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102-695: The river played an important role in the industrial development in this region from the 17th century until the early 20th century as a source for hydropower . Small-scale hydroelectric dams are located in Västerås (the Turbine House and at Falkenberg's Mill), Skerike , and Skultuna , among others. The river also provided power for the many water wheels associated with Skultuna's centuries-old copper foundry Skultuna mässingsbruk . 59°36′04″N 16°32′48″E  /  59.6010°N 16.5468°E  / 59.6010; 16.5468 This article related to

204-400: A better way could be found to remove the seed. Eli Whitney responded to the challenge by inventing the inexpensive cotton gin . A man using a cotton gin could remove seed from as much upland cotton in one day as would previously have taken two months to process, working at the rate of one pound of cotton per day. These advances were capitalised on by entrepreneurs , of whom the best known

306-520: A cottage industry under the putting-out system . Occasionally, the work was done in the workshop of a master weaver. Under the putting-out system, home-based workers produced under contract to merchant sellers, who often supplied the raw materials. In the off-season, the women, typically farmers' wives, did the spinning and the men did the weaving. Using the spinning wheel , it took anywhere from four to eight spinners to supply one handloom weaver. The flying shuttle , patented in 1733 by John Kay —with

408-401: A country sells off its resources to entities outside their country this will also be reflected over time in decreased GNI, but not decreased GDP. This would make the use of GDP more attractive for politicians in countries with increasing national debt and decreasing assets. Gross national income (GNI) equals GDP plus income receipts from the rest of the world minus income payments to the rest of

510-637: A country's citizens at home and abroad rather than its "resident institutional units" (see OECD definition above). The switch from GNP to GDP in the United States occurred in 1991. The role that measurements of GDP played in World War II was crucial to the subsequent political acceptance of GDP values as indicators of national development and progress. A crucial role was played here by the U.S. Department of Commerce under Milton Gilbert where ideas from Kuznets were embedded into institutions . The history of

612-583: A detailed account of the term. Economic historians and authors such as Mendels, Pomeranz , and Kridte argue that proto-industrialisation in parts of Europe, the Muslim world , Mughal India , and China created the social and economic conditions that led to the Industrial Revolution, thus causing the Great Divergence . Some historians, such as John Clapham and Nicholas Crafts , have argued that

714-444: A fairly accurate idea of what it is and know it is tough to come up with quantitative measures for such constructs as happiness, quality of life, and well-being. From the perspective of environmental, social and governance (ESG) measures, GDP per capita trends can be influenced by factors such as gender parity and elements of regulatory quality. In an example of a developing country with a mixed economy from 2008 to 2021, elements such as

816-638: A global trading empire with colonies in North America and the Caribbean. Britain had major military and political hegemony on the Indian subcontinent ; particularly with the proto-industrialised Mughal Bengal , through the activities of the East India Company . The development of trade and the rise of business were among the major causes of the Industrial Revolution. Developments in law also facilitated

918-482: A legal system that supported business; and financial capital available to invest. Once industrialisation began in Great Britain, new factors can be added: the eagerness of British entrepreneurs to export industrial expertise and the willingness to import the process. Britain met the criteria and industrialized starting in the 18th century, and then it exported the process to western Europe (especially Belgium, France, and

1020-421: A mechanised industry. Other inventors increased the efficiency of the individual steps of spinning (carding, twisting and spinning, and rolling) so that the supply of yarn increased greatly. Steam power was then applied to drive textile machinery. Manchester acquired the nickname Cottonopolis during the early 19th century owing to its sprawl of textile factories. Although mechanisation dramatically decreased

1122-708: A more even thickness. The technology was developed with the help of John Wyatt of Birmingham . Paul and Wyatt opened a mill in Birmingham which used their rolling machine powered by a donkey. In 1743, a factory opened in Northampton with 50 spindles on each of five of Paul and Wyatt's machines. This operated until about 1764. A similar mill was built by Daniel Bourn in Leominster , but this burnt down. Both Lewis Paul and Daniel Bourn patented carding machines in 1748. Based on two sets of rollers that travelled at different speeds, it

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1224-406: A number of subsequent improvements including an important one in 1747—doubled the output of a weaver, worsening the imbalance between spinning and weaving. It became widely used around Lancashire after 1760 when John's son, Robert , invented the dropbox, which facilitated changing thread colors. Lewis Paul patented the roller spinning frame and the flyer-and- bobbin system for drawing wool to

1326-410: A reverberatory furnace, coal or coke could be used as fuel. The puddling process continued to be used until the late 19th century when iron was being displaced by mild steel. Because puddling required human skill in sensing the iron globs, it was never successfully mechanised. Rolling was an important part of the puddling process because the grooved rollers expelled most of the molten slag and consolidated

