The Industrial Revolution of 1760 to 1820 was the decisive turning point in modern economic history. During these years, the British economy entered a process of sustained economic growth and this spread to other regions of the world. This article considers two questions: what were the sources of growth during these years and why did the Industrial Revolution happen?
The growth accounting approach is a way of identifying the sources of economic growth, measuring the contributions to growth made by changing quantities of capital and land, and estimating the extent to which growth is due to improved efficiency in the use of those factors of production. The model can be expressed as a simple equation:
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