Economic History Midterm

Eric Jones, The European Miracle (1981)

Examines rise of Europe compared to Islamic & Chinese civilizations from the Late Middle Ages -> 20th C.

Joel Mokyr, Lever of Riches (1992)

Argues there emerged a unique culture of innovation in England that led to the industrial revolution.
Stated China and India did not compare.

Kenneth Pomeranz, The Great Divergence (1996)

Compares Britain and China in early modern period (Disputes simplified claims of previous authors)
Direct comparative research w/ focus on resources (domestic coal and colonial produce to explain divergence)

California School Scholars

Argue that until ~1800 India and China share of Global GDP was high, and is usurped by Western Europe and USA afterward

Ray Dalio

Argued that there are cycles of growth and prominence of major powers

The Big Cycle of Internal Order and Disorder

6 Phases proposed by Ray Dalio to describe the rise, peak, and decline of prominent nations

First Economic Historians

Since economists didn't exist yet, it was an interdisciplinary study by rich white politics guys - started out with simple relativistic models of human behavior

Karl Marx

Believed in the Development of Society in Stages (primitive, slave, feudal, capitalistic, communistic)

Marxist Progression

In each stage, freedom is reach through reform/rebellion

W. W. Rostow

Had Five Stages of Economic Growth (Traditional, Preconditions for Take-Off, Take-Off, Drive to Maturity, Age of Mass Consumption (response to Karl Marx)

Rostow Critics

Believe his stages are too linear and Western-centric, ignores that possibility of skipping stages through globalization and technology transfer

Wittfogel's Hydraulic Theory

Believed Asian states had very powerful despots who absorbed all surplus and could control population through water supply -> Indian population had no choice but to accept poverty

Alexander Gerschenkron (1962)

Theory of economic growth: backwardness model

• the more backward an economy is at the outset of economic development, the more likely certain conditions are to occur
  All states don't industrialize the same way

Advantages of 'Economic Backwardness'

They could import new technologies from already industrialized countries, the state could play an important role in coordinating industries, banks could play an important role in providing finance. (e.g. Stalin's 'Big Push')

Edward Said, Orientalism (1978)

Argued that many cultural representations of Asia reflect western perceptions as opposed to realities and the tendency of romanticizing the East/Middle East was a way to justify colonialism.

Economic Development measureables

GDP, real wages, productivity, factors of production, utility, etc.

Cliometric Revolution

Applied econometric techniques to Economic History with exponentially increasing dataset sizes over time

New Institutional Economics

Recognize that economic growth depends on political/economic institutions to provide security, enforce contracts (courts), stable currencies. Branch is more akin to political science than traditional economics

Hatton, O'Rourke, & Taylor (2007)

Argued that research should be generalizable similar to that of Pomeranz and see history as a source of economic experiments across different regions and time periods

Drivers of Change in Economic History

Technology, human capital (# of people in universities), changes in who is researching (# of people not from west increases and want to research where they're from), more papers overall

Imperfect Experiments

There's no way to create experimental and control groups out of a whole economy and not two countries or societies are exactly alike

Lack of data/sources

Very difficult to find sources which provide exact answers

survival bias

Occurs when the results of a study are influenced by the fact that in some place records still exist while in others they don't due to cultural differences

Selection Bias

A polling error in which the sample is not representative of the population being studied, so that some opinions are over- or underrepresented

Lamp-post effect

A result of scale and survival bias problems, where researchers are only looking into areas where data exists.

