IDEAS home Printed from https://ideas.repec.org/a/cup/jechis/v33y1973i01p177-190_07.html
   My bibliography  Save this article

Transactions Costs and Differential Growth in Seventeenth Century Western Europe

Author

Listed:
  • Reed, Clyde G.

Abstract

From the Middle Ages through the sixteenth century, the major countries of Western Europe—England, Holland, France, and Spain—can be viewed as a single entity in terms of overall economic growth. Population and output rose in all until the early fourteenth century when famine and then plague caused population and production to decline for over a century. Again in the sixteenth century there exist clear indications of a general expansion of population and output levels. In the seventeenth century, however, this uniform pattern is broken. Holland and England continue to expand; France falls relatively behind; and Spain absolutely declines. A simple Malthusian model appears to go far in explaining the general contours of the pre-seventeenth-century growth pattern. The differential pattern of the seventeenth century, however, has proven less amenable to unique explanation. This paper will not provide a unique explanation of the seventeenth-century growth pattern. It will, however, attempt to focus the search for such an explanation by arguing that the source of the differential growth lay in a single sector of the economies under discussion. Specifically, it will be argued that given the relatively constant technology of the period, growth, both extensive and intensive, can be explained by population increase in conjunction with economies of scale; that the source of the economies of scale lay in the transactions sectors of the economies under study; that only England and Holland had institutional structures that allowed the population growth beginning in the sixteenth century to give rise to large market areas and thereby allow realization of the economies of scale inherent in the transactions sector; and that the productivity increases brought about through realization of these economies of scale made it possible for Holland and England in the seventeenth century to support continued population increase and to evidence an increasing standard of living. This explanation of growth will necessarily remain incomplete because no attempt will be made to explain why Crown policies, and therefore institutional structures, differed between the countries.

Suggested Citation

  • Reed, Clyde G., 1973. "Transactions Costs and Differential Growth in Seventeenth Century Western Europe," The Journal of Economic History, Cambridge University Press, vol. 33(1), pages 177-190, March.
  • Handle: RePEc:cup:jechis:v:33:y:1973:i:01:p:177-190_07
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S0022050700076518/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. John H. Munro, 1999. "The Low Countries' Export Trade in Textiles with the Mediterranean Basin, 1200-1600: A Cost-Benefit Analysis of Comparative Advantages in Overland and Maritime Trade Routes," Working Papers munro-99-01, University of Toronto, Department of Economics.
    2. Munro, John H., 2006. "South German silver, European textiles, and Venetian trade with the Levant and Ottoman Empire, c. 1370 to c. 1720: a non-Mercantilist approach to the balance of payments problem, in Relazione economic," MPRA Paper 11013, University Library of Munich, Germany, revised Jul 2006.
    3. Epstein, Stephan R., 1992. "Regional fairs, institutional innovation and economic growth in late medieval Britain," Economic History Working Papers 22450, London School of Economics and Political Science, Department of Economic History.
    4. Munro, John H., 2005. "I panni di lana: Nascita, espansione e declino dell’industria tessile di lana italiana, 1100-1730 [The woollen cloth industry in Italy: The rise, expansion, and decline of the Italian cloth industr," MPRA Paper 11038, University Library of Munich, Germany, revised Sep 2006.
    5. Munro, John H., 2000. "The 'New Institutional Economics' and the Changing Fortunes of Fairs in Medieval and Early Modern Europe: the Textile Trades, Warfare, and Transaction Costs," MPRA Paper 11029, University Library of Munich, Germany, revised Feb 2001.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jechis:v:33:y:1973:i:01:p:177-190_07. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/jeh .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.