College papers academic writing service


The first and second fundamentals in columbian industrial revolution after 15th century

  • Secondly, there were the northern seas, stretching eastward from the Baltic to the White Sea and the Siberian coasts and westward to the northern American coasts of Canada , Labrador , the Hudson Bay and the Baffin Island;
  • As potential members of the Catholic Church and subjects of the crown of Castile, they should not be enslaved, it was argued, and they should be granted the same rights as any other Spanish subjects;
  • For example, in 1570 the ratio of silver to gold was 6;
  • Two predominant factors influenced this perception;
  • Despite its limitations, we hope the results of this paper bring to the forefront of literature on Colombian economic history some important quantitative questions to be solved by future research;
  • There, beginning in the second half of the 1600s, they fuelled a population explosion...

Our results show Colombia's remarkably inefficient use of technology relative to a country that is a leader in this regard and provide quantitative estimates of the proximate causes of relative income differences between the two economies. N1, N16, O47 Keywords: Long-run growth, total factor productivity, industrialization, Colombia, relative income differences.

In this paper, we measure and highlight the proximate causes of this relative stagnation, as a prerequisite for a disciplined exploration of the fundamental causes of this phenomenon.

Encounters: With whom, where and when?

The paper focuses on the role of technology and Colombian use of this technology relative to a country that is a leader in this regard. In order to do so, we first document the development pattern of Colombia relative to countries that are now industrialized economies. Using modern growth theory, we measure Colombia's total-factor productivity TFP relative to an artificial benchmark economy and the growth experience of the U.

The model is an extension of Hansen and Prescott 2002 and has several virtues.

European Encounters in the Age of Expansion

First, by endogenizing some key macroeconomic variables such as capital, we are able to estimate relative TFP without using capital which is difficult to estimate for the 19th century. Second, our results are general equilibrium outcomes. In this model, TFP today affects implied TFP tomorrow through the process of capital accumulation, consumption and fertility rates. Third, it tells a unified albeit oversimplified story of the transition from constant living standards Malthusian economy and the process of industrialization to modern, sustained growth Solow's model of economic growth.

There is a growing line of literature focusing on long-run patterns and models of growth starting from the eve of industrialization through modern, sustained economic growth of developed economies Lucas 2002. Likewise, there is a vast body of literature focusing on the determinants of growth proximate and fundamental causes -some of which is largely focused on explaining relative income levels among countries.

Our paper is part of this body of literature and makes use of a growth model to study the determinants of Colombian economic growth over the last 200 years. Despite its limitations, we hope the results of this paper bring to the forefront of literature on Colombian economic history some important quantitative questions to be solved by future research. Our main result is an estimation of Colombia's total-factor productivity over the last 200 years relative to an industrialized leader, the United Kingdom.

We show that in order to explain Colombia's relative income stagnation, TFP differences must be substantial. To explain how industrialization in Colombia which occurred around 1910 was delayed almost 75 years after industrialization in England at the beginning of the 19th century requires a TFP difference between 0. In Section 5 we the first and second fundamentals in columbian industrial revolution after 15th century an interpretation of these results.

The paper is organized as follows. Following this introduction there are four more sections. The second section highlights key stylized facts about the long-run economic growth of the United Kingdom, the United States and Colombia. We take these salient features as restrictions for our modeling framework. The third section briefly describes the model, in particular the main difference with the Hansen and Prescott 2002 model. The fourth section presents the results and the fifth section provides a tentative explanation and concluding remarks.

Finally, the Appendix provides references to all of the data used. We call this economic state a Malthusian economy. Then, on the eve of the 19th century, Europe underwent a dramatic change in all aspects of society. The industrial revolution that started in England in the late 18th century may be the most important event affecting economic and social life over the last 200 years.

Before the industrial revolution, the main economic indicators were as described in the previous paragraph. After the industrial revolution, some countries began to grow at unprecedented rates.

