Economic history

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A medieval marketplace.

Economic history is the study of economies or economic phenomena of the past. Analysis in economic history is undertaken using a combination of historical methods, statistical methods and the application of economic theory to historical situations and institutions. The topic includes financial and business history and overlaps with areas of social history such as demographic and labor history. The quantitative—in this case, econometric—study of economic history is also known as cliometrics. [1]

An economy is an area of the production, distribution and trade, as well as consumption of goods and services by different agents. Understood in its broadest sense, 'The economy is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of resources'. Economic agents can be individuals, businesses, organizations, or governments. Economic transactions occur when two groups or parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency. However, monetary transactions only account for a small part of the economic domain. Economic activity is spurred by production which uses natural resources, labor and capital. It has changed over time due to technology, innovation such as, that which produces intellectual property and changes in industrial relations. A given economy is the result of a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure and legal systems, as well as its geography, natural resource endowment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of human practices and transactions. It does not stand alone.

Historical method techniques and guidelines by which historians use primary sources and other evidence to research and then to write histories in the form of accounts of the past

Historical method is the collection of techniques and guidelines that historians use to research and write histories of the past. Primary sources and other evidence including those from archaeology are used.

Applied economics is the application of economic theory and econometrics in specific settings. As one of the two sets of fields of economics, it is typically characterized by the application of the core, i.e. economic theory and econometrics, to address practical issues in a range of fields including demographic economics, labour economics, business economics, industrial organization, agricultural economics, development economics, education economics, engineering economics, financial economics, health economics, monetary economics, public economics, and economic history.


Development as a separate field

In Germany in the late 19th century, scholars in a number of universities, led by Gustav von Schmoller, developed the historical school of economic history. It ignored quantitative and mathematical approaches. Historical approach dominated German and French scholarship for most of the 20th century. The approach was spread to Great Britain by William Ashley, 1860–1927, and dominated British economic history for much of the 20th century. Britain's first professor in the subject was George Unwin at the University of Manchester. [2] [3] In France, economic history was heavily influenced by the Annales School from the early 20th century to the present. It exerts a worldwide influence through its Journal Annales. Histoire, Sciences Sociales. [4]

Gustav von Schmoller German economist

Gustav FriedrichSchmoller was the leader of the "younger" German historical school of economics.

The historical school of economics was an approach to academic economics and to public administration that emerged in the 19th century in Germany, and held sway there until well into the 20th century. The professors involved compiled massive economic histories of Germany and Europe. Numerous Americans were their students. The school was opposed by theoretical economists. Prominent leaders included Gustav von Schmoller (1838–1917), and Max Weber (1864–1920) in Germany, and Joseph Schumpeter (1883–1950) in Austria and the United States.

William Ashley (economic historian) British economic historian

Sir William James Ashley was an influential English economic historian. His major intellectual influence was in organizing economic history in Great Britain and introducing the ideas of the leading German economic historians, especially Gustav von Schmoller and the historical school of economic history. His chief work is The Economic Organisation of England, still a set text on many A-level and University syllabuses.

Treating economic history as a discrete academic discipline has been a contentious issue for many years. Academics at the London School of Economics and the University of Cambridge had numerous disputes over the separation of economics and economic history in the interwar era. Cambridge economists believed that pure economics involved a component of economic history and that the two were inseparably entangled. Those at the LSE believed that economic history warranted its own courses, research agenda and academic chair separated from mainstream economics.

London School of Economics public research university in London, United Kingdom

The London School of Economics is a public research university located in London, England, and a member institution of the federal University of London. Founded in 1895 by Fabian Society members Sidney Webb, Beatrice Webb, Graham Wallas, and George Bernard Shaw for the betterment of society, LSE joined the University of London in 1900 and established its first degree courses under the auspices of the University in 1901. LSE started awarding its own degrees in its own name in 2008, prior to which it awarded degrees of the University of London.

University of Cambridge university in Cambridge, United Kingdom

The University of Cambridge is a collegiate public research university in Cambridge, United Kingdom. Founded in 1209 and granted a royal charter by King Henry III in 1231, Cambridge is the second-oldest university in the English-speaking world and the world's fourth-oldest surviving university. The university grew out of an association of scholars who left the University of Oxford after a dispute with the townspeople. The two 'ancient universities' share many common features and are often referred to jointly as 'Oxbridge'. The academic standards, history, influence and wealth of the University of Cambridge has made it one of the most prestigious universities in the world.

