Made in America? The New World, the Old, and the Industrial Revolution

28 Pages Posted: 17 Jun 2008

See all articles by Gregory Clark

Gregory Clark

University of California, Davis - Department of Economics

Kevin H. O'Rourke

University of Dublin, Trinity College; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Alan M. Taylor

University of California, Davis - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: June 2008

Abstract

For two decades, the consensus explanation of the British Industrial Revolution has placed technological change and the supply side at center stage, affording little or no role for demand or overseas trade. Recently, alternative explanations have placed an emphasis on the importance of trade with New World colonies, and the expanded supply of raw cotton it provided. We test both hypotheses using calibrated general equilibrium models of the British economy and the rest of the world for 1760 and 1850. Neither claim is supported. Trade was vital for the progress of the industrial revolution; but it was trade with the rest of the world, not the American colonies, that allowed Britain to export its rapidly expanding textile output and achieve growth through extreme specialization in response to shifting comparative advantage.

Keywords: British Industrial Revolution, colonies, Great Divergence, growth, specialisation, trade

JEL Classification: F11, F14, F43, N10, N70, O40

Suggested Citation

Clark, Gregory and O'Rourke, Kevin H. and Taylor, Alan M., Made in America? The New World, the Old, and the Industrial Revolution (June 2008). CEPR Discussion Paper No. DP6856, Available at SSRN: https://ssrn.com/abstract=1146781

Gregory Clark (Contact Author)

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States

Kevin H. O'Rourke

University of Dublin, Trinity College ( email )

Department of Economics
Dublin 2
Ireland
+353 1 608 3594 (Phone)
+353 1 677 2503 (Fax)

HOME PAGE: http://econserv2.bess.tcd.ie/korourke/homepage.htm

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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Centre for Economic Policy Research (CEPR)

London
United Kingdom

Alan M. Taylor

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-1572 (Phone)
530-752-9382 (Fax)

HOME PAGE: http://www.econ.ucdavis.edu/faculty/amtaylor/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://nber.org

Centre for Economic Policy Research (CEPR)

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United Kingdom

HOME PAGE: http://cepr.org

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