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ECON 232: The Diffusion of Modern Economic Growth

Fall Term 2021

Overview:

Since the early 2000s, the two most persistent factors affecting the global economy have been the integration of international markets, and differential growth among the world’s converging economies. The powerful globalization forces driving the integration of markets have been associated with uncertainty and volatility in wages, prices, interest rates, and exchange rates. The social, military, political, and environmental effects of differential growth are just beginning to become evident. In this course we look to the past in an effort to understand the relationship between globalization and the diffusion of modern economic growth. We focus on country and context dependent circumstances that affected the pace and pattern of long run, globalization-led diffusion.

At the end of the 19th and beginning of the 20th centuries there was a shift in global economic power away from Britain, towards the United States (and other Atlantic economies). This transition was coincident with an unprecedented expansion in the inter-continental movement of people, capital, technology, and goods. Economists are still working to fully understand the complex and inter-related changes that characterize this transformation of the international economy, but a better understanding of this ‘first era of globalization’ (1870-1913) seems prudent in light of our current concerns about the consequences of globalization and the reshuffling of the global economic order.

Adopting a historical perspective on globalization provides us with a remarkably well understood and carefully documented illustration of the causal connections linking economic growth to international market integration. The parallels between the first era of globalization and the market integration occurring in our lifetimes are striking but not perfect, and in this course we emphasize both the similarities and differences among the transitions we will be studying. In particular, we focus on the long run effects of innovation and the spread of new technologies, human capital accumulation, trade, migration, and the operation of international capital markets.

Topics / Meeting Schedule:

Week 1: Defining "modern economic growth" and distinguishing it from "pre-modern economic growth".

Week 2: Why doesn’t modern economic growth diffuse uniformly to all nations?

Week 3: The leaders become laggards – economic failure in Victorian Britain.

Week 4: Human capital – mass education and the US model.

Week 5: Technological change – diffusion versus local innovation.

Week 6: Midterm – Thursday, October 21.

Week 7: Trade and the transition to modern economic growth.

Week 8: Freight rates, railways and falling transport costs.

Week 9: The impact of trade policy – free trade in Britain, protectionism everywhere else.

Week 10: Term paper – Thursday, November 18.

Week 11: Migration – theory and evidence.

Week 12: The integration of international capital markets under a fixed exchange rate regime.

Prerequisite:

The prerequisite for this course is ECON 110 (or ECON 111). It is assumed that all students have some previous experience with basic calculus and statistics. This is an applied economics course in which students will use the tools they have acquired in their economic theory classes.

Graded Requirements:

A 24-hour, take-home, open-book midterm exam will be posted on the ECON 232 OnQ page on Thursday, October 21.

A term paper of approximately 3,500 words (12 double spaced pages), will be submitted by 4:00 pm on Thursday, November 18. A list of potential term paper topics is included at the end of this syllabus. Because the structure of this assignment is based on the principles of universal course design, extensions will only be considered under exceptional circumstances in consultation with QSAS and/or faculty accommodation and consideration advisors.

NOTE: Students will submit an electronic version of their term paper to the OnQ assignment drop box. These submissions will be checked for potential violations of the University’s academic integrity policy using Turnitin.com.

A late penalty of 2% per day (including weekends) will be applied to all papers submitted past the due date. No papers will be accepted after the last day of classes (Friday, December 3).

A 24-hour, take-home, open-book final exam will be posted on the ECON 232 OnQ page during the April exam period.

Term paper and midterm grades will be made available through OnQ.

Letter Grading:

All graded course components receive letter grades which, for the purpose of calculating your course grade, are translated into numeric scores using the faculty approved scale. Your course average will then be converted to a final letter grade according to the university official grade conversion scale. All late penalties will be assessed against numeric scores. Arts and Science Policy on Grading

Privacy (Third-Party Software):

This course makes use of MS Teams and Turnitin for online meetings and academic integrity. Be aware that by logging into these sites, you will be leaving onQ.  Your independent use of those sites, beyond what is required for the course (for example, purchasing the company’s products or services), is subject to MS Teams and Turnitin terms of use and privacy policy. You are encouraged to review the applicable privacy statements before using these sites.

