Economic Impact of War and Recovery
47 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What percentage of total war deaths is attributed to the USA and Germany combined?

  • 10%
  • 25% (correct)
  • 34%
  • 6%

What was the GDP per capita trend recovery time following World War II?

  • 30 years
  • 2 decades (correct)
  • 10 years
  • 20 years

According to the content, what factor influences the speed at which a country's economy catches up post-war?

  • Per capita income level (correct)
  • Natural resources
  • Population density
  • Foreign investments

What effect does wartime destruction have on long-term city growth?

<p>Resilience in city growth is observed (A)</p> Signup and view all the answers

What major aspect of economic activity increases at the end of the war period according to the discussed themes?

<p>American economic activity (C)</p> Signup and view all the answers

What is one of the main focuses of the course regarding economic transitions?

<p>The transition from pre-modern economic stagnation to modern economic growth (D)</p> Signup and view all the answers

What economic event does the course examine as a significant historical occurrence?

<p>The Great Divergence (A)</p> Signup and view all the answers

In what format will the case studies be submitted?

<p>One A4 historical case study per group (D)</p> Signup and view all the answers

What constitutes the majority of the final exam's evaluation?

<p>MC questions and open questions combined (B)</p> Signup and view all the answers

What is one of the group project requirements regarding the case study?

<p>Choose a course-related topic like the Great Depression in the Netherlands (D)</p> Signup and view all the answers

What aspect of the Great Depression does the course specifically analyze?

<p>The economic and political consequences of the Great Depression (D)</p> Signup and view all the answers

Which of the following is NOT a key topic covered in the course?

<p>The impact of climate change on economies (B)</p> Signup and view all the answers

What is a key goal of the course?

<p>To understand the history of the world economy (B)</p> Signup and view all the answers

What is one way that economic history contributes to understanding non-experimental economic data?

<p>By offering historical examples as natural experiments (C)</p> Signup and view all the answers

Which of the following is a limitation of controlled experiments in economics?

<p>Many economic factors cannot be isolated in a controlled environment (D)</p> Signup and view all the answers

How does economic history address the scarcity of data in studying rare events?

<p>It utilizes historical events to provide additional observations (B)</p> Signup and view all the answers

What does path dependency in economic history imply?

<p>Past economic events significantly influence present economic conditions (B)</p> Signup and view all the answers

What is an example of a historical event that can illustrate economic effects?

<p>The monetary policy changes following maritime disasters (D)</p> Signup and view all the answers

According to the content, what is the relationship between expansionary monetary policy and GDP growth?

<p>There is a high correlation between expansionary monetary policy and low GDP growth (C)</p> Signup and view all the answers

What does the observation about economic data suggest regarding historical data's role in economics?

<p>Historical data is vital for understanding current economic issues (C)</p> Signup and view all the answers

What important insight can be gained from studying the Great Divergence?

<p>It highlights the impact of history on current economic inequalities among countries (D)</p> Signup and view all the answers

What is the threshold for a recession caused by a financial crisis in terms of real GDP per capita decline?

<p>≥5% (B)</p> Signup and view all the answers

How long does a typical recession last compared to a recession caused by a financial crisis?

<p>1-2 years vs. several years (B)</p> Signup and view all the answers

Which of the following is NOT considered a salient long cycle in economic variables?

<p>Exchange rate fluctuations (B)</p> Signup and view all the answers

According to the content, the distant past can be more relevant for the present compared to which of the following?

<p>Recent economic events (B)</p> Signup and view all the answers

What does the data on global goods market integration indicate about the average trade ratio based on developed economies from 1870 to 2020?

<p>It has increased generally over time. (C)</p> Signup and view all the answers

What was the top decile income share in Europe and the United States during the period of 1950s-1970s?

<p>30-35% (C)</p> Signup and view all the answers

Who are the authors associated with the analysis of monetary policy, leverage cycles, and financial crises from 1870 to 2008?

<p>Schularick and Taylor (D)</p> Signup and view all the answers

What kind of changes do many important economic variables exhibit over time?

<p>Long cycles (B)</p> Signup and view all the answers

What is defined as a systemic financial crisis?

<p>Severe banking sector issues leading to interventions (C)</p> Signup and view all the answers

Which of the following regions is shown to have significant GDP per capita changes over time?

<p>Both East-Germany and West-Germany (C)</p> Signup and view all the answers

According to the data, when did significant economic developments occur in Germany?

<p>Between 1938 and 1950 (A)</p> Signup and view all the answers

What kind of dataset did Schularick and Taylor compile to study financial crises?

