Analysis of the Great Divergence under a Unified Endogenous
Growth Model

Kunting Chen

Recently published research that attempts to explain the Great Divergence
mainly focuses on geography, technological progress, and international trade. However, we do not believe these are its only or even the most basic causes. Instead, we submit that the 'social culture' of a country or a region is the most fundamental reason and incorporates these other causes, thereby providing a reasonable unified explanation. This paper is mainly based on a very simple two-sector benchmark model that simulates the economic characteristics of England and the Yangzi Delta of China during 1400-1850. It explores aspects of this transition period, and obtains many meaningful results that are consistent with Unified Growth theory, which is usually based on very complex models.

Key Words: The industrial revolution; The great divergence; Difference of culture and systems.
JEL Classification Numbers: O10, O40.