Technology and the great divergence

Global economic development since 1820

Robert (Bob) Allen

    Research output: Contribution to journalArticle

    Abstract

    The paper measures productivity growth in seventeen countries in the nineteenth and twentieth centuries. GDP per worker and capital per worker in 1985 US dollars were estimated for 1820, 1850, 1880, 1913, and 1939 by using historical national accounts to back cast Penn World Table data for 1965 and 1990. Frontier and econometric production functions are used to measure neutral technical change and local technical change. The latter includes concurrent increases in capital per worker and output per worker beyond the highest values achieved. These increases were pioneered by the rich countries of the day. An increase in the capital-labor ratio was usually followed by a half century in which rich countries raised output per worker at that higher ratio. Then the rich countries moved on to a higher capital-ratio, and technical progress ceased at the lower ratio they abandoned. Most of the benefits of technical progress accrued to the rich countries that pioneered it. It is remarkable that countries in 1990 with low capital labor ratios achieved an output per worker that was no higher than countries with the same capital labor ratio in 1820. In the course of the last two hundred years, the rich countries created the production function of the world that defines the growth possibilities of poor countries today.

    Original languageEnglish (US)
    Pages (from-to)1-16
    Number of pages16
    JournalExplorations in Economic History
    Volume49
    Issue number1
    DOIs
    StatePublished - Jan 1 2012

    Fingerprint

    Economic development
    Workers
    Divergence
    Great Divergence
    Economic Development
    Labor
    Technical progress
    Technical change
    Production function
    Technical Change
    Capital ratios
    Productivity growth
    National accounts
    20th century
    Econometrics
    Productivity

    Keywords

    • Economic growth
    • Global history
    • Great divergence
    • Technological change

    ASJC Scopus subject areas

    • History
    • Economics and Econometrics

    Cite this

    Technology and the great divergence : Global economic development since 1820. / Allen, Robert (Bob).

    In: Explorations in Economic History, Vol. 49, No. 1, 01.01.2012, p. 1-16.

    Research output: Contribution to journalArticle

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