Money and modernization in early modern England

Arbeitspapier

Classic accounts of the English industrial revolution present a long period of stagnation followed by a fast take-off. However, recent findings of slow but steady per capita economic growth suggest that this is a historically inaccurate portrait of early modern England. This growth pattern was in part driven by specialization and structural change accompanied by an increase in market participation at both the intensive and extensive levels. These, I argue, were supported by the gradual increase in money supply made possible by the importation of precious metals from America. They allowed for a substantial increase in the monetization and liquidity levels of the economy, hence decreasing transaction costs, increasing market thickness, changing the relative incentive for participating in the market, and allowing agglomeration economies to arise. By making trade with Asia possible, precious metals also induced demand for new desirable goods, which in turn encouraged market participation. Finally, the increased monetization and market participation made tax collection easier. This helped the government to build up fiscal capacity and as a consequence to provide for public goods. The structural change and increased market participation that ensued paved the way to modernization.

Objekt anzeigen

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: EHES Working Paper ; No. 147

Klassifikation und Themen

• Klassifikation: Wirtschaft ; General Aggregative Models: General ; Money and Interest Rates: General ; Monetary Policy, Central Banking, and the Supply of Money and Credit: General ; Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: Europe: Pre-1913 ; Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: Europe: Pre-1913 ; Economic Growth and Aggregate Productivity: General
• Thema: Origins and persistence of modern economic growth ; the industrious ; industrial and financial revolutions ; early modern monetary injections ; the great divergence ; the little divergence ; state-formation ; provision of public goods

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Palma, Nuno
• Ereignis: Veröffentlichung
• (wer): European Historical Economics Society (EHES)
• (wo): s.l.
• (wann): 2019

Weitere Informationen

• Handle: http://hdl.handle.net/10419/247077