1428-671: A river in Sweden is a stub . You can help Misplaced Pages by expanding it . Industrial Revolution The Industrial Revolution , sometimes divided into the First Industrial Revolution and Second Industrial Revolution , was a period of global transition of the human economy towards more widespread, efficient and stable manufacturing processes that succeeded the Agricultural Revolution . Beginning in Great Britain ,

1530-438: A simple, wooden framed machine that only cost about £6 for a 40-spindle model in 1792 and was used mainly by home spinners. The jenny produced a lightly twisted yarn only suitable for weft, not warp. The spinning frame or water frame was developed by Richard Arkwright who, along with two partners, patented it in 1769. The design was partly based on a spinning machine built by Kay, who was hired by Arkwright. For each spindle

1632-621: A specific time period by a country or countries. GDP is often used to measure the economic health of a country or region. Several national and international economic organizations maintain definitions of GDP, such as the OECD and the International Monetary Fund . The ratio of GDP to the total population of the region is the GDP per capita and can approximate a concept of a standard of living . Nominal GDP does not reflect differences in

1734-620: A variety of cotton cloth, some of exceptionally fine quality. Cotton was a difficult raw material for Europe to obtain before it was grown on colonial plantations in the Americas. The early Spanish explorers found Native Americans growing unknown species of excellent quality cotton: sea island cotton ( Gossypium barbadense ) and upland green seeded cotton Gossypium hirsutum . Sea island cotton grew in tropical areas and on barrier islands of Georgia and South Carolina but did poorly inland. Sea island cotton began being exported from Barbados in

1836-538: A weight. The weights kept the twist from backing up before the rollers. The bottom rollers were wood and metal, with fluting along the length. The water frame was able to produce a hard, medium-count thread suitable for warp, finally allowing 100% cotton cloth to be made in Britain. Arkwright and his partners used water power at a factory in Cromford , Derbyshire in 1771, giving the invention its name. Samuel Crompton invented

1938-430: Is Arkwright. He is credited with a list of inventions, but these were actually developed by such people as Kay and Thomas Highs ; Arkwright nurtured the inventors, patented the ideas, financed the initiatives, and protected the machines. He created the cotton mill which brought the production processes together in a factory, and he developed the use of power—first horsepower and then water power—which made cotton manufacture

2040-467: Is US$ 5,040,107.75 (in a million). Predictably, as a developed country, Japan has a higher GNI (by 182,779.46, in millions of USD), which is indicative that the production level in the country is higher than that of national production. On the other hand, the case with Armenia is the opposite, with GDP being lower than GNI by US$ 196.12 (in million). This demonstrates that countries receive investments and foreign aid from abroad. The Total income divided by

2142-425: Is also sometimes expressed as: The third way to estimate GDP is to calculate the sum of the final uses of goods and services (all uses except intermediate consumption) measured in purchasers' prices. Market goods that are produced are purchased by someone. In the case where a good is produced and unsold, the standard accounting convention is that the producer has bought the good from themselves. Therefore, measuring

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2244-838: Is calculated this way it is sometimes called gross domestic income (GDI), or GDP (I). GDI should provide the same amount as the expenditure method described later. By definition, GDI is equal to GDP. In practice, however, measurement errors will make the two figures slightly off when reported by national statistical agencies. This method measures GDP by adding incomes that firms pay households for factors of production they hire – wages for labour, interest for capital, rent for land and profits for entrepreneurship. The US "National Income and Product Accounts" divide incomes into five categories: These five income components sum to net domestic income at factor cost. Two adjustments must be made to get GDP: Total income can be subdivided according to various schemes, leading to various formulae for GDP measured by

2346-423: Is contributed at each stage of production. This approach mirrors the OECD (Organisation for Economic Co-operation and Development) definition given above. Gross value added = gross value of output – value of intermediate consumption. Value of output = value of the total sales of goods and services plus the value of changes in the inventory. The sum of the gross value added in the various economic activities

2448-448: Is desirable to compensate for changes in the value of money—for the effects of inflation or deflation. To make it more meaningful for year-to-year comparisons, it may be multiplied by the ratio between the value of money in the year the GDP was measured and the value of money in a base year. For example, suppose a country's GDP in 1990 was $ 100 million and its GDP in 2000 was $ 300 million . Suppose also that inflation had halved

2550-404: Is known as "GDP at factor cost". GDP at factor cost plus indirect taxes less subsidies on products = "GDP at producer price". For measuring the output of domestic product, economic activities (i.e. industries) are classified into various sectors. After classifying economic activities, the output of each sector is calculated by any of the following two methods: The value of output of all sectors

