Research Highlights Featured Chart
March 29, 2022
The Little Divergence
What was the economic impact of the Black Death in Europe?
Replica of the Dance of Death fresco in the Church of Holy Trinity in Hrastovlje
Source: National Gallery of Slovenia, Public domain, via Wikimedia Commons
The Black Death first appeared in Europe in 1347 and in just five years, killed more than a third of the population. As a result, the growth and trajectory of the continent was permanently altered. Many economic scholars have connected the plague with the Great Divergence between Europe and the rest of the world. It may have also triggered the so-called Little Divergence, which set north-western Europe on a different growth path from southern Europe.
In a paper in the Journal of Economic Literature, authors Remi Jedwab, Noel D. Johnson, and Mark Koyama investigated how the institutions of Europe were reorganized as result of the devastation caused by the Black Death. They highlight that the plague led to an initial increase in wages and incomes that were only sustained in some parts of the continent.
In particular, Figure 6 from the authors’ paper shows how the economic geography of Europe shifted toward the northwest.
Figure 6 from Jedwab et al. (2022)
The chart shows estimates of GDP per capita in England, Holland, Italy, and Spain, before and after 1347 (dashed vertical line). Before the plague, northern Italy was the richest economy in Europe and possibly the richest economy in the world. While the region retained its economic lead over the rest of Europe in the century following the pandemic, the Netherlands and England began to catch up and eventually surpassed it.
The authors say that this Little Divergence was possibly the result of long-term structural changes in the European economies. And their survey, which builds on a wide range of scholarship, takes a closer look at how religious practices, labor markets, diets, and other institutions adapted to local and continent-wide shocks resulting from the Black Death.
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“The Economic Impact of the Black Death” appears in the March 2022 issue of the Journal of Economic Literature.