Trade and Economic Growth: Historical Evidence
AbstractIs free trade good for growth? Some of the most disturbing evidence to the contrary comes from a period that is often described as the first era of globalization. Studies of the period 1870-1914 have emphasised that protectionist tariff policy was associated with higher rates of economic growth. In this paper we reassess the empirical evidence about the relationship between tariffs and growth in this era. Our key findings challenge the idea of the 19th century tariff-growth paradox. High tariffs did not stimulate economic growth. But there is equally little evidence that trade and other external factors were key determinants of economic growth. The paradox of this era of globalization is not that free trade was bad for growth; it is that the international environment seems to have mattered little to countries' growth trajectories.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0936.
Date of creation: 24 Sep 2009
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Web page: http://www.econ.cam.ac.uk/index.htm
economic growth; international trade; economic history; growth econometrics; globalization;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-10-03 (All new papers)
- NEP-FDG-2009-10-03 (Financial Development & Growth)
- NEP-HIS-2009-10-03 (Business, Economic & Financial History)
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- Dan Liu & Christopher M. Meissner, 2013. "Market Potential and the Rise of US Productivity Leadership," NBER Working Papers 18819, National Bureau of Economic Research, Inc.
- Broadberry, Stephen; Crafts, Nicholas., 2010. "Openness, Protectionism And Britain’S Productivity Performance Over The Long-Run," CAGE Online Working Paper Series 36, Competitive Advantage in the Global Economy (CAGE).
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