Notice of Recording:

Weekly synchronous MS Teams meetings will be available as part of this course through video conferencing supported by Queen’s.  The University has taken steps to configure the conferencing platform in a secure manner. Meetings will be recorded with video and audio, and will be made available to students on the course OnQ page for the duration of the term. These recordings may capture students’ names, images, or voices through the video and audio recordings. Students are not required to turn on their cameras or microphones during these meetings. However, by attending these sessions, students are consenting to the collection of information for the purposes of administering the class and associated coursework. To learn more about how your personal information is collected, used and disclosed by Queen’s University, please see the Notice of Collection, Use and Disclosure of Personal Information.

Academic Accommodation and Consideration:

Queen's University is committed to achieving full accessibility for people with disabilities. Part of this commitment includes arranging academic accommodations for students with disabilities to ensure they have an equitable opportunity to participate in all their academic activities. The Senate Policy for Accommodations for Students with Disabilities was approved at Senate in November 2016. If you are a student with a disability and think you may need academic accommodations, you are strongly encouraged to contact the Queen's Student Accessibility Services (QSAS) and register as early as possible.  For more information, including important deadlines, please visit the QSAS website.

Queen’s University is committed to providing academic consideration to students experiencing extenuating circumstances. For more information, please see the Senate Policy on Academic Consideration for Students in Extenuating Circumstances.

Each Faculty has developed a protocol to provide a consistent and equitable approach in dealing with requests for academic consideration for students facing extenuating circumstances.  Arts and Science undergraduate students can find the Faculty of Arts and Science protocol and the portal where a request can be submitted. Students in other Faculties and Schools who are enrolled in this course should refer to the protocol for their home Faculty.

If you need to request academic consideration for this course, you will be required to provide the name and email address of the instructor/coordinator. Please use the following contact information: Ian Keay (keay at queensu.ca).

Students are encouraged to submit requests as soon as the need becomes apparent and to contact their Professors/Course Coordinators as soon as possible once Consideration has been granted. Any delay in contact may limit the Consideration options available.

For more information on the Academic Consideration process, what is and is not an extenuating circumstance, and to submit an Academic Consideration request, please visit website.

Academic Integrity:

Queen’s students, faculty, administrators and staff all have responsibilities for upholding the fundamental values of academic integrity; honesty, trust, fairness, respect, responsibility and courage. These values are central to the building, nurturing, and sustaining of an academic community in which all members of the community will thrive. Adherence to the values expressed through academic integrity forms a foundation for the "freedom of inquiry and exchange of ideas" essential to the intellectual life of the University (see the Senate Report on Principles and Priorities).

Students are responsible for familiarizing themselves with the regulations concerning academic integrity and for ensuring that their assignments and their behaviour conform to the principles of academic integrity. Information on academic integrity is available in the Arts and Science Calendar (see Academic Regulation 1), on the Arts and Science website, and from the instructor of this course. Departures from academic integrity include plagiarism, use of unauthorized materials, facilitation, forgery and falsification, and are antithetical to the development of an academic community at Queen's. Given the seriousness of these matters, actions which contravene the regulation on academic integrity carry sanctions that can range from a warning or the loss of grades on an assignment to the failure of a course to a requirement to withdraw from the university.

Please note that we have had issues in the past with unintended plagiarism in this course. Regardless of how and where you retrieve information, the principles of academic integrity apply. https://www.queensu.ca/academicintegrity/students/avoiding-plagiarismcheating

Turnitin.com:

This course uses Turnitin, a third-party application that helps maintain standards of excellence in academic integrity. Normally, students will be required to submit their course assignments through OnQ to Turnitin. In doing so, students' work will be included as source documents in the Turnitin reference database, where they will be used solely to detect plagiarism.

Turnitin is a suite of tools that provide instructors with information about the authenticity of submitted work and facilitates the process of grading. Turnitin compares submitted files against its extensive database of content and produces a similarity report and a similarity score for each assignment. A similarity score is the percentage of a document that is similar to content held within the database. Turnitin does not determine if an instance of plagiarism has occurred. Instead, it gives instructors the information they need to select the authenticity of work as a part of a larger process.

Please read Turnitin’s Privacy Pledge, Privacy Policy, and Terms of Service, which govern users' relationship with Turnitin. Also, please note that Turnitin uses cookies and other tracking technologies, however, in its service contract with Queen's Turnitin has agreed that neither Turnitin nor its third-party partners will use data collected through cookies or other tracking technologies for marketing or advertising purposes. For further information about how you can exercise control over cookies, see Turnitin’s Privacy Policy.

