Populism is Back! Why has this happened and why does it matter?

Populism and the Economics of Globalization

By Dani Rodrik (Harvard University)

Abstract: Populism may seem like it has come out of nowhere, but it has been on the rise for a while. I argue that economic history and economic theory both provide ample grounds for anticipating that advanced stages of economic globalization would produce a political backlash. While the backlash may have been predictable, the specific form it took was less so. I distinguish between left-wing and right-wing variants of populism, which differ with respect to the societal cleavages that populist politicians highlight. The first has been predominant in Latin America, and the second in Europe. I argue that these different reactions are related to the relative salience of different types of globalization shocks.

URL: http://EconPapers.repec.org/RePEc:cpr:ceprdp:12119

Distributed by NEP-HIS on: 2017-07-09

Review by Sergio Castellanos-Gamboa (Bangor University)


Populism has been at the front of news headlines for a while now. Whether it was the controversial campaign for Brexit led by Nigel Farage from the United Kingdom Independence Party (UKIP) and Boris Johnson from the Conservative Party in Great Britain, or the equally controversial campaign and victory of Donald Trump in the recent United States elections, the rise of anti-immigrant and anti-European political parties in countries like France, Greece, and Spain, the so called “anti-imperial Castro-Chavist” movements and governments in Venezuela, Bolivia, and Ecuador, or the opposition of the Democratic Center Party (a right-wing political agrupation led by ex-president Alvaro Uribe Velez) to the peace treaty in Colombia, populism is back and very strong, and according to the author, it is here to stay for the foreseeable future.

Dani Rodrik combines the use of economic history and economic theory to analyze the recent surge of these populist movements across Europe and America (see a blog-post version of the paper on VOX here). The main argument of the paper is that “advanced stages of globalization are prone to populist backlash” and the specific form populism takes will depend on the different societal cleavages that politicians can exploit to promote anti-establishment movements. There will be a tendency for left-wing populism when “globalization shocks take the form of trade, finance, and foreign investment”. The opposite will happen when “the globalization shock becomes salient in the form of immigration and refugees”.


Rodrik first presents a rather short summary of what economic history has to say about the appearance of populism during the first globalization era. He points out to the abolition of the Corn Laws in Britain in 1846 as the origin of a series of commercial treaties that, combined with the Gold Standard and free mobility of capital and people, made the world almost as globalized as it is today. Nonetheless, the decline of agricultural prices in the 1870s and 1880s motivated an increase in agricultural tariffs in almost all of Europe, and later on, the United States instituted a series of acts to reduce immigration from several countries. Moreover, Rodrik argues that the first self-consciously populist movement appeared in the US during the 1880s, with the farmers’ alliance against the Gold Standard, bankers and financiers.

The author moves on to analyze the effects of trade on redistribution. Based on the theorem developed by Stolper and Samuelson (1941), Rodrik argues that in most international economic models where trade does not lead to specialization, “there is always at least one factor of production that is rendered worse off by the liberalization of trade. In other words, trade generically produces losers”. Moreover, he argues that the net profits of trade openness decrease relatively to the redistribution costs, as the initial barriers to trade are lower. He backs this argument with empirical evidence from the literature on NAFTA and the US trade with China, and a model that looks at the effect of the size of the initial tariff being removed on the change in low-skill wages and the increase in real income of the economy.

Rodrik also argues that although there could be a form of compensation for the affected industries, this is usually very costly and not practical. Also, one of the reasons why populist movements in Europe have not been anti-trade might be the existence of safety nets that made unnecessary ex-post mechanisms of compensation. Very important as well is the general perception of the masses on the degree of fairness of the increase in inequality perceived after reducing trade tariffs. Namely, populism is more likely to appear when the losses derived from globalization and increases in inequality are deemed to be produced by a group taking unfair advantage of the new economic atmosphere.

The author also analyzes the perils of financial globalization, whereby looking at the current literature of the effects of capital mobility on inequality, he concludes that countries prefer when capital adopts the form of a long-term flow, like direct foreign investment, rather than short-term, volatile financial flows. Rodrik comments that the literature has found that financial globalization tends to increase the negative impact of low-quality domestic institutions. There is also a high correlation presented by Reinhart and Rogoff (2009) between capital mobility and the incidence of banking crises.

The article concludes with an analysis of the possible determinants of the specific type of populism that spreads in a given country. In a different paper (Mukand and Rodrik, 2017) Rodrik presented a model that could explain to some extent the reason why populist movements in Europe have traditionally been right winged, whereas in Latin America they have been usually left winged. The main determinants in the model were the presence of an ethno-national/cultural or an income/social cleavage. Rodrik also provides empirical evidence of this phenomenon with a newly constructed dataset.


During my training as an economist I was well aware of the distributional effects that trade has on the economies involved. Nonetheless, the argument I heard was always that trade is a positive-sum game and net profits from it could be redistributed among the losers, thus alleviating any negative effects. The usual argument to explain why trade openness was sometimes not so popular was that the potential losers from trade were better represented and had more lobbying power, thus preventing tariff reductions. As Rodrik argues in this paper, sometimes, especially at advanced stages of globalization, not only are there problems redistributing the potential net profits; it looks as the net effects of opening more the economy at this stage might be actually negative.

This paper comes out at a moment when academics, politicians, the media, and the general public are trying to understand the reasons why these movements have appeared somewhat all of a sudden. Rodrik’s argument is that these events were predictable. The implications of the development of a particular form of populism on economic welfare are still not clear yet: analyzing this could be one of the lines of future research opened by this paper. Very often populism is associated with demagoguery, and it will be very important to differentiate between the two in the future. It is not the same that an anti-corrupt-establishment movement aims to change the political structure of a country, than filling the public opinion with lies and false promises as it happened with Brexit in the UK and with the peace treaty referendum in Colombia. In the former, the Leave campaign promised to the general public that the resources spent on the EU could be directly transferred to funding the National Health Service, which turned out to be a false statement. In the latter, leaks of recordings from the campaign opposing the peace treaty clearly showed how different socio-economic groups were fed different false arguments to gain their sympathy.

Finally, the paper shows the relevance of economic history for the discussion of present problems. Rodrik uses economic history to acknowledge that populism has sprung in the past at advanced stages of globalization. Following his example, economic historians should contribute to the literature by further explaining the channels through which populism has developed, to help us understand which are the consequences of different types of populism on economic development and societal welfare.


Mukand, Sharun, and Dani Rodrik, 2017. The Political Economy of Liberal Democracy. Harvard Kennedy School.

Reinhart, C.M. and Rogoff, K.S., 2009. This Time is Different: Eight Centuries of Financial Folly. Princeton University Press.

Stolper, W. F. and Samuelson, P.A., 1941. “Protection and Real Wages.” Review of Economic Studies 9(1), pp. 58-73.

Knowledge in Mining does matter. But not any Knowledge.

