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Tag Archives: Economic History

Paasche Says Progress

When economists debate economic stagnation, I routinely recall my undergraduate macroeconomics textbook, Dornbusch and Fischer’s Macroeconomics (5th edition). In Appendix 2-1, these famed economists introduce readers to two main contrasting price indices: the Laspeyres, or base-weighted, and the Paasche, or current-weighted: While this may seem technical, much is at stake. Suppose a stagnationist belittles the economic importance of the internet. “So we get some...

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Fantastic Neoliberal Policies and Where to Find Them

Perhaps the use of the word “neoliberalism” should be taxed, so that its use may become more parsimonious and more thoughtful. In a 2009 paper, Taylor C. Boas and Jordan Gans-Mors highlighted that the word (which now basically an “anti-liberal slogan”) is very frequently used and yet very rarely defined. Historians of ideas may use it to refer to the German Ordo-liberals and some of their contemporaries (like Walter Lippman), who endeavoured to adapt the classical...

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When the shoe was on the other foot (A suggestion for Chinese trade negotiators)

US trade negotiators complain that China is stealing or borrowing Western inventions without sufficient compensation. How might the Chinese negotiators respond? Here’s my suggestion. The Chinese might want to ask how much China has been compensated for its inventions. How much did the West pay China for the secret to making gunpowder? How much did the West pay China for the compass? How much did the West pay for the secret to making silk? How much did the West pay for...

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What’s Historic?

I regularly read Wikipedia’s “Historical Events on This Day.”  It’s fun, and I learn new history.  But I’m still puzzled by the selection criteria.  Wikipedia casually blends three very different kinds of events: 1. Critical political, diplomatic, and military events that plausibly changed the lives of millions or even billions of people. 2. Terrorist attacks. 3. Natural disasters and major accidents. “Historical events” for February 11, for example, include crucial...

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A brief intellectual biography

But a very long blog post. I hope this will be of some value to younger researchers. In the summer of 1986, my personal life had hit rock bottom and I decided to immerse myself in economic research, as a form of therapy.  That year I came up with most of the ideas that I’ve used throughout my career.  Here’s how I did it. 1. As a teenager, I had greatly enjoyed reading Friedman and Schwartz’s Monetary History of the United States, and this led me to spend a lot of...

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Why I’m Optimistic About Venezuela

If there were mass protests against the government of Saudi Arabia, and the U.S. decided to recognize the opposition as the legitimate government of Saudi, I would expect disaster.  Why?  Because… 1. Supporters of the Saudi monarchy remain powerful and confident enough to aggressively fight back, plunging the country into hellish civil war. 2. If the monarchy loses, its most likely replacement will be a revolutionary Islamist dictatorship. 3. Even if the new Saudi...

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Thanksgiving in Little Hill Village

The residents of Little Hill Village were suffering from hunger. The problem was easy to diagnose—they had relied on a communal system, which stunted incentives and led to too little food being produced. Then in late November, a sort of miracle happened. The villagers decided to scrap the communal system of agriculture and adopt a system of private property. Food production increased rapidly. In retrospect, this can be seen as the beginning of an astounding economic...

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The Underbelly of State Capacity

Here are some highlights from Johnson and Koyama's "States and Economic Growth: Capacity and Constraints" (Explorations in Economic History, 2017).  Remember: Since this piece is a literature review, you should continue to take my critical remarks as a criticism of the literature, not as a criticism of my esteemed colleagues.1. How do researchers actually measure state capacity?  One of the most common...

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FDR and George Warren

I am currently about one half way through an excellent book entitled "American Default", by Sebastian Edwards. The primary focus of the book is the abrogation of the gold clause in debt contracts, which (I believe) is the only time the US federal government actually defaulted on its debt. But the book also provides a fascinating narrative of FDR's decision to devalue the dollar in 1933-34. Here's what I...

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