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The Growing Dependence of Britain on Trade During the Industrial Revolution

Author

Listed:
  • Gregory Clark

    (University of California, USA)

  • Kevin Hjortshøj O’Rourke

    () (All Souls College, Oxford University, UK)

  • Alan M. Taylor

    (University of California, USA)

Abstract

Many previous studies of the role of trade during the British Industrial Revolution have found little or no role for trade in explaining British living standards or growth rates. We construct a three-region model of the world in which Britain trades with North America and the rest of the world, and calibrate the model to data from the 1760s and 1850s. We find that while trade had only a small impact on British welfare in the 1760s, it had a very large impact in the 1850s. This contrast is robust to a large range of parameter perturbations. Biased technological change and population growth were key in explaining Britain’s growing dependence on trade during the Industrial Revolution.

Suggested Citation

  • Gregory Clark & Kevin Hjortshøj O’Rourke & Alan M. Taylor, 2014. "The Growing Dependence of Britain on Trade During the Industrial Revolution," Oxford University Economic and Social History Series _126, Economics Group, Nuffield College, University of Oxford.
  • Handle: RePEc:nuf:esohwp:_126
    as

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    File URL: http://www.economics.ox.ac.uk/materials/papers/13258/clark-et-al-new-world.pdf
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    References listed on IDEAS

    as
    1. Gregory Clark, 2005. "The Condition of the Working Class in England, 1209-2004," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1307-1340, December.
    2. Ronald Findlay & Kevin H. O'Rourke, 2007. "Power and Plenty: Trade, War and the World Economy in the Second Millennium (Preface)," Trinity Economics Papers tep0107, Trinity College Dublin, Department of Economics.
    3. Allen,Robert C., 2009. "The British Industrial Revolution in Global Perspective," Cambridge Books, Cambridge University Press, number 9780521868273.
    4. Clark, Gregory & Jacks, David, 2007. "Coal and the Industrial Revolution, 1700 1869," European Review of Economic History, Cambridge University Press, vol. 11(01), pages 39-72, April.
    5. Harley, C. Knick & Crafts, N.F.R., 2000. "Simulating the Two Views of the British Industrial Revolution," The Journal of Economic History, Cambridge University Press, vol. 60(03), pages 819-841, September.
    6. Mokyr, Joel, 1977. "Demand vs. Supply in the Industrial Revolution," The Journal of Economic History, Cambridge University Press, vol. 37(04), pages 981-1008, December.
    7. Ronald Findlay & Kevin H. O'Rourke, 2007. "Introduction to Power and Plenty: Trade, War, and the World Economy in the Second Millennium," Introductory Chapters,in: Power and Plenty: Trade, War, and the World Economy in the Second Millennium Princeton University Press.
    8. Ronald Findlay & Kevin H. O'Rourke, 2007. "Preface to Power and Plenty: Trade, War, and the World Economy in the Second Millennium," Introductory Chapters,in: Power and Plenty: Trade, War, and the World Economy in the Second Millennium Princeton University Press.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    British Industrial Revolution; Great Divergence; trade; colonies; growth; specialization;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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