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Technology and the Great Divergence

  • Robert Allen
  • Robert C. Allen

The paper measures productivity growth in seventeen countries in the nineteenth and twentieth centuries.� GDP per worker and capital per worker in 1985 US dollars were estimated for 1820, 1850, 1880, 1913, 1939 by using historical national accounts to back cast Penn World Table data for 1965 and 1990.� Frontier and econometric production functions are used to measure neutral technical change and local technical.� The latter includes concurrent increases in capital per worker and output per worker beyond the highest values achieved.� These increases were pioneered by the rich countries of the day.� An increase in the capital-labour ratio was usually followed by a half century in which rich countries raised output per worker at that higher ratio.� Then the rich countries moved on to a higher capital-ratio, and technical progress ceased at the lower ratio they abandoned.� Most of the benefits of technical progress accrued to the rich countries that pioneer it.� It is remarkable that countries in 1990 with low capital labour ratios achieved an output per worker that was no higher than countries with the same capital labour ratio in 1820.� In the course of the last two hundred years, the rich countries created the production function of the world that defines the growth possibilities of poor countries today.

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File URL: http://www.economics.ox.ac.uk/materials/papers/5001/paper548.pdf
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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 548.

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Date of creation: 01 Apr 2011
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Handle: RePEc:oxf:wpaper:548
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  1. Robert Allen & Robert C. Allen, 2007. "How Prosperous were the Romans? Evidence from Diocletian`s Price Edict (301 AD)," Economics Series Working Papers 363, University of Oxford, Department of Economics.
  2. repec:cup:cbooks:9780521868273 is not listed on IDEAS
  3. Daniel J. Henderson & R. Robert Russell, 2005. "Human Capital And Convergence: A Production-Frontier Approach ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(4), pages 1167-1205, November.
  4. Allen, Robert C. & Bassino, Jean-Pascal & Ma, Debin & Moll-Murata, Christine & Zanden, Jan Luiten van, 2009. "Wages, prices, and living standards in China, 1738-1925: in comparison with Europe, Japan, and India," CEI Working Paper Series 2009-03, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
  5. Allen, Robert C., 2009. "Engels' pause: Technical change, capital accumulation, and inequality in the british industrial revolution," Explorations in Economic History, Elsevier, vol. 46(4), pages 418-435, October.
  6. Allen, Robert C., 1983. "Collective invention," Journal of Economic Behavior & Organization, Elsevier, vol. 4(1), pages 1-24, March.
  7. Nunn, Nathan, 2007. "The Long-Term Effects of Africa's Slave Trades," MPRA Paper 4134, University Library of Munich, Germany.
  8. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
  9. Timmer, Marcel & Ark, Bart van, 2000. "Capital formation and productivity growth in South Korea and Taiwan: realising the catch-up potential in a world diminishing returns," CCSO Working Papers 200003, University of Groningen, CCSO Centre for Economic Research.
  10. Los, Bart & Timmer, Marcel P., 2003. "The 'appropriate technology' explanation of productivity growth differentials: an empirical approach," GGDC Research Memorandum 200361, Groningen Growth and Development Centre, University of Groningen.
  11. Thomas J. Weiss, 1992. "U. S. Labor Force Estimates and Economic Growth, 1800-1860," NBER Chapters, in: American Economic Growth and Standards of Living before the Civil War, pages 19-78 National Bureau of Economic Research, Inc.
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