The Growing Dependence of Britain on Trade During the Industrial Revolution

37 Pages Posted: 2 Jun 2014

See all articles by Gregory Clark

Gregory Clark

University of California, Davis - Department of Economics

Kevin O'Rourke

University of Oxford

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: March 2014

Abstract

Many previous studies of the role of trade during the British Industrial Revolution have found little or no role for trade in explaining British living standards or growth rates. We construct a three-region model of the world in which Britain trades with North America and the rest of the world, and calibrate the model to data from the 1760s and 1850s. We find that while trade had only a small impact on British welfare in the 1760s, it had a very large impact in the 1850s. This contrast is robust to a large range of parameter perturbations. Biased technological change and population growth were key in explaining Britain’s growing dependence on trade during the Industrial Revolution.

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

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

Suggested Citation

Clark, Gregory and O'Rourke, Kevin and Taylor, Alan M., The Growing Dependence of Britain on Trade During the Industrial Revolution (March 2014). CEPR Discussion Paper No. DP9878, Available at SSRN: https://ssrn.com/abstract=2444899

Gregory Clark (Contact Author)

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

One Shields Drive
Davis, CA 95616-8578
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Kevin O'Rourke

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
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/

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Centre for Economic Policy Research (CEPR)

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