Endogenous technological progress, population and long run economic growth

2017-02-02T02:45:30Z (GMT) by Banerjee, Rajabrata
The underlying central theme that drives this thesis is endogenous technological progress and its contributions to long run economic growth. Over the past four hundred years we have seen dynamic patterns of growth that have varied across countries and over time. In the eighteenth and nineteenth centuries Britain was the technological leader, with Germany and France catching up, and then in the twentieth century the world saw a new technological leader, where the United States forged ahead of Europe. This thesis is a collection of three self-contained studies where in each chapter one important technological epoch is examined back in time. Moreover, to understand the different forces of economic growth and to characterize each stage of development a time series estimation method is chosen, using dynamic time series techniques and estimation methods. The first study of this thesis is a journal article co-authored with my thesis supervisors (revised and resubmitted to Journal of Economic Growth), where, using long historical data for Britain over the period 1620-2006, we seek to explain the importance of innovative activity and population growth in inducing the transition from the Malthusian trap to the post-Malthusian growth regime in Britain. Furthermore, the paper tests the ability of two competing second-generation endogenous growth models to explain the British Industrial Revolution. The results suggest that innovative activity was an important force in shaping the Industrial Revolution and that the British growth experience is consistent with Schumpeterian growth theory. The second study in this thesis is a chapter solely written by me; however findings from this chapter have also been written up as a journal article and submitted to “European Economic Review”, where the article is currently under review. The journal paper titled “Innovation, Technological Change and the British Agricultural Revolution” and is co-authored with my thesis supervisors. In the second study, the roles of technological progress in advancing the productivity growth in British agriculture in the period 1620-1850 are examined. Two different indicators of technological progress are considered, namely, agricultural patents issued and number of technical books published on farming. In doing so, the modern endogenous growth models have been tested, namely, the Schumpeterian and Semi-endogenous models of economic growth, where support was acquired in favour of Schumpeterian growth model. The third and final study explores the contributions of technological progress on a sectoral basis to shed some light on the phenomenon of ‘America’s catching-up and forging ahead of Britain’. This study finds that agriculture and service sectors contributed significantly to the US take-off period. Furthermore, increased research intensity, R&D investments, together with increasing returns to land in the agricultural sector; and major transformations in the transport sector, paved the way for the American economy to grow faster than its counterparts in Britain. Overall, contributions from all three chapters fill a number of important gaps in the literature and show that accurate explanations of the mechanisms behind technological epochs back in time can have significant policy implications for both advanced and currently growing economies.