National borders matter...where one draws the lines too
The fact that crossing a political border dramatically reduces trade ﬂows has been widely documented in the literature. The increasing number of borders has surprisingly attracted much less attention. The number of independent countries has indeed risen from 72 in 1948 to 192 today. This paper estimates the eﬀect of political disintegration since World War II on the measured growth in world trade. We ﬁrst show that trade statistics should be considered carefully when assessing globalization over time, since the deﬁnition of trade partners varies over time. We document a sizeable resulting accounting artefact, which accounts for 17% of the growth in world trade since 1948. Second, we estimate that political disintegration alone since World War II has raised measured international trade ﬂows by 9% but decreased actual trade ﬂows (including inter-regional trade) by 4%.
|Date of creation:||2013|
|Date of revision:|
|Publication status:||Published in Canadian Journal of Economics, 2013, Vol. 46, no. 1. pp. 135-153.Length: 18 pages|
|Contact details of provider:|| Web page: http://www.dauphine.fr/en/welcome.html|
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