Made in America? The New World, the Old, and the Industrial Revolution
AbstractFor two decades, the consensus explanation of the British Industrial Revolution has placed technological change and the supply side at center stage, affording little or no role for demand or overseas trade. Recently, alternative explanations have placed an emphasis on the importance of trade with New World colonies, and the expanded supply of raw cotton it provided. We test both hypotheses using calibrated general equilibrium models of the British economy and the rest of the world for 1760 and 1850. Neither claim is supported. Trade was vital for the progress of the industrial revolution; but it was trade with the rest of the world, not the American colonies, that allowed Britain to export its rapidly expanding textile output and achieve growth through extreme specialization in response to shifting comparative advantage.
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Date of creation: Jun 2008
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Other versions of this item:
- Gregory Clark & Kevin H. O'Rourke & Alan M. Taylor, 2008. "Made in America? The New World, the Old, and the Industrial Revolution," American Economic Review, American Economic Association, vol. 98(2), pages 523-28, May.
- Gregory Clark, Kevin H. O'Rourke and Alan M. Taylor, 2008. "Made in America? The New World, the Old, and the Industrial Revolution," The Institute for International Integration Studies Discussion Paper Series iiisdp251, IIIS.
- Clark, Gregory & O'Rourke, Kevin H & Taylor, Alan M, 2008. "Made in America? The New World, the Old, and the Industrial Revolution," CEPR Discussion Papers 6856, C.E.P.R. Discussion Papers.
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
- N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-06-13 (All new papers)
- NEP-HIS-2008-06-13 (Business, Economic & Financial History)
- NEP-INT-2008-06-13 (International Trade)
- NEP-OPM-2008-06-13 (Open Economy Macroeconomic)
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