IDEAS home Printed from
   My bibliography  Save this paper

Directed technical change and the British Industrial Revolution


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


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

    Download full text from publisher

    File URL:
    Download Restriction: no


    Blog mentions

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

    More about this item


    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

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    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:een:camaaa:2017-26. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Cama Admin). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.