Climate Change and the Macroeconomic Structure in Pre-Industrial Europe: New Evidence from Wavelet Analysis

Abstract

The relationship between climate change and the macroeconomy in pre-industrial Europe has attracted considerable attention in recent years. This study follows the combined paradigms of evolutionary economics and ecological economics, in which wavelet analysis (spectrum analysis and coherence analysis) is applied as the first attempt to examine the relationship between climate change and the macroeconomic structure in pre-industrial Europe in the frequency domain. Aside from confirming previous results, this study aims to further substantiate the association between climate change and macroeconomy by presenting new evidence obtained from the wavelet analysis. Our spectrum analysis shows a consistent and continuous frequency band of 60–80 years in the temperature, grain yield ratio, grain price, consumer price index, and real wage throughout the study period. Besides, coherence analysis shows that the macroeconomic structure is shaped more by climate change than population change. In addition, temperature is proven as a key climatic factor that influences the macroeconomic structure. The analysis reveals a unique frequency band of about 20 years (15–35 years) in the temperature in AD1600-1700, which could have contributed to the widespread economic crisis in pre-industrial Europe. Our findings may have indications in re-examining the Malthusian theory.

Epidemics in Ming and Qing China: Impacts of changes of climate and economic well-being

“…Following analyses of pre-industrial Europe (Pei et al, 2015a(Pei et al, , 2014(Pei et al, , 2013(Pei et al, , 2015bD. D. Zhang et al, 2011), we adopt price as an indicator of economic well-being in China.…”

Crop Management as an Agricultural Adaptation to Climate Change in Early Modern Era: A Comparative Study of Eastern and Western Europe

“…In addition, Europe has detailed records on climate history [21]. Data of crop yield ratios are also available, which have been repeatedly employed in previous studies [7][8][9][10].…”

Examining the Direct and Indirect Effects of Climatic Variables on Plague Dynamics

“…Academically, much more is known about how climate affects economic systems, or how economic attributes led to epidemics-partly because climate-epidemics study is a comparatively new subject for researchers. A series of work by Pei et al [16,[39][40][41] is most prominent in justifying the casual pathway from cooling to the shrinkage of crop productivity, and thus, shock in the agricultural market and the stability of agrarian society. In fact, before the time of the Industrial Revolution, when most people were farmers, it is understandable that an agrarian society relies heavily on "good climate".…”

“…Dunca and Scott [15] also emphasized the crucial role of nutrition and immunity in the spread of infectious diseases in pre-industrial European societies. The study by Pei, et al [16] outlined the dependence on climate of the macroeconomic structure in Europe, and further indicated that such dependence would be imperative in pulling human societies into the Malthusian trap, which includes epidemics outbreak, in pre-industrial Europe. Specifically, we also provided a hypothetical explanation of the climate-plague relationship and highlighted the possibility that climate change affected plague dynamics via economic systems.…”