The Three Horsemen of Growth: Plague, War and Urbanization in Early Modern Europe

Nico Voigtländer () and Hans-Joachim Voth

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: How did Europe overtake China? We construct a simple Malthusian model with two sectors and use it to explain why European per capita incomes and urbanization rates surged ahead of Chinese ones. Productivity growth can only explain a small fraction of the rise in living standards. Population dynamics – changes of the birth and death schedules – were far more important drivers of the long-run Malthusian equilibrium. The Black Death raised wages substantially, creating important knock-on effects. Because of Engel’s Law, demand for urban products increased, raising urban wages and attracting migrants from rural areas. European cities were unhealthy, especially compared to Far Eastern ones. Urbanization pushed up aggregate death rates. This effect was reinforced by more frequent wars (fed by city wealth) and disease spread by trade. Thus, higher wages themselves reduced population pressure. We show in a calibration exercise that our model can account for the sustained rise in European urbanization as well as permanently higher per capita incomes in 1700, without technological change. Wars contributed importantly to the ’Rise of Europe,’ even if they had negative short-run effects.

Keywords: Malthus to Solow; Long-run Growth; Great Divergence; Epidemics; Demographic Regime (search for similar items in EconPapers)
JEL-codes: E27 N13 N33 O14 O41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-his, nep-mac and nep-ure
Date: 2008-08, Revised 2009-05
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Working Paper: The Three Horsemen of Growth: Plague, War and Urbanization in Early Modern Europe (2009)
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