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Jack Leach (26)


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Jack Leach

Course: ECON 3R03 - The History of Economic Growth Section: CO1 Instructor: J. Leach Date: 10-01-13 Economic Accounting Most economic statistics focus on the margin but in some cases the first units of a resource are sometimes the most important. The marginal value of water is very low for us in the Western world but the first units of water are much more valuable because we need them to keep us alive. In slow growing economies the market price is the right price because there is little innovation so the market price captures the full benefits of the goods. An innovative economy constantly introduces new goods. The market prices of these goods understate their value to the consumer and therefore the GNP also understates the per capita welfare. We notice that there exists no substantial inequality around the world in the first millennium but this changes in the second half of the second millennium when the European countries started to run away with growth. The lesson here was that if you didn’t grow early on you didn’t experience rapid growth until, at the earliest, the late 20th century. Today’s GNP differences are the result of long-running processes of growth starting in the Middle Ages / Industrial Revolution. As late as 1500 there were minimal difference in per capita GNP. History of Rome It’s not a question of who was first or who is responsible for the inventions otherwise we could stop looking once we examined the Romans because they did many things first. We will recognize that the Roman economy had many of the features of a modern economy such as insurance and banking to name a few. At it
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