Question

2) The bubonic plague struck Europe in the mid-fourteenth century. Over the next century it killed around one third of the population of Europe. Use a suitable diagram (e.g. Blanchard, p. 242, fig 11-2) to explain the impact of the plague on the European economy

Answer 1

Answer: The impact of the plague on the European economy

Three effects of the Bubonic plague on Europe included widespread chaos, a drastic drop in population, and social instability in the form of peasant revolts.

After the plague, there was a short period of abundance. Food seemed plentiful because there were many fewer mouths to feed. However, because so many people died across the region, there were far fewer people to plant and harvest crops. Agricultural production suffered.after the plague.

The drastic reduction in workforce enabled the surviving serfs and freemen to demand higher wages. Manor owners had to compete for their workers. This new atmosphere of competition in the peasant classes led to greater social mobility and also promoted capitalism

The lower classes gained some wealth, and the economic system of Europe began to change. Serfs were able to pay off debt and buy their freedom. Because of the labor shortage, some lords were forced to pay cash wages to keep their workers. Wealth flowed to the lower classes.

Farming had become a risky financial venture for the wealthy. Some feudal lords reversed their original plan. These lords kept, rather than promised, ownership of their land. The feudal lords rented their land to freeman for cash or a share of the crops. Renting provided an income.

Daigram Explaining what happend after the impact of the plague on the European economy

Productivity (as in Figure), is here replaced by per capita GDP on the vertical axis as a function of labour on the horizontal axis. Subsistence is represented by the horizontal line S. The level of subsistence is always the same (it can therefore be represented by a straight line), since certain essential needs must be provided for in order to survive. Subsequently, with population growth and per capita GDP diminishing from B to B1, the surplus, i.e. the part of income that is over the subsistence level, shrinks. The deductive consequence is that surplus beyond the vital needs is modest. People are forced to work for their subsistence.

Non-essential purchases diminish. Petty traders, craftsmen, middle groups shrink. Some wealthy landowners profit from this general poverty. Less than 1 percent of the population benefits, however, from the economic trend thus giving rise to the equality of the majority. Polarization of income will take place, but not inequality, which means that a large section of the population is far from the average income.

Any concentration index, such as the Gini or Theil indexes, will present lower values whenever economy moves from B to B1.The opposite will occur as soon as the occurrence of an epidemic rapidly displaces per capita GDP from B1 to B. In this case there is more space for inequality,since per capita GDP is far higher than subsistence. Non essential purchases increase and, with these, the middle groups. As long as economy moves from B1 toB, the equality of poverty is replaced by the inequality of wealth.

This is the conclusion of a deductive exercise, which may seem paradoxical.However, it is known, that functional and personal income distribution are not subjected to the same laws.