Course motivation

Economic conditions and our economic lives are constantly changing. During the last decades, the rise of China has fostered deindustrialization in developed countries; the financial crisis in 2008 is still prolonging and visible in unconventional monetary policy measures; and technological change fosters the skill-premium and somewhat translates into radical political movements. How can we classify these current events and how unique are these changes in a historical context? Indeed, technological change, monetary and economic crises, waves of globalization and fertility transitions repeatedly shaped the world during the last 300 years. The lecture “Economic History” deals with the causes and determinants of the long-run evolution of economic and socio-economic variables. We look at economic shocks and their respective policy measures, zoom into the situation in Switzerland and ask whether economic history may help to achieve appropriate policy measures for challenges in the present day.

Course outline

This course provides an overview of economic history and the long-run development of socio-economic figures and focuses on the situation in Switzerland as well. The course consists of three main blocs. First, the course starts with the question why some regions in the world start to become so much richer than the rest of the world. Explanations for the economic success of Western Europe are, among others, the early fertility transition that caused the so-called “Little Divergence” and the Industrial Revolution starting in the UK around 1780. We also discuss whether the industrialization pattern in Switzerland parallels the situation in Europe. The first bloc ends with a lecture on the formation and evolution of social norms. We will discuss how the natural environment and long-gone historical or institutional legacies are shaping trust and norms until today. We also analyze the effect of culture on economic outcomes along the Swiss “Röstigraben” and the cultural legacy of the Zähringer dynasty.

Second, the course continuous with the period between World War I and World War II. During the interwar period, the independence of many countries in Central and Eastern Europe, hyperinflations, the Great Depression and the rise of totalitarian regimes (Soviet Union, Nazi Germany) shaped the economic situation fundamentally. We discuss the economic effects of World War I, the resulting hyperinflations and their ends. We continue with the economic downturn during the Great Depression. We focus on the course and the end of the crisis, analyze differences in the USA and Europe and discuss potential lessons that were somewhat adapted after 2008. We also discuss the economic situation and the temporal economic success of totalitarian regimes in Germany and the USSR.

The third bloc investigates the economic development after World War II. The division of Europe into an Eastern and Western bloc provides quasi-experimental settings to study economic growth and convergence. We analyze the liberation and zoning of Europe after World War II to understand the determinants of regional economic growth and political outcomes. We discuss the sources of the so-called “economic miracle” after World War II and analyze the economic effects of trade and monetary integration within the Western Bloc (e.g., GATT/WTO, Bretton Woods/Euro) and compare it to the situation in COMECON countries in Eastern Europe. We end the course with the monetary history from the Bretton Woods system to the Euro and the economic transition of Central and Eastern Europe (CEE) after 1990.