IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v100y2021ics0264999321000973.html
   My bibliography  Save this article

Class differences and the Commercial Revolution: An equilibrium selection story

Author

Listed:
  • Iacopetta, Maurizio

Abstract

The reopening of the Mediterranean routes in the tenth century sparked, in some regions of Europe, a long period of economic boom. It also triggered a social change whereby some members of the nobility, despite their social status, turned to commerce. I explain these events through the lens a Kiyotaki and Wright (1989) model, extended to a two-country world. The response of the elite to a communication shock causes the economy to transit from a low-to a high-production equilibrium, if pre-existing class differences are not too large. Quantitative experiments illustrate the view of economic historians that medieval expansion ensued in regions where the elite enjoyed relatively modest privileges and was slow in places, most notably France, where the elite's preoccupation for preserving the social-status was strong.

Suggested Citation

  • Iacopetta, Maurizio, 2021. "Class differences and the Commercial Revolution: An equilibrium selection story," Economic Modelling, Elsevier, vol. 100(C).
  • Handle: RePEc:eee:ecmode:v:100:y:2021:i:c:s0264999321000973
    DOI: 10.1016/j.econmod.2021.105508
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999321000973
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.econmod.2021.105508?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Alfani, Guido & Murphy, Tommy E., 2017. "Plague and Lethal Epidemics in the Pre-Industrial World," The Journal of Economic History, Cambridge University Press, vol. 77(1), pages 314-343, March.
    2. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2016. "Long-Term Persistence," Journal of the European Economic Association, European Economic Association, vol. 14(6), pages 1401-1436, December.
    3. Chu, Angus C. & Fan, Haichao & Wang, Xilin, 2020. "Status-seeking culture and development of capitalism," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 275-290.
    4. Kelly, M., 1996. "The Dynamics of Smithian growth," Papers 96/9, College Dublin, Department of Political Economy-.
    5. Davide Cantoni & Noam Yuchtman, 2014. "Medieval Universities, Legal Institutions, and the Commercial Revolution," The Quarterly Journal of Economics, Oxford University Press, vol. 129(2), pages 823-887.
    6. Luis Araujo & Raoul Minetti, 2011. "On The Essentiality Of Banks," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(3), pages 679-691, August.
    7. De Long, J Bradford & Shleifer, Andrei, 1993. "Princes and Merchants: European City Growth before the Industrial Revolution," Journal of Law and Economics, University of Chicago Press, vol. 36(2), pages 671-702, October.
    8. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1991. "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 503-530.
    9. Kiyotaki, Nobuhiro & Wright, Randall, 1989. "On Money as a Medium of Exchange," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 927-954, August.
    10. Lars Boerner & Albrecht Ritschl, 2009. "The Economic History of Sovereignty: Communal Responsibility, the Extended Family, and the Firm," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(1), pages 99-112, March.
    11. Jutta Bolt & Jan Luiten Zanden, 2014. "The Maddison Project: collaborative research on historical national accounts," Economic History Review, Economic History Society, vol. 67(3), pages 627-651, August.
    12. Morgan Kelly, 1997. "The Dynamics of Smithian Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 112(3), pages 939-964.
    13. Day, Gerald W., 1977. "Manuel and the Genoese: A Reappraisal of Byzantine Commercial Policy in the Late Twelfth Century," The Journal of Economic History, Cambridge University Press, vol. 37(2), pages 289-301, June.
    14. Matthias Doepke & Fabrizio Zilibotti, 2005. "Social Class and the Spirit of Capitalism," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 516-524, 04/05.
    15. Matthias Doepke & Fabrizio Zilibotti, 2008. "Occupational Choice and the Spirit of Capitalism," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 747-793.
    16. Acemoglu, Daron, 1995. "Reward structures and the allocation of talent," European Economic Review, Elsevier, vol. 39(1), pages 17-33, January.
    17. Alfani, Guido, 2015. "Economic Inequality in Northwestern Italy: A Long-Term View (Fourteenth to Eighteenth Centuries)," The Journal of Economic History, Cambridge University Press, vol. 75(4), pages 1058-1096, December.
    18. Iacopetta, Maurizio, 2019. "The Emergence Of Money: A Dynamic Analysis," Macroeconomic Dynamics, Cambridge University Press, vol. 23(7), pages 2573-2596, October.
    19. Guido Alfani, 2017. "The rich in historical perspective: evidence for preindustrial Europe (ca. 1300–1800)," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 11(3), pages 321-348, September.
    20. Baumol, William J., 1996. "Entrepreneurship: Productive, unproductive, and destructive," Journal of Business Venturing, Elsevier, vol. 11(1), pages 3-22, January.
    21. Maurizio Iacopetta & Raoul Minetti, 2019. "Asset Dynamics, Liquidity, And Inequality In Decentralized Markets," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 537-551, January.
    22. Diego Puga & Daniel Trefler, 2014. "International Trade and Institutional Change: Medieval Venice’s Response to Globalization," The Quarterly Journal of Economics, Oxford University Press, vol. 129(2), pages 753-821.
