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Was industrialization an escape from the commodity lottery? Evidence from Italy, 1861-1940

  • Giovanni Federico


  • Michelangelo Vasta


the specialization in exporting primary products is frequently deemed harmful for long-run development, because it increases volatility of terms of trade and thus the number and frequency of macroeconomic shocks. One would expect modern economic growth to solve the problem by changing the composition of trade. This paper tests this hypothesis with a new series of Italian terms of trade from 1861 to 1939, a period which spans the first stage of the industrialization of the country. The results do not tally with the hypothesis. The change in composition improved marginally the terms of trade, but it did not help much in terms of volatility

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Paper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 573.

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Date of creation: Sep 2009
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Handle: RePEc:usi:wpaper:573
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  9. Lederman, Daniel & Maloney, William F., 2003. "Trade structure and growth," Policy Research Working Paper Series 3025, The World Bank.
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