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Fighting the forces of gravity - Seapower and maritime trade between the 18th and 20th centuries

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  • Rahman, Ahmed S.

Abstract

How have large naval powers affected international commerce in history? Using a panel gravity model, we investigate the interactions of wars, alliances, naval power and trade from the 18th to mid-20th centuries. Striking an alliance with a naval power helps a country's interstate commerce. Fighting a naval power on the other hand limits a country's interstate commerce. Further, we split this effect on trade between an extensive effect (effect on a country's trade when fighting a naval power) and an intensive effect (effect of that power gaining more naval strength). We conclude that the intensive effect is a powerful one - large navies have historically been destroyers of trade when mobilized to combat.

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Bibliographic Info

Article provided by Elsevier in its journal Explorations in Economic History.

Volume (Year): 47 (2010)
Issue (Month): 1 (January)
Pages: 28-48

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Handle: RePEc:eee:exehis:v:47:y:2010:i:1:p:28-48

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Web page: http://www.elsevier.com/locate/inca/622830

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Keywords: D74 F02 F10 F51 N40 N70 Trade War Naval history;

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  1. Frankel, Jeffrey A & Stein, Ernesto & Wei, Shang-Jin, 1996. "Regional Trading Arrangements: Natural or Supernatural," American Economic Review, American Economic Association, vol. 86(2), pages 52-56, May.
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    ," Introductory Chapters, Princeton University Press.
  4. Thursby, Jerry G & Thursby, Marie C, 1987. "Bilateral Trade Flows, the Linder Hypothesis, and Exchange Risk," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 488-95, August.
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  7. Robert Barro & Silvana Tenreyro, 2007. "Economic Effects Of Currency Unions," Economic Inquiry, Western Economic Association International, vol. 45(1), pages 1-23, 01.
  8. Ronald Findlay & Kevin H. O'Rourke, 2007. "Introduction to Power and Plenty: Trade, War, and the World Economy in the Second Millennium
    [Power and Plenty: Trade, War, and the World Economy in the Second Millennium]
    ," Introductory Chapters, Princeton University Press.
  9. Andrew K. Rose, 2000. "One money, one market: the effect of common currencies on trade," Economic Policy, CEPR & CES & MSH, vol. 15(30), pages 7-46, 04.
  10. Daniel M. Jones & Stuart A. Bremer & J. David Singer, 1996. "Militarized Interstate Disputes, 1816–1992: Rationale, Coding Rules, and Empirical Patterns," Conflict Management and Peace Science, Peace Science Society (International), vol. 15(2), pages 163-213, September.
  11. repec:cge:warwcg:20 is not listed on IDEAS
  12. Michael A. Clemens & Jeffrey G. Williamson, 2000. "Where did British Foreign Capital Go? Fundamentals, Failures and the Lucas Paradox: 1870-1913," NBER Working Papers 8028, National Bureau of Economic Research, Inc.
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