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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)

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.

Suggested Citation

  • Kunting Chen, 2012. "Analysis of the Great Divergence under a Unified Endogenous Growth Model," Annals of Economics and Finance, Society for AEF, vol. 13(2), pages 317-353, November.
  • Handle: RePEc:cuf:journl:y:2012:v:13:i:2:n:4:chen
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    More about this item

    Keywords

    The industrial revolution; The great divergence; Difference of culture and systems;
    All these keywords.

    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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