Intersecting Old with New: An Analysis of Rome's Economy

Abstract

This paper examines the time period of the early Roman Empire, the crisis of the third century, and the collapse of Rome. I look to economics to explain Rome’s collapse and examine monetary decisions and policies. My main goal, however, is to research ancient history from a modern perspective, compiling insights from different schools of economics and the applications to historical examples. Past studies have focused on crises like the great fire, the Antonine plague, and the rise of inflation. Yet few papers give insights into the broader reasoning for decision-making and societal implications of economic decline. Secondarily, using data analysis and linear regression models, I correlated soldiers' wages with currency devaluation. I found that each 1% decrease in silver content leads to a 14 denarius increase in annual pay. While the economy was indeed on the path to economic stagnation before the crisis of the 3rd century, and while some emperors had reformed the monetary system correctly, general macroeconomic decision-making and alternative factors led to Rome’s collapse. I later suggest an ethical framework of economics that combines Austrian and Keynesian thought and aims to mediate significant social problems.

Keywords: Rome, economics, history, inflation, correlation, debasement, devaluation, roman, soldier pay, keynesian, keynesian economics, austrian, austrian economics, adam smith, neoliberalism

JEL Classification: H12, H6, C, N13, P5