The first industrial revolution: Resolving the slow growth/rapid industrialization paradox

Abstract

The paper reviews recent attempts to quantify the British industrial revolution. It concludes that the episode was one of rapid industrialization but modest growth. To a considerable extent this is explained by the early adoption of capitalist farming and the weak impact of steam on productivity growth. However, this should not detract from a marked acceleration in the rate of technological change by the second quarter of the 19th century. This may be explicable in an endogenous innovation framework in terms of a reduced cost of accessing useful knowledge. Models of long-run growth should take this enhanced technological capability seriously. © 2005 by the European Economic Association.