History. Lecture 1 (2013)

Apunte Inglés
Universidad Universidad Pompeu Fabra (UPF)
Grado International Business Economics - 2º curso
Asignatura International Business & Economic History
Año del apunte 2013
Páginas 3
Fecha de subida 22/06/2014
Descargas 4
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Lecture  1.  What  is  economic  history?   Efficency  in  the  use  of  resources  shapes  the  wealth  of  nations.     Economic  history  is  concerned  on  how  well  mankind1,  over  time,  has  used  resources  to   create  wealth.  Nature  provides  resources  and  man  transforms  these  resources  into  goods  and   services.   o Some  of  these  resources  are  fixed  (land);  others,  like  fertility  can  be  improved.  Other  resources   are  made  by  mankind  (machinery,  tools)  and  finally  there  is  labour  (how  well  the  mankind  uses   this  resources)   Economic  history  traces  the  efficiency  characteristics  of  institutions  by  studying  the   development  of  commodity  and  labour  markets,  financial  intermediaries  (banks),  and  legal   institutions  (contract  enforcement,  property  rights,  openness  to  trade  and  international  cash   flows)  -­‐              for  so,  and  inductive  type  method  is  used   -­‐markets  have  tended  to  become  thicker  and  more  efficient  over  time   -­‐money  facilities  trade  and  banks  can  help  saver  with  incomplete  knowledge  to  find  investment   -­‐openness  tends  to  increase  efficiency  in  the  use  of  resources  ,  but  there  are  losers  as  well.   Therefore  openness  is  linked  to  the  evolution  of  specific  institutions.  Governments  set  the  rules   of  the  game.   Historians  also  use  juridical,  political,  social,  cultural,  geographic  institutions   Efficiency  is  determined  by  the  technology  of  production  and  by  the  institutions  that  give   access  to  the  use  of  resources.     Institutions  or  principals  (Rights  of  Man)  are  the  rules  of  the  game  for  the  economic  life.   Examples:  if  the  people  are  not  enough  rewarded  they  will  not  offer  sufficient  effort,  thus  their   work  won’t  be  efficient.  Or  if  owners  don’t  have  capital  assurances  they  won’t  be  willing  to   invest  and  there’s  not  going  to  be  improvement.                          The  inequalities  in  the  distribution  of   income  tend  to  be  a  reason  for  distributional  conflicts  in  nations,  and  this  hamper2  growth   because  it  creates  uncertainty  about  the  rules  of  the  game  in  the  future.     Technology  is  knowledge  about  how  to  use  resources.  Modern  technologies  differ  from  pre-­‐ nineteenth-­‐century  technologies  by  the  fact  that  they  are  developed  form  theoretical  and   scientific  inquiry3  about  the  world.     Material  resources    can  be  classified  in:  rival  goods  (the  use  of  the  good  prevent  others   to  use  it)  and  non-­‐rival  goods  (the  ones  that  generates  EFFICENCY,  the  use  of  a  specific   knowledge  doesn’t  prevent  others  to  use  it).  Non-­‐rival  goods  have  potential  to  change  the   efficiency  of  production  Example:  Changes  in  corporate  taxation  can  be  imitated  in  any  nation.                                                                                                                           1  Humanidad    obstaculiza   3  investigación   2 ECONOMIES  THAT  ARE  RICHLY  ENDOWED  WITH  RESOURCES  ARE  NOT  NECESSARILY  RICH  BUT   ECONOMIES  WHICH  USE  RESOURCES  EFFICIENTLY  ARE  ALMOST  ALWAYS  RICH  IRRESPECTIVE  OF   THEIR  RESOURCE  ENDOWEMENT.   Why  do  we  study  economic  history?     Each  historical  situation  is  unique  and  non  repeatable   We  may  find  some  regularities,  but  not  LAWS.  This  prevents  predicting  the  future.     