Working Paper: CEPR ID: DP14816
Authors: Leandro Prados de la Escosura; Carlos Vladimir Rodriguez-Caballero
Abstract: This paper contributes to the debate on the origins of modern economic growth in Europe from a very long-run perspective using econometric techniques that allow for a long-range dependence approach. Different regimes, defined by endogenously estimated structural shocks, coincided with episodes of pandemics and war. The most persistent shocks occurred at the time of the Black Death and the twentieth century’s world wars. Our findings confirm that the Black Death often resulted in higher income levels, but reject the view of a uniform long-term response to the Plague while evidence a negative reaction in non-Malthusian economies. Positive trend growth in output per head and population took place in the North Sea Area (Britain and the Netherlands) since the Plague. A gap between the North Sea Area and the rest of Europe, the Little Divergence, emerged between the early seventeenth century and the Napoleonic Wars lending support to Broadberry-van Zanden’s interpretation.
Keywords: long-run growth; little divergence; war; pandemics; Malthusian
JEL Codes: E01; N10; N30; N40; O10; O47
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Black Death (N94) | higher income levels (D31) |
| Black Death (N94) | uneven long-term response across economies (F69) |
| Black Death (N94) | persistent effects on economic growth (F62) |
| World Wars (N44) | persistent effects on economic growth (F62) |
| Malthusian model (J11) | does not capture economic realities post-Black Death (N93) |