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Discussion Paper Details

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Title: Trade, Knowledge, and the Industrial Revolution

Author(s): Kevin Hjortsh�j O'Rourke, Ahmed Rahman and Alan M. Taylor

Publication Date: May 2007

Keyword(s): demography, endogenous growth and trade

Programme Area(s): International Macroeconomics

Abstract: Technological change was unskilled-labour-biased during the early Industrial Revolution of the late eighteenth and early nineteenth centuries, but is skill-biased today. This fact is not embedded in extant unified growth models. We develop a model of the transition to sustained economic growth which can endogenously account for both these facts, by allowing the factor bias of technological innovations to reflect the profit-maximising decisions of innovators. Endowments dictated that the initial stages of the Industrial Revolution be unskilled-labour biased. The transition to skill-biased technological change was due to a growth in ``Baconian knowledge'' and international trade. Simulations show that the model does a good job of tracking reality, at least until the mass education reforms of the late nineteenth century.

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Bibliographic Reference

O'Rourke, K, Rahman, A and Taylor, A. 2007. 'Trade, Knowledge, and the Industrial Revolution'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6293