viernes, 28 de mayo de 2010

A Brief Insight on the British Industrial Revolution

         Technological transfer of advanced agricultural techniques used in the Netherlands in the 18th century, the most advanced country by then but at the same time a land scarce one, to England, a poor and land abundant country, helped the latter generate agricultural surpluses (of labor and output) that allowed for investment in the labor intensive industrial sector. 

       The magnitude of this surplus allowed England to invest enough to quickly displace the Netherlands as the world's industrial powerhouse.

        The fact that potential real appreciation, explained by the massive increase in agricultural exports, did not hurt the export performance of England, could be explained by high Dutch export prices. One could argue that such prices should have been high because the Dutch were collecting temporal rents caused by the fact that they didn't have international industrial competitors at the time.

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