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Population growth and manufacturing real wages in 18th century England: a spatial perspective

  • BEHRENS, Kristian

We develop a two-region population growth model of economic geography and show that a process of urbanization has a substantial impact on the evolution of manufacturing real wages. Whereas real wages decline as the population increases when the spatial structure of the economy is fixed, they actually rise in the long-run when factors are mobile. Agglomeration may hence be seen as a rational response to declining real wages and provides a new explanation of why manufacturing real wages did not decline prior to the Industrial Revolution in England, despite a historically unprecedented population growth.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2004025.

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Date of creation: 00 May 2004
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Handle: RePEc:cor:louvco:2004025
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  1. Baldwin, Richard & Martin, Philippe & Ottaviano, Gianmarco, 1998. "Global Income Divergence, Trade and Industrialization: The Geography of Growth Take-Offs," CEPR Discussion Papers 1803, C.E.P.R. Discussion Papers.
  2. Philippe Martin & Gianmarco Ottaviano, 1996. "Growth and Agglomeration," Working Papers 1996-14, CEPII research center.
    • Martin, Philippe & Ottaviano, Gianmarco I P, 2001. "Growth and Agglomeration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 947-68, November.
  3. Baldwin, Richard E. & Martin, Philippe, 2004. "Agglomeration and regional growth," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 60, pages 2671-2711 Elsevier.
  4. Walz, Uwe, 1996. "Transport costs, intermediate goods, and localized growth," Regional Science and Urban Economics, Elsevier, vol. 26(6), pages 671-695, December.
  5. Diego Puga & Tony Venables, 1997. "Agglomeration and economic development: import substitution versus trade liberalisation," LSE Research Online Documents on Economics 2088, London School of Economics and Political Science, LSE Library.
  6. TABUCHI, Takatoshi & THISSE, Jacques-François, 2003. "Regional specialization, urban hierarchy, and commuting costs," CORE Discussion Papers 2003060, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Kelly, Morgan, 1997. "The Dynamics of Smithian Growth," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 939-64, August.
  8. Galor, Oded & Weil, David, 1998. "Population, Technology and Growth: From the Malthusian Regime to the Demographic Transition," CEPR Discussion Papers 1981, C.E.P.R. Discussion Papers.
  9. Jonathan Haskel & Holger C. Wolf, 2001. "The Law of One Price - A Case Study," CESifo Working Paper Series 428, CESifo Group Munich.
  10. Gianmarco Ottaviano & Takatoshi Tabuchi & Jacques-Francois Tissse, 1999. "Agglomeration and Trade Revisited," CIRJE F-Series CIRJE-F-65, CIRJE, Faculty of Economics, University of Tokyo.
  11. Sala-i-Martin, Xavier X., 1996. "Regional cohesion: Evidence and theories of regional growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1325-1352, June.
  12. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
  13. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  14. Behrens, Kristian, 2004. "Agglomeration without trade: how non-traded goods shape the space-economy," Journal of Urban Economics, Elsevier, vol. 55(1), pages 68-92, January.
  15. David N. Weil & Oded Galor, 1999. "From Malthusian Stagnation to Modern Growth," American Economic Review, American Economic Association, vol. 89(2), pages 150-154, May.
  16. Puga, Diego & Venables, Anthony J, 1999. "Agglomeration and Economic Development: Import Substitution vs. Trade Liberalisation," Economic Journal, Royal Economic Society, vol. 109(455), pages 292-311, April.
  17. Baldwin, Richard E., 1999. "Agglomeration and endogenous capital," European Economic Review, Elsevier, vol. 43(2), pages 253-280, February.
  18. Quah, Danny T., 1996. "Regional convergence clusters across Europe," European Economic Review, Elsevier, vol. 40(3-5), pages 951-958, April.
  19. Martin, Philippe & Ottaviano, Gianmarco, 1996. "Growing Locations: Industry Location in a Model of Endogenous Growth," CEPR Discussion Papers 1523, C.E.P.R. Discussion Papers.
  20. Quah, Danny, 1996. "Regional Convergence Clusters Across Europe," CEPR Discussion Papers 1286, C.E.P.R. Discussion Papers.
  21. Fujita, Masahisa & Krugman, Paul & Mori, Tomoya, 1999. "On the evolution of hierarchical urban systems1," European Economic Review, Elsevier, vol. 43(2), pages 209-251, February.
  22. Ronald Lee, 1980. "A Historical Perspective on Economic Aspects of the Population Explosion: The Case of Preindustrial England," NBER Chapters, in: Population and Economic Change in Developing Countries, pages 517-566 National Bureau of Economic Research, Inc.
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