I will be in Chicago with the Economic Student Association.
Just a friendly reminder: Exam 2 for Econ 328 is April 7.
Next week I will give you one of the questions to prepare. The time period for this exam is basically the Civil War through WWI. Chapters 14-20.
Next week I will give you one of the questions to prepare. The time period for this exam is basically the Civil War through WWI. Chapters 14-20.
articlereview.pdf
Please note that a topic is not due until before spring break (March 13).
The article review is due on April 23.
Please note that a topic is not due until before spring break (March 13).
The article review is due on April 23.
Just a friendly reminder!
Today's topic was the monetary history of the U.S. from about 1792 to the eve of the Civil War.
Key points:
We did not have time to discuss the "wildcat banks" today. I'll show a quick table on that next time. Read the part on the gold rush on your own. Additional information on the points mentioned here can be found in the Walton and Rockoff text as well as Atack and Passell's New Economic View of American History and several other sources.
A daily summary like this is not guaranteed ever day, but we covered a lot of ground, and there is a lot going on here, so this should help you keep things straight. Obviously there were more details discussed in class (and many of these are in the text).
Key points:
- Coinage Act of 1792 established bimetallic (gold and silver) standard at a 15:1 mint ratio. However, gold was undervalued at the mint (i.e. could fetch a higher price in the market) and so silver made up most of the coins in circulation.
- Clearing of payments was often difficult (i.e. costly) but not prohibitively so. Two institutions in particular provided important clearing services (Bank of the United States and the Suffolk Bank).
- The (First) Bank of the United States was chartered in 1791, was partially (20%) financed by the federal government, was the fiscal agent of the government, and had branches in different states.
- Opposition to the First Bank of the United States was largely political. Many objected to the large share of foreign (British) ownership.
- Charter for the First Bank of the United States was allowed to expire in 1811. In the five years that followed, state chartered banks grew in number.
- The Suffolk Bank provided clearing services mostly in New England to member banks. It functioned much like a modern clearinghouse.
- The Second Bank of the United States was chartered in 1816 and was again given a 20 year charter.
- Nicholas Biddle became president of the Second Bank of the United States in 1823. Under Biddle's leadership, the bank became a key player in the financial system. The bank was conservatively managed, held ample reserves, and helped to "regulate" the system. The regulation was not official, but was possible by virtue of the bank's position as a net creditor. This position allowed the bank to keep the growth of loans by commercial banks in check. For obvious reasons, such actions were unpopular with some of the commercial banks and their political allies.
- Andrew Jackson is elected president in 1828. He immediately sets out to dismantle the bank. An early bill to renew the charter (1832) is vetoed and the veto is sustained. This coincided with the beginning of Jackson's second term, during which he began to remove federal deposits from the Second Bank of the United States and put them into state chartered banks.
- As a result, Biddle contracted the growth of credit from the bank (some argue he contracted too much in an attempt to force Jackson to relent). A widespread financial contraction ensued, and the charter of the bank expired in 1836.
- As the Second Bank was in its final months, there was a period of inflation accompanied by an expansion of state chartered banks. At first, historians attributed this to irresponsible growth of the money supply (bank notes) by these new banks. That is, it was all Jackson's fault. If the Second Bank had still existed, it would have prevented the inflation.
- Reconsideration by economic historians has found that the original interpretation is not necessarily accurate.
- Irresponsible lending would show up as a decrease in average reserves. There was no notable decrease in average reserves during the period.
- Specie stock actually increased during the period. Why?
- Inflows of silver from Mexico, payments from France settling claims on war related shipping losses, and a slower outflow of specie to China due to the opium trade are some of the reasons for the increase in specie.
- The increase in specie naturally caused the inflation (Hume's Price-Specie-Flow mechanism)
- When Britain raised interest rates to stem the outflow of specie, the inflation reversed course and the depression of 1839-1843 set in. This depression was largely financial (GNP actually increased!), but it did set back investment in the infrastructure needed for a growing country and contributed to the growing economic divisions between the North and the South.
We did not have time to discuss the "wildcat banks" today. I'll show a quick table on that next time. Read the part on the gold rush on your own. Additional information on the points mentioned here can be found in the Walton and Rockoff text as well as Atack and Passell's New Economic View of American History and several other sources.