<p>A dataset of systemic financial crises in advanced economies (C)</p> Signup and view all the answers

What are potential effects of regions facing fundamental institutional and political changes?

<p>They could have long-run economic impacts. (B)</p> Signup and view all the answers

According to the content, how many observations of financial crises were noted post-WW2?

<p>Relatively few observations (B)</p> Signup and view all the answers

What denotes the costs of systemic financial crises compared to normal recessions?

<p>Higher income losses and longer recovery times (C)</p> Signup and view all the answers

Which authors are associated with the study of credit cycles and financial crises?

<p>Schularick and Taylor (B)</p> Signup and view all the answers

What was a persistent effect of the inventions such as the steam engine and Spinning Jenny?

<p>Onset of modern economic growth (D)</p> Signup and view all the answers

Based on the data presented, which city had the highest wages compared to the others listed?

<p>London (C)</p> Signup and view all the answers

Which of the following inventions is associated with the industrial revolution and economic growth?

<p>Steam engine (C)</p> Signup and view all the answers

Which value represents the lowest wage in grams of silver per day amongst the listed cities?

<p>4 grams (B)</p> Signup and view all the answers

What metric is used to illustrate wages in the provided data?

<p>Grams of silver per day (D)</p> Signup and view all the answers

Which city is NOT mentioned as having high wages in the data?

<p>Paris (A)</p> Signup and view all the answers

What economic phenomenon is evidenced by high wages in England?

<p>Modern economic growth (A)</p> Signup and view all the answers

Which other technology could be categorized alongside the steam engine for its impact on economic development?

<p>Spinning Jenny (C)</p> Signup and view all the answers

In the economic data provided, which of the cities shows a wage close to 10 grams of silver per day?

<p>Amsterdam (A)</p> Signup and view all the answers

What general trend does the graph imply about wages in major cities during the era referenced?

<p>Significant variation in wages (B)</p> Signup and view all the answers

Flashcards

Economic Recovery

The level of economic activity in a country or region returns to its previous levels after a period of decline, often due to a war or disaster.

Resilience of City Growth

The long-term growth of cities, even after significant destruction, is surprisingly strong.

Post-WWII Economic Recoveries

The period after World War II saw relatively rapid recovery of economies in many countries.

Recovery Speed and Income Level

The rate at which an economy recovers after a decline depends on its pre-war income level. Poorer countries tend to recover faster.

Signup and view all the flashcards

War Deaths as Human Capital Loss

The number of deaths in a war, divided by the population before the war, can be used to measure the impact of war on a country's human capital.

Signup and view all the flashcards

The Transition to Modern Economic Growth

The global economy's shift from slow, stable pre-modern conditions to the period of sustained rapid progress we see today.

Signup and view all the flashcards

The Great Divergence

The widening gap in income levels between different parts of the world, specifically between richer nations and poorer nations.

Signup and view all the flashcards

The Great Depression

The severe worldwide economic downturn that began in 1929 and lasted through the 1930s, characterized by widespread unemployment, deflation, and a decline in global trade.

Signup and view all the flashcards

Economic History

The examination of past economic events and their causes and consequences, providing insights into long-term trends and policies.

Signup and view all the flashcards

The Pre-Modern Economy

The study of economic systems before the transition to modern economic growth, highlighting factors like agriculture, trade, and societal structures.

Signup and view all the flashcards

Course Introduction

A brief overview of important topics and key questions that will be explored in the course.

Signup and view all the flashcards

Final Exam

The primary method of evaluation in this course, consisting of a set of open-ended and multiple-choice questions.

Signup and view all the flashcards

Case Study

A group assignment requiring in-depth analysis of a historical economic event, allowing for application of course concepts.

Signup and view all the flashcards

Natural Experiments in Economics

Economic data typically is not collected through controlled experiments but history provides opportunities for natural experiments, where groups are seemingly randomly assigned to treatments, often with unforeseen consequences.

Signup and view all the flashcards

Rare Events and Long Cycles

Studying rare events like major pandemics or financial crises using historical data allows economists to analyze their long-term impacts and patterns.

Signup and view all the flashcards

Path Dependency in Economics

The present state of economies is influenced by past decisions and events, making historical understanding crucial for comprehending current economic trends.

Signup and view all the flashcards

Lack of Controlled Experiments in Economics

Controlled experiments are vital in many sciences, but economics often lacks them. However, historical events can provide valuable insights into causal relationships by acting as quasi-experiments.