Knowledge constraints

Limited access to archives in war-torn regions, lack of experience with history, culture, and language(s) of a region

Types of Sources

Diaries, biometric data, historical architecture, paintings and art, artifacts, linguistics

advantages of quantitative methods

Allows for larger study scopes and comparative research

Disadvantages of Quantitative Methods

Need large amounts of data which has innate biases, also correlation is relatively easy, proving causation is much harder

examples of quantitative methods

Statistical analyses, time series (correlations), and regressions (causation)

Examples of qualitative methods

Case studies, analytical narratives, biographies

Advantages of Qualitative Methods

Need less data, can test theories and concepts through the human experience

Disadvantages of qualitative methods

Still need sources which have biases, and have less data which means narrower scope

Examples of Theoretical Methods

Market models, game theory models

Advantages of Theoretical Methods

Able to study topics where there is little to no data and can understand what potential outcomes might be

Disadvantages of Theoretical Methods

Generally include many assumptions and restraints to make them model work which are unrealistic in the real world

Thomas Malthus (1766-1834)

Believed populations have the potential to increase at a faster rate than resources. As a result there is intense competition among individuals

Marginal Returns to Labor

At first increasing returns with each extra person working, then diminishing returns per person added

Malthusian Trap (1798)

Believed there was a maximum per capita income so to stop poverty we need population growth control through positive and preventative checks

positive checks on population

War, famine, disease - i.e. the deaths of people who are alive now

preventative checks on population

"moral restraint" - abortion, birth control, abstinence, sterilization, delayed marriage - i.e. lowering birth rate

Solow-Swan Model

Standard growth model developed in late 1950s which assumes steady state is always preserved

Total Factor Productivity (TFP)

Any permanent improvement in the efficiency with which factors of production are combined over time

Evidence against Malthus

Historical data shows highly variable population density, with areas that he believed to be the richest having high density.

First to Escape Malthusian Trap

China population growth was especially high after 1600 with introduction of new world crops (like potatoes) and because wet rice had much higher marginal return

Causes of historical differences in global population levels

Western European marriage patterns (Hajnal), response to soil productivity, institutions, historical wealth & income

Ester Boserup

Posed a revision to Malthus that describes food production will increase in conjunction to population growth because of innovation. There have been at least two key points where food production has spiked because of innovation - the Agricultural Revolution and the Industrial Revolution.

Path Dependence

A situation in which the options one faces in the current situation are limited by decisions made in the past

Mark Elvin

Theorized about the High Level Equilibrium Trap: a situation in which an economy that is meeting high levels of demand with traditional technology finds that it has little scope to increase its output

Jared Diamond (1997)

Author of Guns, Germs, and Steel - believes that geography is the key to inequality

McClosky

Determined that peasants had several plots of land in different regions as opposed to one large plot to adjust to climate uncertainty (low risk, stable output)

Abu Lughod

Argued that black death (an exogenous event) led to the end of the silk road era

Bruce Campbell (2016)

Related environmental and economic changes to each other (cooling temperatures led to declining trade)

Geoffrey Parker (2015)

Attributes 17th Century Crisis to a Little Ice Age that occurred during the period

Pierre-Etienne Will & Bin Wong

Outlined Chinese State granary system as a way for preserving grain for times of famine as well as flood prevention system

Why was triangle trade worth it

Cash crops like cotton and sugar were worth enough to counteract the cost to transport slaves across the Atlantic to the Americas for those doing it.

Industrial Revolution

"period of modernization, social change and increased productivity occurring in England between 1750-1900"

Edmond Smith (2025)

Argued networks & linkages mattered more than technology for ind rev

Alka Raman

Argued that European manufacturers were trying to match Indian cloth quality, not production costs

LRAC

long run average cost (economies of scale)

Jan De Vries: Industrious Revolution (1994)

Argued conspicuous consumption was what drove industrial revolution as "keeping up with the Joneses" led to effective demand

Joel Mokyr Education Explanation

Believed that Enlightenment ideals and scientific organizations like the Royal Society spurred the industrial revolution through the culture of experimentation and rational though

Yifu Lin

Argued that Chinese imperial examination system was not based on useful knowledge like science and technology, but solely on Confucian Classics

Robert Allen

Argued that Britain's high labor and low energy (coal) costs led to company owners trying to save on cost through mechanization

Hartwell

Showed that during the 11th century Chinese iron production matched Europe's in the 18th century. (~125000 tons)

Needham Puzzle

Wondered why modern science started in Europe as opposed to Asia

Smithian Growth

Extensive growth through the increasing factors of production (specialization, market expansion, population growth)

Schumpeterian Growth

Intensive growth through TFP that leads to 'creative destruction' where new technologies/processes change the manner of production

Production Possibility Frontier

All of the possible combinations of two outputs that can be produced in an economy with given inputs (K,L)

Cobb-Douglas production function

Y=AL^aK^b (output = TFP * labour^a * capital^b)

cottage industry

Manufacturing based in homes rather than in a factory, commonly found before the Industrial Revolution.

