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General course motivation
We apparently live in economic turbulent times: The COVID-19 pandemic crushes the economy; the rise of China fosters deindustrialization in developed countries; the financial crisis in 2008 is still prolonging and visible in ongoing unconventional monetary policy measures; and technological change fosters the skill-premium and somewhat translates into radical political movements. However, these present-day challenges are not new: The Spanish flu in 1918/1919 provides lessons on the economic consequences of pandemics, the Great Depression in the early 1930s show some parallels to the crisis in 2008 but led to different policy measures; and technological change are shaping the world at least since the Industrial Revolution. The lecture “Economic History – From the Stone Age to the Euro” aims at deepening our understanding of past economic shocks and looks at long-run economic development by combining stylized facts, theoretical concepts and empirical findings. We will classify current events, link it to similar occurrences in the past and discuss how unique present-day obstacles are in a historical context. We look at economic shocks and their respective policy measures, zoom into the situation in Central and Eastern Europe – and into the Czech Lands in particular – and ask whether economic history may help to achieve appropriate policy measures for challenges in the present day. The lecture follows two approaches to learn more about economics in general and economic history in particular. On the one hand, a long-term perspective on the evolution of socio-economic figures can help to understand changes and obstacles today. On the other hand, history provides so-called quasi-experimental shocks to test theoretical concepts empirically. Both approaches of doing economic history deepen our understanding of economics. Thereby, the lecture bases on a broader understanding of economics. Despite classical economic measures like GDP, inflation or population growth, we will also discuss so-called soft economic variables such as norms, culture, trust and social capital. These soft economic variables are important drivers of economic growth, cooperation and economic success. Poslední úprava: Kellnerová Eva, Mgr. (16.09.2020)
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Course outline This course provides an overview of economic history and the long-run development of socio-economic figures. The course mainly deals with the situation in the Western hemisphere (i.e., Europe and its Spinoffs) and covers topics of Central and Eastern Europe as well. After the introduction and a non-technical overview of basic empirical methods in economic history, the course is divided into three blocs: (1) early development; (2) interwar period; and (3) the period after World War Two (WWII). Bloc No. 1 on early development: The first bloc starts with the question why some regions in the world start to become so much richer than other parts of the world. In ancient times, the Neolithic revolution and early trade networks, i.e., in ancient Greece or in the Roman Empire, are key to explain the increase in the standard of living. Thereafter, we focus on the origin of the economic success of Western Europe starting in the medieval period. We will discuss the early fertility transition that caused the so-called “Little Divergence” and the Industrial Revolution starting in the UK around 1780 and spreads to Continental Europe in the following decades. The first bloc also covers so-called soft economic variables like culture and social norms that explain long-run economic outcomes. We will discuss how the natural environment and long-gone historical or institutional legacies are shaping trust and norms until today. Bloc No. 2 on the interwar period: The course continuous with the period between World War I and World War II. We look whether the Spanish Flu after WWI spreads with similar patterns as COVID-19 and discuss policy responses. We discuss the economic effects of World War I, the resulting hyperinflations and their ends in Central and Eastern Europe. We continue with the economic downturn during the Great Depression, analyze differences in the USA and Europe and discuss potential lessons that were somewhat adapted after the financial crisis in 2008. We also discuss the economic situation and the temporal economic success of totalitarian