In the initial period of the subject's development, the LSE position of separating economic history from economics won out. Many universities in the UK developed independent programmes in economic history rooted in the LSE model. Indeed, the Economic History Society had its inauguration at LSE in 1926 and the University of Cambridge eventually established its own economic history programme. However, the past twenty years have witnessed the widespread closure of these separate programmes in the UK and the integration of the discipline into either history or economics departments. Only the LSE and the University of Edinburgh retain a separate economic history department and stand-alone undergraduate and graduate programme in economic history. Cambridge, Glasgow, the LSE and Oxford together train the vast majority of economic historians coming through the British higher education system today.

The Economic History Society (EHS) is a learned society that was established at the London School of Economics in 1926 to support the research and teaching of economic history in the United Kingdom and internationally. The society also acts as a pressure group working to influence government policy in the interests of history and economic affairs, alongside other societies and professional bodies with similar interests. In addition, the Society regularly liaises with funding bodies such as Higher Education Funding Council for England, the Arts and Humanities Research Council, and the Economic and Social Research Council.

University of Edinburgh public research university in Edinburgh, Scotland

The University of Edinburgh, founded in 1582, is the sixth oldest university in the English-speaking world and one of Scotland's ancient universities. The university has five main campuses in the city of Edinburgh, with many of the buildings in the historic Old Town belonging to the university. The university played an important role in leading Edinburgh to its reputation as a chief intellectual centre during the Age of Enlightenment, and helped give the city the nickname of the Athens of the North.

University of Oxford university in Oxford, United Kingdom

The University of Oxford is a collegiate research university in Oxford, England. There is evidence of teaching as early as 1096, making it the oldest university in the English-speaking world and the world's second-oldest university in continuous operation after the University of Bologna. It grew rapidly from 1167 when Henry II banned English students from attending the University of Paris. After disputes between students and Oxford townsfolk in 1209, some academics fled north-east to Cambridge where they established what became the University of Cambridge. The two 'ancient universities' are frequently jointly called 'Oxbridge'. The history and influence of the University of Oxford has made it one of the most prestigious universities in the world.

United States

Meanwhile, in the US, the field of economic history has in recent decades been largely subsumed into other fields of economics and is seen as a form of applied economics. As a consequence, there are no specialist economic history graduate programs at any universities anywhere in the country. Economic history remains as a special field component of regular economics or history PhD programs in universities including at University of California, Berkeley, Harvard University, Northwestern University and Yale University.

University of California, Berkeley Public university in California, USA

The University of California, Berkeley is a public research university in Berkeley, California. It was founded in 1868 and serves as the flagship campus of the ten campuses of the University of California. Berkeley has since grown to instruct over 40,000 students in approximately 350 undergraduate and graduate degree programs covering numerous disciplines.

Harvard University Private research university in Cambridge, Massachusetts, United States

Harvard University is a private Ivy League research university in Cambridge, Massachusetts, with about 6,700 undergraduate students and about 13,100 postgraduate students. Established in 1636 and named for its first benefactor, clergyman John Harvard, Harvard is the United States' oldest institution of higher learning. Its history, influence, wealth, and academic reputation have made it one of the most prestigious universities in the world. It is cited as the world's top university by many publishers.

Northwestern University Private research university in Illinois, United States

Northwestern University (NU) is a private research university based in Evanston, Illinois, United States, with other campuses located in Chicago and Doha, Qatar, and academic programs and facilities in Miami, Florida; Washington, D.C.; and San Francisco, California. Along with its selective undergraduate programs, Northwestern is known for its Kellogg School of Management, Pritzker School of Law, Feinberg School of Medicine, Bienen School of Music, Medill School of Journalism, Media, Integrated Marketing Communications, and McCormick School of Engineering and Applied Science.

Economic history and economics

Yale University economist Irving Fisher wrote in 1933 on the relationship between economics and economic history in his "Debt-Deflation Theory of Great Depressions" (Econometrica, Vol. 1, No. 4: 337–38):

Yale University Private research university in New Haven, Connecticut, United States

Yale University is a private Ivy League research university in New Haven, Connecticut. Founded in 1701, it is the third-oldest institution of higher education in the United States and one of the nine Colonial Colleges chartered before the American Revolution.

Irving Fisher American economist

Irving Fisher was an American economist, statistician, inventor, and Progressive social campaigner. He was one of the earliest American neoclassical economists, though his later work on debt deflation has been embraced by the post-Keynesian school. Joseph Schumpeter described him as "the greatest economist the United States has ever produced", an assessment later repeated by James Tobin and Milton Friedman.

