This paper documents the size and timing of the world inter-continental trade boom following the greate voyages in the 1490s of Columbus, da Gama and their followers. Indeed, a trade boom followed over the subsequent three centuries. But what was its cause? The conventionnal wisdom in the world history literature offers globalization as the answer: it alleges that declining trade barriers falling transport costs and overseas "discovery" explains the boom. In contrast, this paper reports the evidence that confirms unambiguously that there was no commodity price convergence between continents, something that would have emerged had globalization been a force that mattered. Thus, the trade boom must have been caused by some combination of European import demand and foreign export supply from Asia and the Americas. Furthermore, the behavior of the relative price of foreign importables in European cities should tell us which mattered most and when. We offer detailed evidence on the relative prices of such importables in European markets over the five centuries 1350-1850. We then offer a model which is used to decompose the sources of the trade boom 1500-1800.
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Paper provided by Trinity College Dublin, Department of Economics in its series CEG Working Papers with number
20014.
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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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Guillaume Daudin & Kevin H. O’Rourke & Leandro Prados de la Escosura, 2008.
"Trade and Empire, 1700-1870,"
Documents de Travail de l'OFCE
2008-24, Observatoire Francais des Conjonctures Economiques (OFCE).
[Downloadable!]
Other versions:
Kevin H. O’Rourke & Leandro Prados de la Escosura & Guillaume Daudin, 2008.
"Trade and Empire, 1700-1870,"
Trinity Economics Papers
tep0208, Trinity College Dublin, Department of Economics, revised May 2008.
[Downloadable!]