Eco 201 American Economic History

ECO 201 AMERICAN ECONOMIC HISTORY Name Institution 1. Explain the modern economic issues that motivated the author to study the causes of American industrial success. During the second half of the 19th century, a new wave of industrialization spread throughout the U.S. Several factors were spurring this technological movement on. First, several new technologies were developed and improved in rapid succession. Railroads, steam engines, telegraph lines, and the internal combustion engine all became more readily available. More and more Americans found themselves depending on industrial technologies for communication and economic and social activities. 2. On page 654, the author makes a careless error when discussing the Leontief Paradox. Identify the mistake. Give a correct definition of the Leontief Paradox. The author makes an error when he says that "according to the neo-factor proportions approach, American exports have been intensive in skills or human capital." On the contrary, according to Leontief Paradox," a country with a higher capital per worker has a lower capital/labor ratio in exports than in imports." Meaning a country like the United States with a higher capital per worker ratio has low human capital exports. 3. Provide at least one possible explanation for the Leontief Paradox based on the information in the article. The Leontief conclusion that in the international division of labor, the U.S. specialized in labor-intensive rather than capital intensive goods contradicted the widely accepted view derived from the H.O. theory. Since it was not doubted that the U.S. was relatively capital abundant and relatively labor deficient, it would seem that, following the theory, exports should be capital intensive and import labor intensive. At first, there was no dispute over the H.O. proposition rather there was a dispute over the particular empirical contradiction presented by Leontief. 4. What do the results in Tables 1, 2, and three on pages 656 and 657 imply about the capital, skill, and resource intensity of exports relative to imports? Table 1 justifies the fact that American exports were more capital intensive than its imports from the years 1879 to 1928. However, in terms of the modern coefficients, the nation's rise to global industrial power was not as a result of a shift towards capital intensive manufacturing exports. Table two demonstrates two indicators of skill intensity. First, the percentage of labor force earning over twelve dollars a week in 1890 and the standard industry wage in 1909. In both situations, the export industries tend to pay higher wages as compared to import-competing industries. Table 3 vividly demonstrates that the resource intensity imports were also growing indicating a reverse in the comparative balance is identified in 1928. 5. Do the regression resu...