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Productivity Growth in the Industrial Revolution: A New Growth Accounting Perspective


The issue of why productivity growth during the British industrial revolution was slow despite the arrival of famous inventions is revisited using a growth accounting methodology based on an endogenous innovation model and the perspective of recent literature on general purpose technologies. The results show that steam had a relatively small and long-delayed impact on productivity growth when benchmarked against later technologies such as electricity or ICT. Even so, technological change including embodiment effects accounted entirely for the acceleration in labor productivity growth that allowed the economy to withstand rapid population growth without a decline in living standards.

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Article provided by Cambridge University Press in its journal The Journal of Economic History.

Volume (Year): 64 (2004)
Issue (Month): 02 (June)
Pages: 521-535

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Handle: RePEc:cup:jechis:v:64:y:2004:i:02:p:521-535_00
Contact details of provider: Postal: Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK
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  1. Crafts, N. F. R. & Mills, Terence C., 1997. "Endogenous Innovation, Trend Growth, and the British Industrial Revolution: Reply to Greasley and Oxley," The Journal of Economic History, Cambridge University Press, vol. 57(04), pages 950-956, December.
  2. Nicholas Crafts & Anthony J. Venables, 2002. "Globalization in History: A Geographical Perspective," CEP Discussion Papers dp0524, Centre for Economic Performance, LSE.
  3. Harberger, Arnold C, 1998. "A Vision of the Growth Process," American Economic Review, American Economic Association, vol. 88(1), pages 1-32, March.
  4. Nicholas Oulton, 2001. "ICT and productivity growth in the United Kingdom," Bank of England working papers 140, Bank of England.
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  7. David, P.A., 1989. "Computer And Dynamo: The Modern Productivity Paradox In A Not-Too Distant Mirror," The Warwick Economics Research Paper Series (TWERPS) 339, University of Warwick, Department of Economics.
  8. Antras, Pol & Voth, Hans-Joachim, 2003. "Factor Prices and Productivity Growth During the British Industrial Revolution," Scholarly Articles 3199066, Harvard University Department of Economics.
  9. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: U.S. Economic Growth in the Information Age," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
  10. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
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  12. Dirk Pilat & Frank C. Lee, 2001. "Productivity Growth in ICT-producing and ICT-using Industries: A Source of Growth Differentials in the OECD?," OECD Science, Technology and Industry Working Papers 2001/4, OECD Publishing.
  13. Devine, Warren D., 1983. "From Shafts to Wires: Historical Perspective on Electrification," The Journal of Economic History, Cambridge University Press, vol. 43(02), pages 347-372, June.
  14. Crafts, N. F. R., 1995. "Exogenous or Endogenous Growth? The Industrial Revolution Reconsidered," The Journal of Economic History, Cambridge University Press, vol. 55(04), pages 745-772, December.
  15. N. F. R. Crafts & C. K. Harley, 1992. "Output growth and the British industrial revolution: a restatement of the Crafts-Harley view," Economic History Review, Economic History Society, vol. 45(4), pages 703-730, November.
  16. Robert J. Barro & Paul Romer, 1993. "Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number barr93-1, December.
    • Robert J. Barro & Paul M. Romer, 1991. "Economic Growth," NBER Books, National Bureau of Economic Research, Inc, number barr91-1, December.
  17. Greasley, David & Oxley, Les, 1997. "Endogenous Growth or “Big Bang”: Two views of the First Industrial Revolution," The Journal of Economic History, Cambridge University Press, vol. 57(04), pages 935-949, December.
  18. Crafts, N. F. R., 1980. "National income estimates and the British standard of living debate: A reappraisal of 1801-1831," Explorations in Economic History, Elsevier, vol. 17(2), pages 176-188, April.
  19. Harley, C. Knick, 1982. "British Industrialization Before 1841: Evidence of Slower Growth During the Industrial Revolution," The Journal of Economic History, Cambridge University Press, vol. 42(02), pages 267-289, June.
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