COURSE OUTLINE AND READING LIST
FOR
AMERICAN ECONOMIC HISTORY
SPRING 2000
Prof. Hugh Rockoff
NJ Hall 102
Phone: 732‑7857
WWW.fas-econ.rutgers.edu/home/rockoff
Hours: wednesdays 3:30-5; mondays 9-11 or by
appointment
This course surveys the economic history of the
United States from the Revolution to the present day. The central purpose is to
show how economic analysis illuminates past trends and events; and how, at the
same time, an understanding of economic history illuminates current economic
problems.
Textbook
All students are expected to read the relevant
chapters of Gary Walton and Hugh Rockoff, History of the American Economy
(eighth edition) before class in order to gain an understanding of the basic
historical and economic issues.
Papers and Examinations
Twenty percent of your grade will be based on the
midterm exam and 40 percent on your final exam. These will be essay exams,
which ask you to summarize and critically evaluate material discussed in the
assigned readings and in class. The exams will cover broad and important
themes. But please realize that in a economic history course, unlike some other
economics courses, you will be expected to learn some facts -- you will have to
memorize them.
Approximately 30 percent of your grade will be
based on a research paper of approximately 25 pages due on friday, April 28.
During the first couple of weeks of the semester
it is your job to stop by my office to get acquainted and to begin discussing
your paper topic. A three-page abstract of the paper is due on Friday February
11. It is expected that the research paper will contribute to knowledge in
economic history by examining new evidence, or reexamining existing evidence.
Finding a good topic for your paper may be one of the hardest parts of the
course. Some suggestions on how to find a good topic are in the appendix at the
end of the syllabus.
The remaining 10 percent of your grade will be
based on class participation.
|
American Economic History The Semester at a Glance |
||
|
Week |
Date |
Topic |
|
1 |
1/19-21 |
Scope and Method |
|
2 |
1/26-28 |
Railroads |
|
3 |
2/2-4 |
Slavery |
|
4 |
2/9-11 |
Antebellum Banking |
|
5 |
2/16-18 |
Postbellum South (Abstract for Paper
is due -- statement of the idea, key sources) |
|
6 |
2/23-25 |
Postbellum Capital Markets |
|
7 |
3/1-3 |
Gold Standard |
|
8 |
3/8 |
Rise of the Modern Corporation |
|
“ |
3/10 |
Midterm Exam |
|
|
3/15-17 |
(Spring Break) |
|
9 |
3/22-24 |
World War I and the 1920s |
|
10 |
3/29-31 |
The Great Depression |
|
11 |
4/5-7 |
World War II |
|
12 |
4/19-21 |
Modern Labor Markets |
|
13 |
4/26 |
Growth of the Federal Government |
|
“ |
4/28 |
Convergence Among Regions and Nations (Paper
due) |
|
15 |
|
Final Exam by arrangement |
Readings
The readings for each week are divided into basic
and supplementary readings. The latter are intended for students who wish to
pursue a topic in greater depth, especially for students whose research paper
will be related to that topic.
Each unit will consist of a lecture and a class
discussion centered on the starred reading.
Copies of the basic journal articles are on
reserve in the Department library. Copies of the basic books are on reserve
in Alexander library.
1.
January 19,21
Scope and Methodology of Economic History
Basic Readings
Walton and Rockoff, History of
the American Economy, chapter 1.
*McCloskey, Donald N. (1976) "Does the Past
Have Useful Economics." Journal of Economic Literature 14: 434-61.
Rockoff, Hugh. "History and Economics."
in Engaging the Past, Eric H. Monkkonen, ed., (Durham: Duke University
Press, 1994), 48-76.
Supplementary
Readings
David, Paul A. "Clio and the Economics of
QWERTY." American Economic Review, Papers and Proceedings 75
(1985): 332-337.
Fogel, Robert W. "The Specification Problem
in Economic History." Journal of Economic History (September 1967):
283-308.