regimes in Germany and the USSR. Bloc No. 3 on the period after WWII: The third bloc investigates the economic development after World War II. The division of Europe into an Eastern and Western bloc provides quasi-experimental settings to study regional economic growth and convergence. We discuss the long-run effects of regional economic growth due to the liberation and zoning of Europe after World War II and explore the long-run economic and political outcomes of ethnic cleansing in Poland and Czechoslovakia. We analyze the economic effects of trade and monetary integration within the Western Bloc (e.g., GATT/WTO, Bretton Woods/Euro) and compare it to the situation in COMECON countries in Eastern Europe. Lastly, we discuss economic growth after World War II, i.e. the economic miracle in the East and West until the mid-1970s and the economic transition after 1990 by zooming into East Germany (the former GDR) and into the situation in CEE countries. Poslední úprava: Kellnerová Eva, Mgr. (16.09.2020)
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Workload The following workload will apply: (1) Lectures and paper seminars (incl. final exam) 51h 1.7 ETCS (2) Paper assignment #1 (Executive summary & presentation) 24h 0.8 ETCS (3) Paper assignment #2 (Executive summary & presentation) 24h 0.8 ETCS (4) Reading the executive summaries 12h 0.4 ETCS (5) Self-study for final exam 69h 2.3 ETCS Total 180h 6.0 ETCS
(1) Lectures: Students are expected to attend all the classes. In the first two weeks, the instructor provides an overview of the lecture and introduces basic concepts of empirical research, which help to understand the paper assignments. After the third week, the course is divided into a lecture part (1.5 hours) and a paper seminar part (1.5 hours) each week. The lectures will introduce a specific era and/or topic by combining stylized facts, theoretical concepts and empirical findings. In the paper seminar, students will present their paper assignments and discuss the results. (2) Paper assignment: Students select two research papers and prepare an executive summary and a presentation. The allocation of research papers will take place in the 2nd week of the course. The papers are mainly empirical studies. The assignments are either individual tasks or done in a small group, depending on the class size. The executive summary should be a short and non-technical description of the main findings and contribution of the paper and does not exceed 4 pages. The presentation takes place in front of the class and last around 20 minutes followed by an open discussion. Students submit their executive summary to the instructor and teaching assistant 2 days before the paper seminar. The executive summaries are then immediately accessible to the entire class. All students are expected to read the executive summaries before the presentation. Notes: The level of difficulty of the empirical research papers vary. The instructor and teaching assistant will help students without a background in econometrics/statistics how to interpret the results of the research paper. The level of difficulty of each paper is indicated in the course schedule below. Grading Grading bases on the following components: (1) Paper assignment #1 (executive summary & presentation) 20 % (2) Paper assignment #2 (executive summary & presentation) 20 % (3) Non-technical written Final exam 60 % The final exam will take place during the normal exam weeks and will cover the content of all lectures and the content of the executive summaries/presentations of the paper assignments. The exam will be a written non-technical examination. Examples of exam questions are provided in the last week of the course. Poslední úprava: Kellnerová Eva, Mgr. (16.09.2020)
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Course material Course material is accessible on the course webpage. Research papers for the paper assignments are available on the course webpage as well. Poslední úprava: Kellnerová Eva, Mgr. (16.09.2020)
