100% tevredenheidsgarantie Direct beschikbaar na betaling Zowel online als in PDF Je zit nergens aan vast
logo-home
Topic 2: trade before the IR notes €3,71
In winkelwagen

College aantekeningen

Topic 2: trade before the IR notes

 12 keer bekeken  0 keer verkocht
  • Vak
  • Instelling

Notes on trade before the IR from the lectures and seminars

Voorbeeld 2 van de 6  pagina's

  • 25 augustus 2021
  • 6
  • 2020/2021
  • College aantekeningen
  • Claudia rei
  • Alle colleges
avatar-seller
Trade and empire before the Industrial Revolution

The Great Divergence

● GD is the difference in economic performance between China and Europe
○ China was more developed than Europe in 1000 (Song Peak) and had
greater inventions - paper, printing
○ Europe industrialised first, creating a gap by 1800

Measurement

● Silver wages suggest an early divergence (before the IR)
○ Silver wages - local wages divided by silver. Gives the amount of silver
that can be bought with daily nominal wages
○ Indian silver wages were 21% of English wages in the late 1500s
○ Early divergence due to institutional differences
■ Emphasis on commerce, productivity and urbanisation in Europe
● Grain wages suggest a late divergence
○ Grain wages - how many kgs of grain can be bought with a daily wage
○ Indian wages were 20% of English wages in the 1800s
○ Useful as grain is used by everyone
○ However - some countries (LDCs) have a CA in agriculture, reducing
the price of grain and increasing the grain wages
● Real wages tell us how much the nominal wage can afford
● Allen (2011) calculates welfare ratios - how many goods baskets a family can
buy
○ Barebones basket covers essentials - no improvement in SoL
○ European Respectability Basket allows for some comfort

Why

Different demographic regimes
● Europe had a delayed marriage pattern, a later age of first marriage and not
all women married (average age of 23-26, 1600-1850)
● China had younger universal marriage (average of 17-20, 1550-1930)
● China had a higher fertility rate and higher resource pressure
○ Asia remained Malthusian for longer
● Europe had higher wages due to preventative checks and higher labour costs
● More technology in Europe decreased the need for labour

Government formation
● Roving bandits create no incentive to produce > subsistence - surplus is taken
○ Bandits monopolise theft and become stationary, creating tax
● Stationary bandit is better than the roving bandit as they do not tax at 100%

, ● Lower taxes encourage production - generates more revenue than 100% tax
● Democracy increases production and competition - competing revenue down
● Challenging the autocrat decreases tax rates - increased competition
● China had a stable autocratic regime with few challengers
● Europe was fast transitioning to “democracy”
● Glorious Revolution started the transition to democracy following the English
civil war and exile of James II (1688)
○ Generated functioning credit markets and rising state capacity
○ Led to the division of powers and constrained the executive via the
independent judiciary - more democratic institutions and more revenue

The European Miracle

● European miracle - rise in GDP pc from the eve of the industrial revolution to
the mid 1700s (phase 2)
● Features of the European miracle:
○ Competing and decentralised states
○ Private institutions
■ Independent legal system, religious authorities, merchant class
■ Development of banking institutions
○ Late medieval commercial revolution increased trade and finance
○ Late medieval agricultural revolution - structural change and movement
away from agriculture

Phase 1: 1300-1600

● European revival of trade after the fall of the Roman Empire - Venice, Genoa,
Florence
● Technological dominance in shipping / commerce
● State involvement
○ Shipbuilding - naval defence for merchant’s ships in Venice
○ Organisation of trade convoys for safety
● Institutional quality and reduction of transaction costs
○ ‘Democratic’ governance, political and legal institutions, property rights

Innovative institutions in Europe
● Medieval merchant guilds (Greif 2000)
● Guilds are a set of rules to ensure trade occurs
○ Force individuals to commit to the rules before trading
○ Prevented commitment problems by having punishments
○ Ensured coordination across markets
● Stronger in Europe from 1300-1500 (present -1600)
● Protect the interests of merchant travellers
○ Makes it harder to trade with other cities due to a lack of trust

Voordelen van het kopen van samenvattingen bij Stuvia op een rij:

Verzekerd van kwaliteit door reviews

Verzekerd van kwaliteit door reviews

Stuvia-klanten hebben meer dan 700.000 samenvattingen beoordeeld. Zo weet je zeker dat je de beste documenten koopt!

Snel en makkelijk kopen

Snel en makkelijk kopen

Je betaalt supersnel en eenmalig met iDeal, creditcard of Stuvia-tegoed voor de samenvatting. Zonder lidmaatschap.

Focus op de essentie

Focus op de essentie

Samenvattingen worden geschreven voor en door anderen. Daarom zijn de samenvattingen altijd betrouwbaar en actueel. Zo kom je snel tot de kern!

Veelgestelde vragen

Wat krijg ik als ik dit document koop?

Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.

Tevredenheidsgarantie: hoe werkt dat?

Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.

Van wie koop ik deze samenvatting?

Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper bethwalton03. Stuvia faciliteert de betaling aan de verkoper.

Zit ik meteen vast aan een abonnement?

Nee, je koopt alleen deze samenvatting voor €3,71. Je zit daarna nergens aan vast.

Is Stuvia te vertrouwen?

4,6 sterren op Google & Trustpilot (+1000 reviews)

Afgelopen 30 dagen zijn er 53068 samenvattingen verkocht

Opgericht in 2010, al 14 jaar dé plek om samenvattingen te kopen

Start met verkopen
€3,71
  • (0)
In winkelwagen
Toegevoegd