North, Douglass C. "Structure and
Performance: The Task of Economic History." Journal of Economic Literature 16 (1978): 963-78.
Redlich, Fritz. "'New' and Traditional
Approaches to Economic History and Their Interdependence." Journal of
Economic History 25 (December, 1965): 480-95.
2.
January 26-28
Railroads and the Growth of the American Economy
Basic Readings
Walton and Rockoff, History of the American
Economy, chapters 9, 16.
*Fogel, Robert W., Railroads and American
Economic Growth (Baltimore: The Johns Hopkins University Press, 1964), pp.
1-146.
Fogel, Robert W. "Notes on the Social Saving
Controversy." Journal Of Economic History 39 (March 1979): 1-54.
Lebergott, Stanley. "United States Transport
Advance and Externalities." Journal of Economic History 26
(December 1966): 437-61.
Supplementary Readings
Coatsworth, John H. "Indispensable Railroads
in a Backward Economy: The Case of Mexico." Journal of Economic Hisotry 39
(December 1979): 939-60.
David, Paul. "Transport Innovations and
Economic Growth: Professor Fogel On and Off the Rails." In Paul David
(ed.), Technical Choice, Innovation, and Economic Growth (New York:
Cambridge University Press, 1975), chapter 6.
Engerman, Stanley L. "Some Issues Relating
to Railroad Subsidies and the Evaluation of Land Grants." Journal of
Economic History 32 (June 1972): 443-63.
Fishlow, Albert. American Railroads and the
Transformation of the Antebellum Economy. Cambridge: Harvard University
Press, 1965.
W.W. Rostow. The Stages of Economic Growth: A
Non-Communist Manifesto. Cambridge: Cambridge University Press, 1960.
3.
February 2-4
Slavery
Basic Readings
Walton and Rockoff, History of
the American Economy, chapter 13.
Fogel, Robert W. and Stanley L. Engerman. Time
on the Cross: The Economics of American Negro Slavery. Two Volumes. Boston:
Little, Brown and Company, 1974, passim.
*Fogel, Robert W. and Stanley L. Engerman.
"Explaining the Relative Efficiency of Slave Agriculture in the Antebellum
South." American Economic Review 67 (1977): 275-296.
Steckel, Richard H. "A Peculiar Population:
The Nutrition, Health, and Mortality of American Slaves from Childhood to
Maturity." Journal of Economic History 46 (1986): 721-42.
Supplementary Readings
Conrad, Alfred H. and John R. Meyer (1958)
"The Economics of Slavery in the Ante Bellum South" Journal of
Political Economy 66: 95-130. Reprinted in their book The Economics of
Slavery and Other Studies in Econometric History, Chicago: Aldine, 1964:
43-92.
Fogel, Robert W. Without Consent or Contract:
The Rise and Fall of American Slavery. New York: W.W. Norton Company, 1989.
A number of papers attacked the evidence offered
by Fogel and Engerman to show that slave agriculture was more efficient than
free agriculture. These include the following.
David, Paul A. and Peter Temin. (1979)
"Explaining the Relative Efficiency of Slave Agriculture in the
Antebellum South: A Comment." American Economic Review 69: 213-218.
Field, Elizabeth B. (1988) "The Relative
Efficiency of Slavery Revisited: A Translog Production Function
Approach." American Economic
Review 78: 543-549.
Schaefer, Donald and Mark D. Schmitz. "The
Relative Efficiency of Slave Agriculture: A Comment." American Economic
Review 69 (1979): 208-212.
Wright, Gavin "The Efficiency of Slavery:
Another Interpretation." American Economic Review 69 (1979):
219-26.
Fogel, Robert W. and Stanley L. Engerman.
"Explaining the Relative Efficiency of Slave Agriculture in the Antebellum
South: Reply." American
Economic Review 70 (1980): 672-690.
4.