Signup and view all the flashcards

Correlation vs. Causation in Economics

Simply observing a correlation between expansionary monetary policy and low GDP growth might be misleading. It doesn't necessarily imply a causal relationship.

Signup and view all the flashcards

Effects of Money Supply Changes

Studying historical data, such as maritime disasters in the Spanish Empire, allows economists to examine the impact of money supply changes on economic outcomes.

Signup and view all the flashcards

Long-run Datasets in Economics

Long-term datasets, gathered from historical records, help economists understand the effects of big financial crises, pandemics, and wars on the economy.

Signup and view all the flashcards

The Great Divergence in Economics

Economic history plays a key role in explaining why some nations are wealthy while others are not. Understanding historical patterns provides insights into income disparities across countries.

Signup and view all the flashcards

Onset of modern economic growth

A period of substantial economic growth marked by significant advancements in technology, productivity, and living standards.

Signup and view all the flashcards

High wages in England

The cost of labor in England was relatively high compared to other parts of the world.

Signup and view all the flashcards

Figure 1: Wages in Grams of Silver

A visual representation of the average daily wages in different cities across the globe during the 18th century, measured in grams of silver. It highlights the relative wealth and economic conditions in various locations.

Signup and view all the flashcards

Systemic Financial Crisis

A situation where a significant number of financial institutions experience bank runs, default rates surge, and capital losses occur, which results in government intervention, bankruptcies, or forced mergers.

Signup and view all the flashcards

Schularick and Taylor (2012)

They analyze data on systemic financial crises from 17 advanced economies between 1870 and today.

Signup and view all the flashcards

Long-Run Effects of Institutional Changes

The long-term economic effects on regions that undergo significant political and institutional changes.

Signup and view all the flashcards

Recessions

Periods of economic downturn characterized by a decline in economic activity, employment, and income.

Signup and view all the flashcards

Regional Inequality

The difference in income levels between different regions or groups.

Signup and view all the flashcards

Income Losses in Financial Crises vs. Recessions

The economic losses experienced during financial crises compared to regular recessions.

Signup and view all the flashcards

Credit Booms and Busts

Periods of rapid growth in credit followed by a sudden decline, often leading to financial crises.

Signup and view all the flashcards

Systemic Financial Crisis Dataset

A dataset compiled by Schularick and Taylor (2012) that captures systemic financial crises across 17 advanced economies.

Signup and view all the flashcards

Financial Crisis Recession

A recession resulting from a financial crisis, characterized by a significant drop in GDP (at least 5%) and a prolonged recovery.

Signup and view all the flashcards

Normal Recession

Economic downturns with a shorter duration and milder impact on GDP, typically lasting 1-2 years and causing a 1-2% decline.

Signup and view all the flashcards

Long Cycles

Recurring patterns of long-term growth and decline observed in various economic indicators, lasting several decades.

Signup and view all the flashcards

Global Goods Market Integration

The extent to which a country's economy is integrated with global markets for goods and services, measured as the ratio of exports and imports to GDP.

Signup and view all the flashcards

Global Capital Market Integration

The extent to which a country's financial system is interconnected with global markets for capital, measured by the ease of cross-border investment and borrowing.

Signup and view all the flashcards

Debt-to-GDP Ratio

The ratio of a country's total debt to its GDP, often used as an indicator of financial risk and vulnerability.

Signup and view all the flashcards

Income Inequality

The disparity in income distribution among different segments of society, often measured as the share of national income held by the highest earners.

Signup and view all the flashcards

History Does Not Repeat Itself, But It Rhymes

The idea that historical patterns and trends can provide insights into current economic conditions and future possibilities, despite the uniqueness of every historical period.

Signup and view all the flashcards

Study Notes

Economic History Introduction

  • This course explores the transition from pre-modern economic stagnation to modern growth.
  • It examines the "Great Divergence," the simultaneous variations in per capita income across the world.
  • The course analyzes the causes and consequences of the Great Depression and the role of different economic policies in ending it.

Course Goals

  • Students gain a comprehensive understanding of world economic history.
  • Students learn and understand the key theories related to the transition to modern economic growth and the Great Depression.

