Technology in the Great Divergence
NBER Working Paper No. 8596
In this paper, we examine the changes in per-capita income and productivity from 1700 to modern times, and show four things: (1) that incomes per capita diverged more around the world after 1800 than before; (2) that the source of this divergence was increasing differences in the efficiency of economies; (3) that these differences in efficiency were not due to problems of poor countries in getting access to the new technologies of the Industrial Revolution; (4) that the pattern of trade from the late nineteenth century between the poor and the rich economies suggests that the problem of the poor economies was peculiarly a problem of employing labor effectively. This continues to be true today.
Document Object Identifier (DOI): 10.3386/w8596
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