Since then, similar growth patterns characterize today's industrialized economies. Although this development pattern first took place in England at the end of the 18th century, it has spread slowly to many other developing countries, and according to some authors will be experienced, sooner or later, by almost every country Lucas, 2002. According to this literature, the stylized fact of long-run development is the transition from the Malthusian economy to a modern industrialized economy or a Solow economy.

From the point of view of this study, the most salient feature of the latter is the sustained and constant growth of living standards. More precisely, RGDP and real wages grow at a constant rate that is equal to the rate of growth of technological progress.

  1. The phenomenon of the "white Mughals" represented a "succession of unexpected and unplanned minglings of peoples and cultures and ideas". In Section 5 we provide an interpretation of these results.
  2. In this paper, we measure and highlight the proximate causes of this relative stagnation, as a prerequisite for a disciplined exploration of the fundamental causes of this phenomenon. But the Indians could improve only under the guidance of the politically and religiously superior Europeans.
  3. In fact, the question has been posed by none other than Joseph Needham, the foremost English-language scholar of Chinese science and technology.

These and other regularities documented as Kaldor stylized facts have a standard rationalization in the Solow growth model. Given that this transition has taken place in different countries at various times in history, it comes as no surprise that the uneven pace of the industrial revolution has given rise to an enormous inequality in living standards as measured in terms of per capita RGDP. We follow Parente and Prescott 2000 and many others in explaining these income differences as the consequence of inefficient use of technology relative to a technological frontier.

Finally, another important feature during this transition, as documented by Lucas 2002 is the so-called demographic transition, which consists of a pattern of low population growth rates followed by very rapid transitions to higher growth rates and, finally, a return to lower rates.

Servicios Personalizados

Figures 2 to 6 illustrate some of these long-run patterns of economic growth. Figure 2 shows U. Both per capita RGDP and real wages tell similar stories. During the 19th century, U. Then, at the beginning of the 20th century, there was a structural change in per capita RGDP and real wage growth rates.

This pattern coincides with U. During the Malthusian period, per capita RGDP and real wages were almost constant, and then after a transition period the economy evolved into a Solow industrialized economy where per capita RGDP and wages grow at the same rate as the rate of growth of TFP.

  • Secondly, there were the northern seas, stretching eastward from the Baltic to the White Sea and the Siberian coasts and westward to the northern American coasts of Canada , Labrador , the Hudson Bay and the Baffin Island;
  • It is of the utmost importance to understand that not only was Neo-Confucianism new, it was also heresy, even during Zhu Xi's lifetime;
  • Thus the academic and intellectual comeback of classical Confucianism was in essence a return to a more optimistic literature that affirmed the world as humans had made it;
  • The discoveries were no less important from a European perspective, but encounters there — which were the starting point of longstanding relationships — were primarily with populous, highly advanced, powerful countries.

In terms of those same variables, the U. That is, the U. In terms of the demographic transition, the story is very different. On the one hand, the U. Moreover, this pattern is consistent with the view of Lucas 2002 of a radical change in fertility rates on the eve of the Industrial Revolution.

On the other hand, the U. S population growth rates in the 19th century reflect greater immigration rather that a change in fertility rates.

S economic history locates its demographic transition in the middle of the 20th century, well after the U. Figure 3 shows an interesting historical fact. Studying Colombia's long-run economic development in terms of the same dimensions, we find several interesting features that are consistent with our model. The transition from a Malthusian economy constant living standards to a Solow economy is obvious. In terms of per capita RGDP, sustained growth began early in the 20th century, which is consistent with historical accounts of Colombian industrialization.

In terms of real wages, shown in Figure 6the message is similar though not as clear at least regarding real wages at the beginning of the 20th century. Nevertheless, there may be several good reasons why real wages behave slightly differently than what we would expect from the Solow growth model.

First, real wages data are constructed by averaging see the Appendix over many sources of nominal data that are not very reliable.

