Technology in the Great Divergence

Gregory Clark and Robert C. Feenstra

in Globalization in Historical Perspective

Published by University of Chicago Press

Published in print August 2003 | ISBN: 9780226065984
Published online February 2013 | e-ISBN: 9780226065991 | DOI:
Technology in the Great Divergence

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This chapter examines the changes in per capita income and productivity from 1800 to modern times. It demonstrates the following: (1) There has been increasing inequality in incomes per capita across countries since 1800 despite substantial improvements in the mobility of goods, capital, and technology. (2) The source of this divergence was increasing differences in the efficiency or total factor productivity of economies. (3) These differences in efficiency were not due to the inability of poor countries to get access to the new technologies of the Industrial Revolution. Instead, differences in the efficiency of use of new technologies explain both low levels of income in poor countries and the slow adoption of Western technology. (4) The pattern of trade from the late nineteenth century between the poor and the rich economies should in principle reveal whether the problem of the poor economies was peculiarly a problem of employing labor effectively. A commentary is also included at the end of the chapter.

Keywords: per capita income; productivity; income inequality; efficiency; total factor productivity; trade; poor economies

Chapter.  17378 words.  Illustrated.

Subjects: Economic History

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