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The Great Divergence in World Incomes: Why Are Some Countries Rich and
The Great Divergence in World Incomes: Why Are Some Countries Rich and
The Great Divergence in World Incomes: Why Are Some Countries Rich and
The Great Divergence in World Incomes: Why Are Some Countries Rich and
Roman Empire c. 300 AD
Roman Empire c. 300 AD
Wage was maintained in northwest Europe (W) and fell elsewhere (W1)
Wage was maintained in northwest Europe (W) and fell elsewhere (W1)
Agriculture did play an important role: output per worker
Agriculture did play an important role: output per worker
Standard explanation emphasizes enclosures and capitalist farming:
Standard explanation emphasizes enclosures and capitalist farming:
The Great Divergence in World Incomes: Why Are Some Countries Rich and
The Great Divergence in World Incomes: Why Are Some Countries Rich and
Surviving medieval ridge and furrow
Surviving medieval ridge and furrow
In fact, these institutional changes made only minor contributions to
In fact, these institutional changes made only minor contributions to
Much of the incentive to increase productivity was a response to the
Much of the incentive to increase productivity was a response to the
If farmers increased output, they could keep up with high wage
If farmers increased output, they could keep up with high wage
The Great Divergence in World Incomes: Why Are Some Countries Rich and
The Great Divergence in World Incomes: Why Are Some Countries Rich and
The Great Divergence in World Incomes: Why Are Some Countries Rich and
The Great Divergence in World Incomes: Why Are Some Countries Rich and
The Great Divergence in World Incomes: Why Are Some Countries Rich and
The Great Divergence in World Incomes: Why Are Some Countries Rich and
As a result, northern and western Britain had the cheapest energy in
As a result, northern and western Britain had the cheapest energy in
Textile productivity is measured as the ratio of input prices (wool,
Textile productivity is measured as the ratio of input prices (wool,
Energy price
Energy price
The Great Divergence in World Incomes: Why Are Some Countries Rich and
The Great Divergence in World Incomes: Why Are Some Countries Rich and
The Great Divergence in World Incomes: Why Are Some Countries Rich and
The Great Divergence in World Incomes: Why Are Some Countries Rich and
The Great Divergence in World Incomes: Why Are Some Countries Rich and Others Poor

: Allen. , . , The Great Divergence in World Incomes: Why Are Some Countries Rich and Others Poor.ppt zip- 2405 .

The Great Divergence in World Incomes: Why Are Some Countries Rich and Others Poor