  • Having been denied a place in the historiography of the Enlightenment and having been ignored by the Hegelian idealist philosophy of history, in the 19th century Africa continued to appear as a land of great contradictions to Europeans;
  • Other civilizations, other histories Europe's relationship with the rest of the Eurasian continent was defined by a different dynamic;
  • Official representatives of the East India Company and members of their staffs in towns across India began to socialize with, and even marry, Hindu or Muslim bibi name for a lady in Urdu and Persian or courtesans and mistresses, adopting Indian customs as a result;
  • For example, in 1570 the ratio of silver to gold was 6;
  • The perceived high degree of refinement of Asian societies meant that Europeans viewed Asian societies as being on a par civilizationally;
  • From the voyage of Vasco da Gama c.

In any case, it is apparent from Figure 6 that if one smoothes out the data from the first 10 or 20 years of the 20th century, real wages grow at a constant rate very much in line with the predictions of the Solow growth model. Finally, and particularly interesting from our modeling framework, the demographic transition is a salient feature of Colombian demographics in the 20th century.

First, during the 19th century, growth rates were low.

Following the industrialization of the Colombian economy at the beginning of the 20th century, the population growth rate increased and only began to fall back to low levels after the 1960s. Second, as opposed to the previously mentioned stylized facts of long-run growth according to which the demographic transition was almost simultaneous with increases in living standards, in Colombia such an increase did not take place until several decades after industrialization.

Third, the demographic transition in our model matches quite well the Colombian experience rather than the previously mentioned stylized facts about industrializations and demographic transitions as documented in Lucas 2002.

On the other hand, by a Solow economy we mean an economy characterized by sustained per capita real GDP growth that matches the rate of growth of technological innovation, exogenous technological progress and real wages that grow at the rate of per capita RGDP. Our working hypothesis is that per capita income differences may be explained by relative TFP efficient use of technology relative to the technological frontier. Our model is the same as Hansen and Prescott except for the introduction of a total factor productivity parameter that we calibrate from observable time series of per capita RGDP.

We refer the reader to Hansen and Prescott for most of the details while focusing here only on the way we have modified and applied their model. The model is a two-period OLG model that will run for six periods. Every period has duration of 35 years and fertility depends on the current to Malthus consumption. The functional form matches Lucas 2002 and Hansen and Prescott 2002 and is given by: Every period there are two available technologies, a Malthus technology and a Solow technology.

Whether one or both are used depends on profits and capital-labor allocation between sectors. The only difference between our model and that of Hansen and Prescott is reflected in the following specifications of technologies in both sectors. In the Solow sector, we assume that production technology takes the form: Now, regarding the calibration of the model, we use Hansen and Prescott 2002 calibration for all parameters except for TFP.

First, in examining Colombian-U. Each represents a period in our model 35 years. Then, on the horizontal axis there are two the first and second fundamentals in columbian industrial revolution after 15th century lines. This marks the very beginning of industrialization. Only by the end of the period, after 35 years, does the Solow technology play a dominant role and it is at this time we can say that industrialization has taken place.

These two periods are highlighted by vertical lines representing U. So far, we have placed two broad restrictions on our model. On the one hand, it must reproduce relative per capita RGDP between the two countries for the whole period and second, it must be consistent with the timing of industrialization in both countries around 1840 for the U. For simplicity's sake, we have made our model consistent with the average relative income differences between the two countries during the Colombian Malthusian period and thereafter we match relative income differences in the next two periods 1910 - 1945 and 1945 - 1980.

That is, we match the Malthus average income difference between the two countries of 0. These restrictions allow us to estimate relative TFP in each sector, Malthus and Solow, for the periods of study as explained below.

RESULTS We first notice that the benchmark calibration where total factor productivity is normalized to one as in Hansen and Prescott 2002 underestimates output per capita compared to the U. Next, notice that the dynamics of income per capita and real wages in Colombia underwent a significant change around 1910.

Therefore, we calibrate relative TFP in the Solow sector in such a way that it is only in 1910 that the Solow technology starts to dominate. Basically, this event relies on proposition 2 in Hansen and Prescott 2002. Our interpretation suggests that these are the technological differences that would explain why Colombia's industrialization occurred 70 years after the U. We examine UK industrialization as a phenomenon starting in 1840 which was the first time the Solow technology became dominant.

This is because when one looks at the data, income per capita in the U.