A N E C O N O MIC H IS T O RY O F E U R O P E This revised and extended edition of the leading textbook on European economic history has been updated to take account of contemporary economic developments and the latest research and debates A concise and accessible introduction that covers the full sweep of European history, the book focuses on the interplay between the development of institutions and the generation and diffusion of knowledge-based technologies With simple explanations of key economic principles, the book is an ideal introduction for students in History and Economics Revised textboxes and figures, an extensive glossary, suggestions for further reading and a suite of online resources lead students to a comprehensive understanding of the subject New material covers contemporary economic developments such as the financial crises of 2007/2008, the Eurozone crisis, new trends in inequality and the austerity debates This remains the only textbook students need to understand Europe’s unique economic development and its global context KARL GUNNAR PERSSON is Emeritus Professor in the Department of Economics at the University of Copenhagen, where he has been teaching comparative economic history and the history of globalization over the last five decades He is the author of Pre-Industrial Economic Growth: Social Organization and Technological Progress in Europe (1988) and Grain Markets in Europe 1500–1900: Integration and Deregulation (1999) PAUL SHARP is Professor in the Department of Business and Economics at the University of Southern Denmark, where he lectures in economic history He has worked on a variety of topics, but his recent focus has been on agriculture in economic history He has published widely in the leading economic history journals such as the Journal of Economic History, and the Economic History Review, in leading economics journals in growth and development, as well as in history journals He is currently working on a book on the economic history of the Danish dairy industry N E W A P P R O A C H E S T O E C O N O MIC A N D S O C IA L H IS T O RY Series editors Nigel Goose, University of Hertfordshire Larry Neal, University of Illinois, Urbana-Champaign New Approaches to Economic and Social History is an important new textbook series published in association with the Economic History Society It provides concise but authoritative surveys of major themes and issues in world economic and social history from the post-Roman recovery to the present day Books in the series are by recognised authorities operating at the cutting edge of their field with an ability to write clearly and succinctly The series consists principally of single-author works – academically rigorous and groundbreaking – which offer comprehensive, analytical guides at a length and level accessible to advanced school students and undergraduate historians and economists A N E C O N O M I C H I S T O RY O F EUROPE Knowledge, Institutions and Growth, 600 to the Present Second Edition Karl Gunnar Persson University of Copenhagen in collaboration with Paul Sharp University of Southern Denmark University Printing House, Cambridge CB2 8BS, United Kingdom Cambridge University Press is part of the University of Cambridge It furthers the University’s mission by disseminating knowledge in the pursuit of education, learning and research at the highest international levels of excellence www.cambridge.org Information on this title: www.cambridge.org/9781107095564 © Karl Gunnar Persson and Paul Sharp 2015 This publication is in copyright Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press First published 2010 Second edition 2015 Printed in the United Kingdom by TJ International Ltd Padstow Cornwall A catalogue record for this publication is available from the British