Kevin H. O'Rourke

Tariffs and Growth in the Late 19th Century

The paper estimates the correlation between tariffs and economic growth in the late 19th century, in the context of three types of growth equation: unconditional convergence equations; conditional convergence equations; and factor accumulation models. It does so for a panel of ten countries between 1875 and 1914. Tariffs were positively correlated with growth in these countries during this period.

The European Grain Invasion 1870-1913

This paper is primarily concerned with the effects of cheap grain on European wages, profits and rents. it brings a quantitative focus to bear on the question, just as Knick Harley (1978, 1980, 1986) and others have examined the quantitative implications of the grain invasion for the new world. The paper polots the dimensions of the grain invasion in several European countries, and explores the extente to which protection succeded in insulating economies from this international commodity market shock.

The Determinants of Individual Trade Policy Preferences: International Survey Evidence

What determines trade policy? While this may seem to be mainly a question for political scientists, it is of increasing concern to international trade theorists, faced with the obvious disjunction between the free trade prescriptions of standard trade models and the protectionist policies pursued by so many governments.1 The intellectual stakes for economists have increased further with the advent of endogenous growth models, which predict that policies can have important, long-run growth effects, as opposed to the fairly trivial deadweight losses implied by static constant returns models. Clearly it is not sufficient to take these policies as exogenous and examine their implications. To understand growth, the theory seems to be telling us, we need to understand why some countries pursue appropriate policies and others inappropriate ones. When faced with such questions, the instinct of economists is to eschew state-centered or cognitive theories and to reach for the rational choice approach: politicians supply policies; voters and interest groups demand them; the institutional environment helps determine the ways in which these demands

Commodity Price Volatility and World Market Integration Since 1700

Poor countries are more volatile than rich countries, and this volatility impedes their growth. Furthermore, commodity prices are a key source of that volatility. This paper explores price volatility since 1700 to offer three stylized facts: commodity price volatility has not increased over time, commodities have always shown greater price volatility than manufactures, and world market integration breeds less commodity price volatility. Thus, economic isolation is associated with much greater commodity price volatility, while world market integration is associated with less.

Factor Price Convergence in the Late Nineteenth Century

The authors examine a dramatic historical episode of factor price convergence in the late nineteenth century. Their focus is convergence between Old World and New, and the analysis centers on land and labor. Wage-rental ratios boomed in the Old World and collapsed in the New, moving the resource-rich, labor-scarce New World closer to the resource-scarce, labor-abundant Old World. The authors use econometrics and simulations to identify proconvergence forces, which include commodity price convergence, factor accumulation, and factor-saving biases. The results confirm that open-economy characteristics and international market integration are important sources of convergence. Copyright 1996 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Late Nineteenth-Century Anglo-American Factor-Price Convergence: Were Heckscher and Ohlin Right?

Due primarily to transport improvements, commodity prices in Britain and the United States tended to converge between 1870 and 1913. Heckscher and Ohlin, writing in 1919 and 1924, thought that these events should have contributed to factor-price convergence. It turns out that Heckscher and Ohlin were right: a significant share of the Anglo-American real-wage convergence was due to commodity-price convergence. It appears that this late nineteenth-century episode was the dramatic start of world-commodity and factor-market integration that continues today.

Around the European periphery 1870-1913: globalization, schooling and growth

On average, the poor European periphery converged on the rich industrial core in the four or five decades prior to the First World War. Some, like the three Scandinavian economies, used industrialization to achieve a spectacular convergence on the leaders, especially in real wages and living standards. Some, like Ireland, seemed to do it without industrialization. Some, like Italy, underwent a less spectacular catch-up, and it was limited to the industrializing North. Some, like Iberia, actually fell back. What accounts for this variety? What role did trade and tariff policy play? What about emigration and capital flows? What about schooling? We offer a tentative assessment of these contending explanations and conclude that globalization was by far the dominant force accounting for convergence (and divergence) around the periphery. Some exploited it well, and some badly.

AFTER COLUMBUS: EXPLAINING EUROPE'S OVERSEAS TRADE BOOM, 1500–1800

This study documents the boom in Europes imports from Asia and the Americas between 1500 and 1800 and explores its causes. There was no commodity-price convergence between continents, suggesting that declining trade barriers were not the cause of the boom. Thus, it must have been caused by some combination of European import demand and foreign export supply. The behavior of the relative price of foreign importables in European cities should tell us which mattered most and when: we provide the evidence and offer a model which is used to decompose the sources of Europes overseas trade boom.

Democracy and Protectionism

Does democracy encourage free trade? It depends. Broadening the franchise involves transferring power from non-elected elites to the wider population, most of whom will be workers. The Hecksher-Ohlin-Stolper-Samuelson logic says that democratization should lead to more liberal trade policies in countries where workers stand to gain from free trade; and to more protectionist policies in countries where workers will benefit from the imposition of tariffs and quotas. We test and confirm these political economy implications of trade theory hypothesis using data on democracy, factor endowments, and protection in the late nineteenth century.

The Cambridge economic history of modern Europe

Unlike existing textbooks on the economic history of modern Europe, which offer a country-by-country approach, The Cambridge Economic History of Modern Europe rethinks Europes economic history since 1700 as unified and pan-European, with material organised by topic rather than by country. The first volume is centred on the transition to modern economic growth, which first occurred in Britain before spreading to other parts of western Europe by 1870, whilst the second tracks Europes economic history through three major phases since 1870. Each chapter is written by an international team of authors who cover the three major regions of northern Europe, southern Europe, and central and eastern Europe. The two volumes together provide a comprehensive and accessible introduction to the key themes in modern economic history from trade, urbanisation, economic growth and business cycles to sectoral developments, and population and living standards.