Evaluating the Engine of the Great Escape
Historians and economists propose several explanations for why some economies began to experience sustained growth in living standards starting around the 18th century, breaking free from a long-term pattern of stagnation where productivity gains were erased by population growth. One major argument emphasizes the unique set of incentives created by the emergence of new economic institutions like private property, competitive markets, and firms. Another argument credits the breakthrough primarily to the intellectual and scientific advancements of the Enlightenment, which provided the raw innovative potential. Evaluate the relative importance of these two explanations. In your answer, argue which factor was more critical in translating technological potential into sustained, widespread economic improvement and explain your reasoning.
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CORE Econ
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Related
For centuries, improvements in technology that increased a society's productivity were typically followed by population growth that returned living standards to near-subsistence levels. Starting around the 18th century, some economies broke this pattern, entering a period of sustained improvement in living standards. Which statement best analyzes the institutional change that was fundamental to enabling this escape?
Institutions and Sustained Economic Growth
Innovation and Economic Stagnation
The sustained increase in living standards that began around the 18th century was primarily caused by population growth slowing down, which then allowed the pre-existing, relatively stable rate of technological innovation to finally raise per-capita income.
Incentives and Economic Breakthrough
The emergence of a specific set of economic institutions is considered crucial for creating the conditions that allowed some societies to break free from a long-term cycle where population growth would cancel out productivity gains, keeping living standards stagnant. Match each institution below to its primary role in fostering this economic transformation.
The Skeptic's Warning
For much of human history, technological advances were offset by population growth, keeping living standards near subsistence. Around the 18th century, a new dynamic emerged in some economies, leading to sustained economic growth. Arrange the following elements into the logical causal sequence that explains this transformation.
Evaluating Policy for Economic Take-off
Evaluating the Engine of the Great Escape