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Global Trade and the Maritime Transport Revolution

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  • David S. Jacks
  • Krishna Pendakur

Abstract

What is the role of transport improvements in globalization? We argue that the nineteenth century is the ideal testing ground for this question: freight rates fell on average by 50% while global trade increased 400% from 1870 to 1913. We estimate the first indices of bilateral freight rates for the period and directly incorporate these into a standard gravity model. We also take the endogeneity of bilateral trade and freight rates seriously and propose an instrumental variables approach. The results are striking as we find no evidence that the maritime transport revolution was the primary driver of the late nineteenth century global trade boom. Rather, the most powerful forces driving the boom were those of income growth and convergence.

Suggested Citation

  • David S. Jacks & Krishna Pendakur, 2008. "Global Trade and the Maritime Transport Revolution," NBER Working Papers 14139, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:14139 Note: DAE ITI
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    Cited by:

    1. Pinilla, Vicente & Serrano, Raúl, 2008. "The Agricultural and Food Trade in the First Globalization: Spanish Table Wine Exports 1871 to 1935 – A Case Study," Journal of Wine Economics, Cambridge University Press, vol. 3(02), pages 132-148, December.
    2. Liu, Dan & Meissner, Christopher M., 2015. "Market potential and the rise of US productivity leadership," Journal of International Economics, Elsevier, vol. 96(1), pages 72-87.
    3. Jacks, David S. & Meissner, Christopher M. & Novy, Dennis, 2011. "Trade booms, trade busts, and trade costs," Journal of International Economics, Elsevier, vol. 83(2), pages 185-201, March.
    4. Lin, Faqin & Sim, Nicholas C.S., 2013. "Trade, income and the Baltic Dry Index," European Economic Review, Elsevier, vol. 59(C), pages 1-18.
    5. Klasing, Mariko & Milionis, Petros, 2012. "Reassessing the Evolution of World Trade, 1870-1949," MPRA Paper 39555, University Library of Munich, Germany.
    6. Sabaté, Marcela & Fillat, Carmen & Gracia, Ana Belén, 2011. "A gravity criterium for discriminating traditional protection measures," Economics Letters, Elsevier, vol. 111(1), pages 50-53, April.
    7. Chilosi, David & Federico, Giovanni, 2015. "Early globalizations: The integration of Asia in the world economy, 1800–1938," Explorations in Economic History, Elsevier, vol. 57(C), pages 1-18.
    8. Peter H. Lindert, 2016. "Purchasing Power Disparity before 1914," NBER Working Papers 22896, National Bureau of Economic Research, Inc.
    9. Klovland, Jan Tore, 2009. "New evidence on the fluctuations in ocean freight rates in the 1850s," Explorations in Economic History, Elsevier, vol. 46(2), pages 266-284, April.
    10. repec:eme:rehizz:s0363-326820170000033002 is not listed on IDEAS
    11. Kym Anderson, 2012. "Costing Global Trade Barriers, 1900 to 2050," Departmental Working Papers 2012-08, The Australian National University, Arndt-Corden Department of Economics.
    12. Patricia Sourdin & Richard Pomfret, 2012. "Trade Facilitation," Books, Edward Elgar Publishing, number 14596, April.
    13. 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.
    14. Brandon Dupont & Drew Keeling & Thomas Weiss, 2017. "First Cabin Fares from New York to the British Isles, 1826–1914," Research in Economic History,in: Research in Economic History, volume 33, pages 19-63 Emerald Publishing Ltd.
    15. repec:dgr:rugggd:gd-126 is not listed on IDEAS
    16. Márquez-Ramos , Laura, 2016. "Regionalism, subnational variation and gravity: A four-country tale," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 35, pages 7-36.
    17. Bensassi, Sami & Márquez-Ramos, Laura & Martínez-Zarzoso, Inmaculada & Suárez-Burguet, Celestino, 2015. "Relationship between logistics infrastructure and trade: Evidence from Spanish regional exports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 72(C), pages 47-61.
    18. David Harvey & Neil Kellard & Jakob Madsen & Mark Wohar, 2012. "Trends and Cycles in Real Commodity Prices: 1650-2010," CEH Discussion Papers 010, Centre for Economic History, Research School of Economics, Australian National University.

    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative

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