The Mining Sectors in Chile and Norway, ca. 1870 – 1940: the Development of a Knowledge Gap

By: Kristin Ranestad (University of Oslo)

Abstract: Chile and Norway are two ‘natural resource intensive economies’, which have had different development trajectories, yet are closely similar in industrial structure and geophysical conditions. The questions of how and why Chile and Norway have developed so differently are explored through an analysis of how knowledge accumulation occurred and how it was transformed by learning into technological innovation in mining, a sector which has long traditions in Norway and has been by far the largest export sector in Chile for centuries. Similar types of ‘knowledge organisations’ with the direct aim of developing knowledge for mining were developed in both countries. Formal mining education, scientifically trained professionals, organisations for technology transfer and geological mapping and ore surveys are compared in the search for differences which may explain the underlying reasons for variations in economic growth.

URL: http://econpapers.repec.org/paper/heswpaper/0105.htm

Distributed by NEP-HIS on: 2016-11-13

Review by Miguel A. López-Morell (University of Murcia)

The effect of mining on the economic development of countries with abundant natural resources is a central issue of the history of economics. The question is straightforward: Why does mining have a positive effect on some countries while in others its contributions to the economic development are scant, not to mention the huge environmental problems that mineral extraction and processing generate? The “resource curse” myth does, unfortunately, hold true in most developing economies, but it is hard to take on board when we consider countries with very long mining traditions like Australia, the USA and Canada, to mention but three, and their high levels of income. There is, therefore, a need for studies that do not demonize the sector but rather search out deep causes and well-founded arguments to explain the conditions in which mining has a positive effect, or other, on development.


Mines in Antofagasta (Chile). Source: Tapia, Daniela. “Distrito Minero Centinela: La ambiciosa apuesta de Antofagasta Minerals.” Nueva Minería y Energía, November 17, 2014, link.


Kristin Ranestad approaches the issue from a comparative institutional perspective. The examples she uses, Chile and Norway, are in some ways congruent, in that both have a long mining tradition and they are not dependent countries with development problems; indeed, in terms of development per inhabitant, they are clear leaders in South America and Europe.

Ranestad identifies the similarities and differences in the levels of education of the mining engineers and technicians; the proportional presence of the latter in mining; the deployment of advanced information systems, such as scientific journals or attendance at congresses and exhibitions; the existence of study travels and work abroad; and the intensity of geological mapping and ore surveys.

The conclusions Ranestad draws leave little room for doubt. All the above facets that affect technological knowledge in modern mining are to be found in both countries, yet there are important differences in terms of quality and quantity, with Norway always coming out on top, except in terms of university education. Chile loses out as there is no direct relationship between the size of the mining sector and the level of development of other factors, where it trails Norway by some way.

The reasons, although not explained in depth here, lie to a large extent in the presence of large North American groups like Kennecot or Anaconda in Chile since the First World War. These controlled the huge deposits of Chuquicamata or El Teniente, where they introduced modern mining production technologies that boosted export capacity, although they always acted in isolation. At the same time, there was a large group of small and medium size Chilean mines that was working with minimum technology, almost non-existent externalities and a highly deficient exploitation of the deposits, which were frequently abandoned well before they had been fully exploited with the technology of the time. In contrast, Norway was streets ahead in all aspects and its mines were far more diversified and making far better use of their resources. They were also far more in tune with the economic environment.

The approach seems to be an interesting one since economic historians frequently, and mistakenly, argue in favor of the importance of quickly reaching historical landmarks that affect institutional and technological development, while overlooking the real significance of these for the production system. We tend to give an overwhelming importance to the age of technical schools, professional associations or scientific publications rather than to reflect more on how much influence they have had and how mature they are.

There may be some question marks hanging over Ranestad’s figures for the numbers of active engineers in each country. According to her reasoning and to the sources consulted, the argument stems from the idea that training was an endogenous affair since she draws on the mining schools’ own records to fix the figures of engineers. So we cannot, on the basis of the information provided, know what percentage of engineers had been trained abroad. In Spain, for example, which was a leading mining power at the time, there was a relatively high number of engineers who had studied abroad prior to the Second World War. Indeed, foreigners and Spaniards who had studied abroad accounted for some 250 mining engineers, according to one database constructed using the annuals of mining engineers, even though it did not include man professionals working in large companies in Spain, like Rio Tinto Co, Tharsis, la Asturiana or Peñarroya, which did not even bother to inform about such matters (see Bertilorenzi, Passaqui and Garçon 2016, pp. 143-162). The author herself, when talking about foreign engineers, notes: “However, their dominance was negative in the sense that the lack of collaboration with domestic engineers and leaders prevented knowledge transfer within the sector”. Yet she does not back this up with hard figures.

Nevertheless, her contribution is a valuable one which affords a novel approach that is perfectly applicable to other works of comparative economic history. In the case of Chile, there is no explanation of the differences to the sector following the nationalization of the copper industry between 1853 and 1971. In perspective, though, it is not comparable with the Norwegian situation in the sense of the sector’s capacity to transfer knowledge to other sectors and to the country as a whole. A prime example is Orkla, which is today a huge, widely diversified conglomerate that has little do to with mining, but which in the 1920s produced copper and pyrites more profitably than its competitors, despite its mineral being 10% poorer in quality. It would even sell technology to Rio Tinto, no less. It would also be worthwhile analyzing whether the nationalization of copper mining and the government control of oil in Norway have had similar repercussions for the inhabitants of each country. A starting point would be to ask Chilean pensioners whether they have similar benefits to their Norwegian counterparts, even though the answer does seem foregone.


Bertilorenzi, Marco; Passaqui, Jean-Philippe and Garçon, Anne-Françoise (dirs.) (2016) Entre technique et gestion, une histoire des « ingénieurs civils des mines » (XIXe-XXe siècles).París, Press des mines

Harvey, C. and Press, J. (1989) “Overseas Investment and the Professional Advance of British Metal Mining Engineers, 1851 – 1914”, Economic History Review 1989, 42 (1) pp. 64-86.

Mokyr, Joel (2002) The Gifts of Athena: Historical Origins of the Knowledge Economy. Princeton: Princeton University Press.

Rosenberg, Nathan (1982) Inside the Black Box: Technology and Economics. Cambridge: Cambridge University Press.

