IDEAS home Printed from https://ideas.repec.org/p/ags/aesc14/169733.html
   My bibliography  Save this paper

Was Ricardo Right?

Author

Listed:
  • Maddison, David
  • Rehdanz, Katrin

Abstract

Records of rental agreements for agricultural land in England between 1690 and 1914 are used to develop an annual rental price index for agricultural land. This index displays a long run cointegrating relationship with indices for the price of agricultural output and agricultural wage rates. A vector error correction model illustrates the powerful long run causal influence of the price of agricultural output and wage rates on rents. By contrast, there is no evidence that rents cause wage rates or the price of agricultural output. Such results suggest that Ricardo was right when he posited that rent was a residual driven by increases in the price of agricultural output rather than the other way around. Matters are different however when the price of individual agricultural commodities is used rather than the price of agricultural output. In this situation there emerges a bidirectional causal relationship of the type envisaged by Jevons. Lastly our framework can also be used to measure the rate of technical progress in agriculture. While we cannot find a statistically significant level of technical progress before the industrial revolution, after 1785 the rate of technical progress is a brisk 1.8 percent per annum.

Suggested Citation

  • Maddison, David & Rehdanz, Katrin, 2014. "Was Ricardo Right?," 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France 169733, Agricultural Economics Society.
  • Handle: RePEc:ags:aesc14:169733
    DOI: 10.22004/ag.econ.169733
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/169733/files/David%20_Maddison_Ricardo3.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.169733?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ahmed Alyousha & Christopher Tsoukis, 1998. "Ricardian causal ordering and the relation between house and land prices: evidence from England," Applied Economics Letters, Taylor & Francis Journals, vol. 5(5), pages 325-328.
    2. Elias Oikarinen, 2009. "Dynamic linkages between housing and lot prices: Empirical evidence from Helsinki," Discussion Papers 53, Aboa Centre for Economics.
    3. Paul A. Samuelson, 1959. "A Modern Treatment of the Ricardian Economy: I. The Pricing of Goods and of Labor and Land Services," The Quarterly Journal of Economics, Oxford University Press, vol. 73(1), pages 1-35.
    4. Clark, Gregory, 1998. "Renting The Revolution," The Journal of Economic History, Cambridge University Press, vol. 58(1), pages 206-210, March.
    5. Robert C. Allen, 1999. "Tracking the agricultural revolution in England," Economic History Review, Economic History Society, vol. 52(2), pages 209-235, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert Allen & Robert C. Allen, 2007. "Pessimism Preserved: Real Wages in the British Industrial Revolution," Economics Series Working Papers 314, University of Oxford, Department of Economics.
    2. Jaume Ventura & Hans-Joachim Voth, 2015. "Debt into growth: How sovereign debt accelerated the first Industrial Revolution," Economics Working Papers 1483, Department of Economics and Business, Universitat Pompeu Fabra.
    3. Hanley, Nick & Tinch, Dugald & Angelopoulos, Konstantinos & Davies, Althea & Barbier, Edward B. & Watson, Fiona, 2009. "What drives long-run biodiversity change? New insights from combining economics, palaeoecology and environmental history," Journal of Environmental Economics and Management, Elsevier, vol. 57(1), pages 5-20, January.
    4. Daniel Barbezat, 2011. "The Economic History of European Growth," Chapters, in: Gail M. Hoyt & KimMarie McGoldrick (ed.), International Handbook on Teaching and Learning Economics, chapter 51, Edward Elgar Publishing.
    5. Carlos Álvarez-Nogal & Leandro Prados De La Escosura, 2013. "The rise and fall of Spain (1270–1850)," Economic History Review, Economic History Society, vol. 66(1), pages 1-37, February.
    6. Antras, Pol & Voth, Hans-Joachim, 2003. "Factor prices and productivity growth during the British industrial revolution," Explorations in Economic History, Elsevier, vol. 40(1), pages 52-77, January.
    7. Jérôme Lallement & Amanar Akhabbar, 2011. "Appliquer la théorie économique de l'équilibre général : de Walras à Leontief," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00609684, HAL.
    8. B. Zorina Khan, 2017. "Prestige and Profit: The Royal Society of Arts and Incentives for Innovation, 1750-1850," NBER Working Papers 23042, National Bureau of Economic Research, Inc.
    9. Mancall, Peter C. & Rosenbloom, Joshua L. & Weiss, Thomas, 2002. "Agricultural labor productivity in the Lower South, 1720-1800," Explorations in Economic History, Elsevier, vol. 39(4), pages 390-424, October.
    10. Barrie Needham, 1981. "A Neo-Classical Supply-Based Approach to Land Prices," Urban Studies, Urban Studies Journal Limited, vol. 18(1), pages 91-104, February.
    11. Finley, Theresa, 2021. "Free riding in the monastery: Club goods, the cistercian order and agricultural investment in Ancien Regime France," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 318-336.
    12. Eric B. Schneider, 2011. "Evaluating the Effectiveness of Yield-Raising Strategies in Medieval England: An Econometric Approach," Oxford Economic and Social History Working Papers _090, University of Oxford, Department of Economics.
    13. Gary, Robert F. & Fink, Matthias & Belousova, Olga & Marinakis, Yorgos & Tierney, Robert & Walsh, Steven T., 2020. "An introduction to the field of abundant economic thought," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    14. Carlos álvarez-Nogal & Leandro Prados de la Escosura & Carlos Santiago-Caballero, 2015. "Agriculture in Europe's Little Divergence: The Case of Spain," Working Papers 0080, European Historical Economics Society (EHES).
    15. Giovanni Federico & Paolo Malanima, 2004. "Progress, decline, growth: product and productivity in Italian agriculture, 1000–2000," Economic History Review, Economic History Society, vol. 57(3), pages 437-464, August.
    16. Lukasz SATOLA & Tomasz WOJEWODZIC & Wojciech SROKA, 2018. "Barriers to exit encountered by small farms in light of the theory of new institutional economics," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 64(6), pages 277-290.
    17. Allen, Franklin & Bartiloro, Laura & Gu, Xian & Kowalewski, Oskar, 2018. "Does economic structure determine financial structure?," Journal of International Economics, Elsevier, vol. 114(C), pages 389-409.
    18. Wei-Bin Zhang, 2013. "A Synthesis Of The Uzawa-Lucas Model With The Walrasian-General-Equilibrium And Neoclassical-Growth Theories," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 58(199), pages 7-38, October -.
    19. Richard Pomfret & Kym Anderson, 2014. "Globalisation and Agricultural Trade," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 54(3), pages 285-306, November.
    20. Ormazabal Sánchez, Kepa Mirena, 2011. "A new look at Marx's refutation of Ricardo's refutation of the labor theory of value," IKERLANAK 6258, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.

    More about this item

    Keywords

    Community/Rural/Urban Development; Consumer/Household Economics; International Development; Land Economics/Use;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aesc14:169733. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aesukea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.