Factory System

A method of production that brought many workers and machines together into one building

Urbanization

Drastically increased between 1850-1920

Major Industries

Textiles, transportation, metallurgy

Adam Smith on Inequality

Believed that wherever there was great property there was great inequality, and civil institutions were the only thing stopping anarchy from equalizing it

Deng Xiaoping Theory

"Let some people get rich first", reformed communist reforms in China after Mao to spur economic growth

Maddison Data Problems

Assumed based on backward projections in Europe and secondary sources in China, India and Africa which were generalized

Tracking Income

Difficult because has many sources (wages, subsistence, rent) which were generally not reported before the wage economy. Also must take into account cost of living

Tracking wealth

Done generally through probate records (wills and testaments), though can be misleading

Gini Coefficient

Gini Index G = A/(A+B), on the Lorenz Curve tries to measure inequality by comparing income share for each percentage of population

Mahbub ul Haq & Amartya Sen

Developers HDI (combination of life expectancy, adult literacy, GDP per capita) to compare quality of life rather than wealth/income.

Calorie consumption

Studied the quality of nutrition of different groups of societies over time to see which were able to eat more protein and reach minimum daily requirements (theory has flaws related to diet)

Height

Changes in height between generations can indicate quality of health and life generally when controlling for genetics and age since it is highly dependent on nutrition and (lack of) disease

Legal Inequality

Examples include apartheid South Africa, Jim Crow United States, women's lack of financial independence in Spain until 1970s.

Adam Smith on Profits

Believed revenue should be used to increase equality at the expense of technology and innovation. Also thought competition would lead to lowered profits across the board

David Ricardo

He proposed the iron law of wages, which was a theory proposed suggesting that the pressure of population growth prevents wages from rising above the subsistence level.

Why Ricardo was wrong

People moved from rural areas to urban ones decreasing demand for land there and stopping high rents from leading to low income per capita

Karl Marx on Inequality

Blames the capitalists (bourgeoisie elite) since owners of the capital keep all of the returns of the technology and workers get a small percentage despite doing majority of the work.

Simon Kuznets

Used data on the top decile of income shares he believed inequality would fall off naturally ("trickle down economics")

Thomas Piketty

Argued when looking at a broader time span than Kuznets that inequality was rising for a century before it fell since r > g (rate of return on capital was greater than economic growth)

Why Inequality dropped after 1910

WW1, WW2, and Great Depression were external shocks that lead to gov't intervention and the creation of the welfare system

Broadberry, Guan & Li

Built dataset from 1300-1850 comparing Yangzi province to the European frontier in terms of GDP per capita, state that divergence actually occurred in 1700s.

Parthasarathi Prasannan

Argued Bengali wages were higher than England's, discrediting Robert Allen's theory.

Judy Stephenson

Assessed builder's wages across major western Europe cities and found that London was middle of the pack, not the top, discrediting Robert Allen's theory.

Feuerwerker

Noted that in the 18th century 92% of China's land was privately owned and 60-80% of it was farmed by those who owned it (as opposed to the tenant/serf system in Europe)

Jane Humphries used 600 autobiographies to show that share of children 7-12 years old spiked upwards of 10% during the industrial revolutiion

Antebellum Puzzle

Positive trends in economic indicators, negative trends in biological indicators due to consequences of urbanization and poor living standards

Engel's Pause

Noted gap in per capita gains and stagnate real wages due to
the fact that it takes time for capital to be adopted and factories to get off the ground.

Douglas North

Described institutions as the "rules of the game" accepted by a group to shape each others behavior

Formal Institutions

The state (law, court, taxation systems), contracts, charters and banks,