Directed technical change and the British Industrial Revolution
John Pezzey (),
David Stern () and
CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University
We build a directed technical change model of the British Industrial Revolution where one intermediate goods sector uses a fixed renewable energy (“wood”) quantity, and another uses coal at a fixed price. With a high enough elasticity of substitution between the two goods in producing final output, an industrial revolution, where over time the coal-using sector grows relative to the wood-using sector and its growth accelerates, is not inevitable. However, greater initial scarcity of wood and/or higher population growth puts the economy on a path to an industrial revolution. The converse slows industrialization, or even prevents it forever.
Keywords: British Industrial Revolution; directed technical change; renewable energy; coal; two-sector model; substitutability; population growth (search for similar items in EconPapers)
JEL-codes: N13 N73 O33 O41 Q43 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-gro and nep-his
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Persistent link: http://EconPapers.repec.org/RePEc:een:camaaa:2017-26
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