Working Paper: NBER ID: w8596
Authors: Gregory Clark; Robert Feenstra
Abstract: In this paper, we examine the changes in per-capita income and productivity from 1700 to modern times, and show four things: (1) that incomes per capita diverged more around the world after 1800 than before; (2) that the source of this divergence was increasing differences in the efficiency of economies; (3) that these differences in efficiency were not due to problems of poor countries in getting access to the new technologies of the Industrial Revolution; (4) that the pattern of trade from the late nineteenth century between the poor and the rich economies suggests that the problem of the poor economies was peculiarly a problem of employing labor effectively. This continues to be true today.
Keywords: No keywords provided
JEL Codes: N7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Incomes per capita diverged more after 1800 (N93) | increased income inequality across nations (F61) |
| increased differences in the efficiency of economies (TFP) (O49) | higher income levels (D31) |
| inefficiency in employing labor and technology (J24) | low income levels in poor countries (I32) |
| inefficiency in labor utilization (J24) | problem of poor economies (O54) |