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Detailed course schedule The course takes places during the 12 weeks of the Fall Semester. After the 3rd week, the course is divided into a lecture (1.5h/week) and a paper seminar part (1.5h/week). The course will follow the following schedule: Week #1: Overview of the course ü Introduction, outline of the course and course requirements ü Short presentation of research papers for paper assignments ü Allocation procedure of paper assignments Week #2: (Non-technical) Introduction to quantitative methods in economic history ü Allocation of research paper assignments ü Quantitative methods in economic history: DiD, IV, (fuzzy) RDD, SCM Week #3: From the Stone Age to early development ü Growth since the year AD 1: From stagnation to the “sustainable” economic growth ü The Malthusian poverty trap ü The four horsemen of riches ü The emergence of the European Marriage Pattern (EMP) and the fertility transition Paper Seminar on “Stone Age economics”: (A1) Matranga, A. (2019): “The Ant and the Grasshopper: Seasonality and the Invention of Agriculture”, Working Paper Chapman University. (Level: medium) (A2) Izdebski, A., Słoczyński, T., Bonnier, A., Koloch, G., and K. Kouli (2020): “Landscape Change and Trade in Ancient Greece: Evidence from Pollen Data”, The Economic Journal (forthcoming). (Level: easy) (A3) Barjamovic, G., Chaney, T., Coşar, K., and A. Hortaçsu (2019): “Trade, Merchants, and the Lost Cities of the Bronze Age”, The Quarterly Journal of Economics, 134 (3), 1455–1503. (Level: difficult) Week #4: The Industrial Revolution ü Theories on the Industrial Revolution: “Enlightenment” versus relative factor prices ü The spread of the industrial revolution: The cases of Germany, France and Russia Paper Seminar on early development before the IR: (B1) Ogilvie, S. (2014): “The Economics of Guilds”, Journal of Economic Perspectives, 28(4), 169–192. (Level: easy) (B2) Dittmar, J. E. (2011): “Information Technology and Economic Change: The Impact of the Printing Press”, The Quarterly Journal of Economics, 126(3), 1133–1172. (Level: medium-difficult) (B3) Derenoncourt, E. (2019): “Atlantic Slavery's Impact on European and British Economic Development”, Working Paper UC Berkeley. (Level: medium) Week #5: Cultural Economics ü Cultural economics: How social trust relates to economic prosperity – An example ü Stylized facts about cultural differences in the European Union ü The origin of cultural differences: Nature, economic conditions and institutions Paper Seminar on the Industrial Revolution: (C1) Markevich, A., and E. Zhuravskaya (2018): “The Economic Effects of the Abolition of Serfdom: Evidence from the Russian Empire”, American Economic Review, 108(4-5), 1074–1117. (Level: medium-difficult) (C2) Heblich, S., and A. Trew (2019): “Banking and Industrialization”, Journal of the European Economic Association 17(6), 1753–1796. (Level: medium-difficult) (C3) de Pleijt, A., Nuvolari, A., and J. Weisdorf (2020): “Human Capital Formation During the First Industrial Revolution: Evidence from the use of Steam Engines”, Journal of the European Economic Association, 18(2), 829–889. (Level: medium) Week #6: The economics of wars and its consequences ü Economic disintegration, coordination failure and the role of new borders ü War debt, reparation and four big hyperinflations in CEE and Germany ü The end of hyperinflations: Fundamentals versus expectations Paper Seminar on the shadow of wars: (D1) Juhász, R. (2018): “Temporary Protection and Technology Adoption: Evidence from the Napoleonic Blockade”, American Economic Review, 108(11), 3339–3376. (Level: medium-difficult) (D2) Correia, S., Luck, S., and E. Verner (2020): “Pandemics Depress the Economy, Public Health Interventions Do Not: Evidence from the 1918 Flu”, Working Paper MIT. (Level: medium) (D3) Becker, S. O., Boeckh, K., Hainz, C., and L. Woessmann (2016): “The Empire Is Dead, Long Live the Empire! Long-Run Persistence of Trust and Corruption in the Bureaucracy”, Economic Journal 126(590), 40–74. (Level: medium) Week #7: The Great Depression in the USA and Europe ü The Great Depression in the USA: From the roaring twenties to the economic downturn ü Recovery in the US: Fundamentals versus expectations ü Europe: Similar but different ü Golden fetters: The role of the Gold Standard for European recovery Paper Seminar on the Great Depression: (E1) Lee, J., and F. Mezzanotti (2017): “Bank Distress and Manufacturing: Evidence from the Great Depression”, Working Paper, Northwestern University. (Level: medium-difficult) (E2) Hausman, J. K., Rhode, P. W., and J. F. Wieland (2019): “Recovery from the Great Depression: The Farm Channel in Spring 1933”, American Economic Review, 109(2), 427–472. (Level: medium-difficult) (E3) Doerr, S., Gissler, S., Peydró, J.L., and H.