicity, market integration, nation-building, trade costs

‘Immigration and Development: German-Speaking Agricultural Settlers in the Kingdom of Hungary’ (with Matthias Blum and Tamás Vonyó)

Accepted for publication in The Journal of Economic History

CEPR discussion paper

After prolonged warfare between the Habsburg and Ottoman Empires, German-speaking immigrants helped repopulate newly conquered Hungarian lands during the 18th century. Exploiting spatial variation across more than four thousand villages in regions subject to resettlement and German immigration, we find that proximity to 18th-century German settlements predicted higher farm productivity until the early 20th century. Consistent with historical accounts, we explain this persistent productivity effect with the higher human capital and intensive agrarian specialization of German farmers. Development gains from German immigration diffused slowly and only locally, driven by the limited geographical dispersion of Germans, not by inter-ethnic knowledge transmission.

JEL Codes: N13, N54, N93, O13, O15

Keywords: Immigration, Development, agriculture, Habsburg empire

‘Ethnic conflicts, civil war and economic growth: Region-level evidence from former Yugoslavia’ (with Aleksandar Kešeljević and Rok Spruk)

Accepted for publication in Journal of Regional Science

JRS Early View

This paper studies the long‐term effects of the Yugoslav civil war (1987–1995) on subnational economic growth across 78 regions in five former Yugoslav republics from 1950 to 2015. We construct counterfactual growth trajectories using a robust region‐level donor pool from 32 conflict‐free countries. Applying a hybrid synthetic control and difference‐in‐differences approach, we find that the civil war inflicted significant regional per capita GDP losses estimated at 38 percent relative to the synthetic counterfactual, with substantial regional heterogeneity. The most war‐affected regions suffered prolonged and permanent economic declines, while north‐western regions and capital cities experienced more transitory effects. Population displacement, ethnic fractionalization and polarization, and economic geography help explain cross‐regional variation in GDP losses. Our results are robust to extensive variety of specification tests, placebo analyses, and falsification exercises

JEL Codes: O1, N1, R1

Keywords: Ethnic conflict, civil war, economic growth, Yugoslavia

Publications

Articles

‘Why Railways Fail: Colonial Railways and Economic Development in Habsburg Bosnia-Herzegovina’ (with Magnus Neubert)

Journal of Development Economics, Volume 181, April 2026, 103747.

JDE Article in press; CSEE-EH working paper; EHES working paper

Are railways always a harbinger of prosperity? We examine the economic effects of railways in Bosnia-Herzegovina under Habsburg colonial rule. Our novel dataset consistently tracks the non-agricultural population share of over 4,500 settlements in Habsburg Bosnia in 1885, 1895, and 1910, based on census records. Applying the inconsequential units approach, with least-cost paths as our instrumental variable, we estimate the effect of railway access on occupational change. In settlements directly connected to imperial railways and competition, non-agricultural activity declined as craftsmen returned to agriculture. By contrast, the new railway network temporarily accelerated non-agricultural activity, primarily by attracting factories

and foreign labor. Railway access generated more sustained non-agricultural employment growth in settlements with higher human capital and stronger law enforcement. Overall, our findings suggest that colonial railways did not uniformly promote economic development: while railway access reshaped local occupational structures, lasting positive effects depended on local development preconditions.

JEL Codes: I25, J21, N94, O18, R11

Keywords: Railways, Development, Bosnia-Herzegovina, Habsburg empire

‘Spatial inequality in prices and wages within a late-developing economy: Serbia, 1863-1910’

The Economic History Review, 78(1), February 2025, pp.207-234.

