Economics and Economic History

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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?.[6] 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

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