Library Library of Congress Cataloguing in Publication data Persson, Karl Gunnar, 1943– An economic history of Europe : knowledge, institutions and growth, 600 to the present / Karl Gunnar Persson and Paul Sharp – Second edition pages cm – (New approaches to economic and social history) Revised edition of the author’s An economic history of Europe : knowledge, institutions and growth, 600 to the present, published in 2010 Includes index ISBN 978-1-107-09556-4 Europe – Economic conditions Europe – Social conditions Europe – Intellectual life Technological innovations – Economic aspects – Europe – History I Title HC240.P388 2015 330.94–dc23 2014036817 ISBN 978-1-107-09556-4 Hardback ISBN 978-1-107-47938-8 Paperback Additional resources for this publication at www.cambridge.org/Persson Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate Contents List of tables List of figures List of maps List of boxes Preface to the second edition Preface to the first edition Introduction: What is economic history? Efficiency in the use of resources shapes the wealth of nations Outline of the chapters 1The making of Europe 1.1The geo-economic continuity of Europe 1.2Europe trades, therefore it is! 1.3The limits of geographical integration 1.4From geo-economics to geo-politics: the European Union 2Europe from obscurity to economic recovery 2.1Light in the Dark Ages 2.2Gains from division of labour: Adam Smith revisited 2.3Division of labour is constrained by insufficient demand 2.4Division of labour promotes technological change 2.5After the post-Roman crisis: the economic renaissance of the ninth to fifteenth centuries 2.6Population 2.7The restoration of a monetary system 2.8Transport and trade routes 2.9Urbanization 2.10Production and technology 3Population, economic growth and resource constraints 3.1Historical trends in population growth 3.2The Malthusian theory of population growth and stagnation 3.3Is the Malthusian theory testable? 3.4The secrets of agricultural progress 3.5Understanding fertility strategies 3.6The demographic transition 4The nature and extent of economic growth in the pre-industrial epoch 4.1Understanding pre-industrial growth 4.2Accounting for pre-industrial productivity growth 4.3Wages and income distribution 4.4The Great Divergence: when did Europe forge ahead? Appendix: The dual approach to total factor productivity measurement 5Institutions and growth 5.1Institutions and efficiency 5.2The peculiarity of institutional explanations 5.3The characteristics of a modern economy 5.4Market performance in history 5.5The evolution of land and labour markets: the rise and decline of serfdom 5.6Firms and farms 5.7Co-operatives and hold-up 5.8Contracts, risks and contract enforcement 5.9Asymmetric information, reputation and self-enforcing contracts 6Knowledge, technology transfer and convergence 6.1Industrial Revolution, Industrious Revolution and Industrial Enlightenment 6.2Science and entrepreneurship 6.3The impact of new knowledge: brains replace muscles 6.4The lasting impact of nineteenth-century discoveries and twentieth-century accomplishments 6.5Technology transfer and catch-up 6.5.1Why was Germany a late industrial nation … and why did it grow faster than Britain once it started to grow? 6.5.2Human and capital investment 6.5.3Research and development 6.5.4Industrial relations 6.6Convergence in the long run: three stories 6.7Why is Europe not closing the income and productivity gap relative to the US economy? 