Economic growth in the Mid-Atlantic region: Conjectural estimates for 1720 to 1800

We construct decadal estimates of GDP per capita for the colonies and states of the Mid-Atlantic region between 1720 and 1800. They show that the region likely achieved modest improvements in per capita GDP over this period despite a number of demographic factors that tended to slow the pace of growth. Nonetheless the rate of growth we find is below that commonly assumed to have prevailed in eighteenth century North America and calls those estimates into question. The striking feature of the region's economy in the eighteenth century was not the rising living-standard, but its ability to achieve rapid extensive growth without a decline in living standards. To contemporaries this extensive growth and short-term volatility in incomes must have been much more visible than any trend improvement in overall well-being.     

American colonial incomes, 1650–1774

New data now allow conjectures on the levels of real and nominal incomes in the 13 American colonies. New England was the poorest region, and the South was the richest. Colonial per capita incomes rose only very slowly if at all, for five reasons: productivity growth was slow; population in the low‐income (but subsistence‐plus) frontier grew much faster than that in the high‐income coastal settlements; child dependency rates were high and probably even rising; the terms of trade were extremely volatile, presumably suppressing investment in export sectors; and the terms of trade rose very slowly, if at all, in the North, although faster in the South. All of this checked the growth of colony‐wide per capita income after a seventeenth‐century boom. The American colonies led Great Britain in purchasing power per capita from 1700, and possibly from 1650, until 1774, even counting slaves in the population. That is, average purchasing power in America led Britain early, when Americans were British. The common view that American per capita income did not overtake that of Britain until the start of the twentieth century appears to be off the mark by two centuries or more.     

The rise and fall of Spain (1270–1850)1

Two distinctive regimes are distinguished in Spain over half a millennium. The first one (1270s–1590s) corresponds to a high land–labour ratio frontier economy, which is pastoral, trade‐oriented, and led by towns. Wages and food consumption were relatively high. Sustained per capita growth occurred from the end of the Reconquest (1264) to the Black Death (1340s) and resumed from the 1390s only broken by late fifteenth‐century turmoil. A second regime (1600s–1810s) corresponds to a more agricultural and densely populated low‐wage economy which, although it grew at a pace similar to that of 1270–1600, remained at a lower level. Contrary to pre‐industrial western Europe, Spain achieved its highest living standards in the 1340s, not by mid‐fifteenth century. Although its death toll was lower, the plague had a more damaging impact on Spain and, far from releasing non‐existent demographic pressure, destroyed the equilibrium between scarce population and abundant resources. Pre‐1350 per capita income was reached by the late sixteenth century but only exceeded after 1820.     

Labor productivity in the United States and the United Kingdom during the nineteenth century

A number of writers have recently questioned whether labor productivity or per capita incomes were ever higher in the United Kingdom than in the United States. This paper focuses on aggregate and sectoral labor productivity in the two countries during the nineteenth century. We build on earlier work by Broadberry to push comparative productivity estimates back to 1840 based on a time series projection from a 1910 benchmark and checked against a benchmark estimate for 1850. The results indicate that labor productivity in agriculture was broadly equal in the two countries, and that the United States had a substantial labor productivity lead in industry as early as 1840, while the United Kingdom was ahead in services. Hence aggregate labor productivity and per capita incomes were higher in the United Kingdom in the mid-nineteenth century, particularly since the United States had a larger share of the labor force in low value-added agriculture and a smaller share of the population in the labor force.     

PHYSICAL STATURE IN NINETEENTH‐CENTURY NEW ZEALAND: A PRELIMINARY INTERPRETATION

During the late nineteenth century, the physical stature of New Zealand‐born men stagnated, despite an apparently beneficial public health environment and growth in per‐capita incomes. We examine trends and differentials in male stature through World War I enlistment and casualty records. Stature varied by social class, with professionals and men in rural occupations substantially taller than their peers. There is not enough evidence to show that the indigenous Maori population differed in height from men of European descent. Stagnation in stature in late nineteenth‐century New Zealand is consistent with patterns observed in Australia, North America, and Western Europe.     

The standard of living in Latin America during the twentieth century1

New and consistent series for Latin American real incomes, life expectancy and adult literacy over the twentieth century reveal that living standards rose most rapidly between the 1930s and 1970s, a period characterised by increased state intervention and reduced trade openness. Within the region, Brazil and Mexico advanced most over the century as a whole despite the early start made by Argentina and Chile, although convergence between larger countries was accompanied by divergence from smaller ones. There was no sustained narrowing of the income gap with the US at all between 1900 and 2000 but some convergence in living standards due to improved life expectancy. Our new estimates of regional per capita income also permit a clearer comparison with both Europe and Asia. The major advances in living standards achieved in the middle decades of the century were closely related to early industrialization, rapid urbanization, and the extension of primary health and education. Subsequent economic volatility and fiscal fragility limited further increases in living standards, undermining social consensus on development strategy.     

