Cliometrics

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Cliometrics refers to the systematic use of economic theory and econometrics techniques to study economic history. The term was originally coined by Jonathan R.T. Hughes and Stanley Reiter in 1960 and refers to Clio, who was the muse of history and heroic poetry in Greek mythology. This term is also sometimes used referring to counterfactual history.

A group to encourage and further the study of cliometrics, The Cliometric Society, was founded in 1983.

In 1993, Robert Fogel and Douglass North were awarded the Bank of Sweden Nobel Memorial Prize in Economics partly for their work in establishing cliometrics, in particular "for having renewed research in economic history by applying economic theory and quantitative methods in order to explain economic and institutional change".

In 2006, a new journal Cliometrica - Journal of Historical Economics and Econometric History (Springer Verlag) was created to provide a leading forum for exchange of ideas and research in all facets, in all historical periods and in all geographical locations of historical economics. The journal encourages the methodological debate, the use of economic theory in general and model building in particular, the reliance upon quantification to buttress the models with historical data, the use of the more standard historical knowledge to broaden the understanding and suggesting new avenues of research, and the use of statistical theory and econometrics to combine models with data in a single consistent explanation Cliometrica.

Recently, a new academic discipline -- called Cliodynamics -- has been created to utilize the tools of natural science (physics, biology, statistics) to study history in general, particularly in matters of war and peace (see, e.g., History and Mathematics, ed. by P.Turchin et al. Moscow: KomKniga, 2006). The leading figures in cliodynamics are Peter Turchin, Bertrand Roehner, and Andrey Korotayev.

1 History
2 Purpose
3 Past Accomplishments of Cliometrics
4 Award-winning Cliometrics
5 Bibliography
6 See also
7 External links

[edit] History

Cliometrics, originated in 1958 with the work of Alfred Conrad and John Meyer with the publication of "The Economics of Slavery in the Ante-Bellum South," in the Journal of Political Economy (4). The cliometric revolution actually began in the mid-1960s and was particularly ugly because most economic historians were either historians or economists who had very little connection to mathematical techniques or statistics. The first projects published during the revolution are well known among economists. Much of the research was conducted by people who were or would become Nobel Laureates. One key area of interest was transportation history. Another was slavery. Still others focused on agriculture and farming. Cliometrics began to gain a following and become better known when Douglass North and William Parker became the editors of the Journal of Economic History in 1960. Today, cliometrics can be followed in Explorations in Entrepreneurial History. The Cliometrics Meetings began to be held around this time at Purdue University and are still held there annually.

While the cliometric revolution was successful, it was almost too much so with its use of modeling and econometrics. Because it largely did away with the old economic history, economic historians seemed more like other economists. They nearly disappeared altogether. However, some new economic historians did, in fact, begin research around this time, among them were Kemmerer and Larry Neal (a student of Albert Fishlow, a leader of the cliometric revolution) from Illinois, Paul Uselding from Johns Hopkins, Jeremy Atack from Indiana, and Thomas Ulen from Stanford. In spite of this, the separation of economic history and economics continued until the 1970s.

Thus became the problem of cliometrics. The dilemma was voiced by Donald McCloskey in 1976. He disagreed with the current position which was created by the new method of formalizing economic theory and testing that economic theorists no longer needed to be learned in economic history. In his article, “Does the Past Have Useful Economics?”, he wrote:

‘Smith, Marx, Mill, Marshall, Keynes, Heckscher, Schumpeter and Viner, to name a few were nourished by historical study and nourished it in turn. Gazing down from Valhalla it would seem bizarre that their heirs would study economics with the history left out, stopping their desultory search for facts in time series at the 1st 25 years and in cross sections at the latest tape from the Bureau of the Census, passing by the experiments of history with little regard for their place in a nonexperimental science, distrusting old facts as error-ridden intrusions from another structure, abandoning historical perspectives on their political economy'.

[edit] Purpose

Cliometrics is necessary because the inclusion of history is necessary in formulating solid economic theory. First, it is risky to base conclusions on “transient phenomena.” Empiricists have learned over time that historical data are useful because they provide larger samples and more clearly show trends. Finally, knowledge from the past helps us see what is possible today.

