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After Columbus: Explaining the Global Trade Boom 1500-1800

Author

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  • K. H. O'Rourke
  • J. G. Williamson

Abstract

This paper documents the size and timing of the world inter-continental trade boom following the great voyages in the 1490s of Columbus, da Gama and their followers. Indeed, a trade boom followed over the subsequent three centuries. But what was its cause? The conventional wisdom in the world history literature offers globalization as the answer: it alleges that declining trade barriers, falling transport costs and overseas "discovery" explains the boom. In contrast, this paper reports the evidence that confirms unambiguously that there was no commodity price convergence between continents, something that would have emerged had globalization been a force that mattered. Thus, the trade boom must have been caused by some combination of European import demand and foreign export supply from Asia and the Americas. Furthermore, the behavior of the relative price of foreign importables in European cities should tell us which mattered most and when. We offer detailed evidence on the relative prices of such importables in European markets over the five centuries 1350-1850. We then offer a model which is used to decompose the sources of the trade boom 1500-1800.

Suggested Citation

  • K. H. O'Rourke & J. G. Williamson, 2001. "After Columbus: Explaining the Global Trade Boom 1500-1800," Trinity Economics Papers 20016, Trinity College Dublin, Department of Economics.
  • Handle: RePEc:tcd:tcduee:20016
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    1. repec:tcd:wpaper:tep9 is not listed on IDEAS
    2. Kevin H. O'Rourke, Leandro Prados de la Escosura and Guilllaume Daudin, 2008. "Trade and Empire, 1700-1870," The Institute for International Integration Studies Discussion Paper Series iiisdp249, IIIS.
    3. Daron Acemoglu & Simon Johnson & James Robinson, 2005. "The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth," American Economic Review, American Economic Association, vol. 95(3), pages 546-579, June.
    4. Kevin H. O’Rourke & Ahmed S. Rahman & Alan M. Taylor, 2007. "Trade, Knowledge and the Industrial Revolution," Development Working Papers 230, Centro Studi Luca d'Agliano, University of Milano.
    5. Jesper Roine & Daniel Waldenström, 2011. "Common Trends and Shocks to Top Incomes: A Structural Breaks Approach," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 832-846, August.
    6. Kevin H. O'Rourke & Jeffrey G. Williamson, 2002. "From Malthus to Ohlin: Trade, Growth and Distribution Since 1500," CEG Working Papers 20023, Trinity College Dublin, Department of Economics.
    7. Peter H. Lindert & Jeffrey G. Williamson, 2002. "Mondialisation et inégalité : une longue histoire," Revue d’économie du développement, De Boeck Université, vol. 10(1), pages 7-41.
    8. Kevin H. O'Rourke, 2002. "Globalization and Inequality: Historical Trends," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 57(01), pages 65-104, March.
    9. Kevin O'Rourke, 2005. "The worldwide economic impact of the Revolutionary and Napoleonic Wars," Trinity Economics Papers 200059, Trinity College Dublin, Department of Economics.
    10. Wallis, Patrick, 2010. "Exotic drugs and English medicine: England’s drug trade, c.1550-c.1800," Economic History Working Papers 28577, London School of Economics and Political Science, Department of Economic History.
    11. Jörg Baten & Johan Fourie, 2012. "Slave numeracy in the Cape Colony and comparative development in the eighteenth century," Working Papers 270, Economic Research Southern Africa.
    12. Cordoba, Juan-Carlos, 2007. "Malthus to Romer: On the Colonial Origins of the Industrial Revolution," MPRA Paper 4466, University Library of Munich, Germany.
    13. Woosik Moon & Yeongseop Rhee, 2012. "Asian Monetary Integration," Books, Edward Elgar Publishing, number 14191, June.
    14. Kevin H. O'Rourke, 2006. "War and Welfare: Britain, France and the United States 1807-14," Trinity Economics Papers tep2008, Trinity College Dublin, Department of Economics.
    15. 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:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services

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