The Great Divergence in World Incomes: Why Are Some Countries Rich and Others Poor.ppt
1The Great Divergence in World Incomes: 28N=population Estimates of net agricultural
Why Are Some Countries Rich and Others exports must be added to go from
Poor? Bob Allen Professor of Economic consumption to production. The output
History Nuffield College, Oxford 2008. estimates are consistent with direct
2Part 1: When did Northwestern Europe calculations for England and the
pull ahead of the Rest of the World? Netherlands.
3The Great Divergence Debate. The 29Standard explanation emphasizes
classical economists and most scholars enclosures and capitalist farming:
since have argued that Europe was ahead of 30
Asia for a very long time. They try to 31Surviving medieval ridge and furrow.
explain why: Smith: Minimal government and 32In fact, these institutional changes
openness to trade Malthus: Differences in made only minor contributions to
marriage patterns Marx: capitalist versus productivity growth:
other institutions (Asiatic mode of 33Much of the incentive to increase
production). productivity was a response to the growth
4The California School has challenged of cities:
this. Key books: Ken Pomeranz, The Great 34Sir James Steuart (1767) had the
Divergence Bin Wong, China Transformed essential insight: a farmer will not
James Lee and Wang Feng, One Quarter of labour to produce a superfluity of grain
Humanity: Malthusian Mythology and Chinese relative to his own consumption, unless he
Realities They claim that income finds some want which may be supplied by
differences between Europe and Asia were the means of the superfluity.. Sixty
small c. 1800 and Asian institutions were years later, Gibbon Wakefield spelled out
adequate for development. Evidence for the global context: In England, the
incomes is very weak. greatest improvements have taken place
5I will argue that the California continually, ever since colonization has
School is wrong and that northwestern continually produced new desires amongst
Europe pulled ahead of Asia 1500-1750. I the English, and new markets wherein to
begin by measuring income differences. purchase the objects of desire. With the
Maddisons GDP estimates are very growth of sugar and tobacco in America,
unrealiable. Instead I rely on real wages. came the more skillful growth of corn in
They measure the incomes of workers and England. Because in England, sugar was
perhaps other people as well. drank and tobacco smoked, corn was raised
6Measuring real wages requires data on with less labour, by fewer hands.
wages and consumer prices. These are 35If farmers increased output, they
available for many European cities in could keep up with high wage economy:
price histories. Many have been written in 36The Growth of London created cheap
last 150 years Historian finds an energy: London population 1500: 50,000
institution that has lasted hundreds of 1600: 200,000 1700: 500,000 1800:
years and copies prices of all 1,000,000 This growth created the British
transactions. Published in books I have coal industry, which was unique in the
computerized these Weights and measures world. The British coal industry gave
converted to metric Money converted to Britain the cheapest energy in the world.
grams of silver This work is being Cheap energy led to invention of energy
extended to Asia. using technology and the expansion of
7The first efforts were for Europe, energy using industries.
followed quickly by the Ottoman Empire: 37
Jan Luiten van Zanden, Wages, and the 38
Standards of Living in Europe, European 39
Review of Economic History, 1999, 175-98. 40As a result, northern and western
Robert C. Allen, The Great Divergence in Britain had the cheapest energy in the
European Wages and Prices, Explorations world.
in Economic History, 2001, 411-447. S. 41Next challenge: Put these ideas
?zmucur and S. Pamuk, Real Wages and together in a model that separates out the
Standards of Living in the Ottoman causes of success and failure in the early
Empire, Journal of Economic History, modern economy: Things to explain
2002, 293-321. (endogenous variables) Real wage
8Now this research is being extended to Urbanization Agricultural productivity
Asia: D Ma and J-P Bassino, Japanese Proto-industrialization Explanatory
Unskilled Wages in International factors (exogenous variables) population
Perspective, Research in Economic Agricultural land Productivity in textiles
History, 2005. RC Allen, J-P Bassino, D (new draperies) Intercontinental trade
Ma, C Moll-Murata, J-L van Zanden, Wages, (result of imperial policy) Price of
prices, and Living Standards in China, energy Prince or republic literacy.
Japan, and Europe, 1738-1925 RC Allen, 42A data base is put together. Countries
India in the Great Divergence, in at fifty or one hundred year intervals
Hatton, ORourke, Taylor, eds., The New Uses earlier occupational distribution
Comparative Economic History: Essays in data Agricultural total factor
Honor of Jeffery G. Williamson, 2007, pp. productivity estimated from output, land,
9-32. and labour Other variables like textile
9These studies involve comparing: Wage productivity, literacy, trade data are
rates, which are usually expressed in calculated.
grams of silver per day. Consumer prices: 43Textile productivity is measured as
usually the cost of a basket of goods. the ratio of input prices (wool, labour)
Welfare ratio: a full years earnings to cloth price:
divided by the cost of maintaining a 44Energy price.
family for a year. 45
10Heres how daily wages compared: 46The model is tested by seeing if it
11Did high silver wages translate into a replicates the various national histories.
high standard of living? The answer Here is the simulated wage:
depends on the cost of living! 47Simulated agricultural TFP.
12To measure the cost of living: Collect 48Simulated urbanization rates:
prices of all of the important consumer 49We can use the model to identify the
goods. These must be converted to grams of causes of Englands advance. Can we turn
silver per metric unit. A basket of goods England into France? Here are simulated
must be specified and its cost computed. wages:
13A basket is specified for an adult 50Simulated urbanization.
male covering a whole year. Various 51Simulated agricultural TFP.
standards of comfort could be chosen. My 52The Great Divergence was mainly the
first basket was what I now call the result of English and Dutch success in the
European respectability basket. This is world economy. To a significant extent,
supposed to represent total, annual this was successful mercantilism. England
spending for a man. This supplies 1940 and the low countries were the high wage
kcalories per day. It was inspired by part of the world. England was also the
eighteenth century budgets and poor house cheap energy region of the world.
diets. Bread is the main carbohydrate. 53Part III: Why did the early modern
Beer or wine and meat are included. Great Divergence lead to the Industrial
Non-foods are included. Rent at 5% is Revolution?
added on. 54The problem is explaining why the
14 steam engine, cotton spinning, coke
15 smelting, etc., were invented and adopted
16Welfare ratio for a family: WR=Annual in Britain in the 18th century. These were
income/annual cost of subsistence Annual macro-inventions Radically changed factor
income = mans annual income assuming full proportions (biased technical change)
time, full year work Annual cost of Great potential for elaboration Ideas came
subsistence = 3 times cost of basket from outside industry Despite their
(including 5% for rent). This annual revolutionary potential, they were barely
subsistence cost includes man, woman, and viable commercially even under the most
children If WR=1, income is just enough to favourable circumstances.
buy the specified basket or standard of 55Were these technologies invented
living. because of better fundamentals? Better
17Roman Empire c. 300 AD. property rights or limited government? No
18The problem with this basket is that Better culture? No Better science? No
it is too expensive for most people in the Better geography? Not better agricultural
world! Therefore, I constructed a bare resources Britain had developed coal but
bones minimum basket. This is supposed to other countries had it.
represent total, annual spending for a 56The macro-inventions were made in 18th
man. This also supplies 1940 kcalories per century Britain because that was the first
day, mainly from the cheapest grain. Small time and place that it paid to invent
amounts of meat, beans, butter, or oil to them. The macro-inventions were biased
supply protein and fat in keeping with technical changes. They used inputs that
local diet. Small quantities of non-foods were cheap in Britain and saved inputs
are included. Rent at 5% is added on. that were dear. Even under British
19 conditions, they were barely profitable to
20The Great Divergence in Living operate. They were not profitable to use
Standards Happened 1400-1750. elsewhere.
21Workers around the World earned 57Invention was an economic activity
incomes 3 4 times subsistence in 1400. influenced by factor prices. Invention is
Some of the surplus was spent on more 1% inspiration and 99% perspiration.
calories. Much of the surplus was spent on (Edison) Inspiration for macro-inventions
better quality foodmeat, alcohol. came from outside the industry (science,
22The Great Divergence preceded the copying, and so forth) Sometimes banal
Industrial Revolution: English and Dutch Perspiration refers to R&D. Perfecting
workers still earned 3 4 times the engineering was most of invention.
subsistence. They provided the mass market This entailed costs. Factor prices
for the consumer revolution. Workers in determined adoption Adoption determined
India, China, and south and central Europe benefits Benefits necessary for R&D
earned only enough to survive (Welfare Therefore, factor prices affected
Ratio = 1). invention.
23Part II: Why did northwest Europe pull 58Micro-inventions. Realized the
ahead? potential of the macro-inventions Came
24The immediate explanation is that the from local learning Tended to produce
high wage economies were economically more neutral technical change Unleashed path
developed: dependent trajectory of improvement.
25Wage was maintained in northwest Eventually cut costs enough to make the
Europe (W) and fell elsewhere (W1). adoption of the macro-inventions
26Why was northwest Europe more profitable outside of Britain When the
successful? Legal, constitutional, tipping point occurred, the Industrial
institutional development? Culture? In Revolution spread abroad.
keeping with the assessment of Marxism, I 59
investigate: Agrarian structure? No 60
Commercial expansion? Yes I will review 61
evidence about agriculture and about 62
energy to argue that urban growth was a 63The British inventions led to modern
cause of these developments. Agricultural economic growth because they were more
revolution. Urban growth. Commercial transformative. Cotton was a global
expansion. Cheap energy (coal). High industry Demand for British cotton was
wages. very price elastic Technical improvements
27Agriculture did play an important led to enormous output growth This led to
role: output per worker. Manchestervast urbanization Also a very
28Output per worker is agricultural large demand for machinery Steam engine
output divided by the agricultural and iron industries allowed General
population from earlier population mechanization of industry, railway, steam
breakdown. Agricultural output is ship Basis of 19th century global economy
calculated from a demand curve. Other Account for almost half of growth in
investigators have used this procedure for British labour productivity in 19th
Spain, the Netherlands, and Italy. This century. Engineering industry was the most
procedure makes per capita consumption of important creation of British industrial
agricultural products a function of income revolution.
and price. Q = P-.6W.5M.1N P = price, W = 64The Great Divergence led to Modern
wage income, M=price manufactures, Economic Growthnot the other way around.
The Great Divergence in World Incomes: Why Are Some Countries Rich and Others Poor.ppt
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The Great Divergence in World Incomes: Why Are Some Countries Rich and Others Poor

