Course: ECON 3R03 - The History of Economic Growth
Instructor: J. Leach
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
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