Trade, Knowledge, and the Industrial Revolution

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

No 13057, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: F15 J13 J24 N10 O31 O33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-his, nep-hrm, nep-ino, nep-int and nep-knm
Date: 2007-04
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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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