2652-423: Is measured widely in that some measure of GDP is available for almost every country in the world, allowing inter-country comparisons. It is measured consistently in that the technical definition of GDP is relatively consistent among countries. It can be argued that GDP per capita is an indicator of standard of living. As a result, GDP per capita as a standard of living is a continued usage because most people have

2754-494: Is normally referred to as SNA2008 to distinguish it from the previous edition published in 1993 (SNA93) or 1968 (called SNA68) SNA2008 provides a set of rules and procedures for the measurement of national accounts. The standards are designed to be flexible, to allow for differences in local statistical needs and conditions. The raw GDP figure as given by the equations above is called the nominal, historical, or current GDP. When one compares GDP figures from one year to another, it

2856-407: Is now known, gross national income (GNI). The difference is that GDP defines its scope according to location, while GNI defines its scope according to ownership. In a global context, world GDP and world GNI are, therefore, equivalent terms. GDP is a product produced within a country's borders; GNI is product produced by enterprises owned by a country's citizens. The two would be the same if all of

2958-551: Is often used as a metric for international comparisons as well as a broad measure of economic progress . It is often considered to be the world's most powerful statistical indicator of national development and progress. However, critics of the growth imperative often argue that GDP measures were never intended to measure progress, and leave out key other externalities , such as resource extraction , environmental impact and unpaid domestic work . Alternative economic indicators such as doughnut economics use other measures, such as

3060-450: Is then added to get the gross value of output at factor cost. Subtracting each sector's intermediate consumption from gross output value gives the GVA (=GDP) at factor cost. Adding indirect tax minus subsidies to GVA (GDP) at factor cost gives the "GVA (GDP) at producer prices". The second way of estimating GDP is to use "the sum of primary incomes distributed by resident producer units". If GDP

3162-598: The Human Development Index or Better Life Index , as better approaches to measuring the effect of the economy on human development and well being . William Petty came up with a concept of GDP, to calculate the tax burden , and argue landlords were unfairly taxed during warfare between the Dutch and the English between 1652 and 1674. Charles Davenant developed the method further in 1695. The modern concept of GDP

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3264-410: The cost of living and the inflation rates of the countries; therefore, using a basis of GDP per capita at purchasing power parity (PPP) may be more useful when comparing living standards between nations, while nominal GDP is more useful comparing national economies on the international market. Total GDP can also be broken down into the contribution of each industry or sector of the economy. GDP

3366-571: The electrical telegraph , widely introduced in the 1840s and 1850s in the United Kingdom and the United States, were not powerful enough to drive high rates of economic growth. Rapid economic growth began to reoccur after 1870, springing from a new group of innovations in what has been called the Second Industrial Revolution . These included new steel-making processes , mass production , assembly lines , electrical grid systems,

3468-488: The spinning mule in 1779, so called because it is a hybrid of Arkwright's water frame and James Hargreaves 's spinning jenny in the same way that a mule is the product of crossbreeding a female horse with a male donkey . Crompton's mule was able to produce finer thread than hand spinning and at a lower cost. Mule-spun thread was of suitable strength to be used as a warp and finally allowed Britain to produce highly competitive yarn in large quantities. Realising that

3570-441: The 1650s. Upland green seeded cotton grew well on inland areas of the southern U.S. but was not economical because of the difficulty of removing seed, a problem solved by the cotton gin . A strain of cotton seed brought from Mexico to Natchez, Mississippi , in 1806 became the parent genetic material for over 90% of world cotton production today; it produced bolls that were three to four times faster to pick. The Age of Discovery

3672-653: The German states) in the early 19th century. The United States copied the British model in the early 19th century, and Japan copied the Western European models in the late 19th century. The commencement of the Industrial Revolution is closely linked to a small number of innovations, beginning in the second half of the 18th century. By the 1830s, the following gains had been made in important technologies: In 1750, Britain imported 2.5 million pounds of raw cotton, most of which

3774-492: The Indian industry. Bar iron was the commodity form of iron used as the raw material for making hardware goods such as nails, wire, hinges, horseshoes, wagon tires, chains, etc., as well as structural shapes. A small amount of bar iron was converted into steel. Cast iron was used for pots, stoves, and other items where its brittleness was tolerable. Most cast iron was refined and converted to bar iron, with substantial losses. Bar iron

3876-425: The Industrial Revolution began in Britain in the 1780s and was not fully felt until the 1830s or 1840s, while T. S. Ashton held that it occurred roughly between 1760 and 1830. Rapid adoption of mechanized textiles spinning occurred in Britain in the 1780s, and high rates of growth in steam power and iron production occurred after 1800. Mechanised textile production spread from Great Britain to continental Europe and

