The First Industrial Revolution: A Guided Tour for Growth Economists
It is routine for growth economists to appeal to the British industrial revolution as motivation for their papers. This overview draws implications from this important experience for how economists think about growth, empirical growth economics, and policy based on recent historical research. The update it provides may also help to improve the plausibility of future economic interpretations of early industrialization. Technological change is, of course, central to the years 1760-1830, a period to which Thomas Ashton (1948) attached the label first industrial revolution. Thus, it is not surprising that new growth models of the endogenous-innovation variety are much more helpful for the analysis of this period than those that envisage endogenous growth without explicit reference to total-factor-productivity (TFP) growth (Crafts, 1995). It follows that it is important to consider Britain's social capability for growth (i.e., the impact of institutions and policy choices on TFP growth), rather than simply focusing on investment in human and physical capital.
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