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The wind of change : maritime technology, trade and economic development
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Pascali, Luigi (2017) The wind of change : maritime technology, trade and economic development. American Economic Review, 107 (9). pp. 2821-2854. doi:10.1257/aer.20140832
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Official URL: https://doi.org/10.1257/aer.20140832
Abstract
The 1870-1913 period marked the birth of the first era of trade globalization. How did this tremendous increase in trade affect economic development? This work isolates a causality channel by exploiting the fact that the introduction of the steamship in the shipping industry produced an asymmetric change in trade distances among countries. Before this invention, trade routes depended on wind patterns. The steamship reduced shipping costs and time in a disproportionate manner across countries and trade routes. Using this source of variation and novel data on shipping, trade, and development, I find that 1) the adoption of the steamship had a major impact on patterns of trade worldwide, 2) only a small number of countries, characterized by more inclusive institutions, benefited from trade integration, and 3) globalization was the major driver of the economic divergence between the rich and the poor portions of the world in the years 1850-1905.
| Item Type: | Journal Article | ||||||
|---|---|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HC Economic History and Conditions H Social Sciences > HE Transportation and Communications |
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| Divisions: | Faculty of Social Sciences > Economics | ||||||
| Library of Congress Subject Headings (LCSH): | Economic history -- 19th century, Trade routes -- Globalization , Steamboat lines, Steamboats | ||||||
| Journal or Publication Title: | American Economic Review | ||||||
| Publisher: | American Economic Association | ||||||
| ISSN: | 0002-8282 | ||||||
| Official Date: | 30 September 2017 | ||||||
| Dates: |
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| Volume: | 107 | ||||||
| Number: | 9 | ||||||
| Page Range: | pp. 2821-2854 | ||||||
| DOI: | 10.1257/aer.20140832 | ||||||
| Status: | Peer Reviewed | ||||||
| Publication Status: | Published | ||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||
| Funder: | Barcelona Graduate School of Economics, University of Warwick. Department of Economics. Centre for Competitive Advantage in the Global Economy (CAGE) |
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