7Money, credit and banking 7.1The origins of money 7.2The revival of the monetary system in Europe: coins and bills of exchange 7.3Usury and interest rates in the long run 7.4The emergence of paper money 7.5What banks do? 7.6The impact of banks on economic growth 7.7Banks versus stock markets 7.8Reflections on recent financial crises Appendix: The bill of exchange further explored 8Trade, tariffs and growth 8.1The comparative advantage argument for free trade and its consequences 8.2Trade patterns in history: the difference between nineteenth and twentieth-century trade 8.3Trade policy and growth 8.4Lessons from history 8.4.1From mercantilism to free trade 8.4.2The disintegration of international trade in the interwar period 8.4.3The restoration of the free trade regime after the Second World War 8.4.4Tariffs and growth Appendix: Comparative advantage 9International monetary regimes in history 9.1Why is an international monetary system necessary? 9.2How policymakers choose the international monetary regime? 9.3International monetary regimes in history 9.3.1The International Gold Standard c 1870–1914 9.3.2The interwar years 9.3.3The Bretton Woods System 9.3.4The world of floating exchange rates 9.3.5The Eurozone Crisis in the light of the historical experience 10The era of political economy: from the minimal state to the Welfare State in the twentieth century 10.1Economy and politics at the close of the nineteenth century 10.2The long farewell to economic orthodoxy: the response to the Great Depression 10.3Successes and failures of macroeconomic management in the second half of the twentieth century: from full employment to inflation targeting 10.4Have austerity policies worked in recent history? 10.5Karl Marx’s trap: the rise and fall of the socialist economies in Europe 10.6A market failure theory of the Welfare State 11Inequality among and within nations: past, present, future 11.1Why is there inequality? 11.2Measuring inequality 11.3Gender inequality 11.4Is inequality on the rise again? 11.5World income distribution 11.6Towards a broader concept of welfare 11.7Speculations about future trends in world income inequality 12Globalization and its challenge to Europe 12.1Globalization and the law of one price 12.2What drives globalization? 12.3The phases of globalization 12.3.1Capital markets 12.3.2Commodity markets 12.3.3Labour markets 12.4Globalization and divergence 12.5Globalization backlash: three cases 12.5.1Trade openness and migration 12.5.2The retreat from the world economy 12.5.3The tale of the twin farm protests Appendix: Freight rates and globalization Glossary Index Tables 1.1Intra-European trade and trade with ROW (Rest of the World) in 2005 Percentage of total exports 2.1Increasing division of labour as measured by number of occupations 3.1Number of live births per married woman, age at marriage and survival chances of children, 1650–1950 in a Tuscan village 4.1Total factor productivity in French agriculture 1522–1789 Per cent per year 4.2.GDP per head in European and Asian nations 1300–1850 (1990 international dollars) 5.1Number of co-operative and proprietary creameries 1888–1909 6.1TFP growth and new and old estimates of national product growth in Britain during the Industrial Revolution Per cent per year 8.1Merchandise trade patterns in the UK and the USA 1880–1913 8.2Merchandise trade patterns in Western Europe 1963–1999 8.3The European trade regimes 9.1The Eurozone crisis in figures: an Optimal Currency Area? 9.2Exchange rate systems 10.1GDP per capita in the USA, Russia and Eastern Europe relative to Western Europe 1950–90 Western Europe = 10.2The uses of local and central government spending in Europe in 2005 Percentage of total Crafts, Nicholas 108, 109 credit 150, 152, 162, 164, 165, 168, 169, 235 church influence 152, 153 growth 167, 168, 169 international 184, 192, 225, 231 see also bill of exchange Crompton, Samuel 117 Czechoslovakia 131 currency 206 growth 140 Dark Ages 25, 26 Davy, Humphry 111 Dean, Phyllis 109 Denmark 236 dairy co-operatives 100, 101, 102 fiscal consolidation 226 growth performance 131 inequality 252, 253 serfdom 94 trade 23, 40, 176, 