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From Malthus to Ohlin: Trade, Industrialisation and Distribution Since 1500

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  • Kevin O’rourke
  • Jeffrey Williamson

Abstract

A recent endogenous growth literature has focused on the transition from a Malthusian world where real wages were linked to factor endowments, to one where modern growth has broken that link. In this paper we present evidence on another, related phenomenon: the dramatic reversal in distributional trends—from a steep secular fall to a steep secular rise in wage-land rent ratios—which occurred some time early in the 19th century. What explains this reversal? While it may seem logical to locate the causes in the Industrial Revolutionary forces emphasized by endogenous growth theorists, we provide evidence that something else mattered just as much: the opening up of the European economy to international trade. Copyright Springer Science+Business Media, Inc. 2005

Suggested Citation

  • Kevin O’rourke & Jeffrey Williamson, 2005. "From Malthus to Ohlin: Trade, Industrialisation and Distribution Since 1500," Journal of Economic Growth, Springer, vol. 10(1), pages 5-34, January.
    • Handle: RePEc:kap:jecgro:v:10:y:2005:i:1:p:5-34
    DOI: 10.1007/s10887-005-1111-5
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    References listed on IDEAS

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    1. O'Rourke, Kevin & Williamson, Jeffrey G., 1994. "Late Nineteenth-Century Anglo-American Factor-Price Convergence: Were Heckscher and Ohlin Right?," The Journal of Economic History, Cambridge University Press, vol. 54(4), pages 892-916, December.
    2. Jones Charles I., 2001. "Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run," The B.E. Journal of Macroeconomics, De Gruyter, vol. 1(2), pages 1-45, August.
    3. Jacks, David, 2000. "Market integration in the North and Baltic Seas, 1500-1800," LSE Research Online Documents on Economics 22383, London School of Economics and Political Science, LSE Library.
    4. Galor, Oded & Mountford, Andrew, 2002. "Why are a Third of People Indian and Chinese? Trade, Industrialization and Demographic Transition," CEPR Discussion Papers 3136, C.E.P.R. Discussion Papers.
    5. Daron Acemoglu & Simon Johnson & James Robinson, 2005. "The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth," American Economic Review, American Economic Association, vol. 95(3), pages 546-579, June.
    6. Jacks, David, 2000. "Market integration in the North and Baltic Seas, 1500-1800," Economic History Working Papers 22383, London School of Economics and Political Science, Department of Economic History.
    7. R. Findlay, 1982. "Trade and Growth in the Industrial Revolution," Palgrave Macmillan Books, in: Charles P. Kindleberger & Guido Tella (ed.), Economics in the Long View, chapter 11, pages 178-188, Palgrave Macmillan.
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