[edit] Past Accomplishments of Cliometrics

1. Rethinking bad economics and reshuffling misused numbers

Although this simply involved rethinking the thoughts of others in the light of economic theory, it was a step toward the future.

2. The extension to history of modern economic counting

Cliometrics as a discipline helped remove the error that pervaded previous economic theory. It has helped answer questions such as how large? How long? How often?

3. The accumulation of the rethinking and remeasurement around major historical issues, i.e. the reinterpretation of economic history.

While traditional economic theory is again the basis for this research, cliometrics has again taken it to the next level and described how many findings made in other times are true or no longer are true or never were true.

[edit] Award-winning Cliometrics

In October 1993, the Royal Swedish Academy of Sciences awarded the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel to Robert William Fogel and Douglass Cecil North ‘for having renewed research in economic history.’ The Academy noted that ‘they were pioneers in the branch of economic history that has been called the ‘new economic history,’ or cliometrics.’ Fogel and North both focused on changes in the price of transportation in their research.

Robert W. Fogel and Douglass North won the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel for turning the theoretical and statistical tools of modern economics on the historical past: on subjects ranging from slavery and railroads to ocean shipping and property rights.

North was born in Cambridge in 1920. As an undergraduate at the University of California at Berkeley in the early 1940s, he considered himself a Marxist. Wartime service in the merchant marine and nine months as a dust bowl photographic chronicler of California farm life for the government persuaded him to become an economist. He formulated his views during 15 years as a professor at the University of Washington in Seattle, before moving to Washington University in St. Louis in 1982.

Fogel was born in New York City in 1926. He earned his doctorate under Simon Kuznets at Johns Hopkins University in 1963, and taught at the University of Chicago until 1975, when he moved to Harvard. He returned to the University of Chicago in 1981, where he remains director of the Center for Population economics. His wife retired in 1988 as associate dean for students of the Graduate School of Business.

Fogel is often described as the father of modern econometric history. He's especially noted for using careful empirical work to overturn conventional wisdom. North, a professor at Washington University in St. Louis, was honored as a pioneer in the "new" institutional history. In the Nobel announcement, specific mention was made of a 1968 paper on ocean shipping, in which North showed that organizational changes played a greater role in increasing productivity than did technical change. It was Robert Fogel who coined the term cliometrics for the application of econometric theory to history.

Fogel is identified with two issues in particular. There was a 1964 book arguing that the spread of the railroad was not as important to the opening of the American West as had been argued by Joseph Schumpeter and Walt Rostow. Using "counterfactual" arguments (supposing that things had happened differently than they did, and examining what the consequences would have been) and a great deal of benefit-cost analysis, Fogel argued that canals would have done the job about as well; the "iron horse" probably contributed no more than 3 percent to the growth of gross domestic product, he calculated.

In a second, far more controversial book, "Time on the Cross," cowritten by Stanley Engerman and published in 1974, Fogel argued that the institution of slavery had been more profitable than previously thought. He was attacked as somehow endorsing slavery. Fogel later published a four-volume study called "Without Consent or Contract," in which he argued forcefully that slavery ended not because it was economically inefficient, but because it was morally repugnant.

[edit] Bibliography

Fogel R. Railroads and American Economic Growth: Essays in Econometric History, 1964.
Fogel, Robert William and Engerman, Stanley L. Time on the Cross: The Economics of American Negro Slavery. Reissue edition. New York: W.W. Norton and Company, 1995. ISBN 0393312186
History & Mathematics: Historical Dynamics and Development of Complex Societies. Edited by Peter Turchin, Leonid Grinin, Andrey Korotayev, and Victor C. de Munck. Moscow: KomKniga, 2006. ISBN 5484010020
History & Mathematics: Analyzing and Modeling Global Development. Edited by Leonid Grinin, Victor C. de Munck, and Andrey Korotayev. Moscow: KomKniga, 2006. ISBN 5484010012