You cannot really understand monetary economics or monetary policy without knowing economic history. No self-respecting monetary economist goes to work without knowing the ins and outs of historical periods like the Depression of the 1930s or great works on such periods, such as Milton Friedman and Anna Schwartz’s Monetary History of the United States, Allan Meltzer’s History of the Federal Reserve, or Amity Shlaes recent popular book The Forgotten Man: A New History of the Great Depression building on the research of Harold Cole and Lee Ohanian.
Among fields of economics, this is especially true of monetary economics, where the theories can get quite abstract and thus benefit greatly from historical groundings, though it applies to other field as well. That’s why I took economic history as one of my Ph.D. fields along ago, and why I’m happy that my department at Stanford has always emphasized economic history with historians like Ran Abramitsky, Paul David, Avner Grief, Nate Rosenberg and Gavin Wright, even as it has been de-emphasized in other departments.
That’s why I’m also pleased that the new opinion page at Bloomberg News has decided to establish a blog called Echoes overseen by Amity Shlaes under the courageous assumption that “The past is news,” as Amity puts it. Echoes should remind traders that today’s profit opportunities can often be found in the economic echoes from the past, or at least remind policy makers that opportunities to improve policy can also be found there.
Here are a few pieces I wrote for Echoes since it was established in late May, mostly on policy lessons, including one from today, where I write that Fed officials should listen to a few of those echoes as they gather in Jackson Hole tomorrow:
Paul Volcker’s Most Important Lesson, June 22
After Revolution, the Hard Part, May 26