177 division of labour 4, 5, 40, 124 aggregate demand 28, 29, 33, 67, 68 decline of 39 economies of practice and 26, 28, 29 gains from 26, 28 income levels and 31, 32 opportunity cost 27, 28 Domar Evsey 90, 94 Durrer, Robert 123 Dyer, Christopher 92 East Germany 229 Eastern Europe, economic growth performance 132 economic growth capital investment and 134, 135 first generation growth theory (Solow model) 127, 177 mercantilist era 180 modern 6, 110, 242, 243, 252, 253 monetization and 159, 164 new growth theory 177, 178 openness and 2, 129, 140, 143, 181, 186, 188 pre-industrial 67, 69 religion and 86 research and development spending and 135, 136 savings and 135, 160, 164 tariffs and 186, 188 total factor productivity 1, 3, 69, 71, 72, 109, 110, 115, 136, 143 trade policy and 177, 179 economic policy automatic stabilizers 221 in Britain 214, 218 in France 214, 216, 220 in Germany 8, 216, 218, 220, 222 Keynesian 214, 215, 218, 222, 226 New Classical 223 New Keynesian 223 in Scandinavia 214, 218, 221 spending multiplier/theory 219, 226 economies of practice 26, 28, 29 economies of scale 16, 43, 165, 176 and ship building 36 size of producing unit 99, 100 Edison, Thomas 114, 120 education 134 efficiency 5, 82, 84, 88, 90 Eichengreen, Barry 199, 221, 223, 226 electric motor 118, 119 Engel’s law 37 Engels, Friedrich 228 England agricultural growth 70, 71, 72, 73 banking 155 constitutional monarchy 87 income 53, 55, 77, 78 manorial production 93 urbanization 74 English language 19 entrepreneurship 115, 116 Eritrea 206 European Central Bank 207, 210 European Economic and Monetary Union (EMU) 207, 209 European Financial Stability Facility (EFSF) 210 European Free Trade Association (EFTA) 23 European Monetary System (EMS) 205 European Union 277 borders of 10, 14 EEC and 23 trade in 21, 23 Eurozone crisis 206, 210 exchange rates 35, 214, 216 fixed 8, 193, 195 floating 8, 193, 203, 206 free-floating system 214, 216 Faraday, Michael 111, 118 Farmer, D L 70 Federico, Giovanni 49 Fernandes, Felipe Tâmega 181 Ferrie, Joe 244 financial crises 167, 169, 206, 210 Finland 226, 227 First World War 114, 213 Fisher index 111 Flemings 105 Florence 34 Ford, Henry 121 Fordism 124 France 14 agricultural total factor productivity 70, 71, 73 banking 155, 163, 164 Champagne fairs 17 during the Great Depression 216 and the gold standard 200, 201, 227 growth 130, 140, 200, 201 inequality 252, 253 manorial production 93 monetary unions 207 weights and measures 20 free trade 179, 182 backlash 259 interwar period 182, 185 Most Favoured Nation (MFN) clause 181 post-Second World War 185, 186 French language 19 Friedman, Milton 223 Galileo, Galilei 107 Galor, Oded 55 Galvani, Luigi 111 GATT (General Agreement on Tariffs and Trade) negotiations 185, 186 GDP deflator 111, 125 German language 18 Germany 19, 23, 92 banking 163, 164 during the Great Depression 216, 218 economic growth 130, 132, 134, 210 free trade 181 industrial investment 134, 135 industrial relations 136 monetary policy 205, 207 research and development spending 135, 136 socialist economies 228, 231 trade 177 training 134 Gerschenkron, Alexander 126, 163, 166 Gilchrist, Percy Carlyle 123 Gini coefficient 239, 243, 247, 248, 249, 250 globalization 9, 256 capital markets 261, 264, 277 commodity markets 265, 267, 277 and divergence 269, 273 labour markets 269 and law of one price 256, 258 Gold Standard 8, 155, 157, 195, 196, 199, 213, 217, 227, 263 interwar years 199 Goldin, Claudia 246 Gramme, Zenobe 111 Great Depression 130, 137, 167, 183, 184, 186, 199, 200, 262 comparison with Great Recession 223, 226 reaction to 201, 203, 214, 218 Great Divergence 76, 79 Great Gatsby Curve 244 Great Recession 186 austerity policies and 223, 228 Greece 131 Eurozone crisis 207, 209 Greif, Avner 105 Guericke, Otto von 107 guilds 83, 84 see