We had a great informal seminar by Noam Yuchtman of UC Berkeley yesterday, talking about a paper he is completing on the effects of medieval universities in acting as a “supply shock” to economic growth by providing more of the legal infrastructure that lowers transactions costs.  it turns out that the Papal Schism of 1378 of Avignon/Rome meant that many German students and teachers returned to Germany and set up three universities starting in 1386.  Yuchtman argues that their establishment was a natural experiment, and that cities closer to the universities subsequently received more “royal” charters to hold markets (he takes as index of economic activity) in subsequent 20 years (i.e. a break in trend towards more rapid growth).

I wasn’t sure how he distinguished the supply side from the demand side (if they had been large amusement parks with no production of knowledge, might the agglomeration have been enough to produce the effect?) but I had to leave early due to office hours, and I haven’t had time to look at the paper.  But he was a great presenter with infectious enthusiasm, and made great links to general questions of historical underpinnings of economic growth of Europe.  It does make me wonder though about how the research agenda gets driven, in the sense that you never see this current crop of economic historians looking for natural experiments that explain the decline of Europe from 400-1000.  It’s taken for granted that growth was complex and decline simple (Goths!).  But maybe decline happened in part because of the rise of the Catholic Church, the same way growth happened in part because of the rise of universities.  Gotta go read my Goody.