Factor prices and induced technical change in the Industrial Revolution

Ravshonbek Otojanov and Roger Fouquet
Authors registered in the RePEc Author Service: Ravshonbek Otojanov () and Roger Fouquet

No 92, Working Papers from Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research

Abstract: Allen (2009) has argued that the divergence in factor prices determined the direction of technical change that altered the course of economic growth in Britain. Using historical data for the 1700 – 1914 period, this paper derives and analyses the nature and direction of technical change. The results show that technical change was biased during the Industrial Revolution and that the bias stemmed from the divergence in the cost of labour and energy. In particular, labour saving responded strongly to the acceleration in wage growth in the 1850-1914 period. Overall, technical change was labour-saving, energy-using and hence capital-deepening. Moreover, the evidence shows that the expansion of effective energy supply allowed British economy to sustain output growth in the First Industrial Revolution era. Labour-saving innovations were particularly crucial in the Second Industrial Revolution.

Keywords: Industrial Revolution; Factor-Saving Technical Change; Induced Technical Change, Productivity, Innovation. (search for similar items in EconPapers)
JEL-codes: N13 O11 O3 (search for similar items in EconPapers)
Date: 2018-09
New Economics Papers: this item is included in nep-eff, nep-ene, nep-gro and nep-his
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http://cgr.sbm.qmul.ac.uk/CGRWP92.pdf

Related works:
Journal Article: Factor prices and induced technical change in the industrial revolution (2023)
Working Paper: Factor prices and induced technical change in the industrial revolution (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:cgs:wpaper:92

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