February 9-11
Antebellum Banking
Basic Readings
Walton and Rockoff, History of
the American Economy, chapter 12.
Temin, Peter. The Jacksonian
Economy, New York: Norton, 1969.
*Rockoff, Hugh. "The Free Banking Era: A Re‑Examination,"
Journal of Money, Credit and Banking, May 1974, pp. 141‑173.
Rolnick, Arthur J., and Warren E. Weber.
"New Evidence on the Free Banking Era." American Economic Review
73 (1983): 1080-1091.
Supplementary Readings
Engerman, Stanley. "A Note on the Economic
Consequences of the Second Bank of the United States," Journal of
Political Economy 78 (July/August 1970): 725B28.
Hammond, Bray. Banks and Politics in America
from the Revolution to the Civil War. Princeton, N.J.: Princeton Univ.
Press, 1957, passim.
Kahn, James A. "Another Look at Free Banking
in the United States." American Economic Review 75 (1985): 881-885.
Macesich, George. "Sources of Monetary
Disturbances in the U.S., 1834-1845." The Journal of Economic History
20 (1960): 407-34.
Redlich, Fritz. The Molding of American
Banking: Men and Ideas. New York: Hafner, 1947 and 1951, 2 vols.
Rockoff, Hugh."New Evidence on Free Banking
in the United States," American Economic Review 76 (September
1986): 886‑889.
Rolnick, Arthur J. and Warren E. Weber. "The
Causes of Free Bank Failures: A Detailed Examination of the Evidence." Journal
of Monetary Economics 14 (1984): 267‑91.
5.
February 16-18
The Postbellum South
(Abstracts
of papers due)
Basic Readings
Walton and Rockoff, History of
the American Economy, chapter 14.
*Engerman, Stanley. "The Economic Impact of
the Civil War." In The Reinterpretation of American Economic History,
Robert Fogel and Stanley Engerman. New York: Harper & Row, 1971.
Ransom, Roger. L., and Richard Sutch. One Kind
of Freedom: The Economic Consequences of Emancipation. New York: Cambridge
Univ. Press, 1977, passim.
Wright, Gavin. Old South, New South:
Revolutions in the Southern Economy. New York: Basic Books, 1986, passim.
Supplementary Readings
Alston, Lee, and Robert Higgs. "Contractual
Mix in Southern Agriculture since the Civil War: Facts, Hypotheses, and
Tests." Journal of Economic History 42 (1982): 327-53.
DeCanio, Stephen. Agriculture in the
Postbellum South. Cambridge: MIT Press, 1974.
Fishback, Price V. "Debt Peonage in
Postbellum Georgia," Explorations in Economic History 26 (1989):
219-36.
Goldin, Claudia, and Frank Lewis. "The
Economic Cost of the American Civil War." Journal of Economic History
35 (1975): 294B326.
Higgs, Robert. Competition and Coercion:
Blacks in the American Economy, 1865B1914. New York:
Cambridge Univ. Press, 1977.
Margo, Robert A. "Accumulation of Property
by Southern Blacks Before World War One: Comment and Further Evidence." American
Economic Review 74 (September 1984): 768-76.
Margo, Robert A. Race and Schooling in the
South, 1880-1950. Chicago: University of Chicago Press, 1990.
Reid, Joseph. "Sharecropping as an
Understandable Market Response: The Postbellum South." Journal of
Economic History 33 (1973): 106B30.
Ransom, Roger L. Conflict and Compromise: The
Political Economy of Slavery, Emancipation, and the American Civil War. New
York and London: Cambridge Univ. Press, 1989.
Temin, Peter. "The Post-Bellum Recovery of
the South and the Cost of the Civil War." Journal of Economic History
36 (1976): 898B907.
Wright, Gavin. Old South, New South:
Revolutions in the Southern Economy. New York: Basic Books, 1986.
6.
