ABSTRACT
For analytical purposes, economic activity is often divided into three sectors: agriculture, manufacture/industry and trade/services. For the most part, the early modern economy remained fundamentally agrarian. The historical evidence in fact suggests two distinct periods of agrarian change, which were almost certainly the result of shifting levels of demand for agricultural produce. At the same time, population growth, urbanization and European expansion prompted large-scale increases in the intensity and geographical extent of trade. The period 1500-1650 was one of very significant population increases across most of Europe. Although growth rates varied they were almost universally combined with increasing urbanization. The basis for European trade was local and regional exchange in thousands of small towns, in which agricultural and manufactured goods were marketed. Farmers across Europe were encouraged to boost output dramatically and they did so principally by using additional factors of production.
