Jan 12 - Econ Jan 12 2009 Introduction Economic History...

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Econ- Jan. 12, 2009 I. The Development of Economic History as a Field of Study “Without theory history becomes undisciplined and disorganized, shaping its material by whim, or purely by rhetoric. Without history, theory loses any grounding in the actual course of human events.” William Parker, 1986 A. A relatively new field of study B. 1958: The “Birth” of Economic History (?) - A. Conrad and J. Meyer publish “The Economics of Slavery in the Antebellum South (see page 247- 248) - Estimates the profitability of slavery- this paper is different because of the methodology (below) - Methodology: calculates rate-of-return using yield, costs and risk- used asset- pricing model: theory of determination of asset prices. Now used to measure price of stocks and bonds, but then measured price of - Compares slavery’s ROR to ROR on alternative investments - Ulrich Phillips: considered the profitability of owning slaves using data f the 1840’s and 1850’s. He didn’t really use models but he noticed that 1840’s and 50’s the price of slaves was going up, and also that price of stayed fairly stable. So he concluded that the profitability of slaves was decreasing because they were expensive while cotton was constant. - The problem with his conclusion, is that if he is right the slave owners w be acting irrationally and based on the truest definition of economics it doesn’t make sense. - Conrad and Meyer used the same data from the time period and used it estimate and asset pricing model. Found that Price of slave= 30 t=0 Σ (Pcotton x MPslave- maintenance cost)
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Jan 12 - Econ Jan 12 2009 Introduction Economic History...

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