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Economic history is the study of economies or economic phenomena in the past. Analysis in economic history is undertaken using a combination of historical methods, statistical methods, and by applying economic theory to historical situations and institutions. The topic includes business history, financial history and overlaps with areas of social history such as demographic history and labor history. Quantitative (econometric) economic history is also referred to as Cliometrics.
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.
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 Glasgow retain separate economic history departments and stand-alone undergraduate and graduate programmes in economic history. The LSE, Glasgow and the University of Oxford together train the vast majority of economic historians coming through the British higher education system.
In the US, economic history has for a long time been regarded as a form of applied economics. As a consequence, there are no specialist economic history graduate programs at any mainstream university anywhere in the country. Instead economic history is taught as a special field component of regular economics PhD programs in some places, including at University of California, Berkeley, Harvard University, Northwestern University and Yale University.
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.[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." Conversely, economists in other specializations have started to write on topics concerning economic history.[a 2]
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: 337–338): '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?. One of the professional societies for economic historians in Europe is also called the European Historical Economics Society to reflect this emphasis.
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.