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Patterns of growth and stagnation in the late nineteenth century Habsburg economy

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  • Schulze, Max-Stephan

Abstract

This article addresses two issues that feature prominently in the recent historiography. First, how does the Habsburg Empire's economic performance compare to the record for other European economies in terms of levels and growth of national income? Second, to what extent was the Austrian economy subject to prolonged stagnation after 1873? These questions are examined on the basis of new annual estimates of GDP for Austria and Hungary for 1870 to 1913. The article argues, first, that over the whole period under review Austrian per capita income failed to expand at a pace broadly commensurate with the country's relative income position. The Austrian economy did not catch up with the leaders and failed to keep pace with other ‘followers’. Second, the Hungarian economy recorded a markedly higher rate of per capita income growth, placing it about mid-range in a European growth comparison. Third, the new evidence supports the notion of a ‘great depression’ in the western half of the empire (Austria) after 1873. The distinct periodicity and differential rates of Austrian and Hungarian growth are consistent with the argument that the outflow of Austrian capital to Hungary after the 1873 Vienna stock market crash was crucial in prolonging economic stagnation in Austria, whilst fuelling the first widespread wave of industrialisation in Hungary. The reversal of this capital outflow in the early 1890s was associated with an increase in Austrian economic growth and a decrease in Hungary's rate of expansion.

Suggested Citation

  • Schulze, Max-Stephan, 2000. "Patterns of growth and stagnation in the late nineteenth century Habsburg economy," LSE Research Online Documents on Economics 4370, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:4370
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    File URL: http://eprints.lse.ac.uk/4370/
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    Cited by:

    1. Marc Flandreau, 2006. "The logic of compromise : monetary bargaining in Austria-Hungary 1867-1913," Working Papers hal-01065619, HAL.
    2. Nikolaus Fink, 2016. "Formation and Adaptation of the Sugar Cartel in Austria–Hungary," WIFO Working Papers 508, WIFO.
    3. Liu, Dan & Meissner, Christopher M., 2015. "Market potential and the rise of US productivity leadership," Journal of International Economics, Elsevier, vol. 96(1), pages 72-87.
    4. Michel Fouquin & Jules Hugot, 2016. "Two Centuries of Bilateral Trade and Gravity data: 1827-2014," Vniversitas Económica 015129, Universidad Javeriana - Bogotá.
    5. Marc Flandreau, 2006. "The logic of compromise : monetary bargaining in Austria-Hungary 1867-1913," Working Papers hal-01065619, HAL.
    6. Carvalho, Jean-Paul & Koyama, Mark, 2016. "Jewish emancipation and schism: Economic development and religious change," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 562-584.
    7. Michael Tomz & Mark L. J. Wright, 2007. "Do Countries Default in "Bad Times" ?," Journal of the European Economic Association, MIT Press, vol. 5(2-3), pages 352-360, 04-05.
    8. repec:spo:wpecon:info:hdl:2441/603 is not listed on IDEAS
    9. repec:dgr:rugggd:gd-101 is not listed on IDEAS
    10. Broadberry Stephen & Fremdling Rainer & Solar Peter M., 2008. "European Industry 1700-1870," Jahrbuch für Wirtschaftsgeschichte / Economic History Yearbook, De Gruyter, vol. 49(2), pages 141-172, December.
    11. Mark Koyama & Jean-Paul Carvalho, "undated". "Development and Religious Polarization: The Emergence of Reform and Ultra-Orthodox Judaism," Discussion Papers 11/11, Department of Economics, University of York.
    12. Prados de la Escosura, Leandro, 2019. "Human Development in the Age of Globalisation," CAGE Online Working Paper Series 421, Competitive Advantage in the Global Economy (CAGE).
    13. Grosfeld, Irena & Zhuravskaya, Ekaterina, 2015. "Cultural vs. economic legacies of empires: Evidence from the partition of Poland," Journal of Comparative Economics, Elsevier, vol. 43(1), pages 55-75.
    14. Steidl, Annemarie & Stockhammer, Engelbert, 2007. "Coming and leaving. Internal mobility in late Imperial Austria," Department of Economics Working Paper Series 107, WU Vienna University of Economics and Business.
    15. Lampe, Markus, 2009. "Effects of Bilateralism and the MFN Clause on International Trade: Evidence for the Cobden-Chevalier Network, 1860-1875," The Journal of Economic History, Cambridge University Press, vol. 69(4), pages 1012-1040, December.
    16. Michael Pammer, 2015. "Income inequality in Imperial Austria, 1911," Working Papers 15028, Economic History Society.
    17. Köppl-Turyna, Monika, 2017. "Drivers of public sector growth in Imperial Austria 1870-1913," Working Papers 11, Agenda Austria.
    18. Carlo Ciccarelli & Anna Missiaia, 2018. "The fall and rise of business cycle co-movements in Imperial Austria’s regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 60(1), pages 171-193, January.

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    JEL classification:

    • N0 - Economic History - - General

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