Capital Substitution in an Industrial Revolution
AbstractA unified growth model is presented in which productivity growth is driven by learning-by-doing. We show that the growth rate of productivity is an increasing function of the share of capital. It is assumed that the industrial sector has a higher capital share than the agricultural sector and that the ability to substitute one output for the other slowly rises over time. Two distinct regimes of constant growth emerge, connected by a rapid transition in which the growth rates of population and income increase by an order of magnitude, indicative of simultaneous agricultural and industrial revolutions.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 40530.
Date of creation: 30 Jun 2012
Date of revision:
Growth; Industrial Revolution; Capital; Substitution;
Find related papers by JEL classification:
- N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
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