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Real Wages and the Origins of Modern Economic Growth in Germany, 16th to 19th Centuries

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  • Ulrich Pfister

    ()
    (Westfälische Wilhelms-Universität Münster)

  • Jana Riedel

    ()
    (Westfälische Wilhelms-Universität Münster)

  • Martin Uebele

    ()
    (Westfälische Wilhelms-Universität Münster)

Abstract

The study develops a real wage series for Germany c. 1500-1850 and analyzes its relationship with population size. From 1690 data density allows the estimation of a structural time series model of this relationship. The major results are the following: First, there was a strong negative relationship between population and the real wage until the middle of the seventeenth century. The dramatic rise of material welfare during the Thirty Years’ War was thus entirely due to the war-related population loss. Second, the relationship between the real wage and population size was weaker in the eighteenth than in the sixteenth century; the fall of the marginal product of labor was less pronounced, and the beginning of the eighteenth century saw a marked increase of labour demand. Third, labor productivity underwent a strong positive shock during the late 1810s and early 1820s, and continued to rise at a weaker pace during the following decades. This growth was only temporarily interrupted by negative shocks during the late 1840s and early 1850s. Results two and three suggest the onset of sustained economic growth well before the beginnings of industrialization, which set in during the third quarter of the nineteenth century.

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Bibliographic Info

Paper provided by European Historical Economics Society (EHES) in its series Working Papers with number 0017.

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Length: 30 pages
Date of creation: Apr 2012
Date of revision:
Handle: RePEc:hes:wpaper:0017

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Keywords: Standard of living; Malthusian economy; state space model;

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  1. Nikolaus Wolf, 2012. "Crises and Policy Responses within the Political Trilemma: Europe, 1929-1936 and 2008-2011," Working Papers 0016, European Historical Economics Society (EHES).
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  7. Crafts, Nicholas & Mills, Terence C., 2009. "From Malthus to Solow: How did the Malthusian economy really evolve?," Journal of Macroeconomics, Elsevier, vol. 31(1), pages 68-93, March.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Looking at the transition from Malthus to industrialization in Germany using real wages
    by Economic Logician in Economic Logic on 2012-05-10 14:31:00
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Cited by:
  1. Michael Kopsidis & Ulrich Pfister, 2013. "Agricultural development during early industrialization in a low-wage economy: Saxony, c. 1790-1830," Working Papers 0039, European Historical Economics Society (EHES).

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