Once more on the Gerschenkron effect — a reply to Larsen and Nilsson

Abstract

One general conclusion from my analysis of prices and volume in Sweden's commodity production during the last decade of the nineteenth and the first two thirds of the twentieth century, was that expansive commodities, branches or sectors were becoming less expensive, that is, they were characterized by falling relative prices.¹ Even if this had been a dominant, long-run phenomenon, in certain periods it was quite pronounced. These variations can be traced to the entrepreneurial activity, the introduction and diffusion of innovations and the like, which markedly have reinforced the correlation between falling relative prices and volume growth.