Trade, Knowledge, and the Industrial Revolution / Kevin H. O'Rourke, Ahmed S. Rahman, Alan M. Taylor.

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O'Rourke, Kevin H

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TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w13057.Publication details: Cambridge, Mass. National Bureau of Economic Research 2007.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Technological change was unskilled-labor-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-labor 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.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w13057 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w13054 Firms in International Trade /	nber w13055 Globalization, Growth and Distribution in Spain 1500-1913 /	nber w13056 The Incentives to Start New Companies: Evidence from Venture Capital /	nber w13057 Trade, Knowledge, and the Industrial Revolution /	nber w13058 An Economic Analysis of Platform Sharing /	nber w13059 Changing Progressivity as a Means of Risk Protection in Investment-Based Social Security /	nber w1306 Monetarist Monetary Policy, Exchange Risk, and Exchange Rate Variability /	Next

April 2007.

Technological change was unskilled-labor-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-labor 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.