February 23-25; 7. March 1-3
The Integration of Capital Markets after the Civil War
[We will discuss both the regional integration of
capital markets in the United States, and the international integration of
capital markets through the gold standard.]
Basic Readings
Walton and Rockoff, History of
the American Economy, chapter
19.
*Davis, Lance. "The Investment Market,
1870-1914: Evolution of a National Market." Journal of Economic History
25 (September 1965): 355-99.
Bordo, Michael D. (1981) "The Classical Gold
Standard: Some Lessons for Today" Federal Reserve Bank of St. Louis, Review.
63: 1-17.
Friedman, Milton and Anna Jacobson Schwartz. A
Monetary History of the United States, 1867-1960. Princeton: Princeton
University Press, for the NBER, 1963, chapter 3, especially, 104-118.
James, John A. "The Development of a
National Money Market, 1893B1911." Journal
of Economic History 33 (1976): 878B97.
Supplementary Readings
Bodenhorn, Howard and Hugh Rockoff "Regional
Interest Rates in Antebellum America." In Claudia Goldin and Hugh Rockoff,
eds., Strategic Factors in Nineteenth Century American Economic History: A
Volume to Honor Robert W. Fogel. Chicago: University of Chicago Press,
1992.
Bordo, Michael. "The Traditional
Approach" in Michael Bordo and Anna J. Schwartz, eds., A Retrospective
on the Classical Gold Standard 1821B1931 (NBER, University of Chicago Press, 1984), pp.
1-120.
Davis, Lance E. "Capital Immobilities and
Finance Capitalism: A Study of Economic Evolution in the United States." Explorations
in Entrepreneurial History 1, no. 1 (Fall 1963): 88B105.
James, John A. Money and Capital Markets in
Postbellum America. Princeton: Princeton Univ. Press, 1978.
Sylla, Richard. "Federal Policy, Banking
Market Structure, and Capital Mobilization in the United States, 1863B1913." Journal of Economic History 29
(1969): 657B86.
Zecher, J. Richard, and McCloskey, D.N. "The
Success of Purchasing Power Parity: Historical Evidence and Its Implications
for Macroeconomics," in Michael Bordo and Anna J. Schwartz, eds., A
Retrospective on the Classical Gold Standard 1821B1931
(NBER, University of Chicago Press, 1984), pp. 121B150.
8. March 8
The Rise of the Modern Corporation
Basic Readings
Walton and Rockoff, History of
the American Economy, chapter 17.
*Chandler, Alfred D., Jr., The Visible Hand:
The Managerial Revolution in American Business (Cambridge: Harvard
University Press, 1977), passim, and chapter 8.
Lamoreaux, Naomi R. The Great merger Movement
in American Business, 1895-1904. New York: Cambridge University Press,
1985, passim.
Supplementary Readings
Allen, Robert C. "The Peculiar Productivity
History of American Blast Furnaces, 1840-1913." Journal of Economic
History 37 (1977): 605-33.
Atack, Jeremy. "Industrial Structure and the
Emergence of the Modern Industrial Corporation." Explorations in
Economic History 22 (1985): 29-52.
Hughes, Jonathan. The Governmental Habit:
Economic Controls from Colonial Times to the Present. New York: Basic
Books, 1977.
8.
March 10
MIDTERM EXAM
The midterm exam will consist of a series of
essay questions that will ask you to synthesize and critically evaluate the
most important trends and ideas discussed in the readings and class lectures.
*
March 15-17
Spring Break
9.
March 22-24
World War I and the Roaring Twenties
Basic Readings
Walton and Rockoff, History of the American Economy,
chapters 21-22.
*White, Eugene N. "When the Ticker Ran Late:
The Stock Market Boom and Crash of 1929." In The Stock Market Crash in
Historical Perspective, ed., Eugene Nelson White. Homewood, IL.: Dow
Jones-Irwin, 1989.
Galbraith, John Kenneth. The Great Crash of
1929, reissued with a new introduction. Boston: Houghton Mifflin, 1961, passim.
