The Gold Rush Origins of California's Wheat Economy

this paper explores the near-simultaneous development of the gold rush and grain production in california during the early 1850s. economic models predict that the production of tradable goods such as wheat are unlikely during a mineral boom due to the availability of imports and the high cost of labor and other inputs. historians have emphasized the effects of immigration and the increase in the size of the local market. a closer examination of the timing and sequencing of production shifts shows that a decline in tradable goods production fits the california case relatively well. in addition, wheat and other cereals output increased for several reasons, including the timing of technological changes in mining, the use of native american labor, california's relative isolation from the north atlantic economy, and the discovery of gold in australia.