The Specification Problem in Economic History

Abstract

The rise of the new economic history has provoked a vigorousdebate on methodology. At issue is the validity of the effort of econometric historians or cliometricians, as practitioners of the new work are sometimes called, to apply the mathematical models of economics to the study of history. Some older historians have attacked the use of such models on the ground that they violate the empirical character of the discipline. In this view, the models employed by the cliometricians represent an unwarranted intrusion of speculation into an area of research previously limited to the careful collection and presentation of facts. The most severe criticism has been directed at the propensity of the new economic historians to deal with questions of the counterfactual-conditional type, that is, with questions which ask how the development of the economy would have been altered by the absence of one or more of its observed features. It has been asserted that the models which underlie the answers to such questions are “figments” and that they cannot be verified. Consequently counterfactual models are held to be a direct threat to the integrity of economic history as an empirically confirmed description of the economic development of nations.