Rockoff, Hugh. Drastic Measures: A History of
Wage and Price Controls in the United States. New York: Cambridge
University Press, chapter 3.
Supplementary Readings
Clark, John Maurice. "The Basis of War-Time
Collectivism." American Economic Review 7 (1917): 772-790.
Clark, John Maurice.. The Costs of the War to
the American People. New Haven: Yale University Press, 1931.
Libecap,
Gary D. "The Political Allocation of Mineral Rights: A Reevaluation of
Teapot Dome," Journal of Economic History 14
(1984): 381-93.
10.
March 29-31
The Great Depression
Basic Readings
Walton and Rockoff, History of the American
Economy, chapter 23, 24.
*Friedman, Milton and Anna J. Schwartz. A
Monetary History of the United States. Princeton: Princeton University
Press, 1965, pp. 299-545, especially 299-332.
Temin, Peter. Did Monetary Forces Cause the
Great Depression? New York: W.W. Norton, 1976.
Bernanke, Benjamin. "Non Monetary Effects of
the Financial Crisis in the Propagation of the Great Depression." American
Economic Review 73 (1983): 257-276.
Supplementary Readings
Bordo, Michael D. (1989) "The Contribution
of A Monetary History of the United States, 1867 - 1960 to monetary
history" in Michael D. Bordo (ed.) Money, History, and International
Finance: Essays in Honor of Anna J. Schwartz. Chicago: University of
Chicago Press: 15-70.
Romer, Christina. "The Great Crash and the
Onset of the Great Depression." Quarterly Journal of Economics CV
(1990): 597-624.
Schwartz, Anna J. "Understanding
1929-33." In Karl Brunner (ed.) The Great Depression Revisited. The
Hague: Martinus Nijhoff, 1981.
Temin, Peter. Lessons from the Great Depression
Cambridge, MA: MIT Press, 1989.
White, Eugene N. "A Reinterpretation of the
Banking Crisis of 1930." Journal of Economic History 44 (1984):
119-138.
11.
April 5-7
World War II
Basic Readings
Walton and Rockoff, History of
the American Economy, chapter 25.
*Friedman, Milton. "Price, Income and
Monetary Changes in Three Wartime Periods." American Economic Review
(May 1952): 612-625.
Evans, Paul. "The Effects of General Price
Controls in the United States during World War II." Journal of Political
Economy 90 (1982): 944-966.
Rockoff, Hugh. Drastic Measures: A History of
Wage and Price Controls in the United States. New York: Cambridge
University Press, chapters 4 and 5.
Supplementary Readings
Galbraith, John Kenneth. A Theory of Price Control.
Cambridge, Mass: Harvard University Press, 1952, passim.
Gordon, Robert J. "45 Billion of U.S.
Private Investment has been Mislaid." American Economic Review 59 (June
1969): 221-38.
Higgs, Robert. "Private Profit, Public Risk:
Institutional Antecedents of the Modern Military Procurement System in the
Rearmament Program 1940-1941." In Geofrey Mills and Hugh Rockoff, eds., The
Sinews of War: Essays on the Economic History of World War II Ames: Iowa
State University Press, 1993..
Rockoff, Hugh. "The Response of the Giant
Corporations to Wage and Price Controls in World War II." Journal of
Economic History 41 (March 1981): 123-8.
12.
April 19-21
The Evolution of the Modern Labor Market
Basic Readings
Walton and Rockoff, History of
the American Economy, chapter 30.
*Donohue, John J., III, and James Heckman.
"Continuous Versus Episodic Change: The Impact of Civil Rights Policy on
the Economic Status of Blacks." Journal of Economic Literature
(December, 1991): 1603-43.
Goldin, Claudia. "The Political Economy of
Immigration Restriction in the United States, 1890-1921." In Claudia
Goldin and Gary D. Libecap (eds.) The Regulated Economy (Chicago:
University of Chicago Press for the NBER), 1994, 223-258.
