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Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run

Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run This paper studies a growth model that is able to match several key facts of economic history. For thousands of years, the average standard of living seems to have risen very little, despite increases in the level of technology and large increases in the level of the population. Then, after thousands of years of little change, the level of per capita consumption increased dramatically in less than two centuries. Quantitative analysis of the model highlights two factors central to understanding this history. The first is a virtuous circle: more people produce more ideas, which in turn makes additional population growth possible. The second is an improvement in institutions that promote innovation, such as property rights: the simulated economy indicates that arguably the single most important factor in the transition to modern growth has been the increase in the fraction of output paid to compensate inventors for the fruits of their labor. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The B.E. Journal of Macroeconomics de Gruyter

Was an Industrial Revolution Inevitable? Economic Growth Over the Very Long Run

Jones, Charles I.
The B.E. Journal of Macroeconomics , Volume 1 (2): 1 – Nov 29, 2001
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Publisher
de Gruyter
Copyright
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
ISSN
1935-1690
eISSN
1935-1690
DOI
10.2202/1534-6013.1028
Publisher site
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Abstract

This paper studies a growth model that is able to match several key facts of economic history. For thousands of years, the average standard of living seems to have risen very little, despite increases in the level of technology and large increases in the level of the population. Then, after thousands of years of little change, the level of per capita consumption increased dramatically in less than two centuries. Quantitative analysis of the model highlights two factors central to understanding this history. The first is a virtuous circle: more people produce more ideas, which in turn makes additional population growth possible. The second is an improvement in institutions that promote innovation, such as property rights: the simulated economy indicates that arguably the single most important factor in the transition to modern growth has been the increase in the fraction of output paid to compensate inventors for the fruits of their labor.

Journal

The B.E. Journal of Macroeconomics – de Gruyter

Published: Nov 29, 2001

Keywords: very long-run economic growth; technical change; innovation; industrial revolution; demographic transition; institutions

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