Eco435

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University of Toronto

Faculty of Arts and Sciences

April Exam, 2012

Eco 435S/Eco 2738S

Duration – 3 hours

No Aids.

Please do all five questions. All questions are equally weighted. 1. In “The Great Divergence”, Ken Pomeranz discusses the “shared” constraints約束; 限制of Europe and the highly developed core areas of China and Japan in the mid-18th century. * development trajectory in (recent) world history, the industrial revolution.  * Before about 1800, growth did occur, but it was mainly “extensive”, leading to more people but almost no growth in income per capita.  * After about 1800 this changed, and growth became (increasingly) “intensive”, focused on an almost continuous growth of GDP per head.  *

What were these shared constraints?
* core regions in Asia and Europe had achieved a relatively high standard of living by the 18th century, shortages of land, soil degradation, deforestation, lack of a dependable energy sources (wood and charcoal were rapidly depleted), and other ecological constraints limited growth in per capita incomes * china, Western Europe, and Japan had developed to a relatively high level and began to face constraints on energy and land use * in Europe the land constraint was relieved by imports from its external periphery, which at the same time also became a captive market for its labor intensive manufactures and the re-export of textiles from Asia. Later of course, these peripheries would supply even more land- intensive - and in Europe land-saving! - cheap commodities, especially cotton and wheat and then alos meat, while also absorbing 60 millions of Europe's surplus population. By contrast, the much more internal Chinese periphery was able to pursue an import substation policy from early on, which simultaneously deprived the Chinese manufacturing centers of markets and by stimulating local demand there reduced the export supply and increased the import price of commodities to these centers from their interior peripheries. Thus Pomeranz shows how Europe's overseas regions ameliorated its ecological and Malthusian constraints as China's and other Asian peripheries never could. What else did they have in common?

* advanced Chinese regions matched or bested European ones in standard of living and especially the most important one * that China’s level of economic performance was more or less at par with that of Western Europe. Moreover, the lower Yangzi delta formed a core of economic prosperity comparable with the North Sea area, the most developed part of Western Europe. * consumption of calories from grain and even from sugar, as well as of household goods and textiles; * in storage, distribution and availability of grain to counter climatically induced famines * in quantities of long-distance grain shipments that were multiples of those through the Baltic; * in textile production and earnings of textile workers; * in commercialization of the economy and especially of agriculture, including markets in land, labor, inputs, products and credit What does Pomeranz argue was central to the divergence分歧between these core areas of Europe and China? * the fact that the industrial revolution occurred in England was due to fortunate geographic circumstances (the availability of cheap coal in the right places) and the fact that European countries had access to colonies, which China lacked. * industrial revolution occurred in Europe rather than China because European entrepreneurs were eager to adopt machines to cut down on high labour costs. China didn’t “miss” the industrial revolution – it didn’t need it. * The ecological damage of previous growth ravaged both China and Europe and especially their forests and therefore their supplies of wood, thus driving up its [opportunity] price, particularly with respect to coal as an alternative....
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