The Athenian economy in the age of Demosthenes: path dependence and change

In this paper, we formulate for the first time the Persian–Athenian conflict of the fifth century as a signaling game. A specific approach to path dependence and regime change is presented. Following the successful outcome for Athens, it was transformed into a seapower. This again resulted in the fourth century into an unparalleled change of the Athenian economy, which shows a number of characteristics that makes us call it the first “modern” economy. We analyze the sectorial structure of the Athenian economy, its trade pattern, contribution to employment/GDP, tax system, banking and services and the emergence of new organization forms like private banks, joint-stock companies and offshore services.