A daily summary like this is not guaranteed ever day, but we covered a lot of ground, and there is a lot going on here, so this should help you keep things straight. Obviously there were more details discussed in class (and many of these are in the text).
On my blog, I posted this entry in response to all the rhetoric flying about economic stimulus.
You'll like the conclusion
You'll like the conclusion
... Only a proper understanding of the economic history of this country will open people's eyes to what is happening.
Only a proper understanding of economic history will make people realize that it's not different this time. Where we go from here depends on that understanding.
Actually, the first one is related to this week's material. It is not required per se, but I am posting it in an answer to one of the questions raised by someone in class.
Fishlow, Albert. "Antebellum Interregional Trade Reconsidered." The American Economic Review, Vol. 54, No. 3, Papers and Proceedings of the Seventy-sixth Annual Meeting of the American Economic Association (May, 1964), pp. 352-364.
The last couple days have been light on the outside readings. We are building up some basic background on the American economy and its history. Things start to pick up speed now as we move into the mid-19th century. The main story last week was the Navigation Acts. The economic analysis of which served as a great example of how economic historians conduct research. Tuesday's main story was the transition from the Articles of Confederation to the Constitution. The economics we study here are less quantitative and more focused on the institutional significance. The Constitution provided for a stronger system of federal government with the power to regulate money, commerce, and trade. Keep this in mind because the mid-19th century growth of the American economy is build on the foundation laid by the constitution. We will be considering money, commerce, and trade over the next couple of weeks, culminating in the Civil War before the first exam.
To that end, here are some supplemental readings for Tuesday, Feb. 10.
Chapter 10 in the main text considers, among other things, tariff policy. Three articles are footnoted on page 199. These make for a good group reading assignment much like we did for the Navigation Acts. Now that you have some experience, I'm going to expect that you will be ready to discuss these in class. Use the wiki to get your thoughts down and discuss them with your group. Reading groups will be assigned in class today. They will be shuffled a bit from the first one.
Here are links to the articles. They should be accessible off-campus with your ID.
Bils, Mark. "Tariff Protection and Production in the Early U.S. Cotton Textile Industry" The Journal of Economic History, Vol. 44, No. 4 (Dec., 1984), pp. 1033-1045
Temin, Peter. "Product Quality and Vertical Integration in the Early Cotton Textile Industry" The Journal of Economic History, Vol. 48, No. 4 (Dec., 1988), pp. 891-907
Harley, C. Knick. "International Competitiveness of the Antebellum American Cotton Textile Industry" The Journal of Economic History, Vol. 52, No. 3 (Sep., 1992), pp. 559-584
The three papers proceed on somewhat different lines. Bils presents a counterfactual (identify it) to show that the textile industry in NE would not have survived without the tariff. Temin extends this by stating that "the lower end of the American cotton industry could prosper with the tariff-not by accident, but by design". As you read the article, try to determine what he means by this. Harley's article makes several refinements on the Bils paper. They all reach the same conclusion. Without the tariff, the NE cotton textile industry would not have survived.
Looking ahead to classes after Lincoln's birthday (No school on Feb. 12), you may read these items on labor in mid-19th century America.
Ferrie, Joseph P. "The Wealth Accumulation of Antebellum European Immigrants to the U.S., 1840-60" The Journal of Economic History, Vol. 54, No. 1 (Mar., 1994), pp. 1-33
As always, use the wiki to make notes for the class. Note that the Ferrie paper has some technical econometrics that not everyone in class has dealt with before. It is not necessary to understand all the econometric details, so do not despair! Do look at it for the way that he formulates a hypothesis and uses data.
Also, pay special attention to the "Economic Insight" on pages 214 and 215.
Fishlow, Albert. "Antebellum Interregional Trade Reconsidered." The American Economic Review, Vol. 54, No. 3, Papers and Proceedings of the Seventy-sixth Annual Meeting of the American Economic Association (May, 1964), pp. 352-364.