The study of dis-equilibrium may proceed in either of two ways. We may take as our unit for study an actual historical case of great dis-equilibrium, such as, say, the panic of 1873; or we may take as our unit for study any constituent tendency, such as, say, deflation, and discover its general laws, relations to, and combinations with, other tendencies. The former study revolves around events, or facts; the latter, around tendencies. The former is primarily economic history; the latter is primarily economic science. Both sorts of studies are proper and important. Each helps the other. The panic of 1873 can only be understood in light of the various tendencies involved—deflation and other; and deflation can only be understood in the light of various historical manifestations—1873 and other.

There is a school of thought among economic historians that splits economic history—the study of how economic phenomena evolved in the past—from historical economics—testing the generality of economic theory using historical episodes. US economic historian Charles P. Kindleberger explained this position in his 1990 book Historical Economics: Art or Science?. [5]

The new economic history, also known as cliometrics, refers to the systematic use of economic theory and/or econometric techniques to the study of economic history. The term cliometrics was originally coined by Jonathan R. T. Hughes and Stanley Reiter in 1960 and refers to Clio, who was the muse of history and heroic poetry in Greek mythology. Cliometricians argue their approach is necessary because the application of theory is crucial in writing solid economic history, while historians generally oppose this view warning against the risk of generating anachronisms. Early cliometrics was a type of counterfactual history. However, counterfactualism is no longer its distinctive feature. Some have argued that cliometrics had its heyday in the 1960s and 1970s and that it is now neglected by economists and historians. [6]

In recent decades economic historians, following Douglass North, have tended to move away from narrowly quantitative studies toward institutional, social, and cultural history affecting the evolution of economies. [7] [a 1] However, this trend has been criticized, most forcefully by Francesco Boldizzoni, as a form of economic imperialism "extending the neoclassical explanatory model to the realm of social relations." [8] Conversely, economists in other specializations have started to write on topics concerning economic history. [a 2]

Economic history and the history of capitalism

A new field calling itself the "History of Capitalism" has emerged in US history departments since about the year 2000. It includes many topics traditionally associated with the field of economic history, such as insurance, banking and regulation, the political dimension of business, and the impact of capitalism on the middle classes, the poor and women and minorities. The field utilizes the existing research of business history, but has sought to make it more relevant to the concerns of history departments in the United States, including by having limited or no discussion of individual business enterprises. [9] [10]

Nobel Memorial Prize-winning economic historians

Have a very healthy respect for the study of economic history, because that's the raw material out of which any of your conjectures or testings will come. – Paul Samuelson (2009) [11]

Notable economic historians

See also


  1. For example:
      Gregory Clark (2006), A Farewell to Alms: A Brief Economic History of the World, Description, contents Archived 2011-12-30 at the Wayback Machine , ch. 1 link, and Google preview.
       • E. Aerts and H. Van der Wee, 2002. "Economic History," International Encyclopedia of the Social & Behavioral Sciences pp. 4102–410. Abstract.
  2. For example: Carmen M. Reinhart and Kenneth S. Rogoff (2009), This Time Is Different: Eight Centuries of Financial Folly. Princeton. Description, ch. 1 ("Varieties of Crises and their Dates," pp. 3–20), and chapter-preview links.

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Douglass North American Economist

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Cliometrics, sometimes called new economic history, or econometric history, is the systematic application of economic theory, econometric techniques, and other formal or mathematical methods to the study of history. It is a quantitative approach to economic history. The term cliometrics comes from Clio, who was the muse of history, and was originally coined by the mathematical economist Stanley Reiter in 1960. There has been a revival in 'new economic history' since the late 1990s.

Lionel Robbins British economist

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George Stigler American economist

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Institutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behaviour. Its original focus lay in Thorstein Veblen's instinct-oriented dichotomy between technology on the one side and the "ceremonial" sphere of society on the other. Its name and core elements trace back to a 1919 American Economic Review article by Walton H. Hamilton. Institutional economics emphasizes a broader study of institutions and views markets as a result of the complex interaction of these various institutions. The earlier tradition continues today as a leading heterodox approach to economics.

Robert Fogel American economic historian

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Charles P. Kindleberger American economic historian

Charles Poor "Charlie" Kindleberger was an economic historian and author of over 30 books. His 1978 book Manias, Panics, and Crashes, about speculative stock market bubbles, was reprinted in 2000 after the dot-com bubble. He is well known for hegemonic stability theory. He has been referred to as "the master of the genre" on financial crisis by The Economist.