Binding constraints to productive investment in Malawi: A modified HRV framework

The paper applies a modified Hausmann, Rodrik, and Velasco (HRV) growth diagnostics framework to analyse Malawi's growth challenges. The study finds five critical binding constraints affecting productive investment and output growth in Malawi. These include land administration, taxation, customs and trade regulations, political governance, and cost‐of‐finance. Land constraints are evidenced by highly urban and rural population growth, an inverse co‐movement between the rural population and investment per capita, and low land administration indices. Tax constraints are evidenced by the negative growth of investment per capita. Customs and trade regulations constraints are evidenced by nontariff measures, such as high costs and the time it takes to export and import. Political governance constraints are evidenced by rising government debt and the low score on transparency, accountability, and corruption based on the World Bank's Public Transparency Scale. Lastly, high cost‐of‐finance constraints are evidenced by monetary policy challenges, such as high real interest rates, inflation rate, uncompetitive exchange rate, and foreign aid ineffectiveness. Therefore, we recommend that the formulation of crucial policy strategies to alleviate these five significant binding constraints be encouraged. The government should base such an approach to sound growth therapeutics that fully account for each challenge's root causes.     

Living costs,real incomes and inequality in colonial Jamaica

This paper provides the first quantitative assessment of colonial Jamaican real incomes and income inequality. We collect local prices to construct cost of living and purchasing power parity indicators. The latter lowers Jamaica's GDP per capita compared with the rest of the Atlantic economy. We also compute welfare ratios for a range of occupations and build a social table. We find that, being a net food importer, the slave colony had extremely high living costs, which rose steeply during the American War of Independence, and low standards of living, particularly for its enslaved population, but also for the free unskilled population that competed with slave labor. Our results also show that due to its extreme poverty for the many in the middle of great wealth for the few, Jamaica was the most unequal place yet studied in the pre-modern world. Furthermore, all of these characteristics applied to the free population alone.     

Methods and sources for the study of Swedish standards of living

Abstract

Recent studies of trends in Swedish standards of living raise questions of principle. Are the trends best measured in terms of individuals or of households, in monetary units or by the acquisition of goods and services? How ought income to be defined for this purpose? Is it better to investigate a cross-section of the population or occupational groups, and which years ought to be studied to obtain a valid series over time? Some of these problems have been elucidated by two dissertations published in the course of the inter-university research project on Swedish living standards 1925-1960, M. Järnek's study of household incomes in the city of Malmö between 1925 and 1964 and the present author's investigation of certain occupational groups in Gothenburg from 1919 to 1960.¹ This article is an attempt to continue and expand the discussion.     

Education and the ability to export manufactures: The relevance to South Africa of the Wood model

According to Wood there is a strong causal relation between education of the population and exports of manufactures. Also, a country that is rich in natural resources will tend to have low manufactured exports, which will be exacerbated by low investment in education. Wood's model is applied to South Africa. Increasing the education of the population will be crucial for expanding higher‐value‐added manufactured exports, increasing per capita incomes and reducing earnings inequality in South Africa.     

Italy in the Renaissance: a leading economy in the European context, 1350–1550

A well‐known debate on the Renaissance economy was held in this journal in 1962–4 between Roberto S. Lopez and Harry Miskimin on one hand and Carlo M. Cipolla on the other. More than half a century later, this topic can be reconsidered in the light of much wider information on the late medieval/early modern Italian economy. Using data on population, urbanization, prices, wages, and GDP, this article outlines the macroeconomic trends in central and northern Italy in the age of the Renaissance (1350–1550). The frequent plagues during the early Renaissance—that is, between 1348 and 1450—decimated the population, probably causing more deaths than in other European countries. Hence resources per worker increased and labour productivity, incomes, and standards of living improved remarkably. A favourable economic environment thus seems to have been a pre‐condition for the Renaissance in culture, art, and politics and the spread of new kinds of consumer demand. From the middle of the fifteenth century, living standards gradually worsened and eventually reached the low levels that had prevailed prior to the Renaissance.     

Population and economic development

The traditional view has been that population growth has adverse effects on real per capita incomes. China's restrictive population policy appears to have been based on the traditional view. There is substantial evidence that contradicts the conclusion that population growth is adverse to economic growth. Most empirical analyses of the relationship between population and economic growth do not find that there is an adverse effect. The history of the world has been that periods of low population growth have been periods of low economic growth and that high rates of economic growth have occurred when population growth is also high. Most of human history has had low population and low economic growth. Only recently has there been both rapid population and economic growth.     

