Homework 1: Econ 111a American Economic History Due Wednesday October 26, 2016 Question 1: The American colonies regularly faced a trade deficit in...

Homework 1:

Econ 111a American Economic History

Due Wednesday October 26, 2016

Question 1: The American colonies regularly faced a trade deficit in the eighteenth century, but it faced a small balance of payments deficit. Use the following table on the Balance of Payments for the 13 Colonies from 1768-1772 to discuss why this was the case.

Question 2: Greater Productivity is one of the key reasons that income per capita grows over time. Some argue that technological change is the main cause of productivity growth. Discuss whether the productivity growth of shipping in the American colonies supports this view or whether it is a counter-example.

Question 3: Based on the two charts below, does life expectancy appear to be a reasonable proxy for per capita income? Explain. Note: France and United Kingdom are part of Western Europe. In 1700, India had a higher per capita income than the USA. By 2003, incomes in the USA were ten time higher than those in India. What two factors would Douglas North argue explain the difference in Indian and USA development? Name them and briefly explain their importance.