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Trade, Knowledge and the Industrial Revolution

Author Info

Listed author(s):
  • Kevin H. O’Rourke

    (Trinity College, Dublin, CEPR, and NBER)

  • Ahmed S. Rahman

    (United States Naval Academy)

  • Alan M. Taylor

    (University of California, Davis, NBER, and CEPR)

Abstract

Technological change was unskilled-labor-biased during the early Industrial Revolution of the late eighteenth and early nineteenth centuries, but is skill-biased today. This fact is not embedded in extant unified growth models. We develop a model of the transition to sustained economic growth which can endogenously account for both these facts, by allowing the factor bias of technological innovations to reflect the profitmaximising decisions of innovators. Endowments dictated that the initial stages of the Industrial Revolution be unskilled-labor biased. The transition to skill-biased technological change was due to a growth in “Baconian knowledge” and international trade. Simulations show that the model does a good job of tracking reality, at least until the mass education reforms of the late nineteenth century.

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Paper provided by Centro Studi Luca d'Agliano, University of Milano in its series Development Working Papers with number 230.

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Length: 52
Date of creation: 01 May 2007
Handle: RePEc:csl:devewp:230
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Fax: +39 02 503 16475
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Keywords: endogenous growth; demography; trade;

Other versions of this item:

Find related papers by JEL classification:
  • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
  • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
  • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
  • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
  • F15 - International Economics - - Trade - - - Economic Integration
  • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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Cited by:

  1. Joan R. Rosés & Kevin H. O'Rourke & Jeffrey G. Williamson, 2007. "Globalization, Growth and Distribution in Spain 1500-1913," Trinity Economics Papers tep0407, Trinity College Dublin, Department of Economics.
  2. Garner, Phillip, 2008. "Productivity revolutions and science driven growth," Economics Letters, Elsevier, vol. 101(1), pages 24-26, October.
  3. Petros Milionis, 2012. "Long-Run Development in the Open Economy," DEGIT Conference Papers c017_059, DEGIT, Dynamics, Economic Growth, and International Trade.

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