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From Malthus to Ohlin: Trade, Growth and Distribution Since 1500

  • Kevin H. O'Rourke
  • Jeffrey G. Williamson

A recent endogenous growth literature has focused on the transition from a Malthusian world where real wages were linked to factor endowments, to one where modern growth has broken that link. In this paper we present evidence on another, related phenomenon: the dramatic reversal in distributional trends -- from a steep secular fall to a steep secular rise in wage-land rent ratios -- which occurred some time early in the 19th century. What explains this reversal? While it may seem logical to locate the causes in the Industrial Revolutionary forces emphasized by endogenous growth theorists, we provide evidence that something else mattered just as much: the opening up of the European economy to international trade.

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Paper provided by Trinity College Dublin, Department of Economics in its series CEG Working Papers with number 20023.

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Date of creation: 2002
Date of revision:
Handle: RePEc:tcd:tcdceg:20023
Contact details of provider: Postal: Trinity College, Dublin 2
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  1. David Jacks, 2000. "Market integration in the North and Baltic Seas, 1500-1800," Economic History Working Papers 22383, London School of Economics and Political Science, Department of Economic History.
  2. R. Findlay & K. H. O'Rourke, 2001. "Commodity market integration, 1500-2000," CEG Working Papers 20019, Trinity College Dublin, Department of Economics.
  3. Jones Charles I., 2001. "Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run," The B.E. Journal of Macroeconomics, De Gruyter, vol. 1(2), pages 1-45, August.
  4. 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.
  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. John H. Coatsworth & Jeffrey G. Williamson, 2002. "The Roots of Latin American Protectionism: Looking Before the Great Depression," NBER Working Papers 8999, National Bureau of Economic Research, Inc.
  7. Daron Acemoglu & Simon Johnson & James Robinson, 2002. "The Rise of Europe: Atlantic Trade, Institutional Change and Economic Growth," NBER Working Papers 9378, National Bureau of Economic Research, Inc.
  8. repec:clu:wpaper:1989_05 is not listed on IDEAS
  9. O'Rourke, Kevin H., 1997. "The European Grain Invasion, 1870–1913," The Journal of Economic History, Cambridge University Press, vol. 57(04), pages 775-801, December.
  10. O'Rourke, Kevin H & Taylor, Alan M & Williamson, Jeffrey G, 1996. "Factor Price Convergence in the Late Nineteenth Century," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(3), pages 499-530, August.
  11. Kevin H. O'Rourke & Jeffrey G. Williamson, 2000. "When Did Globalization Begin?," NBER Working Papers 7632, National Bureau of Economic Research, Inc.
  12. Harley, C. Knick, 1988. "Ocean Freight Rates and Productivity, 1740–1913: The Primacy of Mechanical Invention Reaffirmed," The Journal of Economic History, Cambridge University Press, vol. 48(04), pages 851-876, December.
  13. Galor, Oded & Mountford, Andrew, 2002. "Why are a Third of People Indian and Chinese? Trade, Industrialization and Demographic Transition," CEPR Discussion Papers 3136, C.E.P.R. Discussion Papers.
  14. Gregory Clark, 2001. "The Long March of History: Farm Laborers Wages in England 1208-1850," NajEcon Working Paper Reviews 625018000000000238,
  15. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
  16. Christopher Blattman & Michael A. Clemens & Jeffrey G. Williamson, 2003. "Who Protected and Why? Tariffs the World Around 1870-1938," Harvard Institute of Economic Research Working Papers 2010, Harvard - Institute of Economic Research.
  17. 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.
  18. Gregory Clark, 2001. "Farm Wages and Living Standards in the Industrial Revolution: England,1670–1869[This resea]," Economic History Review, Economic History Society, vol. 54(3), pages 477-505, 08.
  19. Kevin H. O'Rourke & Jeffrey G. Williamson, 2001. "Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650592, June.
  20. Goodfriend, Marvin & McDermott, John, 1995. "Early Development," American Economic Review, American Economic Association, vol. 85(1), pages 116-33, March.
  21. Maurice Obstfeld & Alan M. Taylor, 2002. "Globalization and Capital Markets," NBER Working Papers 8846, National Bureau of Economic Research, Inc.
  22. Kevin H. O'Rourke & Jeffrey G. Williamson, 2001. "After Columbus: Explaining the Global Trade Boom 1500-1800," NBER Working Papers 8186, National Bureau of Economic Research, Inc.
  23. Patrick O'Brien, 1982. "European Economic Development: The Contribution of the Periphery," Economic History Review, Economic History Society, vol. 35(1), pages 1-18, 02.
  24. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
  25. O'Rourke, Kevin & Williamson, Jeffrey G., 1994. "Late Nineteenth-Century Anglo-American Factor-Price Convergence: Were Heckscher and Ohlin Right?," The Journal of Economic History, Cambridge University Press, vol. 54(04), pages 892-916, December.
  26. Hatton, Timothy J. & Williamson, Jeffrey G., 1998. "The Age of Mass Migration: Causes and Economic Impact," OUP Catalogue, Oxford University Press, number 9780195116519.
  27. Gary D. Hansen & Edward C. Prescott, 1998. "Malthus to Solow," NBER Working Papers 6858, National Bureau of Economic Research, Inc.
  28. Alesina, Alberto & Perotti, Roberto, 1996. "Income distribution, political instability, and investment," European Economic Review, Elsevier, vol. 40(6), pages 1203-1228, June.
  29. Pritchett, Lant, 1995. "Divergence, big time," Policy Research Working Paper Series 1522, The World Bank.
  30. N. F. R. Crafts & C. K. Harley, 1992. "Output growth and the British industrial revolution: a restatement of the Crafts-Harley view," Economic History Review, Economic History Society, vol. 45(4), pages 703-730, November.
  31. Temin, Peter, 1997. "Two Views of the British Industrial Revolution," The Journal of Economic History, Cambridge University Press, vol. 57(01), pages 63-82, March.
  32. Alesina, Alberto & Perotti, Roberto, 1994. "The Political Economy of Growth: A Critical Survey of the Recent Literature," World Bank Economic Review, World Bank Group, vol. 8(3), pages 351-71, September.
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