EHR Early View; EHES working paper; The Long Run blogpost, NotebookLM podcast

Serbia emerged as a small independent nation-state in the economic periphery of nineteenth-century Europe. This article leverages uniquely abundant town-level data to examine spatial inequality in prices and wages within this late-developing economy. I first build a new dataset on prices of traded and household goods, and wages of skilled and unskilled workers for a panel of 42 urban settlements in Serbia, in the period from 1863 to 1910. I apply the welfare ratio approach to calculate real wages of day labourers and masons. Second, I find strong spatial convergence in grain prices and costs of living, but divergence in wages, both nominal and real. Lastly, I investigate the determinants of price convergence and wage divergence with panel-data models. The results suggest that falling transport costs decreased price gaps between locations, whereas rising population differences increased inter-urban wage gaps.

‘Income inequality in Eastern Europe: Bulgaria and Czechoslovakia in the twentieth century’ (with Filip Novokmet and Piotr Paweł Larysz)

Explorations in Economic History, 94 (2024): 101594.

(Special Issue on Wealth and Income Inequality around the World)

World Inequality Database working paper; World Inequality Database blogpost

This article provides novel estimates of long-term income inequality in Bulgaria and Czech Lands / Czechoslovakia in the twentieth century. Relying on newly-constructed datasets and the social tables approach, we measure inequality between salient social strata. We find that Czechoslovakia was significantly more unequal than Bulgaria before 1945. Inequality converged to similarly low levels under socialism. Decomposition analysis by social classes reveals that different levels of inequality in the first half of the century were principally due to higher within social-class inequality in Czechoslovakia, owing to a more stratified industrial society; whereas a low dispersion within the dominant agricultural sector held down the within social-class component in Bulgaria. A dramatic fall in total inequality after 1945 was a result of the social revolution that encompassed the virtual disappearance of between social-class inequality and a marked reduction in within social-class inequality. Our findings point to the critical role of institutional and political factors in driving inequality in Eastern Europe throughout the twentieth century.

‘Determinants of Industrial Location: Kingdom of Yugoslavia in the interwar period’, European Review of Economic History, Volume 22, Issue 1, 1 February 2018, Pages 101–133.

What determines the location of industry? Using panel data econometrics and a new dataset on interwar Yugoslavia the predictions of three theories—Heckscher-Ohlin, New Economic Geography, and Path Dependence—are quantified and compared. Results show that all three theories mattered and that New Economic Geography forces played a dominant role. The consensus view that several theories can simultaneously explain the distribution of industrial activity is thus reinforced. The main novelty is that Path Dependence can affect the location of industry in addition to Heckscher-Ohlin and New Economic Geography forces.

Chapters in edited volumes

‘Regional industrialization in Yugoslavia’ (with Leonard Kukić), in Erik Buyst, Bas van Leeuwen, and Robin Phillips (eds.), An Economic History of Regional Industrialization, Routledge, 2021, pp. 79-100.

Based on a combination of new data on industrial employment and recent empirical findings, we explore regional industrialization of Yugoslavia in the long term. We find that the pace of industrialization was highly uneven among Yugoslav regions. Neither capitalist nor socialist modes of production were able to ensure a more egalitarian pace of industrialization. No single theory can explain regional industrialization patterns over the long term. During the interwar period, factor endowments, markets, and path dependence help explain why some regions were more industrialized than others. During the socialist period, a combination of institutional and policy-related factors drove regional industrialization patterns.

‘Between disintegration and convergence, 1918-1939: flows of capital, goods, and labor’ (with Jari Eloranta and Flora Macher), in Matthias Morys (ed.), The Economic History of Central, East, and South-East Europe: 1800 to the Present, Routledge, 2021, pp. 216-242.

This chapter explores the broad patterns of economic integration and disintegration – between Central Eastern and South-Eastern European states and the West, as well as within the region, from the First World War to the end of the interwar period – and how these patterns were shaped by economic and political forces related to the war and its aftermath as well as by the Great Depression. It discusses the elements affecting labor mobility in the period. The period in fact featured both integration and disintegration, and the League was an important facilitator of capital flows to those nations. Trade of Central Eastern and South-Eastern European (CESEE) countries during the interwar period can be divided into periods of increasing trade, stagnation and decline, and recovery. After the First World War, an increasing number of restrictions on immigration were put in place in the United States – the dominant overseas country of destination for European emigrants.

