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Introduction ECN 110B World Economic History Since the Industrial Revolution J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 1 / 40 Contact info, office hours John Parman (instructor) Email: jmparman@ucdavis.edu

  1. Introduction ECN 110B – World Economic History Since the Industrial Revolution J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 1 / 40

  2. Contact info, office hours John Parman (instructor) Email: jmparman@ucdavis.edu Office: 1125 SSH Office hours: M, W 3pm-5pm Andrew Foote (TA) Email: afoote@ucdavis.edu Office: 120 SSH Office hours: TBA Brock Smith (TA) Email: brosmith@ucdavis.edu Office: 132 SSH Office hours: TBA J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 2 / 40

  3. General Details We will have a course website (smartsite.ucdavis.edu) The syllabus, lecture slides, old exams and extra readings will all be posted to the site (under the ’Resources’ section) Lecture slides will typically be posted the morning of the lecture Try accessing smartsite at some point in the next couple of days to make certain you have access J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 3 / 40

  4. Prerequisites Officially, the prerequisites are ECN 1A, ECN 1B and ECN 110A You should have taken ECN 1A and 1B, I’ll assume a certain knowledge of economic terms and concepts from these courses It is fine if you haven’t taken 110A (although the first week may be slightly easier if you have taken 110A) J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 4 / 40

  5. Wait list, open campus, permission to add, etc. The economics department does not issue PTA numbers Everyone gets into the course through the waitlist Be careful about switching sections, paying fees late, etc. Open campus students should talk to me after class J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 5 / 40

  6. Grading Grades are based on two midterms (each worth 25% of the overall grade) and one final exam (worth 50%) The final course grades will be curved in line with the econ department rules (the average GPA for the class will be 2.7) There are no makeup exams, everyone must take the exam at the regularly scheduled time You have one week after an exam is first returned to raise any grading issues J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 6 / 40

  7. Readings The required text for the course will be “A Farewell to Alms” by Gregory Clark: There will be additional required readings posted on Smartsite (these will be shorter articles) I’ll also reference other readings that aren’t required but are worth exploring if any of the topics catch your interest J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 7 / 40

  8. Schedule Week of Monday Wednesday Friday March 28 lecture lecture no class April 4 lecture lecture lecture April 11 lecture lecture Midterm 1 April 18 lecture lecture lecture April 25 lecture lecture lecture May 2 lecture lecture Midterm 2 May 9 lecture lecture lecture May 16 lecture lecture lecture May 23 lecture lecture lecture May 30 Holiday lecture – Final Exam: Monday, June 6, 8am-10am J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 8 / 40

  9. What The Course is About 9 9 9 8 8 8 ln (real GDP) ln (real GDP) ln (real GDP) 7 7 7 ln (population) ln (population) ln (population) 6 6 6 ln (real GDP per capita) ln (real GDP per capita) ln (real GDP per capita) 5 5 5 4 4 3 3 2 2 1 1 0 0 1790 1840 1890 1940 1990 US Growth, 1790-2008 J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 9 / 40

  10. What The Course is About J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 10 / 40

  11. What The Course is About J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 11 / 40

  12. Was Anything Happening in the Malthusian World? J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 12 / 40

  13. Plenty Happened in the Malthusian World Major technological advances: fire, tools, metal working, canals, windmills, explosives, domestication of plants and animals, math, astronomy, physics, etc. Exploration and trade across long distances occurred Empires came and went Some people became very, very wealthy but overall income per capita did not rise J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 13 / 40

  14. Explaining the Malthusian Trap The first part of the course will be explaining this Malthusian world Why did income per person stay constant for so long? Why weren’t technological advances leading to economic growth? Why didn’t the rise of empires, international trade, etc. lead to increases in average income? J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 14 / 40

  15. Escaping the Malthusian Trap The Industrial Revolution marked a break from the Malthusian Trap The second part of the course will be explaining what the Industrial Revolution actually was We’ll cover the technological improvements but these were just a part of what happened Other important features of the revolution: Agricultural Revolution Industrious Revolution Demographic Transition J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 15 / 40

  16. Escaping the Malthusian Trap Why was it England that led this break from the Malthusian world? Why did the Industrial Revolution happen when it did? Why didn’t it happen sooner in other parts of the world? We’ll consider a variety of explanations: Institutions Natural Resources Geography Evolutionary J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 16 / 40

  17. The Great Divergence J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 17 / 40

  18. The Great Divergence What were the benefits of industrialization for Western European countries? Which segments of society benefited the most? Why did other countries not benefit from the Industrial Revolution? How do we explain the divergence in per capita income across countries since the Industrial Revolution? J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 18 / 40

  19. Explaining the Malthusian Economy J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 19 / 40

  20. Population in the Modern World J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 20 / 40

  21. Population in the Preindustrial World J. Parman (UC-Davis) World population (in millions) World population (in millions) ation (in millions) 1000 1000 1500 1500 1500 2000 2000 2000 2500 2500 2500 3000 3000 3000 500 500 0 0 10000 BC 0 BC 6500 BC 0 BC 4000 BC 0 BC World Economic History, Spring 2011 2000 BC 0 BC 500 BC 0 BC 200 BC 0 BC 200 AD 0 AD 500 AD 0 AD 700 AD 0 AD 900 AD 0 AD 1100 AD 0 AD 1250 AD 0 AD 1340 AD 0 AD 1500 AD 0 AD 1650 AD 0 AD 1750 AD 0 AD 1850 AD 0 AD 1910 AD 0 AD 1930 AD 0 AD March 28, 2011 1950 AD 0 AD 21 / 40

  22. Population in the Preindustrial World Surviving Population in Population in children per Location 1300 1800 woman Norway 0.4 0.88 2.095 Southern Italy 4.75 7.9 2.061 France 17 27.2 2.056 England 5.8 8.7 2.049 Northern Italy 7.75 10.2 2.033 Iceland 0.084 0.047 1.93 J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 22 / 40

  23. Explaining Stationary Populations One of the key differences between the preindustrial world and the modern world was that population size was pretty much static It turns out that there is a very simple economic argument for why this was the case The argument depends on three assumptions about how preindustrial economies worked: Each society had a birth rate increasing with living standards Each society had a death rate decreasing with living standards Living standards decline as population increases J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 23 / 40

  24. The Birth Rate Schedule The birth rate is just the number of births per year per thousand people For example, there were 4,059,000 births in the United States in 2000 and the US population was 281,421,906: b 2000 = 4059000 = 14 . 4 281421906 1000 We assume that in the preindustrial world, birth rates rose with material living standards Why? A wealthier family could better afford an additional child, a healthier woman was more likely to have a successful pregnancy, ... J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 24 / 40

  25. The Birth Rate Schedule J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 25 / 40

  26. The Death Rate Schedule The death rate is just the number of deaths per year per thousand people For example, there were 2,403,000 deaths in the United States in 2000 and the US population was 281,421,906: d 2000 = 2403000 = 8 . 5 281421906 1000 We assume that in the preindustrial world, death rates fell with material living standards Why? Higher levels of consumption (better food, clothing, shelter, etc.) helps you live longer J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 26 / 40

  27. The Death Rate Schedule J. Parman (UC-Davis) World Economic History, Spring 2011 March 28, 2011 27 / 40

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