GDP in the Dutch Cape Colony: The National Accounts of a Slave‐Based Society

New estimates of the gross domestic product of the Dutch Cape Colony (1652‐1795) suggest that the Cape was one of the most prosperous regions during the eighteenth century. This stands in sharp contrast to the perceived view that the Cape was an “economic and social backwater,” a slave economy with slow growth and little progress. Following a national accounts framework, we find that Cape settlers' per capita income is similar to the most prosperous countries of the time – Holland and England. We trace the roots of this result, showing that it is partly explained by a highly skewed population structure and very low dependency ratio of slavery, and attempt to link the eighteenth‐century Cape Colony experience to twentieth‐century South African income levels.     

Tall and shrinking Muslims, short and growing Europeans: The long-run welfare development of the Middle East, 1850-1980

In this study we examine anthropometric data for eight countries in the Middle East for the period 1850-1910, and we follow those countries until the 1980s. The Middle East had a relatively good position during the mid-19th century, if human stature or real wages are considered, but much less so in terms of GDP per capita. Initially low population densities allowed better anthropometric outcomes. The height advantage was due, among other factors, to easier access to animal products. All indicators suggest that the Middle East lost ground after the 1870s relative to the industrializing Countries.     

A new study of the Chinese regions in a neoclassical framework of models of growth

This study tests economic growth and convergence across the Chinese provinces during the period 1981–2005 based on augmented neoclassical growth models where land is included as a production input. A positive steady-state growth of per capita output cannot be sustained if the population growth rate or the output elasticity of land is sufficiently high. The study implements a panel data approach and shows that land may have an output elasticity as high as 1/3, suggesting that the natural environment indeed poses an important constraint on China's economic growth. In this study of the Chinese provinces, the panel data approach has implied much higher rates of conditional convergence in per capita output, compared with cross-section estimations.     

Exploring income variations across traditional authorities in KwaZulu‐Natal,South Africa

To understand income inequality and poverty, one must go beyond the important and much‐studied differences rural and urban living and investigate inequalities within rural areas. Using new South African data aggregated by ‘traditional authorities’, this article examines variations in per capita income across poor, rural, mostly black areas of KwaZulu‐Natal (KZN) province. The inequalities are significant. In explaining them, the article examines the importance of such variables as education, proportion of females in the resident population, population density, soil quality and rainfall. A geographical information system is used to map both the raw data and the residuals from a regression analysis, and this combination of statistical and geographical analyses yields new insights. Finally, the article suggests how these techniques might be supplemented by qualitative and quantitative studies of ‘overachieving’ and ‘underachieving’ traditional authorities ‐ those whose incomes per capita are well above or below what regression equations would predict.     

The growing dependence of Britain on trade during the Industrial Revolution

Many previous studies of the role of trade during the British Industrial Revolution have found little or no role for trade in explaining British living standards or growth rates. We construct a three-region model of the world in which Britain trades with North America and the Rest of the World, and calibrate the model to data from the 1760s and 1850s. We find that while trade had only a small impact on British welfare in the 1760s, it had a very large impact in the 1850s. This contrast is robust to a large range of parameter perturbations. Biased technological change and population growth were key in explaining Britain's growing dependence on trade during the Industrial Revolution.     

Decomposing income inequality in a backward pre‐industrial economy: Old Castile (Spain) in the middle of the eighteenth century

Research on economic inequality in early modern Europe is complicated by the lack of appropriate data for reconstructing income or wealth distributions. This article presents a study of income inequality in mid‐eighteenth‐century Old Castile (Spain) using the Ensenada Cadastre, a census conducted between 1749 and 1759. The article describes the information provided by this census and then discusses its advantages and disadvantages for reconstructing income profiles and calculating income inequality. This is followed by analysis of a dataset derived from the Cadastre that consists of more than 4,000 observations from Palencia (a province in northern Spain) and contains information on sources of household income, each household head's main occupation, residence location, and other household characteristics. Demographic data from this census is used to weight observations in the sample and thereby minimize selection bias. Findings show that inequality in eighteenth‐century Spain was probably substantial despite its relative backwardness; that the relationship between inequality and per capita income was not clear‐cut and was probably influenced by measurement of the higher incomes; and that although income inequality was largely driven by uneven land distribution, labour income also contributed to overall inequality—especially in urban centres.     

The contribution of increased life expectancy to economic development in twentieth century Japan

This paper estimates the value of improved health in Japan over the twentieth century. By valuing the decline in the death rate and appending this to existing measures of GDP per capita it is possible to calculate health augmented GDP per capita growth and generate original results about the monetary value of improved life expectancy over the twentieth century in Japan. The findings of the paper indicate that this is a pertinent exercise because GDP per capita growth approximately doubles when it is extended to include increases in the life expectancy of the population of Japan. These results also provide a justification for the increase in health care service spending that was evident at the close of the twentieth century.