Cookies?
Library Header Image
LSE Research Online LSE Library Services

Market potential and the rise of US productivity leadership

Liu, Dan and Meissner, Christopher M. (2013) Market potential and the rise of US productivity leadership. In: Modern and comparative economic history seminar, 2013-02-28.

Full text not available from this repository.

Identification Number: Discussion Paper No.1303

Abstract

The US advantage in per capita output, apparent from the late 19th century, is frequently attributed to its relatively large domestic market. We construct market potential measures for the US and 26 other countries between 1880 and 1913 based on a general equilibrium model of production and trade. When compared to other leading economies in 1900, the year around which the US overtakes Britain in productivity leadership, the US does not have the overwhelming lead in market potential that it has in GDP per capita. Still, market potential is positively related to the cross-country distribution of income per capita, but the impact of market potential is likely to be very heterogeneous. We illustrate this in a quantitative calculation of the welfare gains from removing international borders in 1900 within a parsimonious general equilibrium trade model. While there are gains from trade for all nations, the largest European countries do not close their per capita income gaps with the US after this hypothetical rise in market potential. On the other hand, many small countries could have done so.

Item Type: Conference or Workshop Item (Other)
Official URL: http://www2.lse.ac.uk/economicHistory/seminars/Mod...
Additional Information: © 2013 The Authors
Divisions: Economic History
Subjects: H Social Sciences > HC Economic History and Conditions
Sets: Departments > Economic History
Date Deposited: 25 Feb 2013 15:06
Last Modified: 19 May 2020 23:17
URI: http://eprints.lse.ac.uk/id/eprint/48822

Actions (login required)

View Item View Item