@article{1d8d2e78667a4c7a860a97f47fca4982,
title = "The evolution of markets and the revolution of industry: A unified theory of growth",
abstract = "This paper puts forth a theory of the Industrial Revolution whereby an economy transitions from Malthusian stagnation to modern economic growth as firms implement cost-reducing production technologies. This take-off of industry occurs once the market reaches a critical size. The mechanism by which market size affects process innovation relies on two overlooked facts pre-dating England's Industrial Revolution: the expansion in the variety of consumer goods and the increase in firm size. We demonstrate this mechanism in a dynamic general equilibrium model calibrated to England's long-run development, and explore how various factors affected the timing of its industrialization.",
keywords = "Competition, Consumer Revolution, Industrial Revolution, Innovation, Unified growth theory",
author = "Klaus Desmet and Parente, {Stephen L.}",
note = "Funding Information: Acknowledgements We thank Michael Bar, Greg Clark, Oded Galor, Thomas Geraghty, Douglas Gollin, Berthold Herrendorf, Peter Howitt, Chad Jones, Richard Rogerson, David Weil, and Dennis Yang, seminar participants at the 2008 NBER Meeting on Economies across space and time, 2008 Midwest Macro Meetings, 2008 SED Meetings, Penn State, Arizona State, Tufts University, UC Davis, Federal Reserve Bank of Atlanta, Federal Reserve Bank of San Francisco, Amsterdam, Universit{\`a} di Cagliari, CEMFI, Stockholm School of Economics, Namur, and Tinbergen Institute as well as three anonymous referees. Financial aid from the European Commission (EFIGE Grant 225551 and HI-POD Grant 225343), the Comunidad de Madrid Funding Information: (PROCIUDAD-CM), the Spanish Ministry of Science (ECO2008-01300 and ECO2011-27014) and the Bank of Spain Excellence Program is acknowledged. The usual disclaimer applies.",
year = "2012",
month = sep,
doi = "10.1007/s10887-012-9080-y",
language = "English (US)",
volume = "17",
pages = "205--234",
journal = "Journal of Economic Growth",
issn = "1381-4338",
publisher = "Springer",
number = "3",
}