TY  - JOUR
AU  - O'Rourke,Kevin
AU  - Taylor,Alan M.
AU  - Williamsmn,Jeffrey G.
TI  - Land, Labor and the Wage-Rental Ratio: Factor Price Convergence in the Late Nineteenth Century
JF  - National Bureau of Economic Research Historical Working Paper Series
VL  - No. 46
PY  - 1996
Y2  - November 1996
UR  - http://www.nber.org/papers/h0046
L1  - http://www.nber.org/papers/h0046.pdf
N1  - Author contact info:
kavin_orourke

Alan M. Taylor
Department of Economics
University of Virginia
Monroe Hall
Charlottesville, VA 22903
Fax: (434) 982-2904
E-Mail: alan.m.taylor@virginia.edu

Jeffrey G. Williamson
350 South Hamilton Street #1002
Madison, WI 53703
Tel: 608-441-0023
Fax: 608-204-0783
E-Mail: jwilliam@fas.harvard.edu
AB  - This paper augments the new historical literature on factor price convergence. The focus is on the late nineteenth century, when economic convergence among the current OECD countries was dramatic; and the focus is on the convergence between Old World and New, by far the biggest participants in the global convergence during the period; and the focus is on land and labor, the two most important factors of production in the nineteenth century. Wage-rental ratios boomed in the Old World and collapsed in the New, moving the resource-rich and labor scarce New World closer to the resource-scarce and labor-abundant Old World. The paper uses both computable general equilibrium models and econometrics to identify the forces causing the convergence. These include: commodity price convergence and the Heckscher-Ohlin Theorem of factor price equalization; migration, capital-deepening and frontier disappearance, factors stressed by Malthus, Ricardo, Wicksell and Viner; and factor-saving biases associated with induced-innovational theory, an endogenous response to relative factor scarcities.
ER  -