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Accounting for the great divergence

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  • Broadberry, Stephen

Abstract

As a result of recent work on historical national accounting, it is now possible to establish firmly the timing of the Great Divergence of living standards between Europe and Asia. There was a European Little Divergence as Britain and Holland overtook Italy and Spain, and an Asian Little Divergence as Japan overtook China and India. The Great Divergence occurred because Japan grew more slowly than Britain and Holland, starting from a lower level. Key turning points are identified around 1348 and 1500, and an explanatory framework is developed that can explain these divergences via the differential impact of shocks on differently structured economies. The key shocks were the Black Death of the mid-fourteenth century and the new trade routes which opened up from Europe to Asia and the Americas at the end of the fifteenth century. The key structural factors were the type of agriculture, the age of first marriage of females, the flexibility of labour supply and the nature of state institutions.

Suggested Citation

  • Broadberry, Stephen, 2013. "Accounting for the great divergence," Economic History Working Papers 54573, London School of Economics and Political Science, Department of Economic History.
    • Handle: RePEc:ehl:wpaper:54573
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    1. Broadberry, Stephen & Custodis, Johann & Gupta, Bishnupriya, 2015. "India and the great divergence: An Anglo-Indian comparison of GDP per capita, 1600–1871," Explorations in Economic History, Elsevier, vol. 55(C), pages 58-75.
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    More about this item

    JEL classification:

    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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