Econometrics and Economic History

The purpose of the course is to introduce students to practical and formal aspects of econometric models through examples in economic history.

The course will cover economic history research on the importance of historical events for modern economic development. Can geography, culture, or institutions explain why we are richer than our ancestors? Do events in the distant past explain the large differences in incomes across societies today? Recent research has put an enormous effort into collecting historical data and analyzing it with modern econometric models. The course will review this recent research as a vehicle to introduce econometric models from a practical standpoint. The course will cover simple regression models, its main challenges, and several econometric models used to overcome them (differences-in-differences, instrumental variables, falsification tests, and regression discontinuity).

A key theme of the course is the colonization of America and Africa, and its persistent effects on economic development. How do income differences between North and South America relate to their colonization experiences? What is the relationship between historical slave trade and poverty in Africa? The course will also analyze a selected number of mechanisms through which colonization and slave trade affected development: institutions, property rights, inequality, geography, legal system, and culture.

The course will be structured as follows: 1) An econometric model will be presented in class from a theoretical standpoint; 2) Next, the econometric model will be put into practice to answer a question in economic history related to colonization. As for compulsory assignments, students will present a topic. As assessment, students will produce an essay, and write an exam. Active participation in class discussions is highly encouraged. Finally, this course can serve as an inspiration to choose topics on the bachelor thesis.

A student who has completed the course should have the following learning outcomes: 

Knowledge

The student

• Understands the econometric concepts of endogeneity, measurement error, omitted variables, reversed causality, selection, and causal inference.
• Understands formal and practical aspects of the following econometric models: regression analysis, differences-in-differences, instrumental variables, falsification tests, and regression discontinuity.
• Has basic knowledge of the history of slave trade and colonization after 1500.
• Understands different theories connecting economic growth, inequality, institutions, and path dependence.

Skills

The student

• Can explain formal and practical aspects of econometric modeling.
• Can critically discuss empirical findings and put the results into a socio-economic perspective.
• Can discuss how institutions, geography, and culture affect economic growth and welfare; and how historical events can shape these relationships.
• Can apply the econometric and economic history concepts learned in the course to current debates on inequality and economic development.

General competence

The student

• Can effectively communicate ideas and formal concepts in presentations and written essays.
• Can participate constructively in discussions on their own and others' work.
• Can understand reports and journal articles related to the topics covered in the course.
• Can use the skills and concepts acquired in the course as a source of inspiration to write a bachelor's thesis.