Lecture4 - American Economic History ECN111B The South as a...

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http://ucdavis.econclasses.org/ECN111B glbrinkley@ucdavis.edu American Economic History – ECN111B The South as a Colonial Economy Lecture 4
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New Explanations of Postbellum South n Theories need to explain n Income pattern n Spatial pattern n Racial pattern n New theories are: n Demand side explanations n Gavin Wright n Supply side explanations n Emancipation n Health decline
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Gavin Wright’s Old South New South n The South has always been economically separate from the North. n The South has an extractive economy. n Mining n Agricultural products n Manufacturing small part of Southern economy n Extractive economies have low value added. n Generally poor n The South’s major crop was cotton. n Cotton comprised half of entire Southern GDP. n The “Fortunes of the South was the Fortunes of Cotton.”
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Cotton Demand Shifts n In the antebellum period, world demand for cotton increased by 5% per year. n In the postbellum period, world demand for cotton increased by 1% per year. n Elasticity of cotton demand was 1. n Total cotton revenue was constant. n Population increased in the postbellum period n Per capita income decreased. n Postbellum agriculture shifts into cotton out of other crops. n Agricultural revenue decreased. n TR 1870 = P c Q c + P oc Q oc n ? TR 1871 = P c Q c +?P oc Q oc
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Price Changes n Southern recovery due to: n World War I n Great Depression n World War II n Government spending in South n World War I made cotton prices higher. n Large migration out of the South occurred in 1918-1920.
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Regression Analysis n Regression analysis is an estimate of the linear relationship between data variables. n Estimate the relationship between Education and Income n Pick many people and ask no. years of school and how much they make. n
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This note was uploaded on 05/15/2010 for the course ECN 60112 taught by Professor Janinewilson during the Fall '10 term at UC Davis.

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Lecture4 - American Economic History ECN111B The South as a...

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