also Hanseatic League Haber, Fritz 122 Hague–Visby rules 18, 21 Hanseatic League (Hanse/Hansa) 18, 36, 84, 105, 150 Hargreaves, James 117 Harley, Knick 108, 109 Hatton, Timothy 273 Hawley, Willis 183, 184 Heckscher, Eli 173, 175 Heller report (1968) 221 Highs, Thomas 117 Hitler, Adolf 135, 217, 218 Hoffman, Philip 70, 73 Huberman, Michael 274 Human Development Index (HDI) 251, 252 Hume, David 197 Hungary 131 Huygens, Christiaan 107 Iceland 249 ICT (information and communication technology) costs 260, 261 effect on economic success 142 see also computers/computing income distribution 74, 76 discrimination 238, 245, 246 world 249, 250 income elasticity 37, 52, 177 India Great Divergence 76, 79 growth 250, 253 income 249, 251, 253 textile industry 270, 272 Indonesia 253 industrial enlightenment 108, 110, 112, 272 industrial relations 136 Industrial Revolution 6, 7, 42, 76, 79, 107, 115 industrialization 97, 143 America 135 Argentina 139 Asia 250 capital investment 99, 100 de-industrialization 270, 272 economic growth and 116, 130 fertility rates and 63 import substitution 275, 276 inequality and 243 Japan 272 partnerships 103 Russia 132 Industrious Revolution 108 inequality 1, 2, colonial past and 239 gender 245, 246 global 249, 250, 252 income 238, 239 rise in 247, 248 and social mobility 244 weighted 249, 250 inflation estimation of 111 targeting 222 information transmission 256, 257, 261 costs 260, 261 Inklaar, Robert 142 institutions co-operatives 100, 102 distributional consequences of 90, 97 and efficiency 82, 84 explanations of 85, 86 in the modern economy 86, 88 stable 6, insurance 17, 235 deposit 167 International Convention on Tonnage Measurement of Ships 21 International Monetary Fund (IMF) 204, 205 international monetary system 192, 193 Bretton Woods System 195, 201, 203, 222, 264 commodity currencies 193, 195 fixed exchange rates 193, 195 floating exchange rates 193, 203, 206 open economy trilemma 194, 195 Ireland co-operative trade 102 Eurozone crisis 207 growth 131, 138, 139 monetary union with UK 206 Irwin, Douglas A 184 Italy 23, 73 credit co-operatives 103 growth 139 income 32 manorial production 93 merchant city states 10 monetary union 207 pawnshops 152, 153 role in trading network 37 urbanization 41 Jacquard loom 117, 124 Jacquard, Joseph-Marie 117 Japan 135, 272 jet engine 121 Jews 105, 153 Kelly, Morgan 113 Kelly, William 122 Kenen, Peter 204 Kennedy, William 134, 163 Keynes, John Maynard 201, 202, 214, 215, 218 knowledge 26 non-rival nature of 3, 125, 177 transfer of 29, 31, 125, 126, 129, 132 Korea 135 Krueger, Alan B 244 Krugman, Paul 176, 209 Kuznets curve 244, 250 Kuznets, Simon 243, 250 labour, unfree 90 labour market evolution of 90, 96, 97 and globalization 269 supply and demand 258, 259 labour-managed firms 99, 100 Lampe, Markus 181 land/landownership 90, 97 Lange, Oscar 229 Laspeyres index 111 Latin 18, 19 Latin Monetary Union 197, 206, 207 Lavoisier, Antoine 112, 117 law of one price 77, 88, 89, 149, 256, 258 learning by doing 26, 27, 29, 31, 43, 56, 67, 107, 115 reversal of 39 Leibniz, Gottfried 124 limited liability corporations 82, 102, 105 Lindert, Peter 236 Livi-Bacci, Massimo 52 Lombards 105, 153 Long, Jason , 244 Lorenz curves 241 Luddites 117, 272 Luther, Martin 86 Luxembourg 207 Luxembourg Income Study 247 Maastricht Treaty (1992) 209 macroeconomics 213 Maddison Project 78 Maddison, Angus 78 Malthus, Thomas 47, 49, 52, 59 Malthusian theory 47, 49, 52, 58, 65, 67, 68, 77 testability of 52, 56 management farm 97, 98 firm 99 labour vs capital 99, 100 manorial organization 93, 96 Marconi, Guglielmo 115 maritime law 18 market efficiency 88, 90 extent of 33 market clearing price 89 market exchange, vertical integration 101 Martin, Emile 118 Marx, Karl 117, 228, 231 McCloskey, D 97 McKinnon, Robert 204 mercantilism 