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Stanley Lewis Engerman is an economist and economic historian at the University of Rochester. He received his Ph.D. in economics in 1962 from Johns Hopkins University. Engerman is known for his quantitative historical work along with Nobel Prize–winning economist Robert Fogel. His first major book, co-authored with Robert Fogel in 1974, was Time on the Cross: The Economics of American Negro Slavery. This significant work, winner of the Bancroft Prize in American history, challenged readers to think critically about the economics of slavery. Engerman has also published over 100 articles and has authored, co-authored or edited 16 book-length studies.

Deirdre McCloskey American economist (born 1942)

Deirdre Nansen McCloskey, is the Distinguished Professor of Economics, History, English, and Communication at the University of Illinois at Chicago (UIC). She is also adjunct professor of Philosophy and Classics there, and for five years was a visiting Professor of philosophy at Erasmus University, Rotterdam. Since October 2007 she has received six honorary doctorates. In 2013, she received the Julian L. Simon Memorial Award from the Competitive Enterprise Institute for her work examining factors in history that led to advancement in human achievement and prosperity. Her main research interests include the origins of the modern world, the misuse of statistical significance in economics and other sciences, and the study of capitalism, among many others.

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Cormac Ó Gráda is an Irish economic historian and professor emeritus of economics at University College Dublin. His research has focused on the economic history of Ireland, Irish demographic changes, the Great Irish Famine, and the history of the Jews in Ireland.

<i>Cliometrica</i> journal

Cliometrica is an academic journal about economic history. It follows the quantitative or formal approaches that have been called cliometrics or the new economic history, applied to any place and time. These formal approaches apply mathematical economic theory, model building, and statistical estimation.

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The European Historical Economics Society (EHES) is Europe's leading research organization and learned society dedicated to the study of economic history. Founded in 1991, the EHES supports academic research within the discipline of economic history; organizes an annual conference; publishes regular working papers; and provides resources for early- and mid-career scholars. The EHES promotes "the advancement of education in European economic history through the study of European economies and economic history." The current president of the EHES is Pierre-Cyrille Hautcœur, a French economist and professor of economics at the Paris School of Economics.

The Faculty of Economics is one of the constituent departments of the University of Cambridge. It is composed of five research groups, in macroeconomics, microeconomic theory, economic history, econometrics, and empirical microeconomics. It is located in the Sidgwick Site in Cambridge, has been host to many distinguished economists, and is regarded as the birthplace of macro-economics. 19 students or members of the faculty have won the Nobel Memorial Prize in Economic Sciences.


  1. See, for example, "Cliometrics" by Robert Whaples in S. Durlauf and L. Blume (eds.), The New Palgrave Dictionary of Economics , 2nd ed. (2008). Abstract
  2. Berg, Maxine L. (2004) ‘Knowles , Lilian Charlotte Anne (1870–1926)’, Oxford Dictionary of National Biography, Oxford University Press, accessed 6 Feb 2015
  3. Berg, M. (1992). The first women economic historians. The Economic History Review, 45(2), 308–329.
  4. Robert Forster, "Achievements of the Annales school." Journal of Economic History 38.01 (1978): 58–76. in JSTOR
  5. Charles P. Kindleberger (1990), Historical Economics: Art or Science?, University of California Press, Berkeley
  6. Whaples, Robert (2010). "Is Economic History a Neglected Field of Study?". Historically Speaking. 11 (2): 17–20 & 20–27 (responses). doi:10.1353/hsp.0.0109.
  7. Douglass C. North (1965). "The State of Economic History," American Economic Review, 55(1/2) pp. 86–91.
    • _____ (1994)."Economic Performance through Time," American Economic Review, 84(3), pp. 359–68. Also published as Nobel Prize Lecture.
  8. Boldizzoni, Francesco (2011). The Poverty of Clio: Resurrecting Economic History. Princeton University Press. p. 18. ISBN   9780691144009.
  9. See Jennifer Schuessler "In History Departments, It’s Up With Capitalism" New York Times April 6, 2013
  10. Lou Galambos, "Is This a Decisive Moment for the History of Business, Economic History, and the History Of Capitalism? Essays in Economic & Business History (2014) v. 32 pp. 1–18 online
  11. Clarke, Conor (June 18, 2009). "An Interview With Paul Samuelson, Part Two". The Atlantic. Retrieved November 26, 2011.

Further reading