Robert E. Lucas on The Industrial Revolution
Update: Gabriel from Economic Investigations notes, in the comments, his praise for Robert Lucas as an economist and more importantly alerts me to the fact that Lucas' middlename is Emerson with and 'E' :) and not .... with an 'F'; I have corrected the headline and post accordingly
Robert E. Lucas economics professor at Chicago University has written an essay on the Industrial Revolution in the past and the future (from 2003!). The paper is also recommended by Mark Thoma (hat tip!) and it looks solid and well written, especially as an introductory piece to modern economic history. Also as Mark points out scholars who take an interest in growth theory will have a good time reading Lucas' piece, that happens to include me so I look forward to spend some time here.
Here is a teaser ...
We live in a world of staggering and unprecedented income inequality. Production per person in the wealthiest economy, the United States, is something like 15 times production per person in the poorest economies of Africa and South Asia. Since the end of the European colonial age, in the 1950s and ’60s, the economies of South Korea, Singapore, Taiwan and Hong Kong have been transformed from among the very poorest in the world to middle-income societies with a living standard about one-third of America’s or higher. In other economies, many of them no worse off in 1960 than these East Asian “miracle” economies were, large fractions of the population still live in feudal sectors with incomes only slightly above subsistence levels. How are we to interpret these successes and failures?
I have brought the story of the industrial revolution up to the present. Where are we going from here? For this, we need a theory of growth, a system of equations that makes economic sense and that fits the facts I have just reviewed. There is a tremendous amount of very promising research now occurring in economics, trying to construct such a system, and in a few years we will be able to run these equations into the future and see how it will look.