179, 181, 269 metal production 42, 45 technologies 116, 117, 118 see also steelmaking migration 269, 277 restrictions, on 273, 274 Milanovic, Branko 241 Mokyr, Joel 108, 110, 112, 113, 272 Møller, Niels Framroze 54, 55 monetary systems European revival of 148, 152 interwar years 199 see also Gold standard , international monetary system monetary unions 197 politics and 206, 207 money banknotes 154, 157 bimetallism 196, 197, 198 coins 148 counterfeit 148 debasement 34, 35, 149 early forms 146, 148 fiat (fiduciary) 34, 149, 154, 156, 157, 193 intrinsic value 148, 154 law of one price 34 markets 34, 35 minting 33, 148, 150 opportunity cost 152 mule (spinning device) 117 multiplier 219, 226 Mundell, Robert 204 Muslim civilization 25 national income 160 natural resources Nazis/Nazism 217, 229 Neal, Larry 261 Neolithic revolution 48 Netherlands 73 modern economy 86, 88 urbanization 40 Newcomen, Thomas 107 nitrates, industrial production of 121, 122 Nobel, Alfred 115 Nordhaus, William 119, 125 Northern Rock bank 168 Norway 10, 17, 21, 93, 94 Nye, John 180 Obstfeld, Maurice 194, 262 Odhner, Willgodt 124 Ó Gráda, Cormac 113, 139 Ohlin, Bertil 173, 175 Ohm, Georg 111 O’Mahony, Mary 142 opportunity cost 173, 230 of having children 64 of hoarding 160 of money 152 Optimal Currency Area Criteria 201 O’Rourke, Kevin 136, 223 Ørsted, Hans-Christian 111, 118 Otto, Nicolaus 121 Ottoman Empire 26 Oxenstierna, Axel 19 Paasche index 111 Palmstruch, Johan 154 paper manufacturing 44, 119, 122 Fourdrinier process 122 Papin, Denis 107 Pareto-efficiency 83 Pascal, Blaise 124 Pasteur, Louis 116 patents 87, 112, 114, 135, 178 applications 131 protection 3, 125, 126 path dependence 99, 166 pawnshops 152, 153 pensions 235, 236 Pepys, Samuel 67, 68 Persson, K G 72 Phillips curve 220, 221 Pirenne, Henri 14, 15, 16, 26 Poland 229 Pomeranz, Kenneth 76 population changes in and market demand 31, 32 decline 33, 49 demographic transition 62, 65 Eurozone crisis 207 fertility strategies 59, 62, 68 growth 5, 6, 31, 33 Malthusian theory 47, 49, 52, 56, 58, 65, 67, 68, 77 positive checks 51, 52 preventative checks 51, 52 trends in 47, 49 Unified Growth Theory 55 Portugal 131, 207 Prados, Leandro 140 Priestley, Joseph 112, 115 printing 44 Gutenberg technology 48 Pritchett, L 249 protectionism 7, 174, 175, 176, 178, 188, 201, 203, 273, 275, 276, 278 Corn Laws 179, 181 Common Agricultural Policy 180, 186 infant-industry 178, 179 Protestant work ethic 86 Prussian Customs Union (1818) 133 putting-out (Verlag) system 99 residual claimant 98 resources 1, Resumption Act (1819) 196 Ricardo, David 173, 179 rival goods Robert, Nicolas 122 robotics 124 Rodrik, Danny 274 Rolls of Oléron (1286) 18 Roman Empire borders of 10, 14 coins 148 currencies 149 decline of 5, 25, 30, 32, 39, 42, 50, 91, 148 income 240 inequality 242 language 18 limits to expansion 19 metal production 42 shipping 36 urbanization 39 Romania 132, 229 Roosevelt, Franklin D 218 Rosenberg, Nathan 124 Rosés, Joan 140 Rousseau, P 161 Russia 10, 18 economic growth 132 isolation of 19, 21 metrication 20 see also Soviet Union Samuelson, Paul 174 Scandinavia 10 dairy co-operatives 100, 102 growth performance 130, 131, 137, 138 income inequality 247, 248 peasantry 93 return to gold standard 227 trading networks 37 Scandinavian Monetary Union 197, 206, 207 Scheele, Carl Wilhelm 111, 115 Schofield, R 54 science see technological innovationtechnology Scotland, banks 155 serfdom 83, 90, 97 sharecropping 103, 104 Sharp, Paul 54, 55 shipping 16, 17, 36 sail powered 109 Siemens, William 118, 123 slave trade 267 slavery 83, 90, 91, 92, 94 Smil, Vaclav 123 Smith, Adam 26, 28, 33, 83, 84, 87, 230 Smoot, Reed 183, 184 Smoot–Hawley Act (1930) 183, 184 socialist economies 228, 231 Solow, Robert 127 South Korea 276 Soviet Union 206, 228, 231 Spain 23, 73, 