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Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run

  • Charles I. Jones

This paper studies a growth model that is able to match several key facts of economic history. For thousands of years, the average standard of living seems to have risen very little, despite increases in the level of technology and large increases in the level of the population. Then, after thousands of years of little change, the level of per capita consumption increased dramatically in less than two centuries. Quantitative analysis of the model highlights two factors central to understanding this history. The first is a virtuous circle: more people produce more ideas, which in turn makes additional population growth possible. The second is an improvement in institutions that promote innovation, such as property rights: the simulated economy indicates that the single most important factor in the transition to modern growth has been the increase in the fraction of output pain to compensate inventors for the fruits of their labor.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7375.

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Date of creation: Oct 1999
Date of revision:
Publication status: published as Advances in Macroeconomics (The B.E. Journal of Macroeconomics) Vol. 1: Iss. 2, Article 1 (June 2001): 1-45
Handle: RePEc:nbr:nberwo:7375
Note: EFG
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  1. Goodfriend, Marvin & McDermott, John, 1995. "Early Development," American Economic Review, American Economic Association, vol. 85(1), pages 116-33, March.
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  7. 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.
  8. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  9. Daron Acemoglu & Fabrizio Zilibotti, 1994. "Was Prometheus unbound by chance? Risk, diversification and growth," Economics Working Papers 98, Department of Economics and Business, Universitat Pompeu Fabra.
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  11. David C. King & Richard J. Zeckhauser, 1999. "Congressional Vote Options," NBER Working Papers 7342, National Bureau of Economic Research, Inc.
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  13. Lant Pritchett, 1997. "Divergence, Big Time," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 3-17, Summer.
  14. Baumol, William J, 1990. "Entrepreneurship: Productive, Unproductive, and Destructive," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 893-921, October.
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  16. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-84, August.
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