Turnitin may provide other services that are not connected to the purpose for which Queen’s University has engaged Turnitin. Your independent use of Turnitin’s other services is subject solely to Turnitin’s Terms of Service and Privacy Policy, and Queen’s University has no liability for any independent interaction you choose to have with Turnitin.

Copyright:

Course materials created by the course instructor, including all slides, presentations, handouts, tests, exams, and other similar course materials, are the instructor's intellectual property. It is a departure from academic integrity to distribute, publicly post, sell, or otherwise disseminate an instructor's course materials or to provide an instructor's course materials to anyone else for distribution (including note sharing sites), posting, sale or other means of dissemination without the instructor's express consent.  A student who engages in such conduct may be subject to penalty for a departure from academic integrity and may also face adverse legal consequences for infringement of intellectual property rights.

Accessing Course Material:

Links to all required readings are available through the library’s eReserve system, which can be accessed through the course OnQ page. Required readings can also be accessed through any computer with a Queen’s IP address from the library’s online journal archives.

Narrated slides for all course material are posted on the ECON 232 OnQ page.

Each week the professor will host a synchronous Teams meeting. At this meeting no new material will be covered, but the topic and readings for the week will be reviewed and students will be given the opportunity to lead the discussion. All meetings will be recorded and posted on the ECON 232 OnQ page.

Meeting Schedule and Required Readings:

All required readings are marked with an *. Suggested readings are unmarked. There will be no presumption that students have read the suggested material, but these articles provide context and greater depth, and may be very helpful for some students.

Week 1. Defining "modern economic growth" and distinguishing it from "pre-modern economic growth".

* Maddison (2005), “Measuring and Interpreting World Economic Performance, 1500-2001”, in Review of Income and Wealth, Pg. 1-35.

* Van den Berg (2001), “Economic Growth throughout History”, in Economic Growth and Development, Pg. 35-82.

Week 2. Why doesn’t modern economic growth diffuse uniformly to all nations?

* Abramovitz (1986), “Catching Up, Forging Ahead and Falling Behind”, in Journal of Economic History, Pg. 385-406.

* Williamson (1996), “Globalization, Convergence and History”, in Journal of Economic History, Pg. 277-305.

Van den Berg (2001), “Solow’s Neo-Classical Growth Model”, in Economic Growth and Development, Pg. 114-52.

Week 3. The leaders become laggards: economic failure in Victorian Britain.

* McCloskey (1970), “Did Victorian Britain Fail?”, in Economic History Review, Pg. 446-59.

Edelstein (1976), "Realized Rates of Return on UK Home and Overseas Portfolio Investment in the Age of High Imperialism", in Explorations in Economic History, Pg. 283-329.

Edelstein (1994), “Foreign Investment and Accumulation, 1860-1914”, in Economic History of Britain since 1700, Volume 2, 2nd Edition, Pg. 173-96.

Pollard (1994), “Entrepreneurship, 1870-1914”, in Economic History of Britain since 1700, Volume 2, 2nd Edition, Pg. 62-89.

Week 4. Human capital: mass education and the US model.

* Lindert (2004), "The Rise of Mass Public Schooling before 1914", in Growing Public, Pg. 87-110.

* Goldin (2001), “The Human Capital Century and American Leadership” in Journal of Economic History, Pg. 263-92.

O’Rourke and Williamson (1997), “Around the European Periphery, 1870-1913: Globalization, Schooling and Growth”, in European Review of Economic History, Pg. 153-91.

Cipolla (1969), “Literacy and the Industrial Revolution”, in Literacy and Development in the West, Pg. 62-99.

Week 5. Technological change: diffusion versus local innovation.

* Broadberry (1997), “Technology”, in The Productivity Race, Pg. 77-89.

* Rosenberg and Frischtak (1985), "Preface: The Nature of Technology", in International Technology Transfer, Pg. vii-xvii.

Ahmad (1966), “On the Theory of Induced Innovation”, in Economic Journal, Pg. 344-57.

Fremdling (2000), “Transfer Patterns of British Technology to the Continent”, in European Review of Economic History, Pg. 195-222.

Week 6. Midterm Thursday, October 21.

Week 7. Trade and the transition to modern economic growth.

