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The significance of the Cape trade route to economic activity in the Cape colony: a medium-term business cycle analysis

Author

Listed:
  • Willem H Boshoff

    () (Department of Economics, University of Stellenbosch)

  • Johan Fourie

    () (Department of Economics, University of Stellenbosch)

Abstract

Trade is a critical component of economic growth in newly settled societies. This paper tests the impact of ship traffic on the Cape economy using a time series smoothing technique borrowed from the business cycle literature and employing an econometric procedure to test for long-run relationships. The results suggest a strong systematic co-movement between wheat production and ship traffic, with less evidence for wine production and stock herding activities. While ship traffic created demand for wheat exports, the size of the co-movement provides evidence that ship traffic also stimulated local demand through secondary and tertiary sector activities, supporting the hypothesis that ship traffic acted as a catalyst for growth in the Cape economy.

Suggested Citation

  • Willem H Boshoff & Johan Fourie, 2008. "The significance of the Cape trade route to economic activity in the Cape colony: a medium-term business cycle analysis," Working Papers 23/2008, Stellenbosch University, Department of Economics.
  • Handle: RePEc:sza:wpaper:wpapers71
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    File URL: https://www.ekon.sun.ac.za/wpapers/2008/wp232008/wp-23-2008.pdf
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    Cited by:

    1. Johan Fourie & Jan Luiten Zanden, 2013. "GDP in the Dutch Cape Colony: The National Accounts of a Slave-Based Society," South African Journal of Economics, Economic Society of South Africa, vol. 81(4), pages 467-490, December.
    2. Johan Fourie & Dieter von Fintel, 2010. "The dynamics of inequality in a newly settled, pre-industrial society: the case of the Cape Colony," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 4(3), pages 229-267, October.
    3. Willem H. Boshoff & Johan Fourie, 2015. "When did globalization begin in South Africa?," Working Papers 10/2015, Stellenbosch University, Department of Economics.
    4. Broadberry, Stephen & Gardner, Leigh, 2014. "African economic growth in a European mirror: a historical perspective," Economic History Working Papers 56493, London School of Economics and Political Science, Department of Economic History.
    5. Johan Fourie & Dieter Fintel, 2014. "Settler skills and colonial development: the Huguenot wine-makers in eighteenth-century Dutch South Africa," Economic History Review, Economic History Society, vol. 67(4), pages 932-963, November.
    6. Jörg Baten & Johan Fourie, 2015. "Numeracy of Africans, Asians, and Europeans during the early modern period: new evidence from Cape Colony court registers," Economic History Review, Economic History Society, vol. 68(2), pages 632-656, May.
    7. Pim de Zwart, 2011. "Real wages at the Cape of Good Hope: A long-term perspective, 1652-1912," Working Papers 0013, Utrecht University, Centre for Global Economic History.
    8. Johan Fourie, 2011. "Slaves as capital investment in the Dutch Cape Colony, 1652-1795," Working Papers 21/2011, Stellenbosch University, Department of Economics.
    9. Johan Fourie & Jolandi Uys, 2011. "A survey and comparison of luxury item ownership in the eighteenth century Dutch Cape Colony," Working Papers 14/2011, Stellenbosch University, Department of Economics.

    More about this item

    Keywords

    Colonial trade; Cape of Good Hope; Dutch East India; Band-pass filter; Medium-term fluctuations; Business cycle; South Africa; Ships; Harvest cycles; Colonial economy;

    JEL classification:

    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • N77 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Africa; Oceania

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