Arbeitspapier

Entrepreneurship, knowledge, and the industrial revolution

This paper constructs a two-sector unified growth model that explains the timing and the inevitability of an industrial revolution through entrepreneurs' role for the accumulation of useful knowledge. While learning-by-doing in agriculture eventually allows the preindustrial economy to leave its Malthusian trap, an industrial revolution is delayed as entrepreneurs of the manufacturing sector do not attempt invention if not much is known about natural phenomena. On the other hand, these entrepreneurs, as managers, serendipitously identify new useful discoveries in all times, and an industrial revolution inevitably starts at some time. The industrial revolution leads the economy to modern growth, the share of the agricultural sector declines, and the demographic transition is completed with a stabilizing level of population in the very long run. Several factors affect the timing of the industrial revolution in expected directions, but some factors that affect the optimal choice of fertility have ambiguous effects. The analysis almost completely characterizes the equilibrium path from ancient times to the infinite future, and the model economy successfully captures the qualitative aspects of the unified growth experience of England.

Language
Englisch

Bibliographic citation
Series: Economics Discussion Papers ; No. 2014-34

Classification
Wirtschaft
Innovation and Invention: Processes and Incentives
Technological Change: Choices and Consequences; Diffusion Processes
One, Two, and Multisector Growth Models
Fertility; Family Planning; Child Care; Children; Youth
Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: Europe: Pre-1913
Subject
unified growth theory
useful knowledge
industrial enlightenment
demographic transition
endogenous technological change

Event
Geistige Schöpfung
(who)
Attar, M. Aykut
Event
Veröffentlichung
(who)
Kiel Institute for the World Economy (IfW)
(where)
Kiel
(when)
2014

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Arbeitspapier

Associated

  • Attar, M. Aykut
  • Kiel Institute for the World Economy (IfW)

Time of origin

  • 2014

Other Objects (12)