IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/5490.html
   My bibliography  Save this paper

Trade and the Great Divergence: The Family Connection

Author

Listed:
  • Galor, Oded
  • Mountford, Andrew

Abstract

This research argues that the rapid expansion of international trade in the second phase of the industrial revolution has played a major role in the timing of demographic transitions across countries and has thereby been a significant determinant of the distribution of world population and a prime cause of the 'Great Divergence' in income per capita across countries in the last two centuries. The analysis suggests that international trade had an asymmetrical effect on the evolution of industrial and non-industrial economies. While in the industrial nations the gains from trade were directed primarily towards investment in education and growth in output per capita, a significant portion of the gains from trade in non-industrial nations was channelled towards population growth.

Suggested Citation

  • Galor, Oded & Mountford, Andrew, 2006. "Trade and the Great Divergence: The Family Connection," CEPR Discussion Papers 5490, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5490
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP5490
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Oded Galor & Omer Moav, 2002. "Natural Selection and the Origin of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1133-1191.
    2. Findlay, Ronald & Kierzkowski, Henryk, 1983. "International Trade and Human Capital: A Simple General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 91(6), pages 957-978, December.
    3. Matthias Doepke, 2004. "Accounting for Fertility Decline During the Transition to Growth," Journal of Economic Growth, Springer, vol. 9(3), pages 347-383, September.
    4. Oded Galor & Andrew Mountford, 2004. "Trading Population for Productivity," GE, Growth, Math methods 0410001, University Library of Munich, Germany.
    5. Oded Galor & Omer Moav, 2000. "Das Human Kapital," Working Papers 2000-17, Brown University, Department of Economics.
    6. repec:hoo:wpaper:e-92-3 is not listed on IDEAS
    7. Galor, Oded, 2005. "From Stagnation to Growth: Unified Growth Theory," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 4, pages 171-293, Elsevier.
    8. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
    9. Oded Galor & Omer Moav, 2006. "Das Human-Kapital: A Theory of the Demise of the Class Structure," Review of Economic Studies, Oxford University Press, vol. 73(1), pages 85-117.
    10. Nancy L. Stokey, 1991. "The Volume and Composition of Trade Between Rich and Poor Countries," Review of Economic Studies, Oxford University Press, vol. 58(1), pages 63-80.
    11. Philippe Aghion & Steven Durlauf (ed.), 2005. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 1, number 1.
    12. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc.
    13. 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.
    14. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 369-405.
    15. Oded Galor, 2011. "Unified Growth Theory," Economics Books, Princeton University Press, edition 1, number 9477.
    16. Clark, Gregory, 1987. "Why Isn't the Whole World Developed? Lessons from the Cotton Mills," The Journal of Economic History, Cambridge University Press, vol. 47(1), pages 141-173, March.
    17. Oded Galor & David N. Weil, 1998. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition," Working Papers 98-3, Brown University, Department of Economics, revised 19 Aug 1998.
    18. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
    19. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oded Galor, 2010. "The 2008 Lawrence R. Klein Lecture-Comparative Economic Development: Insights From Unified Growth Theory," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(1), pages 1-44, February.
    2. Oded Galor & Andrew Mountford, 2008. "Trading Population for Productivity: Theory and Evidence," Review of Economic Studies, Oxford University Press, vol. 75(4), pages 1143-1179.
    3. Kevin H. O'Rourke & Ahmed S. Rahman & Alan M. Taylor, 2007. "Trade, Knowledge and the Industrial Revolution," Development Working Papers 230, Centro Studi Luca d'Agliano, University of Milano.
    4. Galor, Oded, 2006. "Economic Growth in the Very Long Run," MPRA Paper 76648, University Library of Munich, Germany.
    5. Sascha Becker & Francesco Cinnirella & Ludger Woessmann, 2010. "The trade-off between fertility and education: evidence from before the demographic transition," Journal of Economic Growth, Springer, vol. 15(3), pages 177-204, September.
    6. Galor, Oded, 2007. "Multiple growth regimes - Insights from unified growth theory," Journal of Macroeconomics, Elsevier, vol. 29(3), pages 470-475, September.
    7. Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 143-179.
    8. Quamrul Ashraf & Oded Galor, 2011. "Dynamics and Stagnation in the Malthusian Epoch," American Economic Review, American Economic Association, vol. 101(5), pages 2003-2041, August.
    9. Josef Falkinger & Volker Grossmann, 2005. "Institutions and Development: The Interaction Between Trade Regime and Political System," Journal of Economic Growth, Springer, vol. 10(3), pages 231-272, September.
    10. Oded Galor & Andrew Mountford, 2004. "Trading Population for Productivity," GE, Growth, Math methods 0410001, University Library of Munich, Germany.
    11. Galor, Oded & Ashraf, Quamrul, 2008. "Dynamics and Stagnation in the Malthusian Epoch: Theory and Evidence," CEPR Discussion Papers 7057, C.E.P.R. Discussion Papers.
    12. Kevin H. O'Rourke & Ahmed S. Rahman & Alan M. Taylor, 2008. "Luddites and the Demographic Transition," NBER Working Papers 14484, National Bureau of Economic Research, Inc.
    13. Galor, Oded, 2006. "Human Capital, Fertility and Growth," MPRA Paper 76649, University Library of Munich, Germany.
    14. Brian Snowdon, 2008. "Towards a Unified Theory of Economic Growth," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 9(2), pages 97-151, April.
    15. Oded Galor, 2012. "The demographic transition: causes and consequences," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 6(1), pages 1-28, January.
    16. Oded Galor, 2005. "The Demographic Transition and the Emergence of Sustained Economic Growth," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 494-504, 04/05.
    17. Brian Snowdon, 2008. "Towards a Unified Theory of Economic Growth: Oded Galor on the Transition from Malthusian Stagnation to Modern Economic Growth," Working Papers 2008-4, Brown University, Department of Economics.
    18. Strulik, Holger & Werner, Katharina, 2014. "Elite education, mass education, and the transition to modern growth," University of Göttingen Working Papers in Economics 205, University of Goettingen, Department of Economics.
    19. Schäfer, Andreas & Prettner, Klaus, 2016. "The fall and rise of inequality," VfS Annual Conference 2016 (Augsburg): Demographic Change 145806, Verein für Socialpolitik / German Economic Association.
    20. David E Bloom & Michael Kuhn & Klaus Prettner, 2020. "The contribution of female health to economic development [The costs of missing the Millennium Development Goal on gender equity]," The Economic Journal, Royal Economic Society, vol. 130(630), pages 1650-1677.

    More about this item

    Keywords

    International trade; Demographic transition; Industrial revolution; Growth; Human capital;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:5490. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.