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A General Purpose Technology at Work: The Corliss Steam Engine in the Late 19th Century

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  • Rosenberg, Nathan
  • Trajtenberg, Manuel

Abstract

The steam engine is widely regarded as the icon of the Industrial Revolution and a prime example of a ‘General Purpose Technology,’ and yet its contribution to growth is far from transparent. This Paper examines the role that a particular innovative design in steam power, the Corliss engine, played in the intertwined processes of industrialization and urbanization that characterized the growth of the US economy in the late 19th century. Waterpower offered abundant and cheap energy, but restricted the location of manufacturing just to areas with propitious topography and climate. Steam engines offered the possibility of relaxing this severe constraint, allowing industry to locate where key considerations such as access to markets for inputs and outputs directed. The enhanced performance of the Corliss engine as well as its fuel efficiency helped tip the balance in favour of steam in the fierce contest with waterpower. With the aid of detailed data on the location of Corliss engines and waterwheels and a two-stage estimation strategy, we show that the deployment of Corliss engines indeed served as a catalyst for the massive relocation of industry away from rural areas and into large urban centers, thus fuelling agglomeration economies, and attracting further population growth. This illustrates what we believe is an important aspect of the dynamics of GPTs, whether it is electricity in the early 20th century or Information Technologies in the present era: the fact that GPTs induce the widespread and more efficient relocation of economic activity, which in turn fosters long-term growth.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3008.

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Date of creation: Oct 2001
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Handle: RePEc:cpr:ceprdp:3008

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Keywords: General Purpose technologies; growth; steam engine; urbanization; waterpower;

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References

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  1. Nathan Rosenberg, 1996. "Uncertainty and technological change," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 40(Jun), pages 91-125.
  2. Atack, Jeremy, 1979. "Fact in fiction? The relative costs of steam and water power: a simulation approach," Explorations in Economic History, Elsevier, vol. 16(4), pages 409-437, October.
  3. Bresnahan, Timothy F. & Trajtenberg, M., 1995. "General purpose technologies 'Engines of growth'?," Journal of Econometrics, Elsevier, vol. 65(1), pages 83-108, January.
  4. Paul Krugman, 1992. "Geography and Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262610868, December.
  5. Kenneth L. Sokoloff, 1988. "Inventive Activity in Early Industrial America: Evidence From Patent Records, 1790-1846," UCLA Economics Working Papers 499, UCLA Department of Economics.
  6. Temin, Peter, 1966. "Steam and Waterpower in the Early Nineteenth Century," The Journal of Economic History, Cambridge University Press, vol. 26(02), pages 187-205, June.
  7. Elhanan Helpman & Manuel Trajtenberg, 1994. "A Time to Sow and a Time to Reap: Growth Based on General Purpose Technologies," NBER Working Papers 4854, National Bureau of Economic Research, Inc.
  8. Atack, Jeremy & Bateman, Fred & Weiss, Thomas, 1980. "The Regional Diffusion and Adoption of the Steam Engine in American Manufacturing," The Journal of Economic History, Cambridge University Press, vol. 40(02), pages 281-308, June.
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Cited by:
  1. Franz-Josef Bade & Claus-Friedrich Laaser & Rüdiger Soltwedel, 2004. "Urban Specialization in the Internet Age � Empirical Findings for Germany," Kiel Working Papers 1215, Kiel Institute for the World Economy.
  2. Thomas Hempell, 2005. "Does experience matter? innovations and the productivity of information and communication technologies in German services," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(4), pages 277-303.
  3. Josef Falkinger & Volker Grossmann, 2004. "Institutions and Development: The Interaction between Trade Regime and Political System," CESifo Working Paper Series 1279, CESifo Group Munich.
  4. Henrekson, Magnus & Edquist, Harald, 2006. "Technological Breakthroughs and Productivity Growth," Working Paper Series 665, Research Institute of Industrial Economics.
  5. Nicholas Crafts, 2003. "Steam as a general purpose technology: a growth accounting perspective," Economic History Working Papers 22354, London School of Economics and Political Science, Department of Economic History.
  6. Carolina Castaldi & Alessandro Nuvolari, 2004. "Technological Revolutions and Economic Growth: The “Age of Steam” Reconsidered," LEM Papers Series 2004/11, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  7. repec:ebl:ecbull:v:15:y:2006:i:7:p:1-8 is not listed on IDEAS
  8. Josef Falkinger & Volker Grossmann, 2005. "Distribution of Natural Resources, Entrepreneurship, and Economic Development: Growth Dynamics with two Elites," CESifo Working Paper Series 1562, CESifo Group Munich.
  9. Sandro Sapio & Grid Thoma, 2006. "The Growth of Industrial Sectors: Theoretical Insights and Empirical Evidence from U.S. Manufacturing," LEM Papers Series 2006/09, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  10. Mauro Napoletano & Andrea Roventini & Sandro Sapio, 2004. "Yeast vs. Mushrooms: A Note on Harberger's "A Vision of the Growth Process"," LEM Papers Series 2004/03, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  11. Castaldi, C. & Nuvolari, A., 2003. "Technological Revolutions and Economic Growth:The �Age of Steam� Reconsidered," Eindhoven Center for Innovation Studies (ECIS) working paper series 03.25, Eindhoven Center for Innovation Studies (ECIS).

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