Goldin, Claudia D. "The Role of World War II
in the Rise of Women's Employment." American Economic Review 81
(1991): 741-56.
Supplementary Readings
Goldin, Claudia. (1988) "Maximum Hours
Legislation and Female Employment: A Reassessment" Journal of Political
Economy 97: 535-560.
Goldin, Claudia. (1990) Understanding the
Gender Gap: An Economic History of American Women. New York and Oxford:
Oxford University Press.
Goldin, Claudia, and Robert A. Margo. (1992)
"The Great Compression: The Wage Structure in the United States at
Mid-Century" Quarterly Journal of Economics 107: 1-35.
Wright, Gavin. "Cheap Labor and Southern
Textiles." Quarterly Journal of Economics 96 (1981) : 605-630.
13.1
April 26
The Growth of the Federal Government
Basic Readings
Walton and Rockoff, History of
the American Economy, chapter 26.
*Higgs, Robert. Crisis and Leviathan: Critical
Issues in the Emergence of the Mixed Economy. New York: Oxford University
Press, 1986, passim, especially 35-76.
Hughes, Jonathan, R.T. The Governmental Habit.
New York: Basic Books, 1977.
Supplementary Readings
Borcherding, Thomas E. "The Sources of
Growth of Public Expenditures in the United States, 1902-1970." In Budgets
and Bureaucrats: The Sources of Government Growth, ed. Thomas E.
Borcherding. Durham, N.C.: Duke University Press, 1977.
Edelstein, Michael. "What Price Cold War?
Military Spending and Private Investment in the US, 1946-1979." Cambridge
Journal of Economics 14 (1990): 421-37.
Hughes, Jonathan, R.T. The Governmental Habit.
New York: Basic Books, 1977.
McCraw, Thomas K. Prophets of Regulation.
Cambridge MA: Harvard University Press, 1984.
Meltzer, Allan H., and Scott F. Richard. "Why Government Grows (and Grows) in a
Democracy." Public Interest
52 (Summer 1978): 111-118.
Meltzer, Allan H., and Scott F. Richard. "A
Rational Theory of the Size of Government." Journal of Political
Economy 89 (October 1981): 914-27.
Meltzer, Allan H., and Scott F. Richard. "Tests of a Rational Theory of the Size
of Government." Public Choice 41 (1983): 403-418.
Niskanen, William A. Bureaucracy and
Representative Government. Chicago: Aldine-Atherton, 1971.
Peltzman, Sam. "The Growth of
Government." Journal of Law and Economics 23 (Oct. 1980): 220-285.
13.2
April 28
Convergence among Regions and Nations
Basic Readings
Walton and Rockoff, History of
the American Economy, chapter 31.
*Abramovitz, Moses. "Catching Up, Forging
Ahead, and Falling Behind." Journal of Economic History XLVI (June
1986): 385-406.
Supplementary Readings
Baulmol, William J. "Productivity, Growth, Convergence,
and Welfare: What do the Long-run Data Show." 78 American Economic
Review (December 1986): 1072-1085.
De Long, J. Bradford. "Productivity Growth,
Convergence, and Welfare: Comment." 76 American Economic Review
(December 1988): 1138-1159.
Easterlin, Richard A. "Does Economic Growth
Improve the Human Lot? Some Empirical Evidence." In Paul David and Melvin
Reder, eds. Essays in Honor of Moses Abramovitz. New York: Academic
Press, 1974.
Gershenkron, Alexander. Economic Backwardness in Historical Perspective New York:
Praeger, 1962.
Lebergott, Stanley. The American Economy:
Income, Wealth and Want. Princeton, NJ: Princeton University Press, 1976.
April 38
(Paper Due)
15.
?
