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Prices and the impact of the industry in the economic growth: the cases of England (1770-1840) and Colombia (1923-1998)

Author

Listed:
  • Carlos Esteban Posada

    (Subgerencia de Estudios Económicos, Banco de la República)

  • Edgar Trujillo

    (Consejo Superior de Comercio Exterior)

Abstract

The industrial development could be an engine of economic growth through several mechanisms. In this essay we analyzed only one of them: the decline of the industrial prices because of the technical change. We designed an equilibrium model of economic growth, and look at the theoretical predictions of this model for the case of a technical change in the manufacturing (one of the two sectors) leading a process of industrial price reductions and accelerated economic growth. The empirical evidence from the English Industrial Revolution (1770-1840) is pretty well interpreted with our model. In the Colombian case (1923-1998), by contrast, the evidence does not support the hypothesis that the mentioned mechanism was an important, and always in motion, engine of growth

Suggested Citation

  • Carlos Esteban Posada & Edgar Trujillo, 2008. "Prices and the impact of the industry in the economic growth: the cases of England (1770-1840) and Colombia (1923-1998)," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 69, pages 163-200, Julio-Dic.
    • Handle: RePEc:lde:journl:y:2008:i:69:p:163-200
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    More about this item

    Keywords

    industry; technical change; relative prices; economic growth;
    All these keywords.

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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