Among the major European countries that are important in the industrial revolution, Sweden stands out as a particularly clear example of a country with a special role to play. Long before the industrial revolution, Sweden had a distinguished record as a European political power — even possessing a Baltic ‘empire’ in the 17th and early 18th centuries — and a solid economic base, based on the agricultural and extractive sectors of the economy, but it appears to have missed much of the first industrial revolution (to 1850), at least in the traditional product lines. Indeed, it has been claimed (Sandberg, 1979, p. 225) that Sweden was actually ‘impoverished but sophisticated’ in 1850, after as many as 150 years of a relative economic decline (meaning that it had a growth rate that was significantly lower than the European average). By ‘sophisticated’ Sandberg means that Sweden ‘had a strikingly large stock of human and institutional capital’ compared with the rest of Europe (p. 225).
KeywordsFinancial Development Money Supply Industrial Revolution Real Income Income Elasticity
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