Ø Economic  history  gives  a  comprehensive  understanding  of  the  present   In  the  last  200  years  the  world  has  changed  quantitatively  and  qualitatively  more  than  in  any   other  moment  of  the  past.     To  understand  poverty  and  wealthy  in  the  world  is  one  of  the  main  tasks  of  the  economic   historian.  Inequality  is  a  child  in  the  modern  era.   Little  summary  of  economic  history  events   After  the  Roman  Empire,  trade  is  stimulated  by  proximity  and  similarity  and  it  is  the  major   force  of  integration.  Europe  trades,  therefore  it  is   XI-­‐XII  centuries:  Italy  and  Flanders  (the  Belgian  provinces  +  regions  of  northern  France  +  a   Dutch  region)   The  forces  that  stimulate  divisions  of  labour  (specialization)that  is  political  order,  population   growth,  money  supply  and  exchange,  were  essential  for  the  revival  of  the  European  economy  in   the  early  Middle  Ages  and  started  a  process  of  slow  growthof  welfare  based  on  skill  perfection   and  learning  by  doing   XV-­‐XVI  centuries:  Great  geographical  discoveries:  Portugal  and  Castile   XVII-­‐XVIII  centuries:  Trade  Empires:  UK,  Holland  and  France   Population  growth  tends  to  increase  demand  and  hence  divison  of  labour  as  well  as   technological  progress.  Institutions  develop  spontaneously  or  by  design,  that’s  why  efficient   institutions  are  often  stable,  but  stable  institutions  are  not  necessarily  efficient  (because  they   may  respond  to  serve  vested  interests  and  powerful  elites)   1770s:  British  Agrarian  Revolution  (earlier  advances  in    The  Netherlands)   1780s:  British  Industrial  Revolution   1820-­‐1870:  Great  Britain:  the  world’s  factory   Science  and  R&D  are  recent  phenomena  in  technological  development.  Fast  technology   transfer  after  1850  led  to  convergence  based  on  catch-­‐up  among  economies  that  had  the   appropriate  educational  and  institutional  infrastructures   1870-­‐1914:  British  climacteric  and  the  emergence  of  USA  and  Germany  -­‐  First  Globalization  Era   1914-­‐1918:  WWI   1919-­‐1929:  The  Happy  Twenties  and  the  birth  of  the  USSR  -­‐Union  of  Soviet  Socialist  Republics   [1922-­‐91]   1929-­‐1939:  The  Crash  and  the  Great  Depression   1939-­‐45:  WWII   1950-­‐73:  “Golden  Age”,  “Cold  War”,  “Welfare  State”  European  economic  integration  Bretton   Woods   The  idea  that  the  economy  was  a  self-­‐regulating  and  equilibrating  process  was  killed  by  the   Great  Depression,  and  after  de  WWII  worked  out  a  new  balance  between  politics  and   economics,  paving  the  way  for  activist  fiscal  and  monetary  policies.  The  Welfare  State  is   primarily  an  inter-­‐temporal  redistribution  institution  which  is  explained  by  market  failures  and   human  lack  of  self-­‐control.   1973-­‐79:  Oil  crisis     1980s:      Latin  America  Debt  Crisis   1990s:      The  end  of  the  Soviet  Block   Banks  have  developed  as  intermediaries  between  savers  and  investors  by  reducing  risks  in   saving,  by  solving  informational  asymmetries  and  by  monitoring  borrowers  more  efficiently   than  savers  would  be  able  to  on  their  own.   Net  gains  from  trade  do  not  preclude  winners  and  losers.  The  protectionist  paradox  is  that  both   large  and  small  groups  can  successfully  lobby  for  protectionism  and  win,  but  for  different   reasons.  Bad  times  foster  protectionism,  but  good  times  help  free  trade  forces.     World  income  inequality  has  probably  peaked  after  200  years  of  increased  income  gaps.  More   equality  ahead  need  not  be  just  wishful  thinking  but  will  be  the  result  of  an  increasing  number   of  nations  getting  the  institutional  infrastructure  needed  for  technological  transfer.             ...