132 Eurozone crisis 207 growth 140 spinning jenny 117 spot exchange 104 Stability and Growth Pact (SGP) 209 standardization (normalization) 124 steam engine 107, 108, 109, 118 steelmaking 116, 117, 118, 123 Bessamer converter 117, 118, 122, 123 Linz–Donawits method 123 Siemens–Martin open hearth process 117, 118 stock markets 165, 166 depth 162 mutual funds 165 Stockholms Banco 154, 155 Stolper, Wolfgang 174 Sunesen, Anders 19 suppliers, hold-up power 101, 102 Swan, Joseph Wilson 120 Sweden agricultural labour force 93, 94 banking 154, 155, 156, 157, 160, 164 fiscal consolidation 226, 227 growth performance 131 trade 176 Switzerland 21 monetary union 206 Taiwan 135 tax 235, 236 progressive/regressive systems 233 Taylor, Alan 194, 262 technological innovation 110, 112, 115, 116 electricity 116, 119 and production processes 120, 122 textile industry 117 twentieth century 123, 125 technology 2, hunter-gatherer 47, 48 progress 3, 50, 65, 67, 68 and production 41, 44 quality improvement 119, 120 science, research and development 7, 107 transfer , 6, 7, 125, 126, 129, 132 see also ICT (Information and Communication Technology) Tena-Junguito, Antonio 181 textile industry 43, 44, 99, 109, 117, 269, 270, 272 textile mills 99, 100 Thomas, Sidney Gilchrist 123 Timmer, Marcel 142 Torricelli, Evangelista 107 trade barter 19, 33, 146 border effects and 14, 16, 21 cohesive force of 10, 14 coincidence of wants 146 comparative advantage 173, 175, 179, 275 costs 256, 257, 259, 260, 276, 277 factor-price equalization theorem 174 gravity theory 4, 14, 16 Heckscher–Ohlin theorem 173, 174, 175, 177 intersectoral 175 intrasectoral 176, 177 liberalization 179, 182, 259, 277 monopolistic competition 176 New Trade theory 176 openness and migration 273, 274 proximity and similarity of nations 16, 18, 21 Rybczynski theorem 174 Stolper–Samuelson theorem 174, 180 use of common language and 18, 19 see also free trade trade routes 35, 37 trade unions 136, 214, 220, 221, 235 tragedy of the commons 82, 83, 112 transport 16, 18, 29, 35, 37 costs 256, 257, 259, 260, 276, 277 Treaty of Rome 23 trend output 167 unemployment 167 Unified Growth Theory 55 United Kingdom banking 157 growth 200, 201 weights and measures 20, 21 United Nations 250 United States economic convergence 137, 139 production methods 123, 124 protectionism 181, 182 research and development 123, 124, 135 weights and measures 20, 21 urbanization 37, 41 and labour productivity 72, 74 usury 152, 153 Venice 10, 17, 34 finance 151 Verlag (putting-out) system 99 Vietnam 253 Vikings 36, 39 villeins , see serfdom Visby Sea Law 18 Volta, Alessandro 111 Vries, Jan de 73, 86, 108 wages convergence 268 effect of migration 273 and income distribution 74, 76 nominal 74, 119, 200, 215 population increase and 60 product 200, 215 real 53, 54, 74, 78, 119, 215, 268 Wall Street Crash 199, 215 water mills 43, 45, 84, 99, 109 Weber, Max 86 weights and measures 20, 21 welfare, measurement of 250, 252 Welfare State 9, 221, 232, 236 White, Harry Dexter 202 Williamson, Jeffrey G 270, 273 windmills 44, 45 Woessmann, Ludger 86 World Trade Organization (WTO) 186 Woude, Ad van der 86, 87 Wrigley, E A 54, 71 Yugoslavia 229 Zollverein (1833) 133 ... from the Atlantic coast to the Black Sea Ireland, the northern periphery of Europe, Scandinavia and Russia were touched by neither the Roman nor the Carolingian rulers Russia’s relationship to Europe. .. as land, but the fertility of land can and must be restored after harvest Over thousands of years of agriculture, mankind learned how animal dung, rotation of crops and the introduction of nitrogenfixing... Persson and Paul Sharp – Second edition pages cm – (New approaches to economic and social history) Revised edition of the author’s An economic history of Europe : knowledge, institutions and growth,