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Freight Rates and Productivity Gains in British Tramp Shipping 1869-1950

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  • Saif I. Shah Mohammed
  • Jeffrey G. Williamson

Abstract

The standard source for pre-WWII global freight rate trends is the Isserlis British tramp shipping index. We think it is flawed, and that its sources offer vastly more information than the Isserlis aggregate contains. The new data confirm the precipitous decline in nominal freight rates before the World War I, but it also extends the series to the 1940s. Furthermore, our new series is linked to the post-World War II era (documented by David Hummels), so that we can be more precise about what has happened over the very long run. We also create route-specific deflators by using the prices of commodities transported. Previous scholars have deflated their nominal freight rate indices by a price index that includes tradables not carried on all routes and non-tradables not carried on any route. Our deflated indices offer a more effective measure of the contribution of declining freight rates to commodity-price convergence across trading regions. Using the pricedual method and new indices for factor prices, we then calculate total factor productivity growth pre-war and interwar for five global routes. Finally, we identify the sources of the total factor productivity growth.

Suggested Citation

  • Saif I. Shah Mohammed & Jeffrey G. Williamson, 2003. "Freight Rates and Productivity Gains in British Tramp Shipping 1869-1950," NBER Working Papers 9531, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:9531
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    1. Harley, C. Knick, 1988. "Ocean Freight Rates and Productivity, 1740–1913: The Primacy of Mechanical Invention Reaffirmed," The Journal of Economic History, Cambridge University Press, vol. 48(04), pages 851-876, December.
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    Cited by:

    1. Gregg Huff, 2012. "Gateway cities and urbanisation in southeast asia before world war II," Oxford University Economic and Social History Series _096, Economics Group, Nuffield College, University of Oxford.
    2. Astorga, Pablo, 2010. "A century of economic growth in Latin America," Journal of Development Economics, Elsevier, vol. 92(2), pages 232-243, July.
    3. Sotoudeh, M-Ali & Worthington, Andrew C., 2016. "Estimating the effects of global oil market shocks on Australian merchandise trade," Economic Analysis and Policy, Elsevier, vol. 50(C), pages 74-84.
    4. Rafael González-Val & Daniel A. Tirado-Fabregat & Elisabet Viladecans-Marsal, 2017. "Market potential and city growth: Spain 1860–1960," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 11(1), pages 31-61, January.
    5. Dennis Appleyard & Shyam Gouri Suresh, 2014. "Crown Rule, Home Charges, and U.K.-India Terms of Trade," Working Papers 14-12, Davidson College, Department of Economics.
    6. Antonio Tena-Junguito & Henry Willebald, 2013. "On The Accuracy Of Export Growth In Argentina, 1870-1913," Economic History of Developing Regions, Taylor & Francis Journals, vol. 28(1), pages 28-68, June.
    7. Jacks, David S. & Meissner, Christopher M. & Novy, Dennis, 2010. "Trade costs in the first wave of globalization," Explorations in Economic History, Elsevier, vol. 47(2), pages 127-141, April.
    8. 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.
    9. Federico Tadei, 2017. "Measuring Extractive Institutions: Colonial Trade and Price Gaps in French Africa," Working Papers 0109, European Historical Economics Society (EHES).
    10. repec:eee:exehis:v:68:y:2018:i:c:p:1-15 is not listed on IDEAS
    11. Astorga, Pablo, 2010. "A century of economic growth in Latin America," Journal of Development Economics, Elsevier, vol. 92(2), pages 232-243, July.
    12. Jeffrey G. Williamson, 2008. "Globalization and the Great Divergence: Terms of Trade Booms and Volatility in the Poor Periphery 1782-1913," Working Papers 08-07, Association Française de Cliométrie (AFC).
    13. 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.
    14. Vicente Pinilla & María Isabel Ayuda, 2006. "“Horn Of Plenty” Revisited: The Globalization Of Mediterranean Horticulture And The Economic Development Of Spain, 1850-1935," Documentos de Trabajo (DT-AEHE) 0606, Asociacion Espa–ola de Historia Economica.
    15. Francis, Joseph A., 2014. "The Periphery’s Terms of Trade in the Nineteenth Century: A Methodological Problem Revisited," MPRA Paper 57934, University Library of Munich, Germany.
    16. Mariko Klasing & Petros Milionis & Robert Zymek, 2015. "Gravity across Space and Time," ESE Discussion Papers 265, Edinburgh School of Economics, University of Edinburgh.
    17. 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.
    18. Huff, Gregg & Angeles, Luis, 2011. "Globalization, industrialization and urbanization in Pre-World War II Southeast Asia," Explorations in Economic History, Elsevier, vol. 48(1), pages 20-36, January.
    19. Martinez-Galarraga, Julio, 2012. "The determinants of industrial location in Spain, 1856–1929," Explorations in Economic History, Elsevier, vol. 49(2), pages 255-275.
    20. William Hynes & David S. Jacks & Kevin H. O'rourke, 2012. "Commodity market disintegration in the interwar period," European Review of Economic History, Oxford University Press, vol. 16(2), pages 119-143, May.
    21. Ghoshray, Atanu, 2015. "A robust estimation of the terms of trade between the United Kingdom and British India, 1858–1947," Economic Modelling, Elsevier, vol. 51(C), pages 53-57.
    22. Gregg Huff, 2012. "Gateway Cities and Urbanisation in Southeast Asia Before World War II," Oxford University Economic and Social History Series _096, University of Oxford, Department of Economics.
    23. Kanda Naknoi, 2008. "Tariffs and the Expansion of the American Pig Iron Industry, 1870-1940," Purdue University Economics Working Papers 1214, Purdue University, Department of Economics.
    24. Mendonça, Sandro, 2013. "The “sailing ship effect”: Reassessing history as a source of insight on technical change," Research Policy, Elsevier, vol. 42(10), pages 1724-1738.
    25. Kris James Mitchener & Se Yan, 2010. "Globalization, Trade & Wages: What Does History tell us about China?," NBER Working Papers 15679, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services

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