The Great Divergence in World Incomes: Why Are Some Countries Rich and Others Poor

English speaking countries - Listening-Reading-Speaking-Test. THE IRISH SEA. WHAT ARE THE MAIN SIGHTS OF BELFAST? WHAT IS IRELAND FAMOUS FOR? MUSIC, WHISKEY, BUTTER, HORSES. Ireland: IRISH. SHIPBUILDING. Great Britain. THE ATLANTIC OCEAN. Ireland. FARMING. WHAT IS IRELAND WASHED BY? WHAT IS THE MAIN PLACE OF INTEREST IN NORTHERN IRELAND?

The english-speaking countries - Disneyland. The English-speaking countries. USA. Australia. Scotland. Great Britain.

Great Britain - THE ROYAL FAMILY. Its towers are 65 metres. SYMBOLS. The weather is usually wet and foggy. Children burn the guy. Great Britain consists of England, Scotland and Wales. CUSTOMS AND TRADITIONS. London and its sights. The main character is Santa Claus. HOLIDAYS. The palace was built in the 18th century.

Great Britain - 4. Where does the ceremony of the Keys take place? Monument. 2. What is the name of the present British Queen? At Buckingham Palace. 2. Countries and capitals. What parts does Great Britain consist of? In Richmond Park. London Cardiff Belfast Edinburgh. In Kensington Gardens. Name the symbol of each country?

The green movement - Management of each such branch in which head there is a chief executive, carries out national board. It became the first African who has headed this organization. National offices Green Peace are opened in 43 countries of the world as the independent units working over achievement of the purposes of the national projects.

The animals - SCORPIO. BEAR. The ANIMALS of our planet. FOX. LION. WHALE. BOBCAT. EMU. SEA-HORSE. LIZARD. SEAL. KOALA. REINDEER. The animals which live in the rainforest and tropics. The animals which live in the forest. The animals which live in the OCEAN. FLAMINGO. FISH. POLAR BEAR. GIRAFFE. DOLPHIN. The animals which live in a SAVANNA.

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