Proposal preview

Networks, Intensity, Extensive Margins of Trade since 19th Century: New approaches of Globalization with large Databases

Many economic history papers dealing with trade globalization in the long term have been produced for about 40 years (Bairoch (1974), Norheim-Anderson (1993), Chase Dunn et al. (2000), Findlay-O’Rourke (2006), Head (2015), World Trade Atlas (2015)).
Our session will be mainly based on new large historical databases dealing with international Trade are being developed: The RiCardo and the Montesquieu databases.
The RICardo project was initiated at Sciences Po (France) in 2004 with the aim of creating a large dataset of historical bilateral trade statistics available to the research community from 1792 to 1938.
The Montesquieu Databasis was intiated at Bordeaux University in 2010 in order to create a dataset of bilateral trade flows at a very disaggregated level (SITC 3 and 5) from 1836 to 1938.
In these databases, variables are more numerous (Trade flows, geographical information, diversity and quality of the products…): does it bring something new from a scientific point of view? What does the recent development of large databases bring to this work? To what extent, more extensive data enable to reconsider the process of globalization and the process of specialization? Does this kind of databases allow to reconsider trade policy and its implications? Can we bring out a new way to present and understand trade globalization in the long term through network analysis?

Organizer(s)

  • Stéphane Becuwe University of Bordeaux (France) stephane.becuwe@u-bordeaux.fr France
  • Concha Betran University of Valencia (Spain) Concepcion.Betran@uv.es Spain
  • Samuel Maveyraud University of Bordeaux (France) samuel.maveyraud@u-bordeaux.fr France

Session members

  • Bertrand Blancheton, University of Bordeaux
  • Giovanni Federico, University of Pisa
  • Samuel Maveyraud, University of Bordeaux
  • Giorgio Fagiolo, Scuola Superiore Sant’Anna
  • Marian Angeles Serrano, University of Barcelona
  • Béatrice Dedinger, SciencePo
  • Jules Hugot, P.U. Javeriana, Bogotá
  • Michael Huberman, Université de Montréal
  • Paul Girard, SciencesPo

Discussant(s)

  • Concha Betran University of Valencia Concepcion.Betran@uv.es

Papers

Panel abstract

This session is designed to analyze how the development of large database in international trade (in terms of countries, periods of time, products at a very disaggregated level…) revisits traditional issues associated with the process of globalization.

1st half

Creeping Bilateralism: Spanish Trade Policy in the Interwar Years

Concha Betran (University of Valencia) and Michael Huberman (Université de Montréal)

Using a granular dataset of Spanish imports between 1922 and 1935 (for approximately 93 countries and 1,700 goods), we study the evolution of Spanish trade policy in the face of economic shocks and in the context of the period’s beggar-thy-neighbor trade environment. The case of Spain is informative because the country was off the gold standard throughout the period and had lost its empire. It also had a political transformation with the establishment of the Republic in 1931 which sought to introduce a more liberal direction in trade policy. Other studies for the period, as well as the 2008 recession, have attributed the contraction in trade to the fall in income which is revealed in the decline of the intensive margin. To the contrary, we find a considerable role for the decline in in the number of products imported, the extensive margin. The stubborn trade imbalance cast a long shadow...

Using a granular dataset of Spanish imports between 1922 and 1935 (for approximately 93 countries and 1,700 goods), we study the evolution of Spanish trade policy in the face of economic shocks and in the context of the period’s beggar-thy-neighbor trade environment. The case of Spain is informative because the country was off the gold standard throughout the period and had lost its empire. It also had a political transformation with the establishment of the Republic in 1931 which sought to introduce a more liberal direction in trade policy. Other studies for the period, as well as the 2008 recession, have attributed the contraction in trade to the fall in income which is revealed in the decline of the intensive margin. To the contrary, we find a considerable role for the decline in in the number of products imported, the extensive margin. The stubborn trade imbalance cast a long shadow on trade policy. In the period before the Depression, we attribute the decline in imported products to tariff policy and the depreciating peseta. After 1931, tariff policy was ineffective. Caught between major trade partners devaluating their currencies and others remaining on gold, the Republic turned to most-favored-nation agreements to improve the trade balance. Typical of the period, these agreements were effectively bilateral and contributed to the overall decline in international trade. We conclude that trade policy mattered in the interwar years.

The hidden hyperbolic geometry of international trade: World Trade Atlas 1870-2013

Guillermo García-Pérez, Marián Boguñá, Antoine Allard and M. Ángeles Serrano

The World Trade Atlas 1870-2013 is a collection of annual world trade maps in which distance combines economic size and the different dimensions that affect international trade beyond mere geography. The maps are based on a gravity model predicting the existence of significant trade channels, such that the closer countries are in trade space, the greater their chance of becoming connected. The atlas provides with information regarding the long-term evolution of the international trade system and demonstrates that, in terms of trade, the world is not flat but hyperbolic, as a reflection of its complex architecture. The departure from flatness has been increasing since World War I, meaning that small economies are moving away from other small economies, while big economies are increasing their chance of getting connected world-wide. We discuss an interpretation in terms of globalization, hierarchicalization, and localization, three forces acting simultaneously to shape the international trade system.

