Seven Centuries of Economic Growth and Decline

This paper investigates very long run pre-industrial economic development. New annual GDP per capita data for six European countries over the last seven hundred years paints a clearer picture of the history of European economic development. First, it confirms that sustained growth has been a recent phenomenon, but rejects the argument that there was no permanent growth in living standards before the Industrial Revolution. Instead, the evidence demonstrates the existence of numerous periods of economic growth before the nineteenth century unsustained, but raising GDP per capita. Second, the data also shows that most economies experienced phases of economic decline. Third, from the nineteenth century, these economies started to reduce the risks of experiencing economic declines and to increase the chances of generating economic growth. Finally, analysis indicates positive relationships between levels of economic development, institutions and human capital formation, as well as population changes, and supports the expectation that civil wars harm economic growth. JEL codes: N13, O11, E01