The evolution of markets and the revolution of industry: A unified theory of growth

Klaus Desmet and Stephen Parente ()

No 2009-06, Working Papers from Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales

Abstract: This paper puts forth a unified theory of growth that captures a number of relevant features of countries’ transitions from stagnant, predominantly rural economies to vibrant, industrialized economies that have been overlooked by the literature. In our theory, increasing variety of consumer goods and increasing firm size, which are the consequence of a gradual expansion in the market, sow the seeds for process innovation and an economy’s take-off. We demonstrate this mechanism in a dynamic general equilibrium model calibrated to England’s long-run development, and explore how various factors affected the timing of its take-off.

Keywords: unified growth theory; industrial revolution; innovation; competition; market revolution (search for similar items in EconPapers)
JEL-codes: N33 O14 O33 O41 (search for similar items in EconPapers)
Date: 2009-05-25
New Economics Papers: this item is included in nep-cse, nep-his, nep-mic and nep-tid
Note: This paper is included in the IMDEA Social Sciences Working Paper Series through the PROCIUDAD-CM and the Bank of Spain Excellence Programmes
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Citations: View citations in EconPapers (6)

Published in Journal of Economic Growth

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Related works:
Journal Article: The evolution of markets and the revolution of industry: a unified theory of growth (2012)
Working Paper: The Evolution of Markets and the Revolution of Industry: a unified theory of growth (2010)
Working Paper: The Evolution of Markets and the Revolution of Industry: A Unified Theory of Growth (2009)
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