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Directed technical change and the British Industrial Revolution

Author

Listed:
  • John C. V. Pezzey
  • David I. Stern
  • Yingying Lu

Abstract

We build a directed technical change model of the British Industrial Revolution where one intermediate goods sector uses a fixed renewable energy (“wood”) quantity, and another uses coal at a fixed price. With a high enough elasticity of substitution between the two goods in producing final output, an industrial revolution, where over time the coal-using sector grows relative to the wood-using sector and its growth accelerates, is not inevitable. However, greater initial scarcity of wood and/or higher population growth puts the economy on a path to an industrial revolution. The converse slows industrialization, or even prevents it forever.

Suggested Citation

  • John C. V. Pezzey & David I. Stern & Yingying Lu, 2017. "Directed technical change and the British Industrial Revolution," CAMA Working Papers 2017-26, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  • Handle: RePEc:een:camaaa:2017-26
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    File URL: https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2017-05/26_2017_pezzey_stern_lu_revised_0.pdf
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. From Wood to Coal: Directed Technical Change and the British Industrial Revolution
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2017-03-29 08:38:00
    2. Barcelona Talk
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2017-10-19 05:17:00
    3. Annual Review 2017
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2017-12-28 02:26:00
    4. Explaining Malthusian Sluggishness
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2018-01-16 12:55:00

    More about this item

    Keywords

    British Industrial Revolution; directed technical change; renewable energy; coal; two-sector model; substitutability; population growth;

    JEL classification:

    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N73 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: Pre-1913
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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