The significance of the Cape trade route to economic activity in the Cape colony: a medium-term business cycle analysis
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.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Postal: Private Bag X1, 7602 Matieland|
Fax: +27 (0)21-808 2409
Web page: http://www.ekon.sun.ac.za
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:sza:wpaper:wpapers71. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Melt van Schoor)
If references are entirely missing, you can add them using this form.