Economic historians are increasingly aware of the divergence between the development of real wages and GDP per capita in pre-industrial Europe, even in affluent urbanized societies with high wage levels such as the sixteenth-century Low Countries. This article offers an empirical answer to this alleged paradox by merging living standards and real wages with income distributions in a case study of sixteenth-century 's-Hertogenbosch. It provides evidence for an optimistic reading of the living standards of this era despite the modest performance of the urban economy and a strong decline in real wages. The rich sources of 's-Hertogenbosch were instrumental in reaching this conclusion, as they offer proof that the drop in wage labourers' purchasing power was paralleled by a marked decline in social position. As such, their income experience turns out to be surprisingly atypical, and does little to capture the strong resilience of the majority of the urban populace in the face of the early price revolution.

Most questions about the sources of agricultural growth during the ‘first agricultural revolution’ are still debated. For the Prussian province of Westphalia, we estimated a translog production function to determine the contribution of intensification and technical change from 1830 to 1880. Additionally, we present evidence on the impact that neutral and biased technical change had on growth. Furthermore, we examine whether spatial differences can be identified concerning the sources of agricultural growth and whether they followed a von Thuenen pattern around the demand centre of the rising industrial belt on the Ruhr River. In addition, we explain why, under the conditions of pre-industrial agriculture, regions with the highest output growth did not necessarily have to exhibit the most dynamic TFP-growth, even if they contributed, on average, the most to output growth.

This article examines how globalization and industrialization offered the nations of the European periphery opportunities to develop exports in sectors where they enjoyed a comparative advantage. As a case in point, we consider Spanish exports of Mediterranean horticultural products (MHP). Two bi-equational export supply and demand models (an equilibrium and a disequilibrium model) are proposed, in which volumes and prices are determined simultaneously, to throw light on the main causes of Spain's expanding exports of MHP. The results clearly reflect the primacy of rightward shifts in the supply and demand curves in explaining the growth of MHP trade by volume. Thus, both rising incomes in the more developed countries and technological change in agriculture specializing in these products were key to the growth of this trade. Meanwhile, Spanish exporters also benefited from the increasing integration of international markets, especially through declining transport costs and, to a lesser extent, trade liberalization.

The dating of, and explanation for, the agricultural revolution in Europe remains an elusive research task. When and why did a low-productive pre-industrial agricultural sector turn into a fast-growing, more productive one? Unique data from Sweden, consisting of more than 80,000 observations of farm production output for the period 1700–1860, are used to calculate and explain decisive changes in pre-industrial agricultural production. Our estimations show that crop production more than quadrupled during the period studied, and from the 1780s and onwards production growth by far outstripped population growth. Furthermore, the data allow us to estimate the determinants of change at individual farm level. The results show that enclosures, markets and property rights were of significant importance. Institutional changes, affecting the incentives and the organization of production, made peasants invest in production and productivity. In a general sense this shows the flexibility and awareness of pre-industrial European peasants in exploiting markets and initiating institutional change.

Thomas Sargent and François Velde (2002) argue that it took government authorities centuries to solve the ‘big problem of small change’ because those authorities were constrained, first by the lack of a sound theory of small change, and then by the lack of adequate technology for implementing the theory. British experience suggests, however, that institutions also played a crucial part. In particular, the monopolistic nature of Great Britain's official coinage arrangements undermined incentives for establishing a sound system of small change even after theoretical and technological constraints were no longer present. The institutional perspective offered here helps to explain a number of historical facts that are otherwise puzzling, including the fact that a relatively successful private-sector small-change system anticipated Great Britain's official solution to the small-change problem by two decades.