Growing at the production frontier. European aggregate growth, 1870-1914
AbstractThe view of a 1870-1913 expanding European economy providing increasing welfare to everybody has been challenged by many, then and now. We focus on the amazing growth that was experienced, its diffusion and its sources, in the context of the permanent competition among European nation states. During 1870-193 the globalized European economy reached a “silver age”. GDP growth was quite rapid (2.15% per annum) and diffused all over Europe. Even discounting the high rates of population growth (1.06%), per capita growth was left at a respectable 1.08%. Income per capita was rising in every country, and the rates of improvement were quite similar. This was a major achievement after two generations of highly localized growth, both geographically and socially. Growth was based on the increased use of labour and capital, but a good part of growth (73 per cent for the weighted average of the best documented European countries) came out of total factor productivity –efficiency gains resulting from not well specified ultimate sources of growth. This proportion suggests that the European economy was growing at full capacity –at its production frontier. It would have been very difficult to improve its performance. Within Europe, convergence was limited, and it only was in motion after 1900. What happened was more the end of the era of big divergence rather than an era of convergence.
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1179.
Date of creation: Oct 2009
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Web page: http://www.econ.upf.edu/
Economic history; aggregate growth; total factor productivity; comparative national patterns; Europe;
Find related papers by JEL classification:
- E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
- N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
- N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-21 (All new papers)
- NEP-EFF-2009-11-21 (Efficiency & Productivity)
- NEP-FDG-2009-11-21 (Financial Development & Growth)
- NEP-HIS-2009-11-21 (Business, Economic & Financial History)
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