Land, labor and the wage-rental ratio: factor price convergence in the late nineteenth century
Kevin O'Rourke (),
Alan Taylor () and
Jeffrey G. Williamson
No 199311, Working Papers from School of Economics, University College Dublin
This paper augments the new historical literature on factor price convergence. The focus is on the late nineteenth century, when economic convergence among the current OECD countries was dramatic; and the focus is on the convergence between Old World and New, by far the biggest participants in the global convergence during the period; and the focus is on land and labor, the two most important factors of production in the nineteenth century. Wage-rental ratios boomed in the Old World and collapsed in the New, moving the resource-rich and labor scarce New World closer to the resource-scarce and labor-abundant Old World. The paper uses both computable general equilibrium models and econometrics to identify the forces causing the convergence. These include: commodity price convergence and the Heckscher-Ohlin Theorem of factor price equalization; migration, capital-deepening and frontier disappearance, factors stressed by Malthus, Ricardo, Wicksell and Viner; and factor-saving biases associated with induced-innovational theory, an endogenous response to relative factor scarcities.
Keywords: Convergence (Economics)--Econometric models; Economic history; Factors of production--Econometric models (search for similar items in EconPapers)
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http://hdl.handle.net/10197/1715 First version, 1993 (application/pdf)
Working Paper: Land, Labor and the Wage-Rental Ratio: Factor Price Convergence in the Late Nineteenth Century (1996)
Working Paper: Land, Labor and the Wage-Rental Ratio Factor Price Convergence in the Late Ninteenth Century (1993)
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Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:199311
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