Growth is a modern phenomenon

suppose the new world did not exist and there was no

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Unformatted text preview: China before industrialization: Along a number of dimensions, Chinese economic activity was very similar to European until the 18th century: Caloric intake Consumption of basic goods Use of inputs in China was not more restrictive than in Europe: Land use was actually easier No guilds to raise wages for artisans (and in turn raise price of consumer goods for people) Less risk of default for Chinese than European Microfinance logic: if you lend to groups of people, the risk of default is less than if you lend to individuals So what caused the divergence?: Suppose the “new world’ did not exist and there was no coal in Northern Europe ! what would the European growth trajectory have looked like in 1500- 1800? Pomeranz’s answer: no divergence between Europe and China Ecological constraints to growth in China: Deforestation Declining marginal product of labor Rising ability of peripheral regions to make their own manufactures Falling returns to innovation and commerce (reducing incentives) Rising returns to landlords or priests for surplus extraction Growth = labor- intensive, and boosts elites but not mass standards of living Growth...
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This document was uploaded on 03/28/2014 for the course INAF 252 at Georgetown.

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