Magazine article The Wilson Quarterly

What Economists Can Learn from History

Magazine article The Wilson Quarterly

What Economists Can Learn from History

Article excerpt

THE SOURCE: "Economics, History, and Causation" by Randall Morek and Bernard Yeung, in Business History Review, Spring 2011.

CONTEMPORARY ECONOMICS IS totally in the thrall of advanced mathematical techniques. Economists should break the spell, argue Randall Morel a professor of finance at the University of Alberta School of Business, and Bernard Yeung, a professor of economies and management at the National University of Singapore Business School. In particular, economists should mine the field of history, both for the information it can provide and for the methods its practitioners employ, Morck and Yeung say.

Economists, the authors complain, are overly focused on making each individual paper internally consistent and not enough on fitting their ideas within the broader context of their field. Even papers in the same issue of a given journal can be premised on conflicting assumptions. Historians, in contrast, are interested in developing "external consistency." To establish its validity, "a good historical narrative must connect the 'dots' of all relevant historical events with causal links."

An example of the sort of historically rooted economic analysis Morck and Yeung want to see more of is Charles Kindleberger's 1978 book Manias, Panics, and Crashes. …

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