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Early Development, Working Paper 94-02

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Early Development, Working Paper 94-02

DATE: January 1994

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ABSTRACT: Long-term economic development involves four fundamental processes: the exploitation of increasing returns to specialization, the transition from household to market production, knowledge and human capital accumulation, and industrialization. In this paper, we integrate these processes into a coherent framework for thinking about economic history. Pre-industrial development is driven by increasing returns to specialization made possible by a growing population. Increasing specialization eventually activates a learning technology and initiates industrial growth, which carries the economy to a fully market-based balanced-growth path. Among other things, we attribute a role to population and market size that is consistent with the evidence.

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Goodfriend, Marvin and McDermott, John. "Early Development, Working Paper 94-02," Working Papers (Federal Reserve Bank of Richmond) (January 1994). https://fraser.stlouisfed.org/title/3942/item/477053, accessed on April 18, 2024.

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NOTE: This paper appears in the March 1995 American Economic Review

PUBLISHER: Federal Reserve Bank of Richmond

PLACE: Richmond

DIGITAL COPY SOURCE: Federal Reserve Bank of Richmond

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RIGHTS: In Copyright (InC)

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