There are two contrasting views of pre-19th century trade and globalization. First, there are the world history scholars like Andre Gunder Frank who attach globalization 'big bang' significance to the dates 1492 (Christopher Colombus stumbles on the Americas in search of spices) and 1498 (Vasco da Gama makes an end run around Africa and snatches monopoly rents away from the Arab and Venetian spice traders). Such scholars are on the side of Adam Smith who believed that these were the two most important events in recorded history. Second, there is the view that the world economy was fragmented and completely de- globalized before the 19th century. This paper offers a novel way to discriminate between these two competing views and we use it to show that there is no evidence that the Ages of Discovery and Commerce had the economic impact on the global economy that world historians assign to them, while there is plenty of evidence of a very big bang in the 19th century. The test involves a close look at the connections between factor prices, commodity prices and endowments world wide.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
7411.
Length: Date of creation: Nov 1999 Date of revision: Handle: RePEc:nbr:nberwo:7411
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Find related papers by JEL classification: F14 - International Economics - - Trade - - - Country and Industry Studies of Trade N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
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