The Early Modern Great Divergence: Wages, Prices and Economic Development in Europe and Asia, 1500-1800

49 Pages Posted: 27 Jul 2005

See all articles by Stephen N. Broadberry

Stephen N. Broadberry

London School of Economics & Political Science (LSE)

Bishnupriya Gupta

University of Warwick - Department of Economics

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Date Written: March 2005

Abstract

Contrary to the claims of Pomeranz, Parthasarathi and other 'world historians', the prosperous parts of Asia between 1500 and 1800 look similar to the stagnating southern, central and eastern parts of Europe rather than the developing northwestern parts. In the advanced parts of India and China, grain wages were comparable to those in northwestern Europe, but silver wages, which conferred purchasing power over tradable goods and services, were substantially lower. The high silver wages of northwestern Europe were not simply a monetary phenomenon, but reflected high productivity in the tradable sector. The 'Great Divergence' between Europe and Asia was already well underway before 1800.

Keywords: Wages, prices, development, Europe, Asia

JEL Classification: N10, N30, O10

Suggested Citation

Broadberry, Stephen N. and Gupta, Bishnupriya, The Early Modern Great Divergence: Wages, Prices and Economic Development in Europe and Asia, 1500-1800 (March 2005). Available at SSRN: https://ssrn.com/abstract=763728

Stephen N. Broadberry (Contact Author)

London School of Economics & Political Science (LSE) ( email )

+44 0 24 7652 3446 (Phone)
+44 0 24 7652 3032 (Fax)

Bishnupriya Gupta

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom

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