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Bouscasse, P., Nakamura, E., Steinsson, J.

When Did Growth Begin? New Estimates of Productivity Growth in England from 1250 to 1870

JIWP Number: 2309

Abstract: We provide new estimates of the evolution of productivity in England from 1250 to 1870. Real wages over this period were heavily influenced by plague-induced swings in the population. We develop and implement a new methodology for estimating productivity that accounts for these Malthusian dynamics. In the early part of our sample, we find that productivity growth was zero. Productivity growth began in 1600—almost a century before the Glorious Revolution. We estimate productivity growth of 3% per decade between 1600 and 1760, which increased to 6% per decade between 1770 and 1860. Our estimates attribute much of the increase in output growth during the Industrial Revolution to a falling land share of production, rather than to faster productivity growth. Our evidence helps distinguish between theories of why growth began. In particular, our findings support the idea that broad-based economic change preceded the bourgeois institutional reforms of 17th century England and may have contributed to causing them. We estimate relatively weak Malthusian population forces on real wages. This implies that our model can generate sustained deviations from the “iron law of wages” prior the Industrial Revolution.

JEL Codes: N13 O40 J10

Author links:

PDF: jiwp2309.pdf

Open Access Link: 10.17863/CAM.99028

Theme: transmission