John Devereux

Measuring British Decline: Direct Versus Long-Span Income Measures

We provide 16 purchasing-power-parity-adjusted estimates of U.K. and U.S. income per capita and output per worker between 1872 and 1990 based on new estimates of their price levels. Our income benchmarks depart from current estimates in four crucial respects. The United States, not the United Kingdom, led in income per capita in the 1870s. The United Kingdom kept pace with the United States through the late Victorian era. Most of the United Kingdoms relative decline occurred between 1905 and 1950. Finally, the post-1950 performance of the U.K. economy was stronger than is now estimated.We thank Michael Edelstein for getting us interested in the topic. We are also indebted to two referees for comments on the first draft. Susan Carter, Greg Clark, C. Knick Harley, Alan Heston, Peter Lindert, Robert Lipsey, Luis Locay, Bryan Roberts, Christina Romer, Richard Sylla, Jeffrey Williamson, and the participants in a seminar at the University of California, Riverside gave helpful suggestions. Finally we are especially grateful to Deirdre McCloskey for advice at an early stage.

The Road Not Taken: Pre-Revolutionary Cuban Living Standards in Comparative Perspective

We examine Cuban GDP over time and across space. We find that Cuba was once a prosperous middle-income economy. On the eve of the revolution, incomes were 50 to 60 percent of European levels. They were among the highest in Latin America at about 30 percent of the United States. In relative terms, Cuba was richer earlier on. Income per capita during the 1920s was in striking distance of Western Europe and the Southern United States. After the revolution, Cuba slipped down the world income distribution. Current levels of income per capita appear below their pre-revolutionary peaks.

Have Absolute Price Levels Converged for Developed Economies? The Evidence since 1870

We compare price level and income convergence since 1870 for eleven developed economies using implicit price deflators derived from the GDP data of Maddison (1995, 2001, 2003). We find that sigma and beta convergence for prices occurs later and to a lesser extent than income. Price levels converge after 1950 while income convergence begins in the 1880s. We find no evidence for stochastic price convergence or for club price convergence.

Relative British and American Income Levels during the First Industrial Revolution

We provide new measures of relative UK and US GDP per capita and output per worker for the crucial years between 1830 and 1870. Our estimates are current price comparisons that compare expenditure on GDP for five benchmark years using new price data. They show that the US leads in income per capita and output per worker compared to Great Britain and the United Kingdom. We check our estimates against sectoral productivity data and real wages.

Explaining price level differences: New evidence on the Balassa–Samuelson effect

We re-examine one of the most venerable results in economics, the Balassa–Samuelson effect of Balassa (1964) and Samuelson (1964). The central claim of Balassa–Samuelson is that nontradables explain price level differences across rich and poor economies. We test Balassa-Samuelson by quantifying the contribution of nontradables to cross-sectional price level variation for countries in the International Comparison Program (ICP). Our results suggest that nontradables explain up to two thirds of price level variation.

The Iron Rice Bowl: Chinese Living Standards 1952-1978

We examine the evolution of Chinese living standards, as measured by household consumption, for the first three decades of communist rule. We find only a slow improvement. Certainly, the Chinese were better clothed; more urbanized and had more household goods after 1949. On the other hand, consumption of food and housing stagnated. We find that overall consumption per capita did not surpass the 1930’s until the late 1960’s. We also compare the Chinese record under Mao Zedong to other economies. As it turns out, Chinese living standards improved at a slower rate than elsewhere.