Working Paper: NBER ID: w23343
Authors: Stephen Broadberry; John Joseph Wallis
Abstract: Using annual data from the thirteenth century to the present, we show that improved long run economic performance has occurred primarily through a decline in the rate and frequency of shrinking, rather than through an increase in the rate of growing. Indeed, as economic performance has improved over time, the short run rate of growing has typically declined rather than increased. Most analysis of the process of economic development has hitherto focused on increasing the rate of growing. Here, we focus on understanding the forces making for a reduction in the rate of shrinking, drawing a distinction between proximate and ultimate factors. The main proximate factors considered are (1) structural change (2) technological change (3) demographic change and (4) the changing incidence of warfare. We conclude with a consideration of institutional change as the key ultimate factor behind the reduction in shrinking.
Keywords: Economic Performance; Economic Development; Historical Perspectives
JEL Codes: N0; N10; O0; O4; O43
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| decline in the rate and frequency of economic shrinking (E32) | improvement in long-run economic performance (O49) |
| institutional change (O17) | decline in the rate and frequency of economic shrinking (E32) |
| structural changes within economies (L16) | decline in the rate and frequency of economic shrinking (E32) |
| technological progress (O33) | decline in the rate and frequency of economic shrinking (E32) |
| demographic transitions (J11) | decline in the rate and frequency of economic shrinking (E32) |
| incidence of warfare (H56) | decline in the rate and frequency of economic shrinking (E32) |
| decline in the rate of economic growth (O49) | improvement in long-run economic performance (O49) |