Stephen Broadberry, 20 April 2021

As a result of recent work on historical national accounting, it is now possible to establish more firmly the timing of the Great Divergence of living standards between Europe and Asia in the 18th century. This column shows that there was a European Little Divergence as Britain and the Netherlands 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 the Netherlands starting from a lower level, and because of a strong negative growth trend in Qing dynasty China.

António Henriques, Nuno Palma, 10 December 2019

The decline of countries such as Castile and Portugal, which first benefited from access to the New World, relative to their followers, especially England and the Netherlands, is often attributed to the quality of the Iberian countries’ institutions at the time Atlantic trade opened. This column questions this narrative by comparing Iberian and English institutional quality over time, considering the frequency and nature of parliamentary meetings, the frequency and intensity of extraordinary taxation and coin debasement, and real interest spreads for public debt. It finds no evidence that the political institutions of Iberia were worse until at least 1650.

Thomas Keywood, Jörg Baten, 07 December 2019

Due to their lower standards of living, Eastern and Central Eastern Europe are losing their young, well-educated and energetic population to the West. The scarcity of data that reach far enough back in time makes it challenging to explain the longstanding East–West differences. This column explores the relationship of economic development with human capital – specifically, elite numeracy – and violence. It concludes that the absence of violence played a significant role in economic development through elite numeracy formation.

Jakob Brøchner Madsen, Peter Robertson, Longfeng Ye, 14 July 2019

The econometric evidence for the Malthusian trap in pre-industrial Europe has been weak. The column presents a new Malthusian model that, combined with new historical data for 17 countries, provides evidence of a much stronger Malthusian trap than the one found by previous research. This helps to explain the economic stagnation from the dark ages to the industrial revolution.

Gianmarco Ottaviano, 03 July 2019

Economic geography strikes back. After a couple of decades of easy talk about the ‘death of distance’ in the age of globalisation, the promise of a world of rising living standards for all is increasingly challenged by the resilience of regional disparities within countries. As long as many people and firms are not geographically mobile – and those who are tend to be the most skilled and productive – easier distant interactions can actually strengthen rather than weaken agglomeration economies. Recent electoral trends in Europe can be understood to a surprisingly large extent from this angle. 

Branko Milanovic, 13 November 2018

Peter Lindert, 15 April 2017

The debate over how the real income gaps between countries have evolved over the centuries has heated up since the 1990s. This column argues for a reshuffling of the global ranks between Columbus and WWI. Findings include that (i) the real income gap between northwest Europe and the major Asian countries was greater since the 1500s than previously estimated; (ii) contrary to all previous estimates, Mughal India around 1600 was already far behind both Japan and Northwest Europe; and (iii) average incomes in North America were already higher than in Britain or France in the late 17th century, long before Maddison’s suggested catching-up date for the US versus Britain of around 1900. 

Kevin O'Rourke, Jeffrey Williamson, 03 April 2017

The Great Divergence in living standards between the West and the Rest is being eroded as developing economies rapidly industrialise. This column explores the origins of modern industrial growth in regions that fell behind the West during the Great Divergence. Modern manufacturing growth in the global periphery dates back to the interwar period, and in some regions much earlier. It depended on a complex interaction between factor endowments, the global context, economic policies, and luck.

Daniel Bernhofen, Markus Eberhardt, Jianan Li , Stephen Morgan, 22 June 2016

Despite being credited with many of the defining inventions of the early modern era, China failed to develop in line with Western Europe at the start of the 19th century. This column suggests that one reason for this was that China’s economy was more fragmented than that of Europe. Using Chinese monthly grain prices from 1740-1820 and grain price panels from Western Europe, it shows that in terms of market integration, the Great Divergence was well under way decades before the start of the 19th century.

Stephen Broadberry, 16 November 2013

The economic divergence we observe today was existent even a thousand years ago. Thanks to recent work on historical data, we can now trace the economic development of different countries centuries back in the past. This column discusses the roots of the Great Divergence between European and Asian economies. The column argues that divergence is due to the differential impact of shocks that hit economies with different structural features.

Oded Galor, Andrew Mountford, 18 February 2008

The last 200 years saw a ‘Great Divergence’ in per capita income, as some countries industrialised while others remained less developed. This column attributes the divergence to international trade. Comparative advantage encouraged industrialising economies to invest in human capital, while non-industrial economies experienced population growth.


CEPR Policy Research