Trade, Knowledge, and the Industrial Revolution

Kevin H. O'Rourke (), Ahmed S. Rahman () and Alan M. Taylor ()

No 6293, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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.

Keywords: demography; endogenous growth; trade (search for similar items in EconPapers)
JEL-codes: F15 J13 J24 N10 O31 O33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-his, nep-int and nep-knm
Date: 2007-05
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Related works:
Working Paper: Trade, Knowledge, and the Industrial Revolution (2007)
Working Paper: Trade, Knowledge and the Industrial Revolution (2007)
Working Paper: Trade, Knowledge, and the Industrial Revolution (2007)
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