Endogenous infrastructure development and spatial takeoff in the first industrial revolution

Abstract

This paper develops a model in which the evolution of the transport sector occurs alongside the growth in trade and output of agricultural and manufacturing firms. Simulation output captures aspects of the historical record of England and Wales over 1710-1881. A number of counterfactuals demonstrate the role that the timing and spatial distribution of infrastructure development play in determining the timing of takeoff. There can be a role for policy in accelerating takeoff through improving infrastructure, but the spatial distribution of that improvement matters.