‘Economic policy, 1918-1939’ (with Nathan Marcus and Tobias Straumann), in Matthias Morys (ed.), The Economic History of Central, East, and South-East Europe: 1800 to the Present, Routledge, 2021, pp. 188-215.

This chapter explains the economic policies adopted by the Eastern European countries in the 1920s and the 1930s, and deals with the Soviet experience. The League’s Council repeatedly called for normalizing international trade and commissioned several studies stressing the danger of autarkic policies in the Danubian region, but without effect. Foreign indebtedness limited monetary policy options and the loss of foreign reserves left the introduction of exchange controls as the only viable option for most Central, East and South-East European (CESEE) countries if they were to keep honouring their foreign debt. The concentration of foreign exchange transactions at the central bank as part of exchange control policy meant that countries that introduced exchange controls effectively prohibited foreign payments and made the government the mediator between domestic debtors and foreign creditors. The interwar years saw important economic policy changes in Eastern Europe. The most radical shift occurred in Russia after the October Revolution of 1917.

‘Neutral Economies During World War I’ (with Herman de Jong), in Stephen Broadberry and Mark Harrison (eds.), The Economics of the Great War: A Centennial Perspective, CEPR press, 2018, pp. 109-116.

Covered by Martin Sandbu in the Financial Times, 9 November 2018

Neutrality in the Great War was an exception, rather than the rule. Only a handful of countries remained neutral by 11 November 1918: the Netherlands, Spain, Switzerland, and three Scandinavian countries – Denmark, Norway, and Sweden – in Europe; and Argentina, Chile, and Mexico in South America (Kruizinga 2016). In this chapter, we concentrate on the six neutrals in the northern, northwestern, central, and southern parts of Europe. Compared to European belligerents, neutrals were minor but not insignificant. Neutrals accounted for around 14%, 9%, and 8.5% of total European area, population, and GDP, respectively (League of Nations 1927, Broadberry and Klein 2012). On average, neutral countries were more developed than the belligerents. Average GDP per capita of neutral countries in 1913 was higher than that of the Central Powers or the Allies (Broadberry and Harrison 2005: 7-11, Broadberry and Klein 2012). Neutrals had much to lose by entering the war. The size and level of economic development influenced their decision to remain neutral. However, this was also dependent on the political goals and strategic economic actions of the Allies and the Central Powers towards the neutrals. Being neutral did not necessarily leave much room for manoeuvre in politics or business.

Doctoral dissertation

New Economic History of Yugoslavia, 1919-1939: Industrial Location, Market Integration and Financial Crises, PhD thesis, University of York, 2017.

Won the VI Balkan Economic History Award

New Economic History of interwar Yugoslavia is uncharted territory. Combining historical data with modern econometrics the present thesis explores how economic development of Yugoslavia - a newly established and diverse country - was shaped by industrial location, market integration and financial crises. The results are relevant for the present as the least economically developed part of Europe today is comprised mostly of Yugoslav successor states.

What determined the location of industry in interwar Yugoslavia? Using panel data econometrics and a new dataset which covers eight Yugoslav regions and ten industries over a period of eight years industrial location is explained by a model in which Heckscher-Ohlin (HO), New Economic Geography (NEG) and Path Dependence theories are captured by interaction variables. Econometric results show that all three of the tested theories had a role to play. History matters in addition to HO and NEG type forces in determining the location of industry.

Were Yugoslav markets integrating during the interwar? If so, what were the drivers? Analysis of a novel panel data set of commodity prices observed over ten cities during the period from 1922 to 1939 shows that market integration increased during the interwar. City-pair commodity market integration is modeled using a set of trade cost. The progress of market integration during the interwar is explained by institutional and infrastructural advancements that reduced transaction and transport costs. Cultural differences did not impede market integration. Yugoslavia set out on a process of economic integration that was not hampered by its diversity.