3978-485: The Industrial Revolution spread to continental Europe and the United States , from around 1760 to about 1820–1840. This transition included going from hand production methods to machines ; new chemical manufacturing and iron production processes; the increasing use of water power and steam power ; the development of machine tools ; and the rise of the mechanised factory system . Output greatly increased, and

4080-572: The Scottish inventor James Beaumont Neilson in 1828, was the most important development of the 19th century for saving energy in making pig iron. By using preheated combustion air, the amount of fuel to make a unit of pig iron was reduced at first by between one-third using coke or two-thirds using coal; the efficiency gains continued as the technology improved. Hot blast also raised the operating temperature of furnaces, increasing their capacity. Using less coal or coke meant introducing fewer impurities into

4182-619: The United States in the early 19th century, with important centres of textiles, iron and coal emerging in Belgium and the United States and later textiles in France. An economic recession occurred from the late 1830s to the early 1840s when the adoption of the Industrial Revolution's early innovations, such as mechanised spinning and weaving, slowed as their markets matured; and despite the increasing adoption of locomotives, steamboats and steamships, and hot blast iron smelting . New technologies such as

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4284-517: The Working Class in England in 1844 spoke of "an industrial revolution, a revolution which at the same time changed the whole of civil society". Although Engels wrote his book in the 1840s, it was not translated into English until the late 19th century, and his expression did not enter everyday language until then. Credit for popularising the term may be given to Arnold Toynbee , whose 1881 lectures gave

4386-427: The accounting year. ) So for example if a car manufacturer buys auto parts , assembles the car and sells it, only the final car sold is counted towards the GDP. Meanwhile, if a person buys replacement auto parts to install them on their car, those are counted towards the GDP. According to the U.S. Bureau of Economic Analysis, which is responsible for calculating the national accounts in the United States, "In general,

4488-417: The average production of a person in the country. Lists of GDP per capita: GDP per capita is often used as an indicator of living standards. The major advantage of GDP per capita as an indicator of the standard of living is that it is measured frequently, widely, and consistently. It is measured frequently in that most countries provide information on GDP every quarter, allowing trends to be seen quickly. It

4590-471: The coal do not migrate into the metal. This technology was applied to lead from 1678 and to copper from 1687. It was also applied to iron foundry work in the 1690s, but in this case the reverberatory furnace was known as an air furnace. (The foundry cupola is a different, and later, innovation.) Coke pig iron was hardly used to produce wrought iron until 1755–56, when Darby's son Abraham Darby II built furnaces at Horsehay and Ketley where low sulfur coal

4692-409: The coke pig iron he made was not suitable for making wrought iron and was used mostly for the production of cast iron goods, such as pots and kettles. He had the advantage over his rivals in that his pots, cast by his patented process, were thinner and cheaper than theirs. In 1750, coke had generally replaced charcoal in the smelting of copper and lead and was in widespread use in glass production. In

4794-461: The column of materials (iron ore, fuel, slag) flowing down the blast furnace more porous and did not crush in the much taller furnaces of the late 19th century. As cast iron became cheaper and widely available, it began being a structural material for bridges and buildings. A famous early example is the Iron Bridge built in 1778 with cast iron produced by Abraham Darby III. However, most cast iron

4896-540: The concept of GDP should be distinguished from the history of changes in many ways of estimating it. The value added by firms is relatively easy to calculate from their accounts, but the value added by the public sector , by financial industries, and by intangible asset creation is more complex. These activities are increasingly important in developed economies, and the international conventions governing their estimation and their inclusion or exclusion in GDP regularly change in an attempt to keep up with industrial advances. In

4998-491: The cost of cotton cloth, by the mid-19th century machine-woven cloth still could not equal the quality of hand-woven Indian cloth, in part because of the fineness of thread made possible by the type of cotton used in India, which allowed high thread counts. However, the high productivity of British textile manufacturing allowed coarser grades of British cloth to undersell hand-spun and woven fabric in low-wage India, eventually destroying

5100-487: The cotton textile industry in Britain was 2.6% in 1760, 17% in 1801, and 22.4% in 1831. Value added by the British woollen industry was 14.1% in 1801. Cotton factories in Britain numbered approximately 900 in 1797. In 1760, approximately one-third of cotton cloth manufactured in Britain was exported, rising to two-thirds by 1800. In 1781, cotton spun amounted to 5.1 million pounds, which increased to 56 million pounds by 1800. In 1800, less than 0.1% of world cotton cloth

5202-504: The country, but owned by one of its citizens, counts as part of its GNI but not its GDP. For example, the GNI of the US is the value of output produced by American-owned firms, regardless of where the firms are located. Similarly, if a country becomes increasingly in debt, and spends large amounts of income servicing this debt this will be reflected in a decreased GNI but not a decreased GDP. Similarly, if