* O’Rourke and Williamson (1999), “Were Hechscher and Ohlin Right?", in Globalization and History, Pg. 57-75.

Estevadeordal, Frantz and Taylor (2003), "The Rise and Fall of World Trade, 1870-1939", in Quarterly Journal of Economics, Pg. 359-407.8

Week 8. Freight rates, railways and falling transport costs.

* Jacks, Meissner and Novy (2010), "Trade Costs in the First Wave of Globalization", in Explorations in Economic History, Pg. 127-41.

* Inwood and Keay (2015), “Transport Costs and Trade Volumes: Evidence from the Trans-Atlantic Iron Trade” in Journal of Economic History, Pg. 95-124.

Fogel (1979), "Notes on the Social Savings Controversy", in Journal of Economic History, Pg. 1-54.

Week 9. The impact of trade policy: free trade in Britain, protectionism everywhere else.

* O’Rourke (2000), “Tariffs and Growth in the Late Nineteenth Century”, in Economic Journal, Pg. 456-83.

* McCloskey (1980), “Magnanimous Albion: Free Trade and British National Income, 1841-1881”, in Explorations in Economic History, Pg. 303-20.

Clemens and Williamson (2004), “Why did the Tariff-Growth Correlation Change after 1950?”, in Journal of Economic Growth, Pg. 5-46.

Irwin (2002), “Interpreting the Tariff-Growth Correlation of the Late Nineteenth Century”, in American Economic Review (Papers and Proceedings), Pg. 165-69.

Harris, Keay and Lewis (2015), "Protecting Infant Industries: Canadian Manufacturing and the National Policy" in Explorations in Economic History, Pg. 15-31.

Week 10. Term paper Thursday, November 18.

Week 11. Migration: theory and evidence.

* Hatton and Williamson (1994), “International Migration, 1850-1939: An Economic Survey”, in Migration and the International Labor Market, 1850-1939, Pg. 3-32.

* Borjas (1994), “The Economics of Immigration”, in Journal of Economic Literature, Pg. 1667-93.

Baines (1991), Emigration from Europe, 1815-1930, Pg. 7-74.

Week 12. The integration of international capital markets under a fixed exchange rate regime.

* Officer (2010), "Gold Standard", in EH.NET Encyclopedia, Pg. 1-37.

McCloskey and Zecher (1981), “How the Gold Standard Worked, 1880-1913”, in Enterprise and Trade in Victorian Britain, Pg. 184-203.

Bordo and Rockoff (1996), “The Gold Standard as a Good Housekeeping Seal of Approval”, in Journal of Economic  History, Pg. 398-428.

Suggested Term Paper Topics:

(1) Much has been written about the impact of "political fragmentation" on nations' pursuit of modern economic growth. Use the example of Italian and/or German unification to illustrate the impact that "political unification" can have on growth. (Suggested author: Nicholas Crafts)

(2) Discuss the historical origins of the persistent differences in economic outcomes experienced by Indigenous and non-Indigenous communities, using evidence from North America and/or Australia. (Suggested author: Donna Feir)

(3) Discuss the advantages (and disadvantages) of the unique capital structure and industrial organization of Russian manufacturers prior to WW1. (Suggested author: Amanda Gregg)

(4) Describe the unique features of Japan’s transition to modern economic growth during the Meiji period. (Suggested author: John Tang)

(5) Discuss the impact of the German customs union (the Zollverein) on late 19th and early 20th century German industrial success. (Suggested author: Florian Ploeckl)

(6) Discuss the possibility that differences in hours worked per day, and days worked per year may have driven differences in industrial development prior to WW2. (Suggested author: Michael Huberman)

(7) Discuss the role played by property rights in promoting modern economic growth, with specific reference to African land tenure and the ongoing absence of modern economic growth in that region. (Suggested author: James Fenske)

(8) Sugar has long been a key export commodity for many South American and Caribbean nations, but domestic and foreign (specifically, US) policies have constrained the ability of exporters to develop and diversify on the basis of this natural resource. Discuss and expand on this statement. (Suggested author: Alan Dye)

(9) The impact of temporary and return migration during the first era of globalization is relatively under-studied. Explain why the economic impact of permanent migration during the pre-WW1 period was likely to have been quite different from the impact of temporary or return migration. (Suggested author: Zach Ward)

(10) Any other topic related to the course themes that does not appear on the course syllabus (with the approval of the instructor).