Study Guide for Test 1
Test #1 will be held in our regular classroom on Thursday, February 1. The test will cover the following
sections of the syllabus:
I. Introduction: Economic History, Cliometrics & the American Economy
Walton & Rockoff, Chap 1
Varian, Hal, “American Companies Show an Edge in Putting Information to Work,”
New York Times
, January 12, 2006.
Sokoloff, Kenneth L., and Stanley L. Engerman, “History Lessons: Institutions, Factor
Endowments, and Paths of Development in the New World,”
The Journal of Economic
, Vol. 14, No. 3, (Summer, 2000), pp. 217-232.
II. The Reunification Era: Southern Stagnation, Western Expansion & the Industrial Revolution (c. 1865-
Agriculture and the Farm Protest Movement
Walton & Rockoff, Chap 15
1. Describe the development of economic history as a field of study. Give some examples of early
scholars whose research combined elements of history and economics.
Karl Marx – “the history of society…is the history of class struggles”
Simon Kuznets – won Nobel Prize in Economics in 1921 for method for defining and measuring the
components of national income and product accounts
2. Why was Conrad and Meyer's 1958 publication considered a turning point in the study of
economic history? What topic is addressed in their paper? Why was their treatment of this topic
controversial, and how did their results differ from previous findings, including those of Phillips
(1929)? Explain the asset-pricing model and the historical data used by Conrad and Meyer to obtain
Disproved Phillips, who claimed that slaves were becoming increasingly unprofitable b/c the price of slaves
was rising while the price of cotton was stable. Their model showed that if the price of cotton was
stable and the price of slaves were rising, then the only reason for this to happen was if the
marginal product of a slave was also rising. Considered a turning point b/c it applied current
economic models to historical data to explain behavior.
Use asset-pricing model to estimate ROR on slaves, showed that P was rising due to increasing MP so
slaves were not becoming unprofitable, disproved U. Phillips, calculates ROR using yield, costs,
and risk, compares slavery’s ROR to alternative investments
3. What are the primary features of cliometrics? What is the focus of most cliometric research?
Cliometrics is the “new economic history” – uses scientific method/hypothesis testing
facts(data) to explicit theory(model);
Expanded range of topics; Focus is study and explanation of economic development( How to measure &
How to explain)
Uses scientific method, focus is study and explanation of economic development (measurement and
explaining), attempts to measure the overall well-being of the people in a society, are people better or
worse off than before?
4. Use the 5 propositions for economic reasoning from Economic Insight 1.1 to discuss/describe the