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5304-427: The country. Steam engines made the use of higher-pressure and volume blast practical; however, the leather used in bellows was expensive to replace. In 1757, ironmaster John Wilkinson patented a hydraulic powered blowing engine for blast furnaces. The blowing cylinder for blast furnaces was introduced in 1760 and the first blowing cylinder made of cast iron is believed to be the one used at Carrington in 1768 that

5406-629: The economic and social changes occurred gradually and that the term revolution is a misnomer. This is still a subject of debate among some historians. Six factors facilitated industrialisation: high levels of agricultural productivity, such as that reflected in the British Agricultural Revolution , to provide excess manpower and food; a pool of managerial and entrepreneurial skills; available ports, rivers, canals, and roads to cheaply move raw materials and outputs; natural resources such as coal, iron, and waterfalls; political stability and

5508-666: The entry for "Industry": "The idea of a new social order based on major industrial change was clear in Southey and Owen , between 1811 and 1818, and was implicit as early as Blake in the early 1790s and Wordsworth at the turn of the [19th] century." The term Industrial Revolution applied to technological change was becoming more common by the late 1830s, as in Jérôme-Adolphe Blanqui 's description in 1837 of la révolution industrielle . Friedrich Engels in The Condition of

5610-460: The expiration of the Arkwright patent would greatly increase the supply of spun cotton and lead to a shortage of weavers, Edmund Cartwright developed a vertical power loom which he patented in 1785. In 1776, he patented a two-man operated loom. Cartwright's loom design had several flaws, the most serious being thread breakage. Samuel Horrocks patented a fairly successful loom in 1813. Horock's loom

5712-519: The first highly mechanised factory was John Lombe 's water-powered silk mill at Derby , operational by 1721. Lombe learned silk thread manufacturing by taking a job in Italy and acting as an industrial spy; however, because the Italian silk industry guarded its secrets closely, the state of the industry at that time is unknown. Although Lombe's factory was technically successful, the supply of raw silk from Italy

5814-400: The first successful cylinder for a Boulton and Watt steam engine in 1776, he was given an exclusive contract for providing cylinders. After Watt developed a rotary steam engine in 1782, they were widely applied to blowing, hammering, rolling and slitting. The solutions to the sulfur problem were the addition of sufficient limestone to the furnace to force sulfur into the slag as well as

5916-553: The income approach. A common one is: The sum of COE , GOS and GMI is called total factor income; it is the income of all of the factors of production in society. It measures the value of GDP at factor (basic) prices. The difference between basic prices and final prices (those used in the expenditure calculation) is the total taxes and subsidies that the government has levied or paid on that production. So adding taxes less subsidies on production and imports converts GDP(I) at factor cost to GDP(I) at final prices. Total factor income

6018-410: The information required (especially information on expenditure and production by governments). The international standard for measuring GDP is contained in the book System of National Accounts (2008), which was prepared by representatives of the International Monetary Fund , European Union , Organisation for Economic Co-operation and Development , United Nations and World Bank . The publication

6120-517: The iron industries during the Industrial Revolution was the replacement of wood and other bio-fuels with coal ; for a given amount of heat, mining coal required much less labour than cutting wood and converting it to charcoal , and coal was much more abundant than wood, supplies of which were becoming scarce before the enormous increase in iron production that took place in the late 18th century. In 1709, Abraham Darby made progress using coke to fuel his blast furnaces at Coalbrookdale . However,

6222-452: The large-scale manufacture of machine tools, and the use of increasingly advanced machinery in steam-powered factories. The earliest recorded use of the term "Industrial Revolution" was in July 1799 by French envoy Louis-Guillaume Otto , announcing that France had entered the race to industrialise. In his 1976 book Keywords: A Vocabulary of Culture and Society , Raymond Williams states in

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6324-467: The mass of hot wrought iron. Rolling was 15 times faster at this than a trip hammer . A different use of rolling, which was done at lower temperatures than that for expelling slag, was in the production of iron sheets, and later structural shapes such as beams, angles, and rails. The puddling process was improved in 1818 by Baldwyn Rogers, who replaced some of the sand lining on the reverberatory furnace bottom with iron oxide . In 1838 John Hall patented

6426-401: The modern capitalist economy, while the Industrial Revolution began an era of per-capita economic growth in capitalist economies. Economic historians agree that the onset of the Industrial Revolution is the most important event in human history since the domestication of animals and plants. The precise start and end of the Industrial Revolution is still debated among historians, as is

