Archive for the ‘Economic history’ Category

The Great Mortgaging

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Tuesday, October 14th, 2014

Òscar Jordà, Moritz Schularick, and Alan Taylor provide a little historical perspective on banks’ mortgage lending here.

Hugh Rockoff on what the US learned from WW1

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Wednesday, October 8th, 2014

The latest on the VoxEu series on the economics of World War 1 is available here.

Avner Offer on World War 1

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Saturday, September 20th, 2014

The latest in the VoxEu series of articles on the economics of World War I is written by Avner Offer, whose classic book on the subject I can thoroughly recommend. The article is available here.

The economic consequences of WW1 in Britain

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Thursday, August 28th, 2014

Nick Crafts provides the latest instalment in the VoxEU series on the economics of World War 1, here.

Irish Performance since Independence and the Scottish Debate

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Wednesday, August 27th, 2014

This paper of mine just came out in a special issue of Oxford Review of Economic Policy on the question of Scottish independence.  I had been asked to reflect on Irish economic performance since independence, on the exercise of fiscal and monetary sovereignty, and on migration policy, without saying anything about Scotland.

From an earlier draft I attach a comparison of population growth in Ireland and Scotland and their respective peripheries.

Disturbing Equilibrium

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Tuesday, August 19th, 2014

A tangled though remarkable story behind the proof in the mid-1950s of the existence of a competitive general equilibrium (Arrow-Debreu, as it is known) is summarised in a recent posting on economicprincipals and revised (rather drastically, it must be said) here (scroll down to ‘A correction’).

There are strong echoes of the controversy over the proper academic credit for the discovery of the double helix structure of DNA. In the Economics case, the problem was compounded by a very slow refereeing process while rivals worked on a related research paper.

Economic Principals is itself an interesting website reporting on topical issues as well as presenting non-technical interpretative overviews of controversies in economics, often disentangling the intellectual, institutional and personal issues. One example, amongst many, relating to the 2011 Sargent-Sims Nobel Prize, is here. The full archive is online.

 

Outward-oriented economic development and the Irish education system

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Saturday, August 16th, 2014

 

Irish Educational Studies recently published a special issue to commemorate the landmark report Investment in Education (which was commissioned in 1962 and released in 1965).  The report’s finding that half of all children were leaving school by the age of 13 generated newspaper headlines and created the environment for Donogh O’Malley’s ‘free education’ initiative of 1966.  An appendix to the report provided information on the educational attainment of the population in 14 European countries (including seven in Eastern Europe) as well as in the US, Japan and Israel.  No equivalent statistics could be produced for Ireland.  Questions relating to educational attainment were included in the Irish Population Census from the following year.   This issue of Irish Educational Studies includes two witness accounts by key players, Áine Hyland, an RA to the report team, and Seán O’Connor, first head of the Development Branch of the Department of Education.  The issue, entitled Investment in Education and the Intractability of Inequality, also contains four academic papers.  Mine is available here.  The abstract reads as follows:

Most studies of the relationship between education and economic development focus on the line of causation running from the former to the latter.  The present paper studies how the pattern of Irish development has influenced the structure of the Irish education system.  The first section sets out the economic context of late industrialisation within which Investment in Education was commissioned and which determined the reception that the report received.  The report’s release would be followed shortly thereafter by a series of policy measures that would expand secondary-school enrolment and graduation rates and massively increase the demand for third-level places.  Later sections analyse the subsequent evolution of Ireland’s binary system of tertiary education and the recent attention devoted to science, technology and innovation policy and the ‘fourth level’ (postgraduate) sector.  Concluding comments focus on the continuing relevance of the perspective embodied in Investment in Education for the surprisingly high numbers who continue to leave the Irish education system without a Leaving Certificate qualification.

 

Patricia Clavin on the origins of international economic institutions

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Friday, August 8th, 2014

The fifth in the VoxEU series of articles on the economics of World War I is available here.

Finance in the run-up to WW1

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Wednesday, July 9th, 2014

Harold James provides the latest addition to the VoxEU series on WW1, here.

WW1 and international migration

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Wednesday, June 25th, 2014

The latest contribution to the VoxEU series on the economics of World War I is available here.

The Economics of World War I

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Tuesday, June 3rd, 2014

Nick Crafts, Alan Taylor and I are editing a series of articles on the economics of World War I, which will be appearing at Vox over the course of the next few months. Today’s column is by Mark Harrison.