The last couple days have been light on the outside readings. We are building up some basic background on the American economy and its history. Things start to pick up speed now as we move into the mid-19th century. The main story last week was the Navigation Acts. The economic analysis of which served as a great example of how economic historians conduct research. Tuesday's main story was the transition from the Articles of Confederation to the Constitution. The economics we study here are less quantitative and more focused on the institutional significance. The Constitution provided for a stronger system of federal government with the power to regulate money, commerce, and trade. Keep this in mind because the mid-19th century growth of the American economy is build on the foundation laid by the constitution. We will be considering money, commerce, and trade over the next couple of weeks, culminating in the Civil War before the first exam.
To that end, here are some supplemental readings for Tuesday, Feb. 10.
Chapter 10 in the main text considers, among other things, tariff policy. Three articles are footnoted on page 199. These make for a good group reading assignment much like we did for the Navigation Acts. Now that you have some experience, I'm going to expect that you will be ready to discuss these in class. Use the wiki to get your thoughts down and discuss them with your group. Reading groups will be assigned in class today. They will be shuffled a bit from the first one.
Here are links to the articles. They should be accessible off-campus with your ID.
Bils, Mark. "Tariff Protection and Production in the Early U.S. Cotton Textile Industry" The Journal of Economic History, Vol. 44, No. 4 (Dec., 1984), pp. 1033-1045
Temin, Peter. "Product Quality and Vertical Integration in the Early Cotton Textile Industry" The Journal of Economic History, Vol. 48, No. 4 (Dec., 1988), pp. 891-907
Harley, C. Knick. "International Competitiveness of the Antebellum American Cotton Textile Industry" The Journal of Economic History, Vol. 52, No. 3 (Sep., 1992), pp. 559-584
The three papers proceed on somewhat different lines. Bils presents a counterfactual (identify it) to show that the textile industry in NE would not have survived without the tariff. Temin extends this by stating that "the lower end of the American cotton industry could prosper with the tariff-not by accident, but by design". As you read the article, try to determine what he means by this. Harley's article makes several refinements on the Bils paper. They all reach the same conclusion. Without the tariff, the NE cotton textile industry would not have survived.
Looking ahead to classes after Lincoln's birthday (No school on Feb. 12), you may read these items on labor in mid-19th century America.
Ferrie, Joseph P. "The Wealth Accumulation of Antebellum European Immigrants to the U.S., 1840-60" The Journal of Economic History, Vol. 54, No. 1 (Mar., 1994), pp. 1-33
As always, use the wiki to make notes for the class. Note that the Ferrie paper has some technical econometrics that not everyone in class has dealt with before. It is not necessary to understand all the econometric details, so do not despair! Do look at it for the way that he formulates a hypothesis and uses data.
Also, pay special attention to the "Economic Insight" on pages 214 and 215.
Remember: No class on Tuesday, Jan. 27. I'll be at the Quad Cities Economic Outlook Breakfast.
Make up for the missed class time by working on the wiki!
Make up for the missed class time by working on the wiki!
There are innumerable guides out there about how to write a critique of an article--most such guides are published by college and university writing centers. Do a search and sample a few. Various guides will differ from each other in subtle ways, but most agree on the essentials.
Most importantly, you must read critically.
This bears repeating. You must read critically.
This is not like reading a novel or even like reading an economic theory textbook. It is much more difficult skill, and one that is acquired with practice. That's why you're doing it.
Read the introduction carefully. Look for the thesis statement and highlight it. As you write your critique, you will want to keep that thesis in mind.
The introduction often has some hints about the approach the author will take in the paper. Jot them down for reference. Then move on to the next section (often discussing the methodology or the data). Is the data well documented? Does the choice of data set make sense? Is the author's methodology sound? (This is harder for undergraduate students to judge--but again, you're learning, and one purpose of this is to introduce you to some classic time-tested papers where the methodology has been judged to be sound so that you'll know what to look for in the future.)
Is there a theoretical model? Is it explained? Take some notes as you read. Does anything puzzle you? If so, ask about it. Are there statistical results? If so, are the results reported in a way that makes sense? Do they seem valid or are there important things that the author missed? Does the author use statistical and economic significance correctly? (We'll get to this later in the semester, so don't worry about that too much in the first assignment.)
