History shows that industrial revolutions come in waves; since the latter half
of the 18th century we have observed an industrial revolution at least three
times over the past three 270 years. This study incorporates population
growth in a Matsuyama model of innovation cycles and investigates whether
industrial revolution cycles may be caused by population growth. Our results
show that industrial revolution cycles may occur if the population growth
rate is set at about 1 to 1:2 percent and if the other parameter values are set
consistently with real world data. The average population growth rate was
about 0.9 percent in the UK during the period covering the rst industrial
revolution and the rst half of the second industrial revolution. It was about
1.2 percent in the US during the period covering the latter hald of the second
industrial revolution through the third industrial revolution. The long-term
population growth rates of the other regions are lower than those UK and
US rates.
Keywords: industrial revolution cycles, population growth, innovation,
market quality
