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CentrePiece article
In brief...Cotton and Cars: the Huge Gains from Process Innovation
Tim Leunig and Joachim Voth
October 2011
Paper No' CEPCP347:
Full Paper (pdf)

CentrePiece 16 (2) Autumn 2011

JEL Classification: N22;N24;O31;O40

Tags: process innovations; new goods; welfare; consumer surplus; mechanisation; mass production; automobiles; cotton; industrial revolution; second industrial revolution

New inventions are good for economic growth, but equally important are improvements in the way we make things - what's known as process innovation. Tim Leunig and Joachim Voth measure the impact of two such innovations - mechanical cotton spinning and the motorcar assembly line - on the world's material wellbeing.