(Superstar) Firms and Inequality

The Fall of the Labor Share and the Rise of Superstar Firms

By: David Autor (MIT, NBER and IZA), David Dorn (University of Zurich and IZA), Lawrence F. Katz (Harvard University, NBER and IZA), Christina Patterson (MIT) and John Van Reenen (MIT, NBER and IZA)

Abstract: The fall of labor’s share of GDP in the United States and many other countries in recent decades is well documented but its causes remain uncertain. Existing empirical assessments of trends in labor’s share typically have relied on industry or macro data, obscuring heterogeneity among firms. In this paper, we analyze micro panel data from the U.S. Economic Census since 1982 and international sources and document empirical patterns to assess a new interpretation of the fall in the labor share based on the rise of “superstar firms.” If globalization or technological changes advantage the most productive firms in each industry, product market concentration will rise as industries become increasingly dominated by superstar firms with high profits and a low share of labor in firm value-added and sales. As the importance of superstar firms increases, the aggregate labor share will tend to fall. Our hypothesis offers several testable predictions: industry sales will increasingly concentrate in a small number of firms; industries where concentration rises most will have the largest declines in the labor share; the fall in the labor share will be driven largely by between-firm reallocation rather than (primarily) a fall in the unweighted mean labor share within firms; the between-firm reallocation component of the fall in the labor share will be greatest in the sectors with the largest increases in market concentration; and finally, such patterns will be observed not only in U.S. firms, but also internationally. We find support for all of these predictions.

URL: http://EconPapers.repec.org/RePEc:iza:izadps:dp10756

Distributed by NEP-HIS on: 2017‒05‒28

Review by: Sebastian Fleitas (University of Arizona)

In the last few years, inequality has been at the center of many political and academic debates. It turns out that, although less mentioned in these debates, the rapid growth of some developing countries in the last decades has actually decreased global inequality. But then, why is there a big debate about inequality? The issue is that, on the other hand, inequality in developed countries has been increasing over time. From the perspective of the functional distribution of income between labor and capital, one of the indicators of this increase in inequality is that the labor’s share of GDP has been falling in the United States and other countries in recent decades. These forces have generated winners and losers. As economist Branko Milanovic points out with his famous “elephant chart,” the middle class of the world and the very rich of the world are the two groups whose incomes have increased more rapidly. In contrast, it can be easily seen that there are large groups of people uncomfortable with increased inequality. Moreover, the factors assumed to be causing inequality have taken a vital role in political debates and recent elections.


“Elephant Chart”: Lakner & Milanovic (2016)

In this context, it is extremely important to understand what is driving these changes in inequality. There are different approaches to understand the increase in inequality in developed countries. The two main perspectives point to the importance of top incomes and changes in the tax system (e.g. Piketty and Saez, 2014), on one hand, and to changes in the labor market, mainly related to the incorporation of technological change that is more favorable to skilled workers (e.g. Autor, 2014), on the other. More recent approaches have begun to more directly incorporate the role of firms. For example, a growing literature estimates models to separate the firm’s and employee’s contributions to wage differences via double fixed-effects models, with many studies finding that firm wage effects account for approximately 20% of the overall variance of wages and have had an increasingly important role over time (e.g. Card et al., 2016). However, while we can all see that “superstar firms” like Apple, Microsoft, Google or many others in different sectors of the economy are growing very quickly, we still do not know what their effect of inequality is.

Do these “superstar firms” increase inequality because they are responsible for the decrease in labor’s share? The paper by Autor, Dorn, Katz, Patterson and Van Reenen addresses exactly this issue. If we are interested in understanding the role of firms in the increase in inequality, it is particularly important to answer the question of whether the decrease in labor’s share of income can be explained by technological changes occurring within firms, or if it is better explained by a rise of “superstar” firms, which tend to use new technologies and are more capital-intensive. The main argument of the authors is that markets have changed in such a way that firms with superior quality, lower costs, or greater innovation get disproportionately high rewards relative to previous periods. Since these “superstar firms” have higher profit levels, they also tend to have a lower share of labor in sales and value-added. Therefore, as these firms gain market share across a wide range of sectors, the aggregate share of labor falls. In this way, “superstar firms” are one of the drivers of the decrease in labor’s share (in favor of capital’s share) of value added.

Before they start developing the evidence for this argument, the authors clearly document the fall in labor’s share of GDP in the United States and other developed countries. After that, they formalize their main argument in a model of “superstar firms,” in order to derive the set of predictions that will be taken to the data. With this model in hand, the authors use several sources of information (U.S. Economic Census, KLEMS, UN Comtrade Database, and others) to run a series of regressions and decompositions to analyze the testable predictions of the model. First, the authors find that sales concentration levels have risen in most sectors. Second, they show that the larger decreases in labor’s share are observed in industries where concentration has increased the most. Third, by comparing the weighted and unweighted mean of labor’s share, the authors conclude that the fall in labor’s share has an important component of reallocation between (and not within) firms. Furthermore, they find that the between-firm reallocation of labor’s share is greatest in the sectors that are concentrating the most. Finally, these patterns are not only present in the US but also in many European countries.

Overall, all of these findings are consistent with the idea of a rise of “superstar firms” that have lower labor’s share, and which have gained more importance by concentrating large shares of sales in different sectors of the economy. It should be noted, however, that the authors do not provide a clean causal identification of the superstar firm model. The empirical exercises are done carefully and controlling for the factors that can more clearly affect the tested relationships. The use of fixed effects and trends by industry allow the authors to obtain identification exclusively from the acceleration or deceleration of labor’s shares and concentration conditional on these controlled trends. Thus, any potential threat to this identification strategy would have to come from other factors not captured by these trends or fixed effects and which are correlated with industry concentration and inequality.

This paper makes a major contribution by pointing out the role of “superstar firms” in explaining increasing inequality and opens some avenues for future research in a direction that had not been typically considered in the literature. In this sense, a particularly interesting direction would be to use the matched employer-employee databases with census data on sales to test if industry concentration has impacts on the firm component of wages and the within and between firm decomposition in each sector.

Sweated LabourFinally, the paper addresses the question of what is the driver of the growth of these “superstar firms.” The main debate here is whether the rise of these “superstar firms” and industry concentration are associated with competitive forces, or if they are a signal of an economy with competition problems. Increased concentration can be a result of technological changes: some sectors could be introducing technologies that have a “winner takes all” aspect. An alternative, more worrisome story is that leading firms are less exposed to competition because they can create barriers to entry or have more lobbying power. The authors provide evidence that is somewhat comforting about this point. They show that concentration is greater in industries experiencing faster technical change, approximated either by patent activity or by total factor productivity growth. However, this evidence is still subject to debate. It could be the case that these originally innovative firms are now using their market power to generate barriers to entry. This can be even more important in some technology sectors where network effects generate an important advantage to the innovators. I think this discussion is actually one of the main directions where this stream of research can be expanded and complemented in the future. In this sense, for example, sector-specific partial equilibrium models could allow formalizing the product and labor markets under innovation dynamics, and such models could be estimated using data for specific industries and structural econometrics estimation techniques.

To sum up, I think that this paper makes a major contribution by pointing out the effect of “superstar firms” on the decrease of labor’s share of GDP, and therefore increased inequality in developed countries. Additionally, this paper opens several avenues for future work in order to generate more evidence consistent with the “superstar firms” model and, critically, to understand its causes and consequences at the individual micro level, especially using matched individual and firm level databases and sector-specific analysis. To understand the relationship between firms and inequality is a key task in a world of “superstar firms,” and these are key inputs for the discussion of, for example, the roles of tax policies, labor market institutions and their relationship with the increasing heterogeneity of firms.


