Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/247077 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
EHES Working Paper No. 147
Publisher: 
European Historical Economics Society (EHES), s.l.
Abstract: 
Classic accounts of the English industrial revolution present a long period of stagnation followed by a fast take-off. However, recent findings of slow but steady per capita economic growth suggest that this is a historically inaccurate portrait of early modern England. This growth pattern was in part driven by specialization and structural change accompanied by an increase in market participation at both the intensive and extensive levels. These, I argue, were supported by the gradual increase in money supply made possible by the importation of precious metals from America. They allowed for a substantial increase in the monetization and liquidity levels of the economy, hence decreasing transaction costs, increasing market thickness, changing the relative incentive for participating in the market, and allowing agglomeration economies to arise. By making trade with Asia possible, precious metals also induced demand for new desirable goods, which in turn encouraged market participation. Finally, the increased monetization and market participation made tax collection easier. This helped the government to build up fiscal capacity and as a consequence to provide for public goods. The structural change and increased market participation that ensued paved the way to modernization.
Subjects: 
Origins and persistence of modern economic growth
the industrious
industrial and financial revolutions
early modern monetary injections
the great divergence
the little divergence
state-formation
provision of public goods
JEL: 
E10
E40
E50
N13
N33
O40
Document Type: 
Working Paper

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