Department of Economics Economic History Field Exam
University of California, Berkeley January 2011
Answer one question from each of parts A, B, and C:
PART A: THE GREAT DEPRESSION:
1. “The Great Contraction,” the chapter on the Great Depression in Milton Friedman and Anna
Schwartz’ _Monetary History of the United States_, is often described as the most influential
economic analysis of the causes of the Great Depression. What exactly do Friedman and
Schwartz argue? Is there analysis compelling? What are the shortcomings of their argument and
their mode of analysis? If you were to try to write a similar chapter today, how would you write
it differently?
2. One thing that makes history unstable is that the more we learn about the present as time
advances changes our view of what happened in the past. How is your view of the Great
Depression different in the aftermath of the Great Recession of 2007-2011 than your view would
have been three years ago?
3. Is it best to think of the Great Depression as a single process, or as two processes--one
centered in America and focused around banking crises and a flight out of private-sector risk
assets and into quality, and the other centered in Europe and focused around exchange rate
crises? Argue first for one and then for the other hypothesis, and then say where you come down.
PART B: INTERNATIONAL ECONOMICS:
1. Charles Kindleberger famously argued that periods marked by shifts in global economic and
geopolitical power also tend to be periods of exceptional instability for the world economy. Is the
history of shifts in global economic preeminence (from China to the West, from the Dutch to the
British, from Britain to the United States, for example) consistent with this hypothesis? If so,
what is the connection between shifts in economic preeminence and economic instability? What
if anything does this history tell us about the ongoing rise of China as a global power?
2. The old chestnut: Why Western Europe rather than China? Why Lancashire rather than the
Yangzi Delta?
3. Why was the classical gold standard a relative success before and a flop after World War I?
What more general lessons for exchange rate systems should we draw from this comparison?
PART C: THE BUSINESS CYCLE IN HISTORICAL PERSPECTIVE:
1. Economic historians have long debated whether there has been a tendency for nominal wages
to grow more rigid over time. What is the most convincing evidence for and against this
hypothesis? If there has been a change in nominal wage flexibility, when would you pinpoint it
and how would you explain it? What are the main alternatives to your preferred timing and
explanation?
