The Size of the Medieval Economy

This chapter assesses the size of the economy during the medieval period and relates it to the long-run development of the British economy. Trends in both total gross domestic product (GDP) and per capita GDP were dominated in the medieval period by the population collapse during the century after the arrival of the Black Death in 1348. Although this led to a sharp decline in total GDP, it also had strongly positive effects on average living standards, as output fell by less than population. These positive effects arose because survivors found themselves with more land and capital or, if they were landless, were able to benefit from higher real wages due to the shortage of labour. The application of this historical national accounting approach to the medieval economy makes it possible to link up with estimates of GDP per capita for later periods. After the return of population growth from the mid-fifteenth century, GDP per capita remained on a higher plateau, from which the next growth phase began in the second half of the seventeenth century, continuing into the Industrial Revolution of the eighteenth century. The path to the Industrial Revolution can thus be traced back to developments in the medieval period.