Four centuries of British economic growth: the roles of technology and population

Abstract

Using long historical data for Britain over the period 1620-2006, this paper seeks to explain the importance of innovative activity, population growth and other factors in inducing the transition from the Malthusian trap to the post-Malthusian growth regime. Furthermore, the paper tests the ability of two competing second-generation endogenous growth models to account for the British growth experience. The results suggest that innovative activity was an important force in shaping the Industrial Revolution and that the British growth experience is consistent with Schumpeterian growth theory.

Growth on a Finite Planet: Resources, Technology and Population in the Long Run

“…The interplay between horizontal and vertical innovations allows the economy to grow in the long run at a constant endogenous rate that is independent of factor endowments (Peretto, 1998;Dinopoulos and Thompson, 1998;Peretto and Connolly 2007). This class of models is receiving strong empirical support (Laincz and Peretto, 2006;Ha and Howitt, 2007;Madsen, 2008;Madsen et al 2010;Madsen and Ang, 2011), which further legitimates its use in our theoretical analysis. Connolly and Peretto (2003) studied the role of endogenous fertility in this framework.…”

“…This class of models has received substantial empirical support in recent years (Laincz and Peretto, 2006;Ha and Howitt, 2007;Madsen, 2008;Madsen et al, 2010;Madsen and Ang, 2011) and is particularly useful in addressing our research question because it predicts that the e¤ect of endowments on growth is only temporary. Speci…cally, product proliferation, i.e., net entry, sterilizes the (strong) scale e¤ect in the long run because it fragments the aggregate market into submarkets whose size does not increase with the size of the endowments.…”

Regulations and productivity: Long run effects and nonlinear influences

“…3 We follow Madsen (2010b) and Madsen et al (2010), to model the production function in per worker terms in the following way:…”

Energy, knowledge and economic growth

“…However, unlike the work of Solow, the bulk of this research has not used time series data but, instead, cross country data, averaged over decades. This is no surprise because it is very difficult to find any support for neoclassically-based growth hypotheses, endogenous or not, using time series data for one country (see Ayres and Warr (2009) and Madsen et al (2010)). The problem with using cross country data is that any chosen sample does not contain consistent information since different countries are all at different stages of development, conditioned by their unique evolutionary histories.…”