Sundstrom, W. 20th Century Economic History

Economics 136
20th Century Economic History
Winter 1999
William A. Sundstrom
Office: Kenna Hall 300N
Phone and voice-mail: 408-554-6892
Fax:: 408-554-2331
E-mail: wsundstrom@mailer.scu.edu
Course web page: http://lsb.scu.edu/~wsundstrom/econ136/
Office hours: Tues. 3:30-4:30, Wed. 3:00-4:00

1. Description
In this course we will study the development of the U.S. economy over the past 100 years. In part this
involves "telling the story" of the American economy during this period: the impact of the two World
Wars, the Great Depression, the postwar economic boom, and recent trends in economic growth and
inequality. We will make use of basic economic theory to understand each of these episodes. At a
deeper level, we will examine the evolution of the institutions of the economy, including how markets
function, how business firms operate, and the interaction between markets and other social institutions,
such as government and the family. We will also focus on the sources economic growth during the
century, including the important contributions of education and technological progress.

2. Prerequisites
Economics 1, 2, and 14.

3. Readings, homework, and participation
There is one required book available for purchase at the bookstore: Peter Fearon, War, Prosperity,
and Depression. There is also a required course reader available for purchase at CopyCraft.
Each class I will assign a few short-answer study questions about the reading assignment for the
following class. Typed answers to these questions are due at the beginning of each class period. You
will receive a T or T- grade for each homework you hand in. You will get full credit for the
homework if you receive 12 T grades. Late homework will not be accepted (if you need to miss a
class, either skip that homework or make sure I get it before class).
Please come to class prepared to discuss the readings and homework questions. You may want to keep
a copy of your answers to the questions, as I will refer to the questions during class discussion.
Comments and questions during lecture are strongly encouraged.

4. Exams and grading
There will be a midterm and a final exam. The final exam will be comprehensive, and will be held at
the scheduled time (no exceptions).
Your grade will be based on the following:
Assignment Approximate weight
Reading homeworks 25%
Midterm exam 30%
Final exam 45%

Schedule of Topics and Readings

Note: Readings are from Fearon, War Prosperity, and Depression, or the course reader

I. Introduction
January 5 Does history matter?
The big picture: growth, cycles, and inequality in the U.S. economy
Sources of economic growth in the 20 Century: education and technological change th
Changing sectoral composition of the U.S. economy

II. The American economy at the turn of the century
January 7 Agrarian heritage
Agriculture in the North: family farming
Populists, progressives, and the origins of federal regulation
Agriculture in the South: the legacy of slave plantations
Read: Atack and Passell, Northern Agricultural Development after the Civil War

January 12 Industrialization before and after the Civil War
Transportation and the emergence of a national market
Antitrust law and the merger movement
The Managerial Revolution
Read: Atack and Passell, The Changing Structure of American Industry

January 14 Immigration and the industrial labor force
Labor and labor management
Read: Brody, The American Worker in the Progressive Age

III. World War I and the 1920s
January 19 The war economy and federal regulation
The postwar depression
Agriculture during the 1920s
Banking and financial markets
Read: Fearon, War, Prosperity, and Depression, ch. 1, 4 (optional: ch. 2)

January 21 Mass production and The Second Industrial Revolution
Case study: Henry Ford and the automobile industry
Electrification and other technological developments
The automobile boom and its social impact
Read: Flink, The Automobile Age, ch. 4, 7

January 26 Interpreting economic prosperity
The 1920s: prosperity decade?
Resource abundance and American industrial success
Read: Fearon, War, Prosperity, and Depression, ch. 3

January 28 America goes to high school: Causes and consequences of the high school movement
Racial differences in educational opportunity
Read: Goldin and Katz, Why the United States Led in Education

IV. The Great Depression, the New Deal, and World War II
February 2 The Great Depression
Strengths and weaknesses of the U.S. economy in 1929
The stock market crash
Bank panics
Human costs of the Depression
Read: Fearon, War, Prosperity, and Depression, ch. 5, 6, 8

February 4 MIDTERM EXAM

February 9 The world in depression
What caused the Great Depression? The usual suspects:
Monetary and expenditure theories
The role of the gold standard
Read: Fearon, War, Prosperity, and Depression, ch. 7, 9

February 11 Alternative views on the causes of the Great Depression
Government responses to the Depression: The New Deal
Agricultural policies
The National Industrial Recovery Act (NIRA)
Read: Fearon, War, Prosperity, and Depression, ch. 10-12

February 16 The New Deal, cont.
Banking and financial reforms
Social security and relief programs
Political economy of New Deal spending
Monetary and fiscal policy
Organized labor in the 1930s and beyond
Read: Fearon, War, Prosperity, and Depression, ch. 13-15

February 18 World War II
Wartime government interventions
Did the War end the Depression?
Read: Fearon, War, Prosperity, and Depression, ch. 16
Higgs, Wartime Prosperity?

V. Postwar developments
February 23 The postwar boom
Overview of postwar economic performance
Sources of growth during the 1950s and 1960s
The military-industrial complex
The rise of the service sector and deindustrialization
Read: Baumol, et al, Productivity and American Leadership, ch. 6

February 25 Ozzie and Harriet and beyond: The economic role of married women
Baby Boom and Bust
Married womens labor force participation
Read: Goldin, Career and Family: College Women Look to the Past

March 2 The 1960s and 1970s: from growth to stagflation
Oil price shocks
Vietnam and macroeconomic policy
Social policy: the Great Society
The changing economic status of African-Americans
Read: Carnoy, Faded Dreams, ch. 2-3

March 4 The slowdown of productivity growth
Causes and consequences of productivity slowdown
Globalization and international economic convergence
Read: Nelson and Wright, The Rise and Fall of American Technological Leadership

March 9 High-tech and the rise of Silicon Valley
The high-tech industries
Silicon Valley vs. Rte. 128
The productivity paradox: computers and economic growth
Read: Mowery and Rosenberg, Paths of Innovation, ch. 6

March 11 Recent changes and challenges
Reaganomics
Regulation and deregulation
The persistence of poverty and growing income inequality in the 1980s
Review
Reading to be announced