Stephen Broadberry (h/t Tyler Cowen):
...the Great Divergence of living standards between Europe and Asia had late medieval origins and was already well under way during the early modern period...Economic historians can now, therefore, account for the Great Divergence, using the word “accounting” in the sense of measurement – by providing a quantitative picture of when and where the Great Divergence occurred. However, there is a second sense in which the word “accounting” can be used – to provide an explanatory narrative.Much remains to be done on the measurement of the key explanatory factors, but the framework adopted here is to see the divergences as arising from the differential impact of shocks hitting economies with different structural features. The economic history literature suggests two important shocks coinciding with the turning points identified above around 1348 and 1500.
- The Black Death – which began in western China before spreading to Europe and reaching England in 1348 – wiped out around one-third of Europe’s population within three years, and more than a half over the following century.
- Around 1500, new trade routes were opened up between Europe and Asia around the south of Africa, and between Europe and the Americas.These shocks had asymmetric effects on different economies because of four important structural factors.
- The type of agriculture.
- The age of first marriage for women.
- The flexibility of labour supply.
- The nature of state institutions.