EPCI (Economie politique du changement institutionnel) Seminar

Du 07/05/2021 de 11:00 à 12:30

Via zoom

O SULLIVAN Mary (Université de Genève)

History as Heresy: The US Great Depression as a Real Puzzle

In spring 2020, in the face of the covid-19 pandemic, central bankers in rich countries made unprecedented liquidity injections to stave off an economic crisis. Such radical action by central banks gained legitimacy during the 2008-2009 global financial crisis and enjoys strong support from prominent economists and economic historians. Their certainty reflects a remarkable agreement on a specific interpretation of the Great Depression of the 1930s in the United States, an interpretation developed by Milton Friedman and Anna Schwartz in A Monetary History of the United States (1963). In this article, I explore the origins, the influence and the limits of A Monetary History’s interpretation for the insights it offers on the relationship between theory and history in the study of economic life. I show how historical research has been mobilised to show the value of heretical ideas in order to challenge economic orthodoxies. Friedman and Schwartz understood the heretical potential of historical research and exploited it in A Monetary History to question dominant interpretations of the Great Depression in their time. Now that their interpretation has become our orthodoxy, I show how we can develop the fertile link between history and heresy to better understand our economic past.

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