Demand vs. Supply in the Industrial Revolution

Abstract

It has been widely believed that demand elements, jointly with supply shifts, were crucial in determining the timing, location, and general characteristics of the Industrial Revolution in England and Continental Western Europe. The possible forms which the role of demand might have taken are specified and examined both theoretically and empirically. While demand factors cannot be ruled out altogether, they were definitely of a secondary order of importance. Neither exogenous increases in the demand for manufactures, nor induced technological change are likely to have been a factor of decisive importance. A macroeconomic interpretation of the “demand hypothesis” is examined and rejected.