Final Exam
The final exam will consist of a series of essay
questions that will ask you to synthesize and critically evaluate the most
important trends and ideas discussed in the readings and class lectures. More
weight will be placed on material covered since the midterm, but the exam will
cover the entire semester's work.
Web Sites
The Department of Economics maintains a
comprehensive web site at
http://economics.rutgers.edu.
This should be your first stop for all your
economics inquiries. On the web site
you will find information about the faculty, library resources, and internet
resources in economics. In particular, try exploring "Other Related
Links" for discussion about what economists do, economics resources at
Rutgers, and economic resources on the web.
Other important links are Econlit (http://www.libraries.rutgers.edu/rulib/indart/socsci.shtml
and choose Econlit), a comprehensive listing of articles in economics,the
Social Science Data Center at Alexander Library
(http://scc01.rutgers.edu/datacenter/dcntr.htm).
For economic historians the most important site
is the "cliometrics" web site at http://www.eh.net
How to find a topic for your paper.
Finding a good topic for your paper will probably
be the hardest thing you have to do in the course. Finding topics is also one
of the most important skills you will need to develop as a professional
economist. You will need to find a topic for your dissertation, and especially
if you work in academia, you will need to find topics for research papers.
I do not expect a publishable paper or a Ph.D.
dissertation. But the process of finding topics is much the same whatever the
goal.
The search for a topic can follow many different
paths. Often it begins with a policy question. How did things really work under
the classical gold standard?" What happened to real wages when immigration
was so rapid at the turn of the century? In any case, one typically (although
not always) begins by reading the frontier literature in the field. But at some
point one has to find a way to add to what is already known.
With this in mind let us consider some of the
ways that economic historians add to our store of knowledge.
(1) Repeating a study with data from a
different country. When asked why he was touring New Zealand, the balladeer
Tom Lehrer said that it was easier to find a new country than a new song.
Milton Friedman and Anna J. Schwartz in their book Monetary Trends
repeated all of the regressions they ran for the United States on the United
Kingdom. The reason being that they had already reached numerous conclusions
about the United States from previous studies; the United Kingdom provided an
important new test of their ideas.
(2) Explaining an "anomaly" in an
existing study. In a famous study of hyperinflation Phillip Cagan showed
that a monetarist model emphasizing the rate of inflation explained the data
fairly well. But a number of points toward the end of the hyperinflations were
"outliers." A number of papers have been written to explain these
points, as the result for example, of anticipated monetary reforms.
Of course, it would be better (for your grade,
for your career, and for the future of civilization) to come up with an
entirely new theory that explains hyperinflation better than the monetary
theory: Inflation rates are determined by the level of profit-dissonance, which
can be measured by the coefficient of variation of profit rates. When the
random walk in profit dissonance carries it above 2.05, hyperinflation results.
This sort of thing is what Thomas Kuhn (The Structure of Scientific
Revolutions) called a paradigm shift. But normal research doesn't work this
way. Most of us are destined to be the economists who gradually extend and
refine Cagan's model.
(3) Extending an existing study backwards or
forwards in time. Howard Bodenhorn (a successful Rutgers Ph.D from a few
years past) and I did a paper in which we extended Lance Davis's study of
regional interest rates which covered the period from the Civil War to the turn
of the century to the pre-civil war period. We had a reason for doing so: we
suspected that the Civil War had significantly disrupted the capital market.
And it wasn't easy to find the data. If it had been, Lance Davis and many
others who have studied the postbellum period, would have extended the data
backwards themselves. But it was worth doing, we found considerable evidence of
capital market integration in the antebellum period.
(4) Repeating a study done for one particular
market with data from another market. For example, Robert Fogel, a winner
of the Nobel prize in economics, estimated the "social savings"
created by U.S. railroads in the
interregional transportation of agricultural products. Gary Walton later
extended this to passenger traffic on the railroads. Similar calculations could
be made for other forms of transportation and for other technological
innovations. Stanley Engerman later performed a similar calculation for the
Second Bank of the United State. Of course, Fogel's study was more significant
than most repetitions are likely to be. The railroad was considered by
historians to be one of the most important technological innovations of the
nineteenth century, and Fogel showed that its impact was rather small.
