TY  - JOUR
AU  - O'Rourke,Kevin H.
AU  - Rahman,Ahmed S.
AU  - Taylor,Alan M.
TI  - Trade, Knowledge, and the Industrial Revolution
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13057
PY  - 2007
Y2  - April 2007
UR  - http://www.nber.org/papers/w13057
L1  - http://www.nber.org/papers/w13057.pdf
N1  - Author contact info:
Kevin H. O'Rourke
All Souls College
Oxford University
Oxford OX1 4AL, UK
Tel: + 44 (0)1865 279 348
Fax: 353-1-6772503
E-Mail: kevin.orourke@all-souls.ox.ac.uk

Ahmed Rahman
Department of Economics
United States Naval Academy
589 McNair Road
Annapolis, MD 21402
E-Mail: rahman@usna.edu

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
AB  - Technological change was unskilled-labor-biased during the early Industrial Revolution of the late eighteenth and early nineteenth centuries, but is skill-biased today. This fact is not embedded in extant unified growth models. We develop a model of the transition to sustained economic growth which can endogenously account for both these facts, by allowing the factor bias of technological innovations to reflect the profit-maximising decisions of innovators. Endowments dictated that the initial stages of the Industrial Revolution be unskilled-labor biased. The transition to skill-biased technological change was due to a growth in "Baconian knowledge" and international trade. Simulations show that the model does a good job of tracking reality, at least until the mass education reforms of the  late nineteenth century.
ER  -