From Wood to Coal May Well Be from Malthus to Solow

Abstract

Why did the Industrial Revolution happen in England and at that time, but not somewhere else and around a different time? By using an endogenous growth model of directed technical change and natural resources, we provide an explanation of the Industrial Revolution as a transition from wood to coal as the main source of energy. We calibrate the model to historical data on energy uses and growth in England. Switching to the wood and coal stocks of France, the model matches the income gap between the two countries in 1600 and slightly overpredicts the gap in their 1600-1900 growth rates.

Keywords: Industrial Revolution, Coal, Energy Transitions, Directed Technical Change

JEL Classification: N13, N73, O33, Q43