Autor, D. (2014). Skills, Education, and the Rise of Earnings Inequality Among the “Other 99 Percent.” Science 344 (6186), 843-851.

Card, D., Cardoso, A. R., Heining, J., & Kline, P. (2016). Firms and Labor Market Inequality: Evidence and Some Theory. National Bureau of Economic Research Working Paper 22850

Lakner, C., & Milanovic, B. (2016). Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession. World Bank Economic Review 30(2), 203-232.

Piketty, T., & Saez, E. (2014). Inequality in the Long Run. Science 344(6186), 838-843.



Beggar-thy-neighbouring-drinker: Effects of Prohibition on American Infant Mortality in the 1930s

Infant Mortality and the Repeal of Federal Prohibition

By: David S. Jacks (Simon Fraser University), Krishna Pendakur (Simon Fraser University), and Hitoshi Shigeoka (Simon Fraser University).

Abstract: Exploiting a newly constructed dataset on county-level variation in Prohibition status from 1933 to 1939, this paper asks two questions: what were the effects of the repeal of federal prohibition on infant mortality? And were there any significant externalities from the individual policy choices of counties and states on their neighbors? We find that dry counties with at least one wet neighbor saw baseline infant mortality increase by roughly 3% while wet counties themselves saw baseline infant mortality increase by roughly 2%. Cumulating across the six years from 1934 to 1939, our results indicate an excess of 13,665 infant deaths that could be attributable to the repeal of federal Prohibition in 1933.

URL: http://www.nber.org/papers/w23372

Distributed by NEP-HIS on: 2017-05-21

Review by: Gregori Galofré-Vilà (University of Bocconi and University of Oxford)

In 1919, the National Prohibition Act (also known as Volstead Act), which passed with the support of American rural protestants and social progressives, mandated that “no person shall manufacture, sell, barter, transport, import, export, deliver, furnish or possess any intoxicating liquor.” The 1920s became the decade when Al Capone operated in the Canadian and Mexican borders smuggling alcohol with the well-known subsequent boost to organized crime.  President Roosevelt lifted Prohibition in 1933, although its rejection was through local referendums or elections. The repeal of Prohibition in some parts of the country divided the US into ‘dry’ and ‘wet’ areas. In dry areas, people either abstained, or were forced to buy alcohol sometimes from toxic homebrews of methanol at illegal underground bars or from ‘wet’ neighbouring counties. Meanwhile, in ‘wet’ areas, the party was on! Interestingly enough, the end of the Prohibition created what epidemiologists call ‘a natural experiment’. These experiments arise from historical events that affect some people, communities or societies, but not others. This divergence offers the possibility of learning how political choices ultimately affect people’s lives, for better or for worse.

Figure 1 ok

To explore the health impacts of the repeal of the National Prohibition Act, Jacks, Pendakur and Shigeoka (2017) created a newly county-level dataset on variations in prohibition status from 1933 to 1939, and related it to previous data on infant mortality from Fishback et al. (2011) and to additional controls (such as retail sales, New Deal spending, urbanisation and so on). They addressed two questions: (1) what were the effects of the repeal of federal Prohibition on infant mortality?; and (2) were there any significant externalities from the individual policy choices of counties and states on their neighbours? In relation to the first question, they found that the effects were quite small: from 1934 until 1939, there was an excess of 13,665 infant deaths (or 1.2 additional deaths per 1,000 live births) that could be attributed to the repeal of the Prohibition in 1933. Indeed, Fishback found that the effects of the New Deal or climatic variations had greater impact on infant mortality (Fishback 2007; 2011). As for the second question, their results indicated that cross-border policy externalities were likely to be important, and that the impact of the prohibition status of individual county on infant mortality was driven by the prohibition status of its neighbours, with higher results on infant mortality for dry counties bordering with wet neighbours.

A very interesting feature of the paper is the methodological approach used in order to recognise the possibility of policy externalities across county borders. Due to spillovers and the open economy, it was not only the county’s choice (the county’s status with regards to prohibition), but, indeed, the prohibition status of its neighbours. Hence, they distinguished among counties that allow the sale of alcohol within their borders (‘wet’ counties), ‘dry’ countries with also ‘dry’ neighbours, and ‘dry’ counties next to a wet neighbours (‘dryish’ counties). In addition to several robustness tests, I particularly like the border-pair discontinuity design considering neighbouring county-pairs. This approach follows a modification of the methodology developed by Dube et al. (2010). The idea is that given the social and economic similarities between neighbouring counties, these are likely to be a good suitable control group as they share common, but unobserved county characteristics with the treatment group. In other words, in this identification strategy, the prohibition status of counties within a county-pair is uncorrelated with the differences in residual infant mortality in either county. This strategy, in turn, gets rid of the need for instrumental variables to limit biases imparted by unobserved or unmeasured confounders correlated with Prohibition.

Figure 2

While this is a really interesting paper, given the small effects, it is possible that the hypothesised causal mechanism between Prohibition, maternal alcohol consumption during pregnancy (from which no data exist) and infant mortality does not fully capture the effects of the Prohibition on health. If that is the case, the selection of infant mortality data is likely to be underestimating the causal effect of Prohibition on health. For example, in The Body Economic, Stuckler and Basu (2013) argued that during the Great Depression the states with the most stringent Prohibition campaigns lowered adult drinking related deaths by around 20% and also diminished suicides rates substantially. Yet, the fact that Jacks et al. (2017) have been able to find effects of the Prohibition on infant mortality highlights the relevance of the Prohibition on health and warrants further research, a research nested into the wider literature of the Great Depression and the New Deal.


Dube, A., T.W. Lester, and M. Reich (2010), “Minimum Wage Effects Across State Borders.” Review of Economics and Statistics 92(4), 945-964.

Fishback, P.V., M.R. Haines, and S. Kantor (2007), “Births, Deaths, and New Deal Relief during the Great Depression.” Review of Economics and Statistics 89(1), 1-14.

Fishback, P.V., W. Troesken, T. Kollmann, M. Haines, P. Rhode, and M. Thomasson (2011), “Information and the Impact of Climate and Weather on Mortality Rates During the Great Depression.” In The Economics of Climate Change (Eds G. Libecap and R. Steckel). Chicago: University of Chicago Press, 131-168

Jacks, D.S., K. Pendakur, and H. Shigeoka (2017), “Infant Mortality and the Repeal of Federal Prohibition.” NBER Working Paper No. 23372

Stuckler, D. and S. Basu (2015) The Body Economic: Why Austerity Kills. Basic Books.

{Economics ∪ History} ∩ {North ∪ Fogel}

A Cliometric Counterfactual: What if There Had Been Neither Fogel nor North?

