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Analysis of the Great Divergence under a Unified Endogenous Growth Model

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  • Kunting Chen

    (Business School, Ningbo University)

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    Abstract

    Recently published research that attempts to explain the Great Divergence mainly focuses on geography, technological progress, and international trade. However, we do not believe these are its only - or even the most basic - causes. Instead, we submit that the 'social culture' of a country or a region is the most fundamental reason and incorporates these other causes, thereby providing a reasonable unified explanation. This paper is mainly based on a very simple two-sector benchmark model that simulates the economic characteristics of England and the Yangzi Delta of China during 1400-1850. It explores aspects of this transition period, and obtains many meaningful results that are consistent with Unified Growth theory, which is usually based on very complex models.

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    Article provided by Society for AEF in its journal Annals of Economics and Finance.

    Volume (Year): 13 (2012)
    Issue (Month): 2 (November)
    Pages: 317-353

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    Handle: RePEc:cuf:journl:y:2012:v:13:i:2:n:4:chen
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    Keywords: The industrial revolution; The great divergence; Difference of culture and systems;

    Find related papers by JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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