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The Three Horsemen of Growth: Plague, War and Urbanization in Early Modern Europe

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  • Voigtländer, Nico
  • Voth, Hans-Joachim

Abstract

How did Europe overtake China? We construct a simple Malthusian model with two sectors, and use it to explain how European per capita incomes and urbanization rates surged ahead of Chinese ones. Productivity growth can only explain a small fraction of rising living standards. Population dynamics - changes of the birth and death schedules - were far more important drivers of the long-run Malthusian equilibrium. The Black Death raised wages substantially, creating important knock-on effects. Because of Engel’s Law, demand for urban products increased, raising urban wages and attracting migrants from rural areas. European cities were unhealthy, especially compared to Far Eastern ones. Urbanization pushed up aggregate death rates. This effect was reinforced by more frequent wars (fed by city wealth) and disease spread by trade. Thus, higher wages themselves reduced population pressure. We show in a calibration exercise that our model can account for the sharp rise in European urbanization as well as permanently higher per capita incomes in 1700, without technological change. Wars contributed importantly to the rise of Europe, even if they had negative short-run effects. We also examine intra-European growth, using a panel of European states in the period 1300-1700. Estimation results suggest that war frequency can explain a good share of divergent fortunes within Europe as well.

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  • Voigtländer, Nico & Voth, Hans-Joachim, 2009. "The Three Horsemen of Growth: Plague, War and Urbanization in Early Modern Europe," CEPR Discussion Papers 7275, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:7275
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    Cited by:

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    2. Mark Koyama, 2013. "Preindustrial Cliometrics," Economic Affairs, Wiley Blackwell, vol. 33(2), pages 268-278, June.
    3. Avner Greif & Guido Tabellini, 2012. "The Clan and the City: Sustaining Cooperation in China and Europe," Working Papers 445, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    4. Erik Hornung, 2014. "Immigration and the Diffusion of Technology: The Huguenot Diaspora in Prussia," American Economic Review, American Economic Association, vol. 104(1), pages 84-122, January.
    5. Carl-Johan Dalgaard & Holger Strulik, 2015. "The physiological foundations of the wealth of nations," Journal of Economic Growth, Springer, vol. 20(1), pages 37-73, March.

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    More about this item

    Keywords

    Demographic Regime; Epidemics; Great Divergence; Long-run Growth; Malthus to Solow;
    All these keywords.

    JEL classification:

    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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