6528-454: The most important effect of the Industrial Revolution was that the standard of living for the general population in the Western world began to increase consistently for the first time in history, although others have said that it did not begin to improve meaningfully until the late 19th and 20th centuries. GDP per capita was broadly stable before the Industrial Revolution and the emergence of

6630-537: The number of cotton goods consumed in Western Europe was minor until the early 19th century. By 1600, Flemish refugees began weaving cotton cloth in English towns where cottage spinning and weaving of wool and linen was well established. They were left alone by the guilds who did not consider cotton a threat. Earlier European attempts at cotton spinning and weaving were in 12th-century Italy and 15th-century southern Germany, but these industries eventually ended when

6732-476: The pace of economic and social changes . According to Cambridge historian Leigh Shaw-Taylor, Britain was already industrialising in the 17th century, and "Our database shows that a groundswell of enterprise and productivity transformed the economy in the 17th century, laying the foundations for the world's first industrial economy. Britain was already a nation of makers by the year 1700" and "the history of Britain needs to be rewritten". Eric Hobsbawm held that

6834-599: The per capita gross domestic product and the unemployment rate have a significant effect on the number of MSMEs in the Philippines. Real GDP can be used to calculate the GDP growth rate, which indicates how much a country's production has increased (or decreased, if the growth rate is negative) compared to the previous year, typically expressed as percentage change . The economic growth can be expressed as real GDP growth rate or real GDP per capita growth rate . GDP can be contrasted with gross national product (GNP) or, as it

6936-400: The pig iron. This meant that lower quality coal could be used in areas where coking coal was unavailable or too expensive; however, by the end of the 19th century transportation costs fell considerably. Gross domestic product#GDP per capita Gross domestic product ( GDP ) is a monetary measure of the market value of all the final goods and services produced and rendered in

7038-426: The productive enterprises in a country were owned by its own citizens and those citizens did not own productive enterprises in any other countries. In practice, however, foreign ownership makes GDP and GNI non-identical. Production within a country's borders, but by an enterprise owned by somebody outside the country, counts as part of its GDP but not its GNI; on the other hand, production by an enterprise located outside

7140-503: The products must be bought by somebody, therefore the value of the total product must be equal to people's total expenditures in buying things. The income approach works on the principle that the incomes of the productive factors ("producers", colloquially) must be equal to the value of their product, and determines GDP by finding the sum of all producers' incomes. Also known as the Value Added Approach, it calculates how much value

7242-675: The raw GDP data. The GDP adjusted for changes in money value in this way is called the real GDP . The factor used to convert GDP from current to constant values in this way is called the GDP deflator . Unlike consumer price index , which measures inflation or deflation in the price of household consumer goods, the GDP deflator measures changes in the prices of all domestically produced goods and services in an economy including investment goods and government services, as well as household consumption goods. GDP can be adjusted for population growth, also called Per-capita GDP or GDP per person . This measures

7344-446: The result was an unprecedented rise in population and the rate of population growth . The textile industry was the first to use modern production methods, and textiles became the dominant industry in terms of employment, value of output, and capital invested. Many of the technological and architectural innovations were of British origin. By the mid-18th century, Britain was the world's leading commercial nation, controlling

7446-607: The revolution, such as courts ruling in favour of property rights . An entrepreneurial spirit and consumer revolution helped drive industrialisation in Britain, which after 1800, was emulated in Belgium, the United States, and France. The Industrial Revolution marked a major turning point in history, comparable only to humanity's adoption of agriculture with respect to material advancement. The Industrial Revolution influenced in some way almost every aspect of daily life. In particular, average income and population began to exhibit unprecedented sustained growth. Some economists have said

7548-408: The same result. They are the production (or output or value added) approach, the income approach, and the speculated expenditure approach. It is representative of the total output and income within an economy. The most direct of the three is the production approach, which sums up the outputs of every class of enterprise to arrive at the total. The expenditure approach works on the principle that all of

7650-418: The slag from almost 50% to around 8%. Puddling became widely used after 1800. Up to that time, British iron manufacturers had used considerable amounts of iron imported from Sweden and Russia to supplement domestic supplies. Because of the increased British production, imports began to decline in 1785, and by the 1790s Britain eliminated imports and became a net exporter of bar iron. Hot blast , patented by

7752-457: The smelting and refining of iron, coal and coke produced inferior iron to that made with charcoal because of the coal's sulfur content. Low sulfur coals were known, but they still contained harmful amounts. Conversion of coal to coke only slightly reduces the sulfur content. A minority of coals are coking. Another factor limiting the iron industry before the Industrial Revolution was the scarcity of water power to power blast bellows. This limitation

7854-428: The source data for the expenditures components are considered more reliable than those for the income components [see income method, above]." Encyclopedia Britannica records an alternate way of measuring exports minus imports: notating it as the single variable NX. Within each country GDP is normally measured by a national government statistical agency, as private sector organizations normally do not have access to

