Universitat Pompeu Fabra

Economic and Business History

INTRODUCTION

Anna Sol

Economic History
Provides a background of the most important
economic facts and processes.
It is useful to relate abstract economic theory
with present and past economic facts.
Present decisions are conditioned by the past
(path dependency).
Different economic schools:
Divergent explanations of historical facts.
Changing ideological and theoretical background
for economic policies.

Business History
Variables like space, time, culture, and
technology have an impact on companies
shapes.
The historical context influence firms and
entrepreneurial actions, providing
opportunities and putting constraints on
entrepreneurs and enterprises.
Firms strategies have changed along history.

Economic growth vs.

economic development
What is economic growth?
It is the process of constant and self-sustaining
increase of income per capita.
It is a multidimensional process (Todaro, 1985):
Reorganization of economic and social systems, not limited
to the increase of income and production.
Essential transformation of institutional, social and
administrative institutions.
Modification in people attitudes, even habits and beliefs.
Its diffusion may involve a transformation of the
international economic and social system.

Economic growth vs.

economic development
When did it take place?
United Kingdom, end of 18th century.
It spread during 19th and 20th centuries.

It is a regional phenomenon:
Limited to Western World and Japan until 1950.
Diffusion, mainly to Asia, after 1950.

How do we measure it? GDP and GDP per

capita
Problems: GDP fetishism (Stiglitz).

Economic growth vs.

economic development
What is economic development?

...development can be understood () as a

process of expansion of capacities and real
freedom that individuals can enjoy. (Amartya
Sen)
What freedom or capacities?

Political freedom.
Economic freedom.
Social opportunities (education, health)

Economic growth vs.

economic development

How do we measure development? Human

Development Index (HDI). Elements:

Income per capita.

Life expectancy, mortality, infant mortality.
Literacy rate and schooling rate.

From 1993 it includes political and civil

rights (Quality of life index ).
It is correlated to income but this
correlation is not perfect.

World economic growth

World GDP per capita (1990 US dollars)

1500-1820: Annual growth rate: 0,05%.

1820-2000: Each generation has enjoyed a 1/3 higher income (in

average) than the previous generation.

Has all the world grown the same?

Has all the world grown the same?