Early Starts, Reversals and Catch-up in the Process of Economic Development

Early states like China and India have been experiencing more rapid economic growth in recent decades. We show that more rapid growth by early starters has been the norm in economic history, and that the "reversal of fortune" associated with the European overseas expansion was both exceptional and temporary. Not only was the post-1500 reversal in the process of being reversed after 1960, but also the advantage conferred by early development in the latter period was considerably greater than the growth rate disadvantage that it conferred during 1500-1960, implying a rapid undoing of the first reversal. Copyright The editors of the "Scandinavian Journal of Economics" 2007 .