7956-524: The supply of cotton was cut off. The Moors in Spain grew, spun, and wove cotton beginning around the 10th century. British cloth could not compete with Indian cloth because India's labour cost was approximately one-fifth to one-sixth that of Britain's. In 1700 and 1721, the British government passed Calico Acts to protect the domestic woollen and linen industries from the increasing amounts of cotton fabric imported from India. The demand for heavier fabric

8058-536: The total expenditure used to buy things is a way of measuring production. This is known as the expenditure method of calculating GDP. GDP (Y) is the sum of consumption (C) , investment (I) , government expenditures (G) and net exports (X − M) . Here is a description of each GDP component: C , I , and G are expenditures on final goods and services; expenditures on intermediate goods and services do not count. (Intermediate goods and services are those used by businesses to produce other goods and services within

8160-415: The use of low sulfur coal. The use of lime or limestone required higher furnace temperatures to form a free-flowing slag. The increased furnace temperature made possible by improved blowing also increased the capacity of blast furnaces and allowed for increased furnace height. In addition to lower cost and greater availability, coke had other important advantages over charcoal in that it was harder and made

8262-406: The use of roasted tap cinder ( iron silicate ) for the furnace bottom, greatly reducing the loss of iron through increased slag caused by a sand lined bottom. The tap cinder also tied up some phosphorus, but this was not understood at the time. Hall's process also used iron scale or rust which reacted with carbon in the molten iron. Hall's process, called wet puddling , reduced losses of iron with

8364-465: The value of its currency over that period. To meaningfully compare its GDP in 2000 to its GDP in 1990, we could multiply the GDP in 2000 by one-half, to make it relative to 1990 as a base year. The result would be that the GDP in 2000 equals $ 300 million × 1 ⁄ 2 = $ 150 million , in 1990 monetary terms. We would see that the country's GDP had realistically increased 50 percent over that period, not 200 percent, as it might appear from

8466-410: The water frame used a series of four pairs of rollers, each operating at a successively higher rotating speed, to draw out the fibre which was then twisted by the spindle. The roller spacing was slightly longer than the fibre length. Too close a spacing caused the fibres to break while too distant a spacing caused uneven thread. The top rollers were leather-covered and loading on the rollers was applied by

8568-473: The words of one academic economist, "The actual number for GDP is, therefore, the product of a vast patchwork of statistics and a complicated set of processes carried out on the raw data to fit them to the conceptual framework." China officially adopted GDP in 1993 as its indicator of economic performance. Previously, China had relied on a Marxist-inspired national accounting system. GDP can be determined in three ways, all of which should, theoretically, give

8670-459: The world. In 1991, the United States switched from using GNP to using GDP as its primary measure of production. The relationship between United States GDP and GNP is shown in table 1.7.5 of the National Income and Product Accounts . Another example that amplifies the difference between GDP and GNI is the comparison of developed and developing country indicators. The GDP of Japan for 2020

8772-502: Was 7,800 tons and coke cast iron was 250,000 tons. In 1750, the UK imported 31,200 tons of bar iron and either refined from cast iron or directly produced 18,800 tons of bar iron using charcoal and 100 tons using coke. In 1796, the UK was making 125,000 tons of bar iron with coke and 6,400 tons with charcoal; imports were 38,000 tons and exports were 24,600 tons. In 1806 the UK did not import bar iron but exported 31,500 tons. A major change in

8874-407: Was a means of decarburizing molten pig iron by slow oxidation in a reverberatory furnace by manually stirring it with a long rod. The decarburized iron, having a higher melting point than cast iron, was raked into globs by the puddler. When the glob was large enough, the puddler would remove it. Puddling was backbreaking and extremely hot work. Few puddlers lived to be 40. Because puddling was done in

8976-600: Was available (and not far from Coalbrookdale). These furnaces were equipped with water-powered bellows, the water being pumped by Newcomen steam engines . The Newcomen engines were not attached directly to the blowing cylinders because the engines alone could not produce a steady air blast. Abraham Darby III installed similar steam-pumped, water-powered blowing cylinders at the Dale Company when he took control in 1768. The Dale Company used several Newcomen engines to drain its mines and made parts for engines which it sold throughout

9078-414: Was converted to wrought iron. Conversion of cast iron had long been done in a finery forge . An improved refining process known as potting and stamping was developed, but this was superseded by Henry Cort 's puddling process. Cort developed two significant iron manufacturing processes: rolling in 1783 and puddling in 1784. Puddling produced a structural grade iron at a relatively low cost. Puddling

