Working Paper: CEPR ID: DP4947
Authors: Stephen N. Broadberry; Bishnupriya Gupta
Abstract: Contrary to the claims of Pomeranz, Parthasarathi and other ?world historians?, the prosperous parts of Asia between 1500 and 1800 look similar to the stagnating southern, central and eastern parts of Europe rather than the developing northwestern parts. In the advanced parts of India and China, grain wages were comparable to those in northwestern Europe, but silver wages, which conferred purchasing power over tradable goods and services, were substantially lower. The high silver wages of northwestern Europe were not simply a monetary phenomenon, but reflected high productivity in the tradable sector. The ?Great Divergence? between Europe and Asia was already well underway before 1800.
Keywords: Asia; Development; Europe; Prices; Wages
JEL Codes: N10; N30; O10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| high silver wages in northwestern Europe (N93) | high productivity in the traded goods sector (O49) |
| high productivity in the traded goods sector (O49) | economic development levels (O10) |
| low silver wages in Asia (F66) | low economic development levels (O54) |
| high silver wages in northwestern Europe (N93) | economic development levels (O10) |
| economic development levels in Asia (O53) | low silver wages (J31) |
| grain wages in Asia (N95) | economic development levels (O10) |
| low silver wages in India (J31) | lower overall level of economic development (O54) |