Towards_a_factor_proportions_approach_to

Towards_a_factor_proportions_approach_to - TOWARDS A FACTOR...

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TOWARDS A FACTOR PROPORTIONS APPROACH TO ECONOMIC HISTORY: Population, Precious Metals and Prices from the Black Death to the Price Revolution Ronald Findlay Columbia University Mats Lundahl Stockholm School of Economics
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1 TOWARDS A FACTOR PROPORTIONS APPROACH TO ECONOMIC HISTORY: Population, Precious Metals and Prices from the Black Death to the Price Revolution * In the history of economic doctrine the name of Bertil Ohlin is inseparable from that of Eli Heckscher. The origin of the famous Heckscher-Ohlin theorem is the seminal article by Heckscher (1919) in the special 1919 David Davidson Festschrift issue of Ekonomisk Tidskrift, later developed by Ohlin in his doctoral dissertation (1924) and his monumental Interregional and International Trade (1933). Together, these three works established the factor proportions approach to international trade. Heckscher, History and Theory When it came to economic history, Ohlin and Heckscher differed completely. There are historical examples in both Handelns teori and Interregional and International Trade, but Ohlin was mainly concerned with theory and contemporary economic problems in his work. Heckscher was different. In spite of his original contributions to trade theory and his numerous pieces on the empirical economic problems of his day he was first and foremost an economic historian – ‘the sole creator of economic history in Sweden as an institutionalized field’ (Henriksson, 1991:142) – with such works as Mercantilism (1931a) and a four-volume (uncompleted) economic history of Sweden from the early sixteenth century to 1815 (1935- 49) to his credit. It was the writing of the latter that he conceived of as his ‘real task’ (Henriksson, 1991:148). Even so, it would be unfair not to conclude that Heckscher had one foot in history and another in economic theory. What is more, he was a pioneer when it came to linking the two. Heckscher dealt with the principles of connection between economic theory and economic history on at least nine occasions: 1904, 1920, 1922, 1929, 1930 (1933, 1936), 1937 (1944), 1942, 1947 and 1951. The main credo was laid down already in the first of these (1904), when the inductive method was rejected and the use of deductive economic theory was (implicitly) held out as the method to be applied in the gathering and interpretation of historical facts. This * We are indebted to Rolf Henriksson for letting us dip into his immense knowledge of Eli Heckscher’s ideas and to André Burgstaller, Stan Engerman, Duncan Foley, Paul Krugman, David Laidler, Lars Magnusson and Alan
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2 part of Heckscher’s research program was to stay with him for the rest of his life. Both the early 1904 article and his subsequent publications on method foreshadow the development of the modern analytical approach by the New Economic History movement that began in the late 1950s. This is true not least of his 1920 article and 1922 book chapter (which overlap to some extent). The latter headed a volume intended to demonstrate the connection between the study of economics and of history, the importance of knowledge of general economic
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