Seven centuries of European economic growth and decline

This paper investigates very long run pre-industrial economic development. New annual GDP per capita data for six European countries over the last seven hundred years paint a clearer picture of the history of European economic development. First, the paper confirms that sustained growth has been a recent phenomenon, but rejects the argument that there was no long run growth in living standards before the Industrial Revolution. Instead, the evidence demonstrates the existence of numerous periods of economic growth before the nineteenth century - unsustained, but raising GDP per capita. It also shows that many of these economies experienced substantial economic decline. Thus, rather than being stagnant, pre-nineteenth century European economies experienced a great deal of change. Finally, it offers some evidence that, from the nineteenth century, these economies increased the likelihood of being in a phase of economic growth and reduced the risk of being in a phase of economic decline

The allocation of energy resources in the very long run

This paper investigates the Nordhaus (1973) model developed to understand how markets allocate energy resources. In particular, the model proposes that royalties earned by non-renewable energy producers are closely related to the cost of the backstop energy source, the interest rate and the switching date to the backstop energy source. Here, the paper presents the prices of the main and backstop energy sources, extraction costs and royalties, as well as transport costs, taxes and interest rates, over more than five hundred years in Britain to test the model’s ability to explain very long run market behavior. While the model needs a more rigorous analysis, the very long run data and this crude test suggests that certain episodes might be explained by the model and that others do not appear to be. Also, each of the three explanatory variables do appear to be relevant in these explained episodes. In general, though, energy markets appear to be myopic, unaware of the limits of the non-renewable resource being traded, and only in moments of crisis do they consider the finiteness of the resource and, then, perhaps too dramatically, triggering major new technological, infrastructure and R&D investments

¿Descendió el producto agrario por habitante en la Europa moderna? El caso castellano

Este trabajo cuantifica el crecimiento del producto agrario y del producto agrario per cápita en cuatro provincias castellanas entre las últimas décadas del siglo XVI y el tercer cuarto del XVIII. Para ello utiliza la vía del producto y se basa en la documentación decimal generada por las diócesis de Ávila, Burgos, Salamanca y Segovia para el reparto del subsidio y del excusado. Su principal conclusión no corrobora la imagen negativa que ofrece parte de la historiografía reciente sobre la evolución del sector primario castellano en los siglos XVI y XVIII: entre 1588-1592 y 1771-1775, tanto el producto agrario como el producto agrario por habitante, lejos de reducirse, crecieron en la región estudiada

The role of war in deep transitions: exploring mechanisms, imprints and rules in sociotechnical systems

This paper explores in what ways the two world wars influenced the development of sociotechnical systems underpinning the culmination of the first deep transition. The role of war is an underexplored aspect in both the Techno-Economic Paradigms (TEP) approach and the Multi-level perspective (MLP) which form the two key conceptual building blocks of the Deep Transitions (DT) framework. Thus, we develop a conceptual approach tailored to this particular topic which integrates accounts of total war and mechanisms of war from historical studies and imprinting from organisational studies with the DT framework’s attention towards rules and meta-rules. We explore in what ways the three sociotechnical systems of energy, food, and transport were affected by the emergence of new demand pressures and logistical challenges during conditions of total war; how war impacted the directionality of sociotechnical systems; the extent to which new national and international policy capacities emerged during wartime in the energy, food, and transport systems; and the extent to which these systems were influenced by cooperation and shared sacrifice under wartime conditions. We then explore what lasting changes were influenced by the two wars in the energy, food, and transport systems across the transatlantic zone. This paper seeks to open up a hitherto neglected area in analysis on sociotechnical transitions and we discuss the importance of further research that is attentive towards entanglements of warfare and the military particularly in the field of sustainability transitions

Historical energy price shocks and their changing effects on the economy

The purpose of this paper is to identify the changes in the impact of energy shocks on economic activity – with an interest in assessing if an economy's vulnerability and resilience to shocks improved with economic development. Using data on the United Kingdom over the last three hundred years, the paper identifies supply, aggregate demand and residual shocks to energy prices and estimates their changing influence on energy prices and GDP. The results suggest that the impacts of supply shocks rose with its increasing dependence on coal, and declined with its partial transition to oil. However, the transition from exporting coal to importing oil increased the negative impacts of demand shocks. More generally, the results indicate that improvements in vulnerability and resilience to shocks did not progress systematically as the economy developed. Instead, the changes in impacts depended greatly on the circumstances related to the demand for and supply of energy sources. If these experiences are transferable to future markets, a transition to renewable energy sources is likely to reduce vulnerability and increase resilience to energy price shocks

Anonymity, efficiency wages and technological progress

Although the industrial revolution is often characterized as the culmination of a process of commercialisation, the precise nature of such a link remains unclear. This paper provides an analysis of one such link: the role of commercialisation in raising wages as impersonal labour market transactions replace personalized customary relations. In the presence of an aggregate capital externality, we show that the resulting shift in relative factor prices will, under certain conditions, lead to higher capital-intensity in the production technology and hence, a faster rate of technological progress. We provide historical evidence using European data to show that England was among the most urbanized and the highest wage countries at the onset of the industrial revolution. The model highlights the effects of changes in the availability of information, typical of a modernising country, on efficiency wages and technological progress

Long run trends in energy-related external costs

This paper considers how energy-related external costs change through time. It focuses on one of the key periods in the history of energy. After a period of declining coal prices and soaring consumption which fuelled the Second Industrial Revolution, the nineteenth century British economy was externalising the social costs of energy production and consumption on a massive scale. Rising from 25% in the 1820s, an estimated 60%–70% of the average social costs of coal were externalised in the 1880s, imposing damages close to 20% of GDP. The eventual decline in air pollution concentration (around 1900) occurred fifty years later than was broadly socially optimal. This experience highlights the evolution of the demand for and supply of environmental quality in the context of economic growth, and the nature of related market and government failures, implying the necessity for adaptation rather than encouraging mitigation. This experience may offer lessons for climate analysis and policy-making