Advent of Industrial Mass Production: Three Stages of Economic Development
Rudrani Bhattacharya and
Satya Das ()
The B.E. Journal of Macroeconomics, 2008, vol. 8, issue 1, 47
Abstract:
This paper develops a human-capital-based endogenous growth scenario in which an economy initially produces the agricultural good, characterized by diminishing returns to scale, then produces `traditional manufacturing' under constant-returns and finally produces `modern manufacturing' under increasing-returns. Transition dates are endogenous and depend on the non-essentiality of the industrial goods in preferences and fixed costs in the technology of the modern manufacturing. Each transition is followed by a jump in the long-run growth rate of real income. The theoretical model is calibrated to U.S. historical data. It `predicts' the first transition to occur around 1820s and the second transition to happen around 1900.
Keywords: Mass Production; Transition; Endogenous Growth (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejmac:v:8:y:2008:i:1:n:24
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DOI: 10.2202/1935-1690.1642
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