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Financial Development, Trade Openness and Growth in the First Wave of Globalization

Author

Listed:
  • Alexandra D’Onofrio

    (Luiss Guido Carli University)

  • Peter L. Rousseau

    (Vanderbilt University)

Abstract

Did financial development and international trade reinforce each other and drive economic growth more than a century ago? We investigate these linkages among 17 countries during the first wave of economic globalization (1850–1929). Cross-country dynamic panels as well as VARs and VECMs for individual countries indicate that financial development led both trade and growth at this time, while trade largely responded to financial development.

Suggested Citation

  • Alexandra D’Onofrio & Peter L. Rousseau, 2018. "Financial Development, Trade Openness and Growth in the First Wave of Globalization," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 60(1), pages 105-114, March.
    • Handle: RePEc:pal:compes:v:60:y:2018:i:1:d:10.1057_s41294-017-0048-y
    DOI: 10.1057/s41294-017-0048-y
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    Cited by:

    1. Zhe Chen, 2022. "The impact of trade and financial expansion on volatility of real exchange rate," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-13, January.

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