Between micro and macro — what economic history can learn from modern economics

Abstract

The aim of this paper is to discuss the role of economic history to modern economic theory. Taking my point of departure from the division that still haunts economic history — between micro and macro approaches — the paper argues that economic theory today is significantly different from what it was only twenty or thirty years ago. Hence, for example, the division between micro and macro has been upset in modern economics. Also the development of institutional economics, the use of concepts like “bounded rationality” or “path dependence” makes it necessary for economic historians to learn from and confront modern economic theorizing. Many economic historians criticise a version of (neo-classical) economics) that belongs rather to the past than to the present.