Did Yugoslavia and six other East European countries experience financial crises during 1931? If so, what were the main contributing factors? Newly gathered high frequency data series on indicators of currency, banking and sovereign risk crises are explored using an analytical narrative. Worsening of economic fundamentals, drop in international credit and global demand, as well as international transmission led to financial crises in Eastern Europe in 1931. Completely avoiding financial crises was elusive but the most economically developed country was the least affected.

This pioneering New Economic History study of interwar Yugoslavia leads to a broad conclusion that present day economic backwardness and regional differences in economic development between Yugoslav successor states are not new and do not stem from a historical lack of market integration but can partly be explained by regionally uneven industrial development and a long history with financial crises.

Book reviews

‘South-eastern European monetary and economic statistics from the nineteenth century to WWII’, The Economic History Review 69.1 (2016): 391-392.

‘Imperial Borderlands: Institutions and Legacies of the Habsburg Military Frontier’, EH.Net, July 2025.

Work in progress

‘Industrialization in the Habsburg Empire: A Spatial Analysis’ (with Tamás Vonyó)

We examine detailed statistics from occupational and business censuses of the Habsburg Empire to provide accurate measures for both the level and spatial concentration of manufacturing before World War I. We first map industry location in 50 regions across 13 industries, differentiating employment in factory industry from handcrafts. We demonstrate dramatically different spatial patterns. Industries dominated by factory employment were all spatially concentrated. The diffusion of manufacturing owed more to large craft industries than to modern factories. While older industries like metallurgy, textiles, or glass and ceramics remained concentrated in Alpine Austria and the Czech lands where the industrial revolution began in Central Europe, modern industries like chemicals or machinery were most prevalent in large agglomerations. We then use occupational data for almost one thousand local districts to identify location determinants in different industries. We find that local agglomeration effects and path dependency, measured by the adoption of steam engines, were much more important than domestic market access. The spatial concentration of older industries reflected in part the location of coal mines, while they had no significant role in newer industries. We use instrumental variables and spatial modelling to rule out omitted variable bias and spatial autocorrelation. By estimating our regressions using different units of spatial analysis, we demonstrate in an historical context the relevance of the modifiable unit area problem, showing that results obtained from regional data overstate the role of market access and reduce the significance of local endowments.

Talks

Invited seminars

Bratislava University of Economics and Business, Economic Policy Department Seminar, 05/2026

University College London, School of Slavonic and Eastern European Studies (SSEES), Centre for Places, Identities and Memories, 03/2026

Valencia University, Faculty of Economics, Economic History Seminar, 09/2025

Halle University, Faculty of Economics, Economic History, Growth and Development Seminar, 04/2023

Cambridge University, Faculty of History, Quantitative History Seminar, 03/2023

Humboldt University, Institute for Economic History, Research Colloquium on Economic and Social History, 01/2023

University College London, School of Slavonic and Eastern European Studies (SSEES), Centre for Comparative Studies of Emerging Economies Seminar, 10/2022

Vienna University of Economics and Business, Institute for Economic and Social History, WU Economic and Social History & Socioeconomics Research Seminar, 05/2022

Wageningen University, Department of Social Sciences, Rural and Environmental History Group Seminar, 10/2021

Queen's University Belfast, Queen's Management School, Economics Seminar, 01/2019

University of York, Department of Economics, Centre for Historical Economics and Related Research Seminar, 10/2018

University Carlos III de Madrid, Department of Social Sciences, Economic History Seminar, 03/2018

Conferences

Economic History

Economic History Society (EHS)

London School of Economics, 2026
University of Cambridge, 2022
Royal Holloway, 2017

European Historical Economics Society (EHES)

University of Hohenheim, 2025
Vienna University of Economics and Business, 2023
University of Groningen, 2022
Paris School of Economics, 2019
Tuebingen University , 2017

European Social Science History Conference (ESSHC)

Leiden University (online), 2021
Queen's University Belfast, 2018
University of Valencia, 2016

World Economic History Congress (WEHC)

Lund University, 2025
Massachusetts Institute of Technology, 2018

Economics/Regional/Urban

Royal Economic Society (RES)

Online conference, 2022

Association for the Study of Religion, Economics, and Culture (ASREC)

University of Macedonia, 2025
Bocconi University, 2023
Harvard University, 2023
Chapman University, 2022

Regional Studies Association (RSA)

University of Leipzig, 2022

European Regional Studies Association (ERSA)

Portugal, 2024
Online conference, 2020

Urban Economics Association (UEA)

Aalborg University, 2024
Bocconi University, 2023
Copenhagen Business School (online), 2021

Teaching

Lecturer, Loughborough University, U.K.

Foundations for Economists

Undergraduate, 2025/26

Intermediate Macroeconomics

Undergraduate, 2025/26

Economics for Business I

Undergraduate, 2023/24, 2024/25

Business Economics

MBA, 2024/25

Lecturer, Bocconi University, Italy

Economic History

Group of 130 undergraduate students,

International Economics and Management program;

2020/21 (online), 2021/22

Lecturer, University of Groningen, The Netherlands

Economic Growth in History

Group of 25 research master students; 2017/18, 2018/19

Economics for International Business

Multiple undergraduate classes of 20-30 students; 2017/18

Global Business History

Multiple undergraduate classes of 20-30 students; 2017/18

Teaching Fellow, Belgrade Banking Academy, Serbia

Economic History

Medium-sized graduate elective; 2015/16

Financial and Macroeconomic History

Medium-sized graduate elective; 2014/15

Teaching Fellow, University of York, U.K.

Historical Perspectives on Economic Growth

Multiple undergraduate tutorial groups; 2012/13, 2014/15

Causes and Consequences of Financial Crises

Multiple undergraduate tutorial groups; 2013/14

Service

Refereeing

Economic History Review
Economic History of Developing Regions
European Review of Economic History
Explorations in Economic History
Journal of Economic History
Journal of Development Economics
UK Research and Innovation

WEast - The Eastern European Economic History Initiative

Co-founder and Principal organiser

2013-present

Economic History Society

Student ambassador

2014-2017

Education

PhD Economics, University of York

2017

Supervisor: Matthias Morys

Examiners: Joan R. Roses (LSE) and Giovanni Federico (Pisa / NYU Abu Dhabi)

MSc Economic History (Research), London School of Economics and Political Science

2011-2012

Supervisor: Stephen Broadberry

BSc Economics, Union University - Belgrade Banking Academy

2008-2011

Summa cum laude

Training

Development - Inequality, Social Interactions, and Institutional Dynamics

Paris School of Economics, 2018

Taught by François Bourguignon, Thierry Verdier, and Ekaterina Zhuravskaya

Geography, Institutions, and Economic Growth in History

University of Warwick, 2017, summer school

Taught by Dan Bogart, Stephen Broadberry, Walker Hanlon, and others

Globalization and Inequality

University of Groningen, 2016, summer school

Taught by Branko Milanović, Leandro Prados de la Escosura, and others

Beyond GDP. A Long-Term View on Human Wellbeing and Inequality

University of Groningen, 2015, summer school

Taught by Jan Luiten van Zanden and others

EHS Residential Training Course for PhD Students in Economics and Social History

University of Manchester, 2014

The Macroeconomic History of the 1930s

University of Southern Denmark, 2013, PhD course

Taught by Nicholas Crafts

Contact

Loughborough University

Loughborough Business School (Economics Group)

Loughborough LE11 3TU, United Kingdom

s.nikolic@lboro.ac.uk

My family at Val Gardena, Italy, August '20

Page updated

Google Sites

Report abuse