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What is the relationship of history to economics?

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Quick Answer

Both history and economics involve the study of events and patterns that have occurred over time and affect the present. This can be put together to be referred to as economic history, which helps people understand all patterns related to economics. Therefore, it provides economists a way to analyze patterns and argue based on historical events.

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Full Answer

Many educational institutions offer economic history as a course to allow graduates to gain vital knowledge and skills necessary in making crucial decisions. Employers and policymakers believe that the knowledge of economic history is vital in understanding financial systems.

Economic history allows students to understand major interruptions in economic performance and policies that have occurred in the past, and their possibility to occur again in the future. With different economic challenges that face the world, economic history provides a platform to critically analyze such challenges and attempts to diagnose them.

Various theories in economics help in understanding the real world, which is necessary in picking facts that really matter. Economic history also helps in evaluation of the interplay between institutions and markets. It opens up to new ideas and creates a new focus on approaching several issues that are vital in economic growth. Typically, economic history helps with making informed decisions that occur day to day in the world.

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