-J. Voth (2020): “From Finance to Fascism, Working Paper”, University of Zurich. (Level: medium-difficult) Week #8: The economics of totalitarian regimes – Nazi Germany and the USSR ü Nazi Germany: “Keynesian” economic policy or other drivers of economic success ü USSR: The great experiment ü Partial success and failure of planning economies Paper Seminar on totalitarian regimes: (F1) Voigtländer, N., and H-J. Voth (2012): “Persecution Perpetuated: The Medieval Origins of Anti-Semitic Violence in Nazi Germany”, The Quarterly Journal of Economics, 127, 1339–1392. (Level: medium) (F2) Mohr, C. (2019): “Carrots and Sticks: Targeting the Opposition in an Autocratic Regime”, Working Paper, LMU Munich. (Level: medium-difficult) (F3) Suesse, M. (2018): “Breaking the Unbreakable Union: Nationalism, Disintegration and the Soviet Economic Collapse”, The Economic Journal, 128 (615), 2933–2967. (Level: medium) Week #9: Regional economics in post-WWII – Lessons from exogenous shocks ü Liberation and occupation of Europe after WWII – Experimental settings for quantitative economic history ü Regional economics: Nature versus man-made regional economic inequality ü Examples: Liberation and occupation of Europe by the Allies, market access ü Political economy: Political extremism Paper Seminar on ethnic cleansing in CEE: (G1) Testa, P. A. (2020), “The Economic Legacy of Expulsion: Lessons from Postwar Czechoslovakia”, The Economic Journal (forthcoming). (Level: medium) (G2) Becker, S. O., Grosfeld, I., Grosjean, P., Voigtländer, N., and E. Zhuravskaya (2020): “Forced Migration and Human Capital: Evidence from post-WWII Population Transfers”, American Economic Review 110(5), 1430–1463. (Level: medium-difficult) (G3) Grossmann, J., Jurajda, S., and F. Roesel (2020): “Forced Migration, Stayers, and New Societies: Evidence from Ethnic Cleansing in Czechoslovakia”, Working Paper/mimeo, Dresden/Prague. (Level: medium) Week #10: Economic growth and bloc integration in the East and West ü Economic miracle in the East and West ü Bloc integration in the West: From EG-6 to the European Union ü Bloc integration in the East: COMECON and the lack of price signals Paper Seminar on post-WWII economic growth: (H1) Ochsner, C. (2020): “Dismantled once, Diverged forever? A Quasi-natural Experiment of Red Army’s Misdeeds in post-WWII Europe”, ifo Working Paper No. 240 (revised). (Level: medium) (H2) Bianchi, N., and M. Giorcelli (2018): “Reconstruction Aid, Public Infrastructure, and Economic Development: The Case of the Marshall Plan in Italy”, Working Paper, UCLA. (Level: medium-difficult) (H3) Glitz, A., and E. Meyersson (2020): “Industrial Espionage and Productivity”, American Economic Review, 110 (4), 1055–1103. (Level: difficult) Week #11: Monetary integration – From Bretton Woods to the Euro ü Bretton Woods: From initial success to imbalances ü European monetary integration: From partial failures to the Euro ü The Euro in the long-run Paper Seminar on the economic transition after 1990: (I1) Abadie, A., Diamond, A., and J. Hainmueller (2015): “Comparative Politics and the Synthetic Control Method”, American Journal of Political Science, 59(2), 495–510. (Level: medium) (I2) Fritsch, M., Sorgner, A., Wyrwich, M., and E. Zazdravnykh (2019): “Historical Shocks and Persistence of Economic Activity: Evidence on Self-employment from a unique Natural Experiment”, Regional Science, 53(6), 790–802. (Level: medium) (I3) Novokmet, F. (2018): “The long-run Evolution of Inequality in the Czech Lands, 1898-2015”, World Inequality Database Working Paper 2018/5. (Level: easy) Week #12: Buffer, repetition and exam preparation ü Finish lectures ü Repetition of the course: Lectures and hints to paper assignments ü Exam preparation ü Feedback and Q&A Poslední úprava: Kellnerová Eva, Mgr. (16.09.2020)
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Prerequisites The course is constructed in way to attract students from different fields of study with heterogeneous backgrounds. Basic economic and econometric concepts in economic history are thus introduced in a non-technical fashion. The research papers for the paper assignments use empirical concepts of causal inferences following Angrist and Pischke (2010): Mostly Harmless Econometrics: An Empiricist’s Companion. The instructor will give a short and intuitive introduction to the main concepts in the 2nd week of the course. Poslední úprava: Kellnerová Eva, Mgr. (16.09.2020)
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