ABSTRACT
By the later nineteenth century, European economies were clearly embarked on a period of sustained economic development. National outputs per head all rose, albeit at different rates and from different levels. Distinctive languages, cultures and institutions favoured clear national identities. On the other hand, freedom of movement of people, ideas and goods across national frontiers, coupled with radically improved transport and communications facilities encouraged a convergence of national economies. The gold standard and the most favoured nation clause, together with the railway, the steamship and the telegraph, provided a framework for rapid diffusion of the ideas that the nineteenth century offered for economic development. Since European national economies therefore shared a similar pattern of change and economic growth, it should be possible to model their nineteenth-century development. In this present attempt to do so, the central questions are why some European countries were richer than others between 1860 and 1910, and why some increased their prosperity faster in the period. A satisfactory model would answer these questions. In particular the model should show what characteristics contributed to income gaps, such as that between the economies of Spain and Britain. Even if existing estimates of real national product per head are only approximately correct, the variations to be explained are substantial; in 1860 the wealthiest country was more than three-times richer than the poorest in the sample analysed here, and in 1910 the gap had widened to four times.3