Claude Diebolt (Strasbourg University) and Michael Haupert (University of Wisconsin – La Crosse)

Abstract – 1993 Nobel laureates Robert Fogel and Douglass North were pioneers in the “new” economic history, or cliometrics. Their impact on the economic history discipline is great, though not without its critics. In this essay, we use both the “old” narrative form of economic history, and the “new” cliometric form, to analyze the impact each had on the evolution of economic history.

URL: http://d.repec.org/n?u=RePEc:afc:wpaper:05-17&r=his

Circulated by nep-his on: 2017-02-19

Revised by Thales Zamberlan Pereira (São Paulo)

Douglass North and Robert Fogel’s contribution to the rise of the “new” economic history is well known, but Diebolt and Haupert’s paper adds a quantitative twist to their roles as active supporters of cliometrics when there was still resistance to apply new methods to the study of the past. Economic theory and formal modeling marked the division between the “old” and the “new” economic historians in the 1960s, and Diebolt and Haupert use two metrics to track the transformation in the field: 1) the increased use of graphs, tables, and especially equations during North’s period as editor (along with William Parker) of the Journal of Economic History between 1961 and 1966; 2) the citation of Fogel’s railroad work, to measure the impact of his innovations in economic history methodology.

Before showing their results about the positive influence of North and Fogel on quantitative economic history, the authors present a brief history of cliometrics, beginning with the 1957 meeting of the Economic History Association (EHA). It was there that Alfred Conrad and John Meyer presented their two foundational papers, about the use of economic theory and statistical inference in economic history, and the economics of slavery in the antebellum South. From that meeting, William Parker edited what was probably the first book (released in 1960) of the cliometric movement.

It was during the 1960s, however, that larger changes would occur. First, Parker and North were appointed editors of the Journal of Economic History (JEH) in 1961 and began to promote papers that used more economic theory and mathematical modelling. Their impact appears in Figures 2 and 3, which show a measure of “equations per page” and “graphs, tables, and equations per page” in the JEH since its first issue in 1941.

Diebolt -fig2

Diebolt -fig3

As a way stay true to the spirit of the discussion, Diebolt and Haupert test the hypothesis if the period between 1961 and 1966 had an enduring effect in the increase of “math” in the JEH. Despite a noticeable increase in the North and Parker years, it was only in 1970 that a significant “level shift” occurs in the series, and Diebolt and Haupert argue that this could be interpret as a lag effect from the 1961-1966 period. Their finding that 1970 marks a shift in the methodology of papers published in the JEH is consistent with the overall use of the word cliometrics in other publications, as a NGRAM search shows.


In addition to the editorial impact of Douglass North in the JEH, the second wave of change in economic history during the 1960s was Robert Fogel. In 1962, Fogel published his paper about the impact of railroads in American economic growth. The conclusion that railroads were not essential to America, along with the use of counterfactuals to arrive at that result, “attracted the attention of the young and the anger of the old” economic historians (McCloskey, 1985, p. 2). Leaving the long debate about counterfactuals aside, what Fogel’s work showed was that the economics methodology at the time was useful to overcome the limitations of interpreting history based only on what historical documents offered at face value.

Diebolt and Haupert’s paper, therefore, shows that cliometric research in the JEH had a positive exogenous shock with North as an editor, with Fogel supplying the demand brought by the new editorial guidelines. However, there is a complementary narrative about these developments that deserves to be mentioned. Many innovations in methodology brought to the field after 1960 came from researchers who were primarily concerned with economic growth, not only with historical events. This idea appears in the paper, when the authors argue that during his post-graduate studies, the starting point of Fogel’s research was about the “large processes of economic growth” (p.8). In addition, the realization that Fogel’s training program “was unorthodox for an economic historian” is also indicative that, in the 1960s, with computational power and new databases that extended to the 19th century, history was the perfect case study to test economic theory.

This exogenous impact in the field, with clear beneficial results, is similar to the role Daron Acemoglu and his many authors had in reviving economic history in the last decade to a broader audience. Acemoglu initial focus when he presented a different way to do research in economic history was in the present (i.e. long-run growth), not the past. It seems, therefore, that the use of mathematical models in economic history was not a paradigm shift in the study of history, but rather it followed the change from what was considered “being an economist” in the United States. After 1945, Samuelson’s Foundations of Economic Analysis set the standard for the type of training that econ students received, turning mathematical models as the dominant method in economics (Fourcade, 2009, p. 84). Cliometrics, by following this trend, created an additional way to do research in economic history.


One comparative advantage of the new economic historians, in addition to the “modern” training in economics, was something that can be called the Simon Kuznets effect. Both North and Fogel worked with Kuznets, and the development of macroeconomic historical databases at the NBER after the 1930s provided the ground to apply new methodologies to understand economic growth. In the first edition of the Journal of Economic History Kuznets already advocated the use of statistical analysis in the study of history (Kuznets, 1941). But the increase in popularity of models and statistics in economic history, especially in the 1970s (see Temin, 2013), seems to be related to its impact to understand the broader questions of economics. One notable example comes with Milton Friedman and Anna Schwartz’s monetary history of the United States, published in 1966. Friedman worked with Kuznets in the 1930s, and the book is the typical research in economic history with a focus on “contemporary” issues.

As Diebolt and Haupert claim, North and Fogel contribution is undeniable, but what about the contrafactual they propose in the title? Just as no single innovation was vital for economic growth, probably no economic historian was a necessary condition for cliometrics. Without North and Fogel, maybe the old economic historians would have had another decade, but by the 1970s the JEH would be under new management.


  • Fourcade, M. (2009) Economists and Societies: Discipline and Profession in the United States, Britain, and France, 1890s to 1990s. Princeton, NJ: Princeton University Press.
  • Kuznets, S. (1941) ‘Statistics and Economic History’, The Journal of Economic History, 1(1), pp. 26–41.
  • McCloskey, D. N. (1985) ‘The Problem of Audience in Historical Economics: Rhetorical Thoughts on a Text by Robert Fogel’, History and Theory, 24(1), pp. 1–22. doi: 10.2307/2504940.
  • Temin, P. (2013) The Rise and Fall of Economic History at MIT. Working Paper 13–11. Boston, MA: MIT. Available at: https://papers.ssrn.com/abstract=2274908 (Accessed: 29 May 2017).

Challenging the Role of Capital Adequacy using Historical Data

Bank Capital Redux: Solvency, Liquidity, and Crisis
By Òscar Jordà (Federal Reserve Bank of San Francisco and University of California Davis), Bjorn Richter (University of Bonn), Moritz Schularick (University of Bonn) and Alan M. Taylor (University of California Davis).

Abstract: Higher capital ratios are unlikely to prevent a financial crisis. This is empirically true both for the entire history of advanced economies between 1870 and 2013 and for the post-WW2 period, and holds both within and between countries. We reach this startling conclusion using newly collected data on the liability side of banks’ balance sheets in 17 countries. A solvency indicator, the capital ratio has no value as a crisis predictor; but we find that liquidity indicators such as the loan-to-deposit ratio and the share of non-deposit funding do signal financial fragility, although they add little predictive power relative to that of credit growth on the asset side of the balance sheet. However, higher capital buffers have social benefits in terms of macro-stability: recoveries from financial crisis recessions are much quicker with higher bank capital.