Finally, read the conclusion. Does it summarize the article adequately? Does it offer avenues for further research? Any unanswered question?
Now, after you've read critically and taken good notes, you're ready to write.
Open with a summary of the article. The purpose is to give a quick synopsis of the article for someone who has not read it. Summarize it in your own words. Keep your own comments out of this section. Again, your first task is to bring your reader up to speed on what you just read.
After summarizing the article, you should take some time to place the work in a broader context. Is the author an authority on the subject (as evidenced by previous scholarship)? Is this a controversial subject? Is there a debate in the literature?
Now bring up any of the specific critiques that came up in your reading. Data, methodology, and results... be brief where there are no major issues, elaborate on the areas of most concern. If there are things that are done exceptionally well, you can point that out too. But scholarly critiques are often a little stingy with praise. Try to find at least a couple of things that could be improved. No paper is perfect.
Discuss your overall impression of the article. Does the author succeed at convincing you? Is this a paper that will be useful to specialists? Will it have a broader appeal (i.e. should all economists read it)?
Depending on the specific type of review or critique and the type of article itself, you may have reason to vary the approach somewhat. But the basic skeleton of a summary, specific concerns, and the overall impression will get you well on your way.
Now, the great thing about this assignment is that you don't have to stick to just the critique of the article. Use the wiki format to develop new pages. Make a page for the author and for any important concept. The entries don't have to be long. Remember, the whole class can edit these all semester!
I will be looking at each person's contributions and provide you feedback regularly on your contributions. Good luck!
Most importantly, you must read critically.
This bears repeating. You must read critically.
This is not like reading a novel or even like reading an economic theory textbook. It is much more difficult skill, and one that is acquired with practice. That's why you're doing it.
Read the introduction carefully. Look for the thesis statement and highlight it. As you write your critique, you will want to keep that thesis in mind.
The introduction often has some hints about the approach the author will take in the paper. Jot them down for reference. Then move on to the next section (often discussing the methodology or the data). Is the data well documented? Does the choice of data set make sense? Is the author's methodology sound? (This is harder for undergraduate students to judge--but again, you're learning, and one purpose of this is to introduce you to some classic time-tested papers where the methodology has been judged to be sound so that you'll know what to look for in the future.)
Is there a theoretical model? Is it explained? Take some notes as you read. Does anything puzzle you? If so, ask about it. Are there statistical results? If so, are the results reported in a way that makes sense? Do they seem valid or are there important things that the author missed? Does the author use statistical and economic significance correctly? (We'll get to this later in the semester, so don't worry about that too much in the first assignment.)
Finally, read the conclusion. Does it summarize the article adequately? Does it offer avenues for further research? Any unanswered question?
Now, after you've read critically and taken good notes, you're ready to write.
Open with a summary of the article. The purpose is to give a quick synopsis of the article for someone who has not read it. Summarize it in your own words. Keep your own comments out of this section. Again, your first task is to bring your reader up to speed on what you just read.
After summarizing the article, you should take some time to place the work in a broader context. Is the author an authority on the subject (as evidenced by previous scholarship)? Is this a controversial subject? Is there a debate in the literature?
Now bring up any of the specific critiques that came up in your reading. Data, methodology, and results... be brief where there are no major issues, elaborate on the areas of most concern. If there are things that are done exceptionally well, you can point that out too. But scholarly critiques are often a little stingy with praise. Try to find at least a couple of things that could be improved. No paper is perfect.
Discuss your overall impression of the article. Does the author succeed at convincing you? Is this a paper that will be useful to specialists? Will it have a broader appeal (i.e. should all economists read it)?
Depending on the specific type of review or critique and the type of article itself, you may have reason to vary the approach somewhat. But the basic skeleton of a summary, specific concerns, and the overall impression will get you well on your way.
Now, the great thing about this assignment is that you don't have to stick to just the critique of the article. Use the wiki format to develop new pages. Make a page for the author and for any important concept. The entries don't have to be long. Remember, the whole class can edit these all semester!
I will be looking at each person's contributions and provide you feedback regularly on your contributions. Good luck!