    23. Maarten Bosker & Eltjo Buringh & Jan Luiten van Zanden, 2013. "From Baghdad to London: Unraveling Urban Development in Europe, the Middle East, and North Africa, 800–1800," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1418-1437, October.
    24. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
    25. Kiminori Matsuyama & Nobuhiro Kiyotaki & Akihiko Matsui, 1993. "Toward a Theory of International Currency," Review of Economic Studies, Oxford University Press, vol. 60(2), pages 283-307.
    26. R. B. Grassby, 1960. "Social Status And Commercial Enterprise Under Louis Xiv," Economic History Review, Economic History Society, vol. 13(1), pages 19-38, August.
    27. Joel Mokyr, 2016. "A Culture of Growth: The Origins of the Modern Economy," Economics Books, Princeton University Press, edition 1, number 10835.
    28. Lopez, Robert Sabatino, 1964. "Market Expansion: The Case of Genoa," The Journal of Economic History, Cambridge University Press, vol. 24(4), pages 445-464, December.
    29. Gregory Clark, 2007. "Introduction to A Farewell to Alms: A Brief Economic History of the World," Introductory Chapters, in: A Farewell to Alms: A Brief Economic History of the World, Princeton University Press.
    30. Stasavage, David, 2014. "Was Weber Right? The Role of Urban Autonomy in Europe's Rise," American Political Science Review, Cambridge University Press, vol. 108(2), pages 337-354, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maurizion Iacopetta, 2016. "Commercial revolutions, search, and development," Documents de Travail de l'OFCE 2016-08, Observatoire Francais des Conjonctures Economiques (OFCE).
    2. Maurizio Iacopetta, 2016. "Commercial Revolutions, Search, and Development," 2016 Meeting Papers 1394, Society for Economic Dynamics.
    3. Nils‐Petter Lagerlöf & Thomas Tangerås, 2008. "From rent seeking to human capital: a model where resource shocks cause transitions from stagnation to growth," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(3), pages 760-780, August.
    4. Thomas Barnebeck Andersen & Jeanet Bentzen & Carl-Johan Dalgaard & Paul Sharp, 2010. "Religious Orders and Growth through Cultural Change in Pre-Industrial England," DEGIT Conference Papers c015_036, DEGIT, Dynamics, Economic Growth, and International Trade.
    5. Han Wang & Andres Rodriguez-Pose, 2021. "Local institutions and pandemics: City autonomy and the Black Death," Papers in Evolutionary Economic Geography (PEEG) 2130, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2021.
    6. Bai, Ying, 2019. "Farewell to confucianism: The modernizing effect of dismantling China's imperial examination system," Journal of Development Economics, Elsevier, vol. 141(C).
    7. Corneo, Giacomo & Jeanne, Olivier, 2010. "Symbolic values, occupational choice, and economic development," European Economic Review, Elsevier, vol. 54(2), pages 237-251, February.
    8. Enrico Spolaore & Romain Wacziarg, 2013. "How Deep Are the Roots of Economic Development?," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 325-369, June.
    9. Guido Alfani, 2020. "Epidemics, inequality and poverty in preindustrial and early industrial times," Working Papers 2020-16, The George Washington University, Institute for International Economic Policy.
    10. Attar, M. Aykut, 2015. "Entrepreneurship, knowledge, and the industrial revolution," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW), vol. 9, pages 1-54.
    11. William F. Maloney & Felipe Valencia Caicedo, 2017. "Engineering Growth: Innovative Capacity and Development in the Americas," CESifo Working Paper Series 6339, CESifo.
    12. Touré, Nouhoum, 2021. "Culture, institutions and the industrialization process," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 481-503.
    13. Michel Serafinelli & Guido Tabellini, 2017. "Creativity over Time and Space," Working Papers 608, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    14. Danish Ahmed SIDDIQUI & Qazi Masood AHMED, 2018. "Institutionalized social technologies index: A global perspective," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(617), W), pages 67-96, Winter.
    15. Shekhar Aiyar & Carl-Johan Dalgaard & Omer Moav, 2008. "Technological progress and regress in pre-industrial times," Journal of Economic Growth, Springer, vol. 13(2), pages 125-144, June.
    16. Klaus Desmet & Avner Greif & Stephen L. Parente, 2020. "Spatial competition, innovation and institutions: the Industrial Revolution and the Great Divergence," Journal of Economic Growth, Springer, vol. 25(1), pages 1-35, March.
    17. Ulrich Pfister & Georg Fertig, 2020. "From Malthusian Disequilibrium to the Post-Malthusian Era: The Evolution of the Preventive and Positive Checks in Germany, 1730–1870," Demography, Springer;Population Association of America (PAA), vol. 57(3), pages 1145-1170, June.
    18. Mark Dincecco & Massimiliano Gaetano Onorato, 2016. "Military conflict and the rise of urban Europe," Journal of Economic Growth, Springer, vol. 21(3), pages 259-282, September.
    19. Nunn, Nathan, 2007. "Historical legacies: A model linking Africa's past to its current underdevelopment," Journal of Development Economics, Elsevier, vol. 83(1), pages 157-175, May.
    20. Bonetto, Federico & Iacopetta, Maurizio, 2019. "A dynamic analysis of nash equilibria in search models with fiat money," Journal of Mathematical Economics, Elsevier, vol. 84(C), pages 207-224.

    More about this item

    Keywords

    Equilibrium selection; Trade; Search;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:100:y:2021:i:c:s0264999321000973. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.