URL: http://econpapers.repec.org/paper/nbrnberwo/23287.htm

Distributed by NEP-HIS on: 2017-05-07

Review by Tony Gandy (London Institute of Banking and Finance)

In 1990-1991 I started a new job, having nearly completed my PhD (which I fully admit I took longer than it should). I joined The Banker, part of the Financial Times group, and proceeded to cover bank statistics, research and bank technology (the latter being a bit of a hobby). Thanks to the fine work of my predecessor, Dr. James Alexander, we had been through a statistical revolution and had revamped our Top 1000 listings of the world’s biggest banks, moving to a ranking based on capital rather than assets. This was the zeitgeist of the moment; what counted was capital, an indicator of capacity to lend and absorb losses. We then also ranked banks by the ratio of loss absorbing capital to total assets to show which were the “strongest” banks. We were modeling this on the progress made by the Basel Committee on Banking Supervision in refocusing banking resilience on to this important ratio, so called capital adequacy and the acknowledging the development and launch of the original Basel Accord.

All well and good, the role of capital was to absorb losses. It seemed on the face of it, that whichever bank had the most capital, and which ever could show the best capital adequacy ratio was clearly the most robust, prudent and advanced manager of risk and the one able to take on more business.

As the years progressed, Basel 1.5, II, 2.5, III and, arguably, IV have each added to or detracted from the value of capital as a guide to robustness. However, the principle still seemed to stand that, if you had a very large proportion of capital, you could absorb greater losses making the bank and the wider economic system more robust. Yes, OK there were weaknesses. Under the original Accord, only the only risk being worries about was credit risk and in only a very rudimentary way. This seemed odd given that one of the events which led to the Basel Accord was the failure and subsequent market meltdown caused by the failure of Bankhaus Herstatt [1] (Goodhart 2011), but it was hard to see how that was in isolation a credit event. Nevertheless, through all the subsequent crises and reforms to the Basel Accords, the principle that a higher proportion of quality capital to assets held by a bank was a good thing.

Jordà, Richter, Schularick and Taylor challenge the assumption that greater capital adequacy can deflect crisis, though they do find that higher initial capital ratios have a great benefit in the post crisis environment. In this working paper, Jordà et al. create a data set focusing on the liability side of bank balance sheets covering a tight definition of Common Equity Tier 1 capital (paid up capital, retained profit and disclosed reserves), deposits and non-core funding (wholesale funding). This is a powerful collection of numbers. They have collated this data for 14 advanced economies from 1870 through to 2013 and for three others for a slightly shorter period.

One note is that it would have been interesting to see a little more detail on the sources of the data used. Journal papers and academic contributions are acknowledged throughout, but other sources are covered by “journal papers, central bank publications, historical yearbooks from statistical offices, as well as archived annual reports from individual banks”. Bank statistics can be a complex area, some sources have sometimes got their definitions wrong (one annual listing of bank capital had an erratum which was nearly as long as the original listings, not mine I hasten to add and maybe my memory, as a rival to that publication, somewhat exaggerates!), so a little more detail would be useful. Also, further discussion of the nature of disclosed reserves would be interesting as one of the key concerns of bank watchers in the past has been the tendency of banks to not disclose reserves or their purposes.

Jordà et al.’s findings are stark. Firstly, and least surprisingly, bank leverage has greatly increased. The average bank capital ratio in the dataset shows that in early period it hovered at around 30% of unadjusted assets, falling to 10% in the post war years and more recently hovering around 5-10%.


Source: Jordà et al. (2017)

Next, they consider the relevance of capital adequacy as a protection for banks and a predictor of a banking system’s robustness; does a high, prudent, level of capital reduce the chances of a financial crisis? The authors note the traditional arguments that higher levels of capital could indicate a robust banking system able to absorb unexpected losses and thus reducing the chance of a financial crisis, but also note that high capital levels could equally indicate a banking system taking greater risks and therefore needing greater amounts of capital to survive the risks. They find no statistical link between higher capital ratios and lower risk of systemic financial crisis, indeed, they find limited evidence that it could be the reverse. It’s worth noting a second time: Increasing capital ratios do not indicate a lower risk of a financial crisis

The authors do note, however, that high levels and rapidly increasing loan-to-deposit ratios are a significant indicator of future financial distress. Clearly, funding a bubble is a bad idea, though it can be hard to resist.

However, capital can have a positive role. The paper finds that systems which start with higher levels of leverage (and consequently lower capital ratios) will find recovery after a crisis harder as banks struggle to maintain solvency and liquidate assets at a greater rate. Thus, while a high capital adequacy ratio may not be a protection against a systemic crisis, it can provide some insight into the performance of an economy after a crunch as banks with higher capital ratios may not face the same pressure to sell and further deflate asset prices and economic activity. Therefore, capital can have a positive role!


Source: Jordà et al (2017)

I won’t pretend to understand fully the statistical analysis presented in this paper, however, while many, including those at the Basel Committee, have recognised the folly of tackling only prudential control through a purely credit risk-focus on capital adequacy and have introduced new liquidity, leverage and scenario planning structure to deflect other routes to crisis. Nevertheless, Jordà et al. provide a vital insight into what is still the very core of the prudential control regime: the value, or not, of capital in providing protection to banks and banking systems. Its role may not be what we expected, its value being in a post-crisis environment and not a pre-crisis environment where higher requirements could have been expected to head-off problems. Instead they find that it is credit booms and indicators of them, such as rapidly rising Loan to Deposit ratios which are better indicators of looming crisis, and capital is more relevant to making brief the impact of an unravelling bubble.

On a more practical note, this fascinating paper offer those who teach prudential regulation to bankers or students a wealth of data and challenges to consider, a welcome resource indeed.


[1] The other main response was the more appropriate formation of the first netting services and then the Continuously Linked Settlement Bank as a method of improving operations to remove the risk which became known as “Herstatt Risk”.

Goodhart, Charles (2011) The Basel Committee on Banking Supervision: a history of the early years, 1974–1997. Cambridge University Press, Cambridge, UK


The Data We Have vs. the Data We Need: A Comment on the State of the “Divergence” Debate (Part II)

How Well Did Facts Travel to Support Protracted Debate on the History of the Great Divergence between Western Europe and Imperial China?

By: Kent Deng (London School of Economics), Patrick O’Brien (London School of Economics)

Abstract: This paper tackles the issue of how reliable the currently circulated ‘facts’ really are regarding the ‘Great Divergence’ debate. Our findings indicate strongly that ‘facts’ of premodern China are often of low quality and fragmented. Consequently, the application of these ‘facts’ can be misleading and harmful.

