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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
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Handle: RePEc:tcd:tcdceg:20023
Contact details of provider: Postal: Trinity College, Dublin 2
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Web page: http://www.tcd.ie/Economics/
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  1. 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.
  2. Pritchett, Lant, 1995. "Divergence, big time," Policy Research Working Paper Series 1522, The World Bank.
  3. 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.
  4. 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.
  5. 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.
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  7. K. H. O'Rourke & J. G. Williamson, 2001. "After Columbus: Explaining the Global Trade Boom 1500-1800," Trinity Economics Papers 20016, Trinity College Dublin, Department of Economics.
  8. Ronald Findlay & Kevin H. O'Rourke, 2001. "Commodity Market Integration, 1500-2000," NBER Working Papers 8579, National Bureau of Economic Research, Inc.
  9. 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.
  10. Marvin Goodfriend & John McDermott, 1994. "Early development," Working Paper 94-02, Federal Reserve Bank of Richmond.
  11. Findlay, R., 1990. "The " Triangular Trade" And The Atlantic Economy Of The Eighteenth Centrury: A Simple General-Equilibrium Model," Princeton Studies in International Economics 177, International Economics Section, Departement of Economics Princeton University,.
  12. Alesina, Alberto & Perotti, Roberto, 1996. "Income distribution, political instability, and investment," European Economic Review, Elsevier, vol. 40(6), pages 1203-1228, June.
  13. Charles I. Jones, . "Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run," Working Papers 99008, Stanford University, Department of Economics.
  14. Garcia-Penalosa, Cecilia & Aghion, Philippe & Caroli, Eve, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Economics Papers from University Paris Dauphine 123456789/10091, Paris Dauphine University.
  15. 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.
  16. Maurice Obstfeld & Alan M. Taylor, 2003. "Globalization and Capital Markets," NBER Chapters, in: Globalization in Historical Perspective, pages 121-188 National Bureau of Economic Research, Inc.
  17. Kevin H. O'Rourke & Jeffrey G. Williamson, 2000. "When Did Globalization Begin?," NBER Working Papers 7632, National Bureau of Economic Research, Inc.
  18. 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.
  19. O'Rourke, K, 1997. "The European Grain Invasion 1870-1913," Papers 97/02, College Dublin, Department of Political Economy-.
  20. Gary D. Hansen & Edward C. Prescott, 2002. "Malthus to Solow," American Economic Review, American Economic Association, vol. 92(4), pages 1205-1217, September.
  21. Hatton, Timothy J. & Williamson, Jeffrey G., 1998. "The Age of Mass Migration: Causes and Economic Impact," OUP Catalogue, Oxford University Press, number 9780195116519, March.
  22. 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.
  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 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.
  25. 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.
  26. 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.
  27. 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.
  28. Gregory Clark, 2001. "The Long March of History: Farm Laborers Wages in England 1208-1850," NajEcon Working Paper Reviews 625018000000000238, www.najecon.org.
  29. 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.
  30. 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.
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  33. 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.
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