Agricultural Revolution and Industrialization

Angus Chu, Pietro Peretto and Xilin Wang

MPRA Paper from University Library of Munich, Germany

Abstract: This study explores how agricultural technology affects the endogenous takeoff of an economy in the Schumpeterian growth model. Due to the subsistence requirement for agricultural consumption, an improvement in agricultural technology leads to a reallocation of labor from the agricultural sector to the industrial sector. Therefore, the agricultural improvement expands the firm size in the industrial sector, which determines the incentives for innovation and triggers an endogenous transition from stagnation to growth. Calibrating the model to US data for a quantitative analysis, we find that without the reallocation of labor from agriculture to the industrial sector in the early 19th century, the takeoff of the US economy would have been delayed by about four decades.

Keywords: agricultural technology; endogenous takeoff; innovation; economic growth (search for similar items in EconPapers)
JEL-codes: O3 O4 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-agr, nep-gro and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://mpra.ub.uni-muenchen.de/100321/1/MPRA_paper_100321.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/101224/1/MPRA_paper_101224.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/111697/1/MPRA_paper_111697.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/112978/1/MPRA_paper_112978.pdf revised version (application/pdf)

Related works:
Journal Article: Agricultural revolution and industrialization (2022)
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