URL: http://econpapers.repec.org/paper/pramprapa/77276.htm

Distributed by NEP-HIS on: 2017-03-19

Review by: Kenneth Pomeranz (University of Chicago)


Comparative Consumption


This brings us, finally, to consumption.  As noted at the beginning of this comment, I agree that this is the most promising area for future research that might illuminate comparative living standards.  It is hard to know where really definitive data would come from: since the Chinese state did not systematically tax any major consumer goods except salt, and very little that ordinary people used was imported, we are unlikely to find data anywhere near as reliable as what we have for liquor, sugar, tobacco, etc., in various European countries.  Nonetheless, it is not that hard to imagine data that would help us make some progress in this area.[1]  And the area where O’Brien and Deng concentrate here – calories from grain – is, of course, fundamental, and there are various ways to generate estimates.  (It should be noted, however, that in unequal societies, the grain consumption of the poor is likely to be a lagging indicator of overall economic divergence –changes in the lives of the first and second quartiles of the income distribution could produce significant differences in average incomes well before the food intake of the poor in one society began to significantly outpace that of their counterparts in another.)  Thus, I applaud the attempt to see what we can learn by focusing on estimates of poor people’s incomes in kilocalories.  I have strong doubts, however, about the conclusion that Deng and O’Brien reach about this matter.

First, it is worth noting that various estimates have been made, which suggest that at least in this area, Chinese poor people (and perhaps some others elsewhere) were no worse off than their Western European counterparts. I have discussed several of them elsewhere, and little would be served by repeating that effort here.[2] 

O’Brien and Deng disagree, and rely upon a paper they published  in Journal of World History (2015).  That paper takes estimates of the likely income from a typical-sized tenant farm in the 18th-19th century Yangzi Delta, as calculated by Philip Huang, Robert Brenner and Christopher Isett, Robert Allen, and myself, and suggests that they converge upon a range of likely incomes that falls considerably short of the incomes of English laborers at the same time. I do not think that that is the most reasonable inference to be drawn from this data.

As they note in their current publication, I wrote to O’Brien and Deng after their  paper was published, largely agreeing with their methodology but questioning their data.  They apparently do not think the difference over data is important, since quickly continue “Nevertheless, these procedure provided us with figures for levels and changes in the standard of living for peasant households in Jiangnan from circa 1600 to circa 1829.” This, I think, misses the significance of the disagreement on data, which is easily stated.  Allow me to quote from the letter I wrote at the time, adding only some boldfaced type for emphasis, and a few explanations of reference in square brackets::

    “…    The key is Row 3 [of Table 4, pages 248-253]: ‘Area cultivated: mu,’ where you suggest that Huang, Brenner and Isett and I all accept an average farm size of 7.5 mu.  Brenner and Isett, of course, simply accepted Huang’s figure: they were all working together,  Brenner reads no Chinese and Isett (B and H’s student) had never worked on the Yangzi Delta.  So that is really one assertion that the farm size was 7.5 mu.  In your notes to that row you suggest that I also accept that figure; there is no direct citation for that point, but earlier you cite my “Facts Are Stubborn Things” essay.   But here’s what I wrote there, referring back to my essay in the first round of our debate [that is, my debate with Huang] (“Beyond the East-West Binary):

‘  …while I accepted Huang’s average farm size of  7.5 mu for purposes of our initial discussion, this  prevailed (if at all) only in the Delta’s most crowded prefectures, where people mostly grew cotton or mulberries.  The larger Delta I discuss had 59,000,000 registered cultivated mu circa 1770, or 10.5 mu  per 5-member farm family. [1]   This confirms Li Bozhong’s estimate that mid-Qing Jiangnan farms averaged 10 mu…’


And indeed, the 7.5 mu figure seems very unlikely to be right.  Consider, just for starters, that the sources you cite for 1820 give farm sizes of either 9.0 or 10 mu (depending on what definition one uses for Jiangnan);  it is widely agreed that there was no new land cleared in Jiangnan after the mid-18th century (further intensification took the form of more double-cropping), and while population figures are not very reliable, there was almost certainly some increase.  (Cao Shuji’s figures (2000, 5:691-92)  suggest a 38% increase from 1776 to 1850, with the rate of increase faster in the earlier years,  for instance; I think that is probably too high, but you see the point.) It thus seems pretty implausible that farmed acreage per family would have been anywhere from 1/6 to ¼ less in 1750 than it would be 70 years later.

Since I think you [Deng and O’Brien] have accurately reported the other figures in your table, the consequences of this one change would be quite significant.  Using 10 mu per family for 1750 would raise the estimate of caloric income in my data from 2,438 to 3,251; using 10.5 raises it to 3,413.  Thus, instead of more or less agreeing with Brenner and Isett, my numbers come to be 30-40 % above theirs – and over 80% above Huang’s (rather than about 33%). Perhaps more importantly, if you turn to your table 6, making this change would mean that instead of having a rough consensus on Jiangnan caloric intake that had already fallen a bit below English farm laborers (if one assumes they ate wheat) or significantly behind them (if they ate oats), you would be back to two views: one based on Huang’s data, that suggested what I have just said, and one which placed the caloric intake of Jiangnan farmers even with English farm laborers if they consumed oats, and still well ahead of them if they consumed wheat.  Significant divergence on this particular measure (admittedly one that lagged others) would be pushed well into the 19th century.  (In fact, if we accept Li or Allen’s work, as summarized in your column for 1800-1849, it would still not have happened in that period.).The difference is therefore quite significant…”


Moreover, I would add,  the adjustment I suggested in this missive would sharply alter the picture of change over time in the Yangzi Delta, yielding a more likely picture that has different comparative implications.  Without the correction, Deng and O’Brien’s data suggest a fairly sharp decline in living standards between 1600 and 1750, with a recovery to roughly 1600 levels by 1829.[3]   This, however, seems unlikely, since it was widely agreed that 1750 was near the middle of a prosperous era, while 1829 was (as already noted) part of an era of crisis.  (Whether the 1620s were part of a good period or not is less settled.[4] )     If we instead adjust the 1750 farm size figures as I have suggested, we have a probable improvement of living standards between 1620 and 1750 (perhaps even a large improvement), followed by either stasis or decline between 1750 and the 1820s; this would be much more in line both with the testimony of contemporary voices and the views of most historians.  And if that is right, it would also fit the picture of an East/West divergence  that came late but gathered steam quickly: not only because first Britian and then other parts of Northwestern Europe surged, but because the most prosperous parts of China began to fall into crisis.