Climate Change

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Monday, March 31st, 2014

The Intergovernmental Panel on Climate Change (IPCC)’s Fifth Assessment Report (AR5) is available here.
Richard Tol’s critique published in the Financial Times is available here.

Barbara Solow

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Thursday, March 27th, 2014

A friend just told me the very sad news that Barbara Solow passed away in February.

She wrote a classic book on Ireland, The Land Question and the Irish Economy, which has a good claim to being the first major cliometric work on Ireland — if by cliometric you mean economic history that is strongly informed by economic theory, and systematically uses data to back up the arguments being made. In more recent years she did terrific work on plantation slavery, which was very influential and certainly made a big impression on me. The last time I saw her was at a conference which she organised in Oxford a couple of years ago to commemorate Eric Williams, and she was as impressive as ever.

I can’t claim to have known her very well, but she was always very nice to me when I was a young Irish economic historian in Boston. She had a wonderful dry sense of humour, and produced one of the great acknowledgment footnotes of all time. Her death is a major loss for the profession, and my heart goes out to her family.

Deflation

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Friday, January 17th, 2014

The Economist has been hosting a roundtable discussion on deflation in the Eurozone, and asked me to say something about this from a historical perspective. My contribution is here. (I should also say that the copyeditor removed my reference to Barry Eichengreen, the go-to person on these matters.)

Annual Conference of the Economic and Social History Society of Ireland Nov 22nd/23rd 2013

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Wednesday, November 6th, 2013

The Annual Conference of the Economic and Social History Society of Ireland is being held in NUI Galway on Friday 22nd and Saturday 23rd of November, convened by Niall Ó Ciosáin and Caitríona Clear.

Registration/booking information and the conference programe are available at:

http://eshsigalway2013.wordpress.com/

The Society’s main web page is here.

Private debt, public debt, and crises

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Wednesday, October 23rd, 2013

Òscar Jordà, Moritz Schularick, Alan Taylor have a new piece on the issue, available here.

Cross of Euros

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Thursday, August 8th, 2013

Alan Taylor and I have a new paper on the never-ending crisis in the Eurozone (and yes, the crisis is still with us, unless you regard mass unemployment as a matter of no concern, and has a way to run yet). It is available here.

Why economics needs economic history

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Friday, July 5th, 2013

The beauty of the internet is that sometimes you come across papers like this one that you might otherwise have missed (H/T Greg Mankiw). As you would expect, I agree with Temin that economic history has a fundamental role to play in economic education, and MIT is a great example. To repeat a point I have made on the blog before, several superstars who have emerged from that department have a historical sensibility that has made them much better economists. Obstfeld and Rogoff are best known for their path-breaking work in open economy macro, but both have written important books on economic history (Obstfeld with Taylor, and Rogoff with Reinhart), and I don’t think it’s a coincidence that Obstfeld-Rogoff style open economy macro tends to be far more grounded in the real world than some closed economy equivalents. Paul Krugman regularly displays an interest in and knowledge of history, which he uses to good effect; don’t even get me started on Ron Findlay; and so on.

There are many reasons to think that we need more history on the economics curriculum, not less. The current economic and financial crisis has given rise to a vigorous debate about the state of economics, and the training which graduate and undergraduates economics students are receiving. Importantly, among those arguing most strongly for a change in the way that young economists are trained are the ultimate employers of these students, in both the private and the public sector. Employers are increasingly complaining that young economists don’t understand how the financial system actually works, and are ill-prepared to think about appropriate policies at a time of crisis.

Strikingly, many employers and policy makers are also arguing that knowledge of economic history might be particularly useful. For example, Stephen King, Group Chief Economist at HSBC, argues that “Too few economists newly arriving in the financial world have any real knowledge of events that, while sometimes in the distant past, may have tremendous relevance for current affairs…The global financial crisis can be more easily interpreted and understood by someone who has prior knowledge about the 1929 crash, the Great Depression and, for that matter, the 1907 crash” (Coyle 2012, p. 22). Andrew Haldane, Executive Director for Financial Stability at the Bank of England, has written that “financial history should have caused us to take credit cycles seriously,” and that the disappearance of subfields such as economic and financial history, as well as money, banking and finance, from the core curriculum contributed to the neglect of such factors among policy makers, a mistake that “now needs to be corrected” (Coyle 2012, pp. 135-6). In a recent Humanitas Lecture in Oxford, Stan Fischer (another MIT graduate) said that “I think I’ve learned as much from studying the history of central banking as I have from knowing the theory of central banking and I advise all of you who want to be central bankers to read the history books” (http://www.youtube.com/watch?v=5Y-ZhFbw2H4, 43.48 minutes in).

