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Class Di¤erences and the Commercial Revolution: An Equilibrium Selection Story

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  • Maurizio Iacopetta

    (SKEMA Business School - SKEMA Business School, GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

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 di¤erences 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

  • Maurizio Iacopetta, 2021. "Class Di¤erences and the Commercial Revolution: An Equilibrium Selection Story," Post-Print halshs-03515585, HAL.
    • Handle: RePEc:hal:journl:halshs-03515585
    DOI: 10.1016/j.econmod.2021.105508
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03515585
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    Keywords

    Equilibrium Selection; Trade; Search;
    All these keywords.

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