(5) Repeating a study done for one government
regulation for another regulation. Recently, Charles Calomiris and Eugene
White studied the political economy of the adoption of Deposit Insurance in the
1930s. There choice was motivated by current policy considerations. But I would
guess that almost any piece of federal legislation would repay careful study.
At the very least a reading of the Congressional Record and of the
Congressional hearings would reveal which economic interest groups promoted and
opposed a particular piece of legislation.
(6) Discovering a body of unexploited data.
Frequently, the order of things is reversed -- a researcher finds the data and
then looks for interesting questions the data can answer. Recently, Lance Davis
and Robert Gallman completed a massive study of the U.S. whaling industry in
the nineteenth century. This project has yielded a large number of research
papers and has drawn considerable attention. It began when Gallman stumbled on
the remarkably complete records of the American whaling industry while
searching for something else in the library. (Considerable detail is available
on every whale caught by an American vessel including length, weight, oil
content, marital status, and previous arrest record.)
As an experiment I tried opening the Historical
Statistics of the United States, the most important compendium of
historical data, randomly. I landed on page 690 which gives annual data on
cigar and cigarette production from 1870 to 1970. It naturally brought to mind
certain questions -- Is price data available in the primary sources cited in
the Historical Statistics?; did cigarette consumption rise at the
expense of cigar consumption, or did total consumption of tobacco products
increase?; when have there been changes in the federal tax on cigarettes?; can
Gary Becker's theory of rational addiction be tested with this data; etc. etc.
And, of course, the sobering thought that if the data is this good, someone has
probably already done the study.
(7) Reexamining older studies using new
statistical or theoretical models. Econometrics is constantly evolving,
some would say progressing. Often new statistical techniques can show that
conclusions drawn previously by using more primitive techniques are in error.
New theories can also provide a basis for reexamining old data. Cagan's study
of hyperinflations is again a good example. As new theories were developed in
macroeconomics, such as rational expectations, they were tested on Cagan's
data.
(8) Following up published suggestions for
future research. Many books and journal articles contain suggestions for
future research. These are sometimes worth considering. Naturally, you have to
ask yourself why the author is willing to share a valuable idea with strangers.
But there are circumstances when it appears that useful suggestions have been
made.
(9) Reexamining one of the "myths"
of economics. The classic example in this genre is Ronald Coase, "The
Lighthouse in Economics," Journal of Law and Economics, 1974,
357-76. Economic theorists since John Stuart Mill have used the lighthouse as
an example of a public good: a valuable service, but one the private sector
would not produce since there is no way to charge the ships that benefit from
the lighthouse. Coase examined the actual history of lighthouse finance, and
showed that the true story is far more complicated.
(10) Surveying the literature on a particular
question. This is usually what students think of as research, and I would
like you to stay away from survey articles if you can. I would prefer that you
get some empirical data and try to analyze it. Most survey articles don't add
to knowledge. But some do, by generalizing from various studies, or by
developing a framework that brings various pieces of work together. So I don't
want to make a blanket statement that survey articles are unacceptable, but you
will have to persuade me that your survey will add to knowledge, and won't
simply be a summary of what other people have said.
(11) Asking someone for a topic. Its
perfectly acceptable to ask people to suggest a topic.
You can ask me. I have a list of topics you can choose from, although I would like
you to at least make an effort to find a topic on your own. I can also help you
turn a general question or interest into a paper topic.
You can ask one of the other professors in the
Department. Of course, you need
to be polite. Make an appointment, realize that the professor is mostly
interested in his or her own research. Something like this might work: "Oh
mighty one, is there some small corner of your research on X that I could work
on? Perhaps the data I collect may be of some small help in your great
work."