9180-552: Was cut off to eliminate competition. In order to promote manufacturing, the Crown paid for models of Lombe's machinery which were exhibited in the Tower of London . Parts of India, China, Central America, South America, and the Middle East have a long history of hand manufacturing cotton textiles, which became a major industry sometime after 1000 AD. In tropical and subtropical regions where it

9282-403: Was designed by John Smeaton . Cast iron cylinders for use with a piston were difficult to manufacture; the cylinders had to be free of holes and had to be machined smooth and straight to remove any warping. James Watt had great difficulty trying to have a cylinder made for his first steam engine. In 1774 Wilkinson invented a precision boring machine for boring cylinders. After Wilkinson bored

9384-483: Was first developed by Simon Kuznets for a 1934 U.S. Congress report, where he warned against its use as a measure of welfare (see below under limitations and criticisms ). After the Bretton Woods Conference in 1944, GDP became the main tool for measuring a country's economy. At that time gross national product (GNP) was the preferred estimate, which differed from GDP in that it measured production by

9486-532: Was followed by a period of colonialism beginning around the 16th century. Following the discovery of a trade route to India around southern Africa by the Portuguese, the British founded the East India Company , along with smaller companies of different nationalities which established trading posts and employed agents to engage in trade throughout the Indian Ocean region. One of the largest segments of this trade

9588-569: Was grown, most was grown by small farmers alongside their food crops and was spun and woven in households, largely for domestic consumption. In the 15th century, China began to require households to pay part of their taxes in cotton cloth. By the 17th century, almost all Chinese wore cotton clothing. Almost everywhere cotton cloth could be used as a medium of exchange . In India, a significant amount of cotton textiles were manufactured for distant markets, often produced by professional weavers. Some merchants also owned small weaving workshops. India produced

9690-469: Was improved by Richard Roberts in 1822, and these were produced in large numbers by Roberts, Hill & Co. Roberts was additionally a maker of high-quality machine tools and a pioneer in the use of jigs and gauges for precision workshop measurement. The demand for cotton presented an opportunity to planters in the Southern United States, who thought upland cotton would be a profitable crop if

9792-632: Was in cotton textiles, which were purchased in India and sold in Southeast Asia , including the Indonesian archipelago where spices were purchased for sale to Southeast Asia and Europe. By the mid-1760s, cloth was over three-quarters of the East India Company's exports. Indian textiles were in demand in the North Atlantic region of Europe where previously only wool and linen were available; however,

9894-400: Was later used in the first cotton spinning mill . In 1764, in the village of Stanhill, Lancashire, James Hargreaves invented the spinning jenny , which he patented in 1770. It was the first practical spinning frame with multiple spindles. The jenny worked in a similar manner to the spinning wheel, by first clamping down on the fibres, then by drawing them out, followed by twisting. It was

9996-437: Was made by the bloomery process, which was the predominant iron smelting process until the late 18th century. In the UK in 1720, there were 20,500 tons of cast iron produced with charcoal and 400 tons with coke. In 1750 charcoal iron production was 24,500 and coke iron was 2,500 tons. In 1788, the production of charcoal cast iron was 14,000 tons while coke iron production was 54,000 tons. In 1806, charcoal cast iron production

10098-419: Was met by a domestic industry based around Lancashire that produced fustian , a cloth with flax warp and cotton weft . Flax was used for the warp because wheel-spun cotton did not have sufficient strength, but the resulting blend was not as soft as 100% cotton and was more difficult to sew. On the eve of the Industrial Revolution, spinning and weaving were done in households, for domestic consumption, and as

10200-413: Was overcome by the steam engine. Use of coal in iron smelting started somewhat before the Industrial Revolution, based on innovations by Clement Clerke and others from 1678, using coal reverberatory furnaces known as cupolas. These were operated by the flames playing on the ore and charcoal or coke mixture, reducing the oxide to metal. This has the advantage that impurities (such as sulphur ash) in

10302-425: Was produced on machinery invented in Britain. In 1788, there were 50,000 spindles in Britain, rising to 7 million over the next 30 years. The earliest European attempts at mechanised spinning were with wool; however, wool spinning proved more difficult to mechanise than cotton. Productivity improvement in wool spinning during the Industrial Revolution was significant but far less than that of cotton. Arguably

10404-674: Was spun and woven by the cottage industry in Lancashire . The work was done by hand in workers' homes or occasionally in master weavers' shops. Wages in Lancashire were about six times those in India in 1770 when overall productivity in Britain was about three times higher than in India. In 1787, raw cotton consumption was 22 million pounds, most of which was cleaned, carded, and spun on machines. The British textile industry used 52 million pounds of cotton in 1800, which increased to 588 million pounds in 1850. The share of value added by

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