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Trade and the Great Divergence: The Family Connection

Oded Galor () and Andrew Mountford ()

No 5490, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This research argues that the rapid expansion of international trade in the second phase of the industrial revolution has played a major role in the timing of demographic transitions across countries and has thereby been a significant determinant of the distribution of world population and a prime cause of the 'Great Divergence' in income per capita across countries in the last two centuries. The analysis suggests that international trade had an asymmetrical effect on the evolution of industrial and non-industrial economies. While in the industrial nations the gains from trade were directed primarily towards investment in education and growth in output per capita, a significant portion of the gains from trade in non-industrial nations was channelled towards population growth.

Keywords: demographic transition; growth; human capital; industrial revolution; international trade (search for similar items in EconPapers)
JEL-codes: F11 F43 J10 N30 O40 (search for similar items in EconPapers)
Date: 2006-02
New Economics Papers: this item is included in nep-dev, nep-his, nep-hrm and nep-int
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