Obviously, we would like comparisons of living standards, even among the poor, to go beyond caloric intake; and attempts have been made, by a number of us, to look quantitatively at cloth, sugar, tea, and a few other goods, and more impressionistically at tobacco, various forms of entertainment, and so on.   But for the time being, those discussions are nowhere near consensus; and in the world of the late 18th century, basic calories still loomed quite large in any case.  And there, I would respect, correcting the error noted above suggests that the balance of available research still suggests comparability until quite late. (Huang’s numbers have other serious problems, which I have discussed elsewhere.[5])    Until we get beyond basic calories in discussing the poor – and get much better estimates, on the Chinese side, of the distribution of income,[6] so we know more about what comparisons of the poor do and do not tell us, our picture of comparative consumption will remain quite inadequate for settling our debates, even if it remains the most promising area for further research; and as long as our understanding of consumption remains so inadequate, I would be loath to shut the door on the other approaches that Deng and O’Brien encourage us to abandon.


Allen, Robert.  2000. “Economic Structure and Agricultural Productivity in Europe, 1300 – 1800,” European Review of Economic History 4:1 (April, 2000),

Allen, Robert. 2004. “Mr. Lockyer Meets the Index Number Problem: The standard of Living in Canton and London in 1704,”  July 2004, available at http://www. iisg.nl/hpw/papers/allen.pdf, accessed December 7, 2008

Allen, Robert. 2009a. The British Industrial Revolution in Global Perspective. Cambridge: Cambridge University Press.

Allen, Robert. 2009b. “Agricultural Productivity and Rural Incomes in England and the Yangzi Delta, ca. 1620-1820,” Economic History Review 62:3 (August), pp. 525-550.

Allen, Robert et.al., 2011.  Robert Allen, Jean-Pascal Bassino, Debin Ma, Christine Moll-Murata, and Jan LuitenVan Zanden, “Wages, Prices and Living Standards in China 1738-1925: In Comparison with Europe, Japan, and India,” Economic History Review 64:1 (February), pp. 8-38.

Baten, Joerg. et al.  2010.  Joerg Baten, Debin Ma, Stephen Morgan and Qing Wang, “Evolution of Living Standards and Human Capital in China in the 18th – 20th Centuries: Evidences From Real Wages, Age-Heaping, and Anthropometrics,” Explorations in Economic History 47, pp. 347-359.

Benedict, Carol. 2011.  Golden-Silk Smoke: A History of Tobacco in China 1550- 2010. Berkeley: University of California Press.

Brenner, Robert and Christopher Isett. 2002. “England’s Divergence from the Yangzi Delta: Property Relations, Microeconomics, and Patterns of Development,” Journal of Asian Studies 61:2 (May), pp. 609-662.

Broadberry, Stephen, Hanhui Guan and David Daokui Li. 2014. “China, Europe, and the Great Divergence: A Study in Historical National Accounting, 980 – 1850,” http://eh.net/eha/wp-content/uploads/2014/05/Broadberry.pdf.


Chang Chung-li (Zhang Zhongli). 1962. The Income of the Chinese Gentry.  Seattle: University of Washington Press.Deng, Kent G., and Patrick K. O’Brien. 2015. “Nutritional Standards of Living in England and the Yangtze Delta (Jiangnan), circa 1644 – circa 1840: Clarifying Data for Reciprocal Comparisons,” Journal of Wor;d History 26:2 (June), pp. 233-267.

Guan Hanhui and David Daokui Li.  2010. “Mingdai GDP ji jiegou shitan,” (A Study of  GDP and its Sturcture in China’s Ming dynasty),” Zhongguo jingji jikan 9:3 (April), pp. 787-829,   http://en.cnki.com.cn/Article_en/CJFDTotal-JJXU201003003.htm
Huang, Philip. 1990. The Peasant Family and Rural Development in the Lower Yangzi Region, 1350-1988.  Stanford: Stanford University Press.

Huang, Philip C.C.  2002a. “Development or Involution in Eighteenth Century Britain and China?  A Review of Kenneth Pomeranz’s The Great Divergence: China, Europe and the Making of the Modern World Economy,”  Journal of Asian Studies 61:2 (May), pp. 501-538.

Huang  Philip. C.C.  2003. “Further Thoughts on Eighteenth-Century Britain and China: Rejoinder to Pomeranz’s Response to My Critique,” Journal of Asian Studies 62:1 (February), pp. 157-167.

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Lee, James, Cameron Campbell and Wang Feng. 2002. “Positive Check or Chinese Checks?” Journal of Asian Studies 61:2  (May), pp. 591-607.

Li Bozhong and Jan Luiten Van Zanden. 2012. “Before the Great Divergence? Comparing the Yangzi Delta and the Netherlands at the Beginning of the Nineteenth Century,” Journal of Economic History 72:4 (December), pp. 956-989.

Li Wenzhi and Jiang Taixin, 2005.  Zhongguo dizhu zhi jingji lun (Essays on the Chinese Landlord Economy). Beijing: Zhongguo shehui kexue chubanshe,

Liu, William Guanglin. 2015.  The Chinese Market Economy 1000-1500,  Albany: State University of New York Press.

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Maddison, Angus. 2001.  The World Economy: A Millenmial Perspective.  Paris: OECD.

Maddison, Angus. 2003. The World Economy: Historical Statistics. Paris: OECD.


Moll-Murata, Christine. 200. “Chinese Guilds from the Seventeenth to the Twentieth Centuries: An Overview,”  International Review of Social History 53, Supplement, pp. 213-247.


Morgan, Stephen. 2004.  “Economic Growth and the Biological Standard of Living in China 1880-1930,” Economic and Human Biology 2:2

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[1] See Benedict 2011:49, lending cautious support to my conjecture that tobacco acreage stagnated or declined between the late 18th and early 20th centuries, greatly reducing per capita output (and thus allowing us to use early 20th century figures to conservatively approximate 18th century consumption).  Thomas Rawski has suggested that we could approach this issue more rigorously if we found a long run of tobacco prices to compare with those for grain: something which hasn’t happened yet, but is certainly possible.

[2] See Pomeranz 2000:36-40,Pomeranz 2002, and Pomeranz 2003.. See also Lee, Campbell and Wang 2002. More recent work on height, longevity, etc., is largely restricted to the 19th and 20th centuries, and has little to say about the Yangzi Delta in particular, but tends to suggest that the parts of China that are represented in the data were at or above the middle of a European distribution in the early 19th century.  See for instance Morgan 2004; Baten et. al. 2010..

[3] This effect is partly the result of the choice of data discussed here, but it is also partly the result of the fact that the data for 1600 and 1829 include estimates from Li Bozhong, who tends to be optimistic in his view of Delta conditions, while the section of the table for 1750 does not; at the same time, Philip Huang, the most pessimistic of the scholars in this debate, is cited in the 1750 section of the table, but not in the other two.

[4]For a recent overview that takes a relatively dour view of the late Ming (though it does accept that it represented a very significant recovery from ehat it considers a catastrophic early and mid-Ming), see Liu 2015.

[5] Pomeranz 2002, 2003.

[6] I made an extremely quick and crude attempt in Pomeranz 2003.  An earlier and partial attempt is Chang 1955.