Template-Type: ReDIF-Paper 1.0
Author-Name: Ravshonbek Otojanov
Author-X-Name-First: Ravshonbek
Author-X-Name-Last: Otojanov
Author-Email: r.otojanov@qmul.ac.uk
Author-Workplace-Name: School of Business and Management, Queen Mary University of London.
Author-Name: Roger Fouquet
Author-X-Name-First: Roger
Author-X-Name-Last: Fouquet
Author-Email: r.fouquet@qmul.ac.uk
Author-Workplace-Name: London School of Economics
Title: Factor prices and induced technical change in the Industrial Revolution
Abstract:Allen (2009) has argued that the divergence in factor prices determined the direction of technical change that altered the course of economic growth in Britain. Using historical data for the 1700 – 1914 period, this paper derives and analyses the nature and direction of technical change. The results show that technical change was biased during the Industrial Revolution and that the bias stemmed from the divergence in the cost of labour and energy. In particular, labour saving responded strongly to the acceleration in wage growth in the 1850-1914 period. Overall, technical change was labour-saving, energy-using and hence capital-deepening. Moreover, the evidence shows that the expansion of effective energy supply allowed British economy to sustain output growth in the First Industrial Revolution era. Labour-saving innovations were particularly crucial in the Second Industrial Revolution.
Length: 40 pages
Creation-Date: 2018 
Revision-Date: 
Publication-Status: 
Classification-JEL:N13, O3, O11 
Keywords:  Industrial Revolution; Factor-Saving Technical Change; Induced Technical
Change, Productivity, Innovation.
File-URL: http://cgr.sbm.qmul.ac.uk/CGRWP92.pdf
Number: 92
Handle: RePEc:cgs:wpaper:92