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Population growth and manufacturing real wages in 18th century England: a spatial perspective

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  • BEHRENS, Kristian

Abstract

We develop a two-region population growth model of economic geography and show that a process of urbanization has a substantial impact on the evolution of manufacturing real wages. Whereas real wages decline as the population increases when the spatial structure of the economy is fixed, they actually rise in the long-run when factors are mobile. Agglomeration may hence be seen as a rational response to declining real wages and provides a new explanation of why manufacturing real wages did not decline prior to the Industrial Revolution in England, despite a historically unprecedented population growth.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2004025.

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Date of creation: 00 May 2004
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Handle: RePEc:cor:louvco:2004025

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Related research

Keywords: population growth; real wages; economic geography; agglomeration; Industrial Revolution;

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References

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  1. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
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  3. Puga, Diego & Venables, Anthony J., 1998. "Agglomeration and Economic Development: Import Substitution Vs. Trade Liberalization," CEPR Discussion Papers 1782, C.E.P.R. Discussion Papers.
  4. Ottaviano, Gianmarco Ireo Paolo & Thisse, Jacques-François, 1998. "Agglomeration and Trade Revisited," CEPR Discussion Papers 1903, C.E.P.R. Discussion Papers.
  5. Baldwin, Richard E & Martin, Philippe & Ottaviano, Gianmarco I P, 2001. " Global Income Divergence, Trade, and Industrialization: The Geography of Growth Take-Offs," Journal of Economic Growth, Springer, vol. 6(1), pages 5-37, March.
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  7. Galor, Oded & Weil, David, 1998. "Population, Technology and Growth: From the Malthusian Regime to the Demographic Transition," CEPR Discussion Papers 1981, C.E.P.R. Discussion Papers.
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  14. Behrens, Kristian, 2004. "Agglomeration without trade: how non-traded goods shape the space-economy," Journal of Urban Economics, Elsevier, vol. 55(1), pages 68-92, January.
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    • Martin, Philippe & Ottaviano, Gianmarco I P, 2001. "Growth and Agglomeration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 947-68, November.
  16. Takatoshi Tabuchi & Jacques-François Thisse, 2006. "Regional Specialization, Urban Hierarchy, And Commuting Costs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(4), pages 1295-1317, November.
  17. Diego Puga & Tony Venables, 1997. "Agglomeration and economic development: import substitution versus trade liberalisation," LSE Research Online Documents on Economics 2088, London School of Economics and Political Science, LSE Library.
  18. Ronald Lee, 1980. "A Historical Perspective on Economic Aspects of the Population Explosion: The Case of Preindustrial England," NBER Chapters, in: Population and Economic Change in Developing Countries, pages 517-566 National Bureau of Economic Research, Inc.
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  21. Baldwin, Richard E. & Martin, Philippe, 2004. "Agglomeration and regional growth," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 60, pages 2671-2711 Elsevier.
  22. Quah, Danny T., 1996. "Regional convergence clusters across Europe," European Economic Review, Elsevier, vol. 40(3-5), pages 951-958, April.
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