Industrial Revolution: factor prices and innovations

BY DR. RAVSHONBEK (ROSH) OTOJANOV

A previous post outlined a number of major inventions (or macro-inventions) of the eighteenth century that were the basis for the inventions of the nineteenth century that propelled productivity growth. These innovations, according to Robert Allen, would not have taken place in Britain in the absence of cheap coal deposits. Another unique factor driving the innovations was Britain’s expensive labour. Labour was expensive in Britain, and economic historians have traced the origins of the high wages back to the Black Death plague (in the 14th century) that reduced the working age population significantly. Moreover, Britain’s commercial success in the international economy played a role in the growth of wages.

Rosh01_02
Figure 1. Average nominal wages and the cost of wood and coal, 1600-1914. Panel (a): Average weekly wages. Panel (b): The price of wood (1600-1870) and coal in GBP per Toe. Data sources: Thomas and Dimsdale (2017) and Fouquet (2011)

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CFP| Workshop on Development Economics

Professor Almudena Sevilla is organising a workshop on development on June 8th as part of CGR research activities. Confirmed speakers are Kaivan Munshi (Professor of Economics at Cambridge University) and Adrienne Lucas (Associate Professor at Delaware University) .

World map by income 2017
Downloaded from http://databank.worldbank.org/data/download/site-content/wdi/maps/2017/world-by-income-wdi-2017.pdf

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