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Trade, Knowledge, and the Industrial Revolution

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  • O'Rourke, Kevin
  • Taylor, Alan M.
  • Rahman, Ahmed
Abstract
Technological change was unskilled-labour-biased during the early Industrial Revolution of the late eighteenth and early nineteenth centuries, but is skill-biased today. This fact is not embedded in extant unified growth models. We develop a model of the transition to sustained economic growth which can endogenously account for both these facts, by allowing the factor bias of technological innovations to reflect the profit-maximising decisions of innovators. Endowments dictated that the initial stages of the Industrial Revolution be unskilled-labour biased. The transition to skill-biased technological change was due to a growth in ``Baconian knowledge'' and international trade. Simulations show that the model does a good job of tracking reality, at least until the mass education reforms of the late nineteenth century.

Suggested Citation

  • O'Rourke, Kevin & Taylor, Alan M. & Rahman, Ahmed, 2007. "Trade, Knowledge, and the Industrial Revolution," CEPR Discussion Papers 6293, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:6293
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    Cited by:

    1. Ahmed S. Rahman, 2008. "A Tale of Two Skill Premia," Working Papers 8021, Economic History Society.
    2. Joan R. Ros s & Kevin H. O'Rourke & Jeffrey G. Williamson, 2007. "Globalization, Growth and Distribution in Spain 1500-1913," Trinity Economics Papers tep0407, Trinity College Dublin, Department of Economics.
    3. Garner, Phillip, 2008. "Productivity revolutions and science driven growth," Economics Letters, Elsevier, vol. 101(1), pages 24-26, October.
    4. David Flacher, 2005. "Industrial Revolutions and Consumption: A Common Model to the Various Periods of Industrialization," Working Papers halshs-00132241, HAL.
    5. Petros Milionis, 2012. "Long-Run Development in the Open Economy," DEGIT Conference Papers c017_059, DEGIT, Dynamics, Economic Growth, and International Trade.

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    More about this item

    Keywords

    Demography; Endogenous growth; Trade;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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