The growing dependence of Britain on trade during the Industrial Revolution

Kevin O'Rourke, Alan Taylor and Gregory Clark

No 9878, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Many previous studies of the role of trade during the British Industrial Revolution have found little or no role for trade in explaining British living standards or growth rates. We construct a three-region model of the world in which Britain trades with North America and the rest of the world, and calibrate the model to data from the 1760s and 1850s. We find that while trade had only a small impact on British welfare in the 1760s, it had a very large impact in the 1850s. This contrast is robust to a large range of parameter perturbations. Biased technological change and population growth were key in explaining Britain?s growing dependence on trade during the Industrial Revolution.

Keywords: British industrial revolution; Colonies; Great divergence; Growth; Specialization; Trade (search for similar items in EconPapers)
JEL-codes: F11 F14 F43 N10 N70 O40 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-his and nep-int
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Journal Article: The growing dependence of Britain on trade during the Industrial Revolution (2014)
Working Paper: The Growing Dependence of Britain on Trade during the Industrial Revolution (2014)
Working Paper: The growing dependence of Britain on trade during the Industrial Revolution (2014)
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