Before the 8088
The 8086 by Intel was the first 16-bit microprocessor. It had twice the data throughput of older 8-bit systems. The 24 registers inside the chip were expanded to 16 bits as well. The 8086 had 20 address lines, and could address 1,048,576 bytes (or 1 Meg) of memory. The 8086 was available in 5, 6, 8 and 10MHz models, with a few 12MHz models made for the military.
The 8088 microprocessor is basically the same as the 8086 with the exception that the 8088 multiplexes, or timeshares, 8 of the 16 address lines between the address bus and the data bus. The 8088 only has 8 data lines coming out of it.
The 8088 was chosen for the first PC because it was cheaper, both in chip manufacture and in motherboard design. It was easier to route 8 data lines vice 16. The chip takes two clock cycles to input data on the bus, one for the lower 8-bits, one for the upper 8-bits. The chip then processed the 16-bits just like the 8086.
Both the 8086 and the 8088 were compatible with the 8087 math co-processor.