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Gragnolati, Ugo
Moschella, Daniele
Pugliese, Emanuele
Year of Publication: 
Series/Report no.: 
LEM Working Paper Series 2011/19
Which features did belong peculiarly to England so as to make it the only possible cradle of the Industrial Revolution? The present work shows that, by combining the effect of relative prices with the joint effect of scale economies and demand, it is possible to provide a purely economic explanation to the location and timing of the Industrial Revolution. The labor-saving innovations which characterized it were profitable only if output could expand after their adoption, thus covering the fixed costs they entailed. The importance of market size is illustrated by means of a detailed case study centered on the cotton industry and on the adoption of the spinning jenny in England and in France during the 18th century. By then, the sufficiently large and relatively well-off English middle class could guarantee an increase in consumption that was not viable in France, where income was lower and more concentrated in the hands of the upper classes. In this sense, demand possibly mattered in the Industrial Revolution.
Industrial Revolution
income distribution
economies of scale
choice of technique
spinning jenny
Document Type: 
Working Paper

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