Economics 182A: US Economic History Study Notes

Course Overview

  • Course Title: Economics 182A US Economic History Up to and Including the Civil War

  • Instructor: Dora Costa
    Email: costa@econ.ucla.edu

  • Teaching Assistants:

    • Chloe Dai
      Email: daimu01@g.ucla.edu

    • Gladys Teng
      Email: gladyst@g.ucla.edu

  • Agenda: Overview of the course, administrative details, foundational concepts, and grading policies.

Importance of Economic History

  • Economic history helps understand various factors influencing economies:

    • Persistence of Institutions: Institutions influence economic outcomes and persist over time, shaped by cultural and historical contexts.

    • Historical Cohorts: The impact of different generations and groups in economic development.

  • History as a Natural Experiment:

    • Investigates how varying institutional contexts can lead to different economic outcomes.

    • Raises questions about change in institutions and lessons learned regarding economic development.

  • Success Story of the US: The US is often cited as a successful case in economic history due to its unique institutional framework.

Difference Between Economic History and General History

  • Cliometrics:

    • Definition: A fusion of economic theory and quantitative data analyses in studying historical events.

    • Focuses on empirical questions and the incorporation of numbers into historical narratives to analyze economic conditions.

Pioneers of the New Economic History

  • Notable Contributions:

    • 1993 Nobel Prize: Awarded to Robert Fogel and Douglass North for their transformative work in economic history.

    • Cliometric Revolution: Inaugurated a methodological shift in historical research, merging economics with historical data.

    • Originators: Began at Purdue University with figures like Stanley Reiter, Lance Davis, and Jonathan Hughes.

Recent Advances in Economic History

  • 2023 Nobel Prize: Awarded to Claudia Goldin for her seminal work in economic history.

  • Looking Ahead: 2024 Nobel Prize potential winners include Daron Acemoglu, Simon Johnson, and James Robinson, indicating ongoing research focus in historical economics.

Key Topics to be Covered

  • Analysis of economic growth trends:

    • Trends in the US economy and how they compare with international counterparts.

  • Core Metrics:

    • Real vs Nominal Values: Understanding economic indicators through their real (inflation-adjusted) and nominal (current) perspectives.

    • Gross Domestic Product (GDP): Metrics for assessing economic performance, including GDP per capita and growth rates.

    • Purchasing Power Parity (PPP): Method of comparing different countries' currencies through a "basket of goods" approach.

GDP per Capita Analysis

  • Historical Trends: GDP per capita measured since early European settlement to present.

  • Illustrative Graphs:

    • Include countries like the United States, France, United Kingdom, and Spain across centuries, identifying trends.

  • Colonial Performance: Not all colonies performed well economically. A closer look at GDP per capita shows relative success/failure of various nations over time.

Sources of US Growth

  • Key Factors of Economic Growth:

    • Population: Increase driven by natural growth and immigration.

    • Land Availability: Expansion into new territories and homesteading.

    • Capital Accumulation: Investments in infrastructure and technology development.

    • Technological Advancements: Innovations that improve productivity and efficiency.

    • Institutional Framework: Quality of governance and legal protections that encourage investment and growth.

Institutional Analysis in Economic History

  • Comparative Success of Regions:

    • Reasons behind the successes and failures of countries (e.g., US vs Latin America, UK vs Spain).

    • The impact of historical colonization on institutional development and long-term economic outcomes.

    • Exploration into the contrasting pathways of North and South Korea's economic fortunes.

Economic Institutions and Their Impact

  • Colonial Influence on Institutions: The type of institutions formed during the colonial period can have long-lasting effects on societal and economic outcomes.

Navigating Economic History: Trade and Innovation

  • Trade Dynamics Post-Revolution:

    • The US struggled economically after independence due to disruption of British trade routes.

    • Examined how the US responded to these challenges, initially focusing on whaling and related industries.

The First Industrial Revolution

  • Description and Characteristics:

    • Definition: A shift to task specialization within manufacturing, replacing skilled artisans with unskilled labor and machinery.

    • Origins: Primarily initiated in England before its progression to the US.

Manufacturing Hubs and Growth

  • Strategic Location of New England:

    • Importance of tariffs supporting fledgling industries (infant industries).

    • Learning by Doing: Emphasis on gaining experience to improve manufacturing processes, especially in textiles.

    • Examination of critical case studies (e.g., British manufacturing techniques and Springfield Armory).

Financial Institutions in Historical Context

  • Banking Landscape Overview:

    • Lack of central bank, each bank issuing its own notes leading to considerable variability in stability and trust.

    • Discussion of bank charters, asset holdings, and deposit insurance reflecting the institutional landscape of the era.

    • Poverty of domestic funding reliant on British investors.

Historical Patterns in Land Use and Migration

  • Westward Expansion:

    • Federal land sales and its implications on the agricultural landscape of the US.

    • The shift of workforce from agriculture from 77% in 1800 to 53% in 1860.

    • Examination of land distribution practices (e.g., Cherokee Land Lottery).

Labor Trends in Economic History

  • Demographics Impacting Labor Supply:

    • Growth driven by natural population increases alongside immigration from Europe.

    • Historical practices including indentured servitude and slavery played significant roles.

Slavery as a Topic of Study

  • Economic Significance:

    • Slavery as a critical source of income and wealth in the Southern US before the Civil War.

    • Studied in context of the Economic History narrative (e.g., role in causing the Civil War, lasting effects).

  • Key Questions:

    • Assessing slavery's efficiency and impact on economic growth.

    • Understanding plantation management and anti-slavery movements.

Civil War: Pivotal Event in Economic History

  • **Transformational Changes:

    • Shift towards industrialization in the North.

    • Decline of Southern agriculture and the rise of national government power.

    • Economic implications stemming from the war itself, including resource allocation and changes in monetary policy.

Consumer Price Index Trends

  • Presentation of Consumer Prices from 1774-2022.

    • Significant events correlated with price implications (e.g., Revolution, Civil War, WWII).

    • Analysis of inflationary trends vs price levels.

    • Reflecting public sentiment regarding inflation.

Methodology in Economic History

  • Analytical Framework:

    • Application of basic economic principles and models as essential tools for analysis.

    • Focus on business case studies and comparative analysis:

    • Before vs after events.

    • Inter-state differences based on varying regimes.

Course Requirements and Expectations

  • Success Factors: Attendance, participation in lab sessions, completion of problem sets, and performance on exams are crucial for success in this class.

Readings and Course Materials

  • Primary Texts: Atack and Passel’s "A New View of American History" and a course reader containing essential readings.

  • Reading assignments correlated with lecture materials.

Attendance and Group Projects

  • Lab Attendance: Limited to enrolled students, required for earning course credit.

  • Economics in Action Conference: Group projects presented at the conference must showcase collaborative research on chosen topics relevant to the course.

Assessment Structure

  • Grading Components:

    • Problem Sets: 20%

    • Exams: 60% (Midterm: 20%, Final: 40%)

    • Group Projects: 20%

    • Additional extra credit opportunities for participation in discussions.

Use of AI in Coursework

  • Caution advised with AI use:

    • High potential for plagiarism.

    • AI's ineffectiveness in economic reasoning and evidence assessment may result in strict examination scrutiny.

    • Use AI for drafting essays but ensure thorough personal input for integrity in submissions.