Course Schedule

  • Week 1, Session 1: Introduction
  • Week 2, Session 2: The pre-modern economy
  • Week 3, Session 3 & 4: The transition to modern economic growth, The Great Divergence
  • Week 4, Session 5: Prelude to the Great Depression
  • Week 5, Session 6: The Great Depression
  • Week 6, Session 7: The spread of the Great Depression
  • Week 7, Session 8: Recovery from the Great Depression
  • Week 9, Session 9: Q&A

Course Materials

  • Lecture slides
  • Book chapters/papers from Canvas
  • Online content (blog posts, video clips, etc.)
  • Quizzes

Evaluation

  • Final Exam (80%): 5 open-ended and 20 multiple-choice questions, 2 hours long
  • Case Study (20%): Group projects of 4 students, one A4 page

Case Study Details

  • Groups form on Canvas by Friday of Week 1, random allocation after that.
  • Group formation should be self-selected.
  • Student groups self-select and choose their own course-related topic (time period and region)
  • Case study examples are available on Canvas
  • Case study due on Friday of Week 7

How to Access Literature

  • University library (URL provided)
  • Google Scholar (URL provided)
  • Journal rankings (URL provided)

Why Economic History?

  • Natural experiments: History provides opportunities not available in controlled experiments
  • Rare events: Analyzing the economic impact of historical, infrequent events
  • Path dependency: Understanding lasting effects of past events

Why Economic History? - Further Details

  • History helps because economic data is often non-experimental, yet history sometimes offers "natural experiments".
  • Examples of natural experiments include causal effects of money supply changes and maritime disasters.
  • Historical data often allows for observation of rare events (e.g., financial crises), which are hard to analyze with standard data sets.
  • History provides relevant long-run datasets.
  • Understanding the past is crucial to comprehending the present; as some countries are rich and others not. This issue can be analyzed by understanding the Great Divergence.

The Spanish Empire Case

  • Maritime disasters in the 15th - early 19th centuries offer a repeated natural experiment.
  • The Spanish Empire experienced substantial silver losses, directly influencing money supply changes.
  • Analysis of these losses can be used to understand the effects of money supply changes.

Economic Consequences of Pandemics and Wars

  • Jordà, Singh, and Taylor (2022) conducted a study to analyze the economic consequences of events such as pandemics and wars back to medieval times.
  • Long-run datasets were used, including 19 large pandemics and over 200 wars, and covered indicators of interest rates and wages.
  • Countries studied include France, Germany, Italy, Netherlands, Spain, and the UK.

Predictions of Neoclassical Growth Models

  • Cobb-Douglas production function is a model used.
  • Predictions from the model include, that pandemics decrease labor force and increase wages, while wars decrease both labor and capital, affecting returns.

Recovery from Wars and Disruptions

  • Post-WW2 recoveries were relatively quick, with GDP per capita returning to pre-war levels within two decades.
  • Recovery of destroyed cities in post-World War II Japan and Hiroshima was also relatively rapid.

Fundamental Vs. Proximate Causes of Growth

  • Regions with greater political or institutional changes were more vulnerable to long-run impacts.
  • Regions subject to fundamental changes can experience long-run impacts. (e.g., institutional or political changes).

Financial Crises

  • Schularick and Taylor (2012) compiled a dataset on systemic financial crises, which examines banking sector experiences (e.g., bank runs, defaults).
  • They analyzed 17 advanced economies from 1870 to the present.
  • Financial crises produce substantial economic losses compared to regular recessions.

Long Cycles

  • Many factors of long cycles are relevant to the present, including inequality and debt-to-GDP ratios.
  • They are more relevant than recent past, given the long-run nature of these issues.

Path Dependence

  • Past events and initial conditions often have persistent effects in path-dependent systems.
  • The QWERTY keyboard layout or railway track gauge serve as examples of path dependence.
  • The Industrial Revolution in 18th-century England provides an example. This was due to the unique combination of factor prices (particularly high wages, cheap coal, and low interest rates).

Factor Prices and Technology Choices

  • Factor prices, such as wage levels, energy, and capital costs, have influenced technological choices in industries like textiles.
  • The different costs influenced technology development and use in different countries (e.g. England vs. France).

Summary of Economic History

  • The study of economic history provides a wealth of information about the causes and consequences of specific events, offering unique insights and perspectives.
  • It aids understanding of historical events which are relevant for the present.
  • Studying economic history contributes to economic analysis.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

Related Documents

Economic History Lecture 1 Introduction PDF

Description

This quiz explores the economic aftermath of war, focusing on factors such as GDP trends, wartime destruction, and transitions in economic activities. It covers the historical significance of World War II and the Great Depression, along with group project requirements and evaluation methods. Join in to understand the complexities of economic recovery post-conflict.

More Like This

Use Quizgecko on...
Browser
Open
Browser
Browser