The World Trade Atlas 1870-2013 is a collection of annual world trade maps in which distance combines economic size and the different dimensions that affect international trade beyond mere geography. The maps are based on a gravity model predicting the existence of significant trade channels, such that the closer countries are in trade space, the greater their chance of becoming connected. The atlas provides with information regarding the long-term evolution of the international trade system and demonstrates that, in terms of trade, the world is not flat but hyperbolic, as a reflection of its complex architecture. The departure from flatness has been increasing since World War I, meaning that small economies are moving away from other small economies, while big economies are increasing their chance of getting connected world-wide. We discuss an interpretation in terms of globalization, hierarchicalization, and localization, three forces acting simultaneously to shape the international trade system.

Terms of trade during the first globalization: an empirical analysis

David Chilosi (University of Groningen), Giovanni Federico (University of Pisa) and Antonio Tena-Junguito (University Carlos III, Madrid)

Terms of trade are a major issue in international development economics. An alleged worsening in terms of trade has been considered a major hindrance to economic growth of peripheral countries since the 1950s. In recent times the focus has shifted on the negative consequences of de-industrialization and volatility. Historical data have widely been used in the debate, but the results have been inconclusive, as they are obtained with a motley collection of relative prices rather than with actual terms of trade. This work sets the record straight by using a newly compiled set of actual terms of trade for all polities from 1800 to 1913. We find significant variations in trends within both core and peripheral areas, small and inconsistent differences in the level of volatility between core and periphery and widespread and significant, albeit discontinuous, falls in volatility. Trends in terms of trade are mainly determined by imports, while...

Terms of trade are a major issue in international development economics. An alleged worsening in terms of trade has been considered a major hindrance to economic growth of peripheral countries since the 1950s. In recent times the focus has shifted on the negative consequences of de-industrialization and volatility. Historical data have widely been used in the debate, but the results have been inconclusive, as they are obtained with a motley collection of relative prices rather than with actual terms of trade. This work sets the record straight by using a newly compiled set of actual terms of trade for all polities from 1800 to 1913. We find significant variations in trends within both core and peripheral areas, small and inconsistent differences in the level of volatility between core and periphery and widespread and significant, albeit discontinuous, falls in volatility. Trends in terms of trade are mainly determined by imports, while volatility is mostly explained by exports. These patterns match into falling prices of both primary products and manufactures, small differences in their levels of volatility and significant falls in volatility for both groups of goods. Similarly, relatively small differences in the composition of imports, with peripheral countries often importing large shares of primary products, help to explain shared trends in core and peripheral areas. By contrast it looks as if changes in the composition of trade over time did not matter much. Overall, the results suggest that a re-evaluation of the role of terms of trade in the great divergence is in order.

2nd half

"Base Montesquieu": French foreign trade data (1836-1938)

Stéphane Becuwe (University of Bordeaux, GREThA - UMR CNRS 5113), Bertrand Blancheton (University of Bordeaux, GREThA - UMR CNRS 5113) and Karine Onfroy (University of Bordeaux, GREThA - UMR CNRS 5113)

This article presents the state of progress of a French foreign trade database called "Base Montesquieu". It includes the foreign trade data contained in the annual series entitled General Table of Commerce of France with its colonies and foreign powers over the period 1836-1938. The article analyzes the issues associated with digitization and the transformation of this source into a database, in order to make them available to international research communities.

This article presents the state of progress of a French foreign trade database called "Base Montesquieu". It includes the foreign trade data contained in the annual series entitled General Table of Commerce of France with its colonies and foreign powers over the period 1836-1938. The article analyzes the issues associated with digitization and the transformation of this source into a database, in order to make them available to international research communities.

The RICardo Project

Béatrice Dedinger (SciencesPo Paris) and Paul Girard (SciencesPo Paris)

RICardo (Research on International Commerce) is a project dedicated to trade between nations over a period spanning the beginning of the Industrial Revolution to the eve of the Second World War. It combines a historical trade database covering the bilateral trade of all countries of the world and a website which invites to an exploration of the history of international trade through data visualizations. RICardo opens the way for new research, especially on the history and geography of trade. By relying as much as possible on primary trade statistics publications, the RICardo database reflects the complexity of both historical trade statistics and the historical world trade network. Combining economic history with digital technology, RICardo can help produce a new vision and understanding of the process of trade globalization over the nineteenth and mid-twentieth centuries.

RICardo (Research on International Commerce) is a project dedicated to trade between nations