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

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

Abstract

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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  • Kevin H. O'Rourke & Jeffrey G. Williamson, 2002. "From Malthus to Ohlin: Trade, Growth and Distribution Since 1500," CEG Working Papers 20023, Trinity College Dublin, Department of Economics.
    • Handle: RePEc:tcd:tcdceg:20023
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    2. Vladimir Popov, 2010. "Development theories and development experience: half a century journey," Working Papers w0153, New Economic School (NES).
    3. Vladimir Popov, 2009. "Why the West Became Rich before China and Why China Has Been Catching Up with the West since 1949: nother Explanation of the “Great Divergence” and “Great Convergence” Stories," Working Papers w0132, New Economic School (NES).
    4. Graziella Bertocchi, 2006. "The Law of Primogeniture and the Transition from Landed Aristocracy to Industrial Democracy," Journal of Economic Growth, Springer, vol. 11(1), pages 43-70, March.
    5. Chor, Davin, 2005. "Institutions, wages, and inequality: The case of Europe and its periphery (1500-1899)," Explorations in Economic History, Elsevier, vol. 42(4), pages 547-566, October.
    6. Lucy Badalian & Victor Krivorotov, 2009. "Economic development as domestication of a geoclimatic zone: The historic East-West divide and the current trends towards its closure," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 13-48.
    7. James A. Robinson, 2006. "Equity, Institutions and the Development Process," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 32, pages 17-50.
    8. Popov, Vladimir, 2019. "Successes and failures of industrial policy: Lessons from transition (post-communist) economies of Europe and Asia," MPRA Paper 95332, University Library of Munich, Germany.
    9. Sharp, Paul & Weisdorf, Jacob, 2013. "Globalization revisited: Market integration and the wheat trade between North America and Britain from the eighteenth century," Explorations in Economic History, Elsevier, vol. 50(1), pages 88-98.
    10. Joel M. Guttman & Avi Tillman, 2017. "Land ownership, the subsistence constraint, and the demographic transition," Review of Economics of the Household, Springer, vol. 15(3), pages 1017-1036, September.
    11. Charles Kenny, 2006. "Were People in the Past Poor and Miserable?," Kyklos, Wiley Blackwell, vol. 59(2), pages 275-306, May.
    12. Londoño de la Cuesta, Juan Luis, 2002. "Trade, resources and inequality in Latin America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.

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    JEL classification:

    • F1 - International Economics - - Trade
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations

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