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A General Purpose Technology at Work: The Corliss Steam Engine in the Late 19th Century

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  • Trajtenberg, Manuel
  • Rosenberg, Nathan
Abstract
The steam engine is widely regarded as the icon of the Industrial Revolution and a prime example of a ?General Purpose Technology,? and yet its contribution to growth is far from transparent. This Paper examines the role that a particular innovative design in steam power, the Corliss engine, played in the intertwined processes of industrialization and urbanization that characterized the growth of the US economy in the late 19th century. Waterpower offered abundant and cheap energy, but restricted the location of manufacturing just to areas with propitious topography and climate. Steam engines offered the possibility of relaxing this severe constraint, allowing industry to locate where key considerations such as access to markets for inputs and outputs directed. The enhanced performance of the Corliss engine as well as its fuel efficiency helped tip the balance in favour of steam in the fierce contest with waterpower. With the aid of detailed data on the location of Corliss engines and waterwheels and a two-stage estimation strategy, we show that the deployment of Corliss engines indeed served as a catalyst for the massive relocation of industry away from rural areas and into large urban centers, thus fuelling agglomeration economies, and attracting further population growth. This illustrates what we believe is an important aspect of the dynamics of GPTs, whether it is electricity in the early 20th century or Information Technologies in the present era: the fact that GPTs induce the widespread and more efficient relocation of economic activity, which in turn fosters long-term growth.

Suggested Citation

  • Trajtenberg, Manuel & Rosenberg, Nathan, 2001. "A General Purpose Technology at Work: The Corliss Steam Engine in the Late 19th Century," CEPR Discussion Papers 3008, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3008
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    3. Josef Falkinger & Volker Grossmann, 2005. "Institutions and Development: The Interaction Between Trade Regime and Political System," Journal of Economic Growth, Springer, vol. 10(3), pages 231-272, September.
    4. Wallsten, Scott, 2003. "Regulation and internet use in developing countries," Policy Research Working Paper Series 2979, The World Bank.
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    9. Thomas Hempell, 2005. "Does experience matter? innovations and the productivity of information and communication technologies in German services," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(4), pages 277-303.
    10. Carolina Castaldi & Alessandro Nuvolari, 2004. "Technological Revolutions and Economic Growth: The “Age of Steam” Reconsidered," LEM Papers Series 2004/11, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
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    12. Falkinger, Josef & Grossmann, Volker, 2005. "Distribution of Natural Resources, Entrepreneurship, and Economic Development: Growth Dynamics with Two Elites," IZA Discussion Papers 1756, Institute of Labor Economics (IZA).
    13. Mauro Napoletano & Andrea Roventini & Sandro Sapio, 2004. "Yeast vs. Mushrooms: A Note on Harberger's "A Vision of the Growth Process"," LEM Papers Series 2004/03, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    14. Sukkoo Kim, 2005. "Industrialization and Urbanization: Did the Steam Engine Contribute to the Growth of Cities in the United States?," NBER Working Papers 11206, National Bureau of Economic Research, Inc.
    15. K.J Joseph & Vinoj Abraham, 2007. "Information technology and productivity: Evidence from India's manufacturing sector," Centre for Development Studies, Trivendrum Working Papers 389, Centre for Development Studies, Trivendrum, India.
    16. Michaels, Guy, 2010. "Challenges for research on resource-rich economies," LSE Research Online Documents on Economics 55256, London School of Economics and Political Science, LSE Library.
    17. Nicholas Crafts, 2004. "Steam as a general purpose technology: A growth accounting perspective," Economic Journal, Royal Economic Society, vol. 114(495), pages 338-351, April.
    18. Sukkoo Kim, 2006. "Division of Labor and the Rise of Cities: Evidence from U.S. Industrialization, 1850-1880," NBER Working Papers 12246, National Bureau of Economic Research, Inc.
    19. Castaldi, C. & Nuvolari, A., 2003. "Technological Revolutions and Economic Growth:The �Age of Steam� Reconsidered," Working Papers 03.25, Eindhoven Center for Innovation Studies.
    20. Paul A. David, 2005. "Productivity growth prospects and the new economy in historical perspective," Economic History 0502005, University Library of Munich, Germany.
    21. Bade, Franz-Josef & Laaser, Claus-Friedrich & Soltwedel, Rüdiger, 2004. "Urban specialization in the internet age: Empirical findings for Germany," Kiel Working Papers 1215, Kiel Institute for the World Economy (IfW Kiel).
    22. Sandro Sapio & Grid Thoma, 2006. "The Growth of Industrial Sectors: Theoretical Insights and Empirical Evidence from U.S. Manufacturing," LEM Papers Series 2006/09, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

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    More about this item

    Keywords

    General purpose technologies; Steam engine; Waterpower; Urbanization; Growth;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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