Trade, Knowledge, and the Industrial Revolution

54 Pages Posted: 18 Apr 2007

See all articles by Kevin H. O'Rourke

Kevin H. O'Rourke

University of Dublin, Trinity College; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Ahmed Rahman

United States Naval Academy

Alan M. Taylor

University of California, Davis - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 4 versions of this paper

Date Written: April 2007

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 profitmaximising 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.

Keywords: Endogenous growth, Demography, Trade

JEL Classification: O31, O33, J13, J24, F15, N10

Suggested Citation

O'Rourke, Kevin H. and Rahman, Ahmed and Taylor, Alan M., Trade, Knowledge, and the Industrial Revolution (April 2007). IIIS Discussion Paper No. 219, Available at SSRN: https://ssrn.com/abstract=980940 or http://dx.doi.org/10.2139/ssrn.980940

Kevin H. O'Rourke (Contact Author)

University of Dublin, Trinity College ( email )

Department of Economics
Dublin 2
Ireland
+353 1 608 3594 (Phone)
+353 1 677 2503 (Fax)

HOME PAGE: http://econserv2.bess.tcd.ie/korourke/homepage.htm

National Bureau of Economic Research (NBER)

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Centre for Economic Policy Research (CEPR)

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Ahmed Rahman

United States Naval Academy ( email )

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Alan M. Taylor

University of California, Davis - Department of Economics ( email )

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Davis, CA 95616-8578
United States
530-752-1572 (Phone)
530-752-9382 (Fax)

HOME PAGE: http://www.econ.ucdavis.edu/faculty/amtaylor/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://nber.org

Centre for Economic Policy Research (CEPR)

London
United Kingdom

HOME PAGE: http://cepr.org

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