Knowledge of economic and financial history is crucial in thinking about the economy in several ways. Most obviously, it forces students to recognize that major discontinuities in economic performance and economic policy regimes have occurred many times in the past, and may therefore occur again in the future. These discontinuities have often coincided with economic and financial crises, which therefore cannot be assumed away as theoretically impossible. A historical training would immunize students from the complacency that characterized the “Great Moderation”. Zoom out, and that swan may not seem so black after all.

A second, related point is that economic history teaches students the importance of context. As Robert Solow (yes, that department again, although a Harvard PhD) points out, “the proper choice of a model depends on the institutional context” (Solow 1985, p. 329), and this is also true of the proper choice of policies. Furthermore, the “right” institution may itself depend on context. History is replete with examples of institutions which developed to solve the problems of one era, but which later became problems in their own right.

Third, economic history is an unapologetically empirical field. Doing economic history forces students to add to the technical rigor of their programs an extra dimension of rigor: asking whether their explanations for historical events actually fit the facts or not. Which emphatically does not mean cherry-picking selected facts that fit your thesis and ignoring all the ones that don’t: the world is a complicated place, and economists should be trained to recognise this. An exposure to economic history leads to an empirical frame of mind, and a willingness to admit that one’s particular theoretical framework may not always work in explaining the real world. These are essential mental habits for young economists wishing to apply their skills in the work environment, and, I would argue, in academia as well.

Fourth, even once the current economic and financial crisis has passed, the major long run challenges facing the world will still remain. Among these is the question of how to rescue billions of our fellow human beings from poverty that would seem intolerable to those of us living in the OECD. And yet such poverty has been the lot of the vast majority of mankind over the vast majority of history: what is surprising is not the fact that “they are so poor”, but the fact that “we are so rich”. In order to understand the latter puzzle, we have to turn to the historical record. What gave rise to modern economic growth is the question that prompted the birth of economic history in the first place, and it remains as relevant today as it was in the late nineteenth century. Apart from issues such as the rise of Asia and the relative decline of the West, other long run issues that would benefit from being framed in a long-term perspective include global warming, the future of globalization, and the question of how rapidly we can expect the technological frontier to advance in the decades ahead.

Fifth, economic theory itself has been emphasizing – for well over twenty years now – that path dependence is ubiquitous.

Finally, and perhaps most importantly from the perspective of an undergraduate economics instructor, economic history is a great way of convincing undergraduates that the theory they are learning in their micro and macro classes is useful in helping them make sense of the real world. Far from being seen as a “soft” alternative to theory, economic history should be seen as an essential pedagogical complement. From experience, I know that there is nothing as satisfying as seeing undergraduates realize that a little bit of simple theory can help them understand complicated real world phenomena. Think of Obstfeld and Taylor’s use of the Mundell-Fleming trilemma to frame students’ understanding of the history of international capital market integration over the last 150 years; or Ronald Rogowski’s use of Heckscher-Ohlin theory to discuss political cleavages the world around in the late nineteenth century. The Domar thesis that Temin refers to in his paper is a great way to talk to students about what drives diminishing returns to labour. Economic history is replete with such opportunities for instructors trying to motivate their students.

Coyle, D., ed. (2012), What’s the Use of Economics?: Teaching the Dismal Science After the Crisis, London Publishing Partnership.

Solow, R. (1985), “Economic History and Economics,” American Economic Review 75, 328-31.

Lessons from the 1950s?

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Saturday, June 15th, 2013

The institutional innovations over the deep crisis of the 1950s gave birth to the modern Irish economy. I analysed the process in this article  in the Irish Independent last week.  Brendan Keenan re edited it slightly to highlight his interpretation of what I was saying. One of the fascinating things about writing anything is how it takes on a life of its own in readers’ minds.   (“And the word was made flesh and dwelt among us”).  Edna Longley once destroyed the meaning of something I had written by aggressive editing; fortunately no such problems arise with Brendan.  I wrote a similar piece for historyhub.ie, a new site developed by a group of young historians.  Though I disagree with much of what Bryce Evans has to say on Lemass, I found his interpretation of what I had written illuminating: “it makes the case very convincingly for expertise offered as a basis for policy-making being more robustly based on both independence and breadth of opinion.”

Call for papers: Economic and Social History Society of Ireland conference 2013

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Tuesday, April 23rd, 2013

The annual Conference of the Economic and Social History Society of Ireland 2013 will take place in NUI Galway, on Friday 22nd and Saturday 23rd November. Cormac Ó Gráda will give the Connell Memorial Lecture. The deadline for paper proposals is 31st July.

Details of the call for papers downloadable from www.eshsi.org

Irish Quantitative History Workshop 2013

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Tuesday, January 15th, 2013

The annual Irish Quantitative History group meeting will take place in TCD, in the IIIS seminar room, 6th Floor, Arts Building, on Friday 25th January 2013, 2pm-6 pm.

  • Peter Solar (Free University Brussels), ‘Market Integration between Ireland and Britain: Timing, Causes and Consequences’

  • Frank Barry (Trinity College Dublin), ‘A Firm-Level Database on Manufacturing Industry in Protectionist-Era Ireland’

  • Richard McMahon (University of Edinburgh), ‘Homicide and Irish migration in late nineteenth-century San Francisco’

  • Aidan Kane (NUI Galway), ‘Exploring 17th century credit networks in the Irish Staple database’

  • Charles Read (University of Cambridge), ‘The Repeal Year: A Quantitative Reassessment’

  • As numbers are limited, please email iqhistory@gmail.com if you intend to go along, and/or if you wish to be added to the IQH group mailing list. The workshop page (hosted by the Centre for Economic History at QUB) is here. The convenor of IQH is Eoin McLaughlin (University of Edinburgh).

    Benchmarking the US and UK economies post-2007

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    Wednesday, October 24th, 2012
    What is it with these economic historians? Schularick and Taylor cast a dim eye on UK economic performance here.
    HT Paul Krugman.

    In which Barry Eichengreen and I are shocked

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    Tuesday, October 23rd, 2012

    Here.

    Benchmarking current economic performance in the US (and elsewhere)

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    Monday, October 8th, 2012

    Moritz Schularick and Alan Taylor have a useful piece on the topic, informed by economic history, here.

    Public Lecture on “1950s Ireland and the Birth of the Modern Economy”

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    Monday, October 1st, 2012

    I am delivering a public lecture on this topic in TCD this coming Friday night.  (The date is significant).  The subtitle is “A Tale of Two Liberalisations”.  Details available here.  The talk is open to all but prior registration of interest is encouraged.

    Origins and Evolution of the IDA

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    Monday, September 24th, 2012

    In this paper - part of a series on the institutional innovations of the 1950s, and related to my paper of last year on the 1956 introduction of export profits tax relief – historian Mícheál Ó Fathartaigh and I describe the circumstances surrounding the establishment of the Industrial Development Authority in 1949 and chart its evolution and expansion of influence over the following decade.

    Not-so-absolutist Spain

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    Friday, September 14th, 2012

    Mauricio Drelichman reviews Regina Grafe’s new book here.

    A couple of economic history links

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    Monday, August 27th, 2012

    Bob Gordon on long run economic growth prospects on the technological frontier.

    Alan Taylor on the ‘great leveraging’.

    The wisdom of Charles Kindleberger

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    Tuesday, June 12th, 2012

    Brad DeLong and Barry Eichengreen have a really nice piece on the lessons today’s policy makers might usefully draw from the work of the great Charles Kindleberger.

    It prompted the following two thoughts on my part, neither of which is perhaps relevant to Kindleberger.

    The first is that the extremes are gaining in Europe because centrist parties are offering voters no meaningful choices. Pasok and ND are an egregious example, but the same is true in all the other programme countries, and to a lesser extent in other countries as well. So if you want to vote against the status quo policies, you have no alternative but to vote for Syriza, or whomever.
    Second, right now in Europe, support for international institutions means, de facto, support for the current policy mix, just as being an internationalist in the interwar period, in too many cases, meant support for gold. And this is killing support for the very international institutions that, as Brad and Barry say, are in principle a solution to the crisis.
    Update: Brad has a great response to this post here. Read it.

    A tale of two depressions, updated

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    Tuesday, March 6th, 2012

    Barry Eichengreen and I provide an update to our original Vox column here.