There is something of a paradox when it comes to invention, particularly before the 18th century in what might be termed The Malthusian Era. We had many prominent and apparently massively influential inventions like writing, bronze, the wheel, agriculture and the gun, yet historians find little evidence of these inventions on incomes in the areas where they were invented. What might explain this? Do we simply not have good enough data to notice an effect? Is every bit of growth being swallowed up by a larger population, as in the standard Malthus explanation?
Jeremiah Dittmar considers the case of the Gutenberg press. Although printed works represented a very small segment of the 15th and 16th economy, and therefore the direct economic effects of the press are surely too small to be noticed, the indirect effects are often thought to be large. Merchants’ tables and mathematical techniques disseminated widely, literacy increased as Bibles spread in the protestant world, and atlases such as those of Blaeu were made available. Dittmar reexamines the case for economic effects of the printing press by looking at growth in city population – a good proxy for economic growth in the 1500s – in cities that had the press versus those that did not. He finds cities that got the press grew quite a bit faster than those did not. The city population data is nice in that it uses urban agglomeration data, rather than administrative boundary data; would that all urban economics handled this point properly!
There is obvious endogeneity, of course. Those cities that are booming would import a press first. To handle this issue, Dittmar runs an IV regression using distance from Mainz, Germany as an instrument. The press was invented in Mainz, and the techniques needed to build it were a secret known only to a guild in that city. For this reason, the press disseminates more or less in concentric circles from Mainz over time, but nonetheless there is some variability. The effect of press adoption before 1500 on city population growth from 1500-1600 is positive and significant. If an alternative instrument is used – say, distance from Amsterdam or Wittenberg – the effect of the press is no longer seen. Also, the cities that adopted the press, in the IV regression, grew no faster than cities that did not in the pre-1450 century.
That’s not a bad little piece of economic history. Actually, Dittmar appears to have a handful of other interesting looking urban history working papers on his website. One suggests that Zipf’s Law did not hold until the era of modern economic growth began. A second uses divergence from power law distribution of cities to identify heavily-distorted economies in the modern world, which is both a clever idea and one I wish I’d thought of first!
http://www.jeremiahdittmar.com/files/Printing-QJE-Final.pdf (Final WP – forthcoming in QJE)