The Puzzle of the Hockey Stick: Why Stagnation Before Growth?
A central question in economic history is explaining the transition from a world where living standards were largely stagnant for centuries—changing little except in the face of major events like epidemics or wars—to the modern era of a continuous technological revolution. This puzzle seeks to understand why we moved to a world where each generation became noticeably and predictably better off than the one before it, as visualized by the sharp upward turn in the 'hockey stick' graph of economic growth.
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The Economy 2.0 Microeconomics @ CORE Econ
Ch.1 Prosperity, inequality, and planetary limits - The Economy 2.0 Microeconomics @ CORE Econ
Introduction to Microeconomics Course
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An economic historian examines a graph of average income per person for Country X and Country Y over the last millennium. The graph shows that for centuries, both countries had very low, stagnant average incomes. Around the year 1750, Country X's average income began to increase sharply and has continued to grow since. Country Y's average income did not begin its sharp, sustained increase until around 1960. Today, Country X's average income is substantially higher than Country Y's. What does this pattern suggest is the primary reason for the large income gap between the two countries today?
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Consider a scenario where two drivers are on a wide, empty highway. Driver A chooses a speed based only on the legal speed limit and their personal comfort, and this choice does not affect the travel time of Driver B. Similarly, Driver B chooses a speed based on the same factors, and this choice does not affect Driver A's travel time. Which of the following modifications would be necessary to transform this situation into a social interaction?
Analyzing the 'Hockey Stick' Pattern of Economic Growth
Imagine a graph showing the average income per person for four countries (A, B, C, D) from the year 1500 to the present. For all four countries, the income line is flat and low until around 1800. After 1800, Country A's income line rises sharply. Country B's income line begins to rise sharply around 1900. Country C's income line begins a modest rise around 1950. Country D's income line remains flat and low throughout the entire period. Based on this information, which statement provides the most accurate analysis of the situation?
An economic historian is studying two countries, Country A and Country B. Both countries experienced centuries of near-zero growth in average income. Around 1820, Country A's average income began to grow rapidly and has continued to do so. Country B's average income remained stagnant until around 1980, at which point it also began to grow rapidly. Based on this information, which of the following conclusions is most likely to be true about the economic situation of these two countries today?
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The 'history's hockey stick' graph illustrates that the sharp, sustained increase in living standards began at approximately the same time for all major economies, leading to a synchronized global take-off.
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An economic historian creates a graph showing the historical path of average income for four hypothetical regions from the year 1000 to the present. All regions start with a long period of flat, low income. Match each region to the description that best fits its economic trajectory as described below.
- Region A: Income begins a steady, gradual rise around 1650.
- Region B: Income remains flat until around 1870, when it begins to rise very sharply.
- Region C: Income starts to grow rapidly, but not until the late 20th century.
- Region D: Income remains flat and low throughout the entire period shown.
Analyzing the 'Hockey Stick' Pattern of Economic Growth