ABSTRACT
Every economist who is interested in economic development knows-or should know, if he or she examines stretches of 100 years-about the rise and decline of regions, cities, nations, and empires. Economic historians are aware of the fact that there are many societies and regions that have suffered not just short-term, cyclical, declines, but declines over very long periods of time. The general story implies that once a certain incentive structure is in place across regions, growth comes about through specialization, diversity, division of labor-all consequences of entrepreneurship and innovations. A key issue in economic development is whether economies that start out behind tend to grow faster in per capita terms and thereby converge toward those that began ahead. The increased division of labor does not imply that growth per capita must necessarily be associated with population growth: innovations can be secured even if the population remains stationary.
