|This blog post was written by |
AlexandraM. de Pleijt,
post doc at Utrecht University
What drove economic growth in pre-industrial Europe, 1300-1800?
The Industrial Revolution is arguably the most important break in global economic history, separating a world of at best very modest improvements in real incomes from the period of ‘modern economic growth’. Thanks to pioneering work of van Leeuwen and van Zanden (2012) and Broadberry et al (2015) this phenomenon has recently been linked to the study of long-term trends in per capita GDP. One of the questions is to what extent growth before 1750 helps to explain the break that occurs after that date; the idea of a ‘Little Divergence’ within Europe has been suggested as part of the explanation why the Industrial Revolution occurred in this part of the world.
This ‘Little Divergence’ is the process whereby the North Sea Area (the UK and the Low Countries) developed into the most prosperous and dynamic part of the Continent. The new series on per capita GDP demonstrate that the Low Countries and England witnessed almost continuous growth between the 14th and the 18th century, whereas in other parts of the continent real incomes went down in the long run (Italy), or stagnated at best (Portugal, Spain, Germany, Sweden and Poland) (see Figure 1). As a consequence, at the dawn of the Industrial Revolution in the 1750s, the level of GDP per capita of Holland and England had increased to 2355 and 1666 (international) dollars of 1990 respectively, compared to 876 and 919 dollar in 1347 (just before the arrival of the Black Death), and 1454 and 1134 in 1500 (Bolt and van Zanden 2014).
|Gross Domestic Product per capita, 1300-1800. |
Notes and sources: See Bolt and van Zanden (2014)
In a new EHES working paper paper, we have tested the various hypotheses explaining pre-industrial growth in early modern Europe using new data on per capita GDP, political institutions (active parliaments), human capital formation (per capita book consumption), productivity in agriculture (yield ratio’s), and international trade (per capita size of the merchant fleet). Our empirical findings show that GDP growth before the Industrial Revolution was mainly driven by human capital formation. We moreover show that institutional changes (the rise of active Parliaments) were closely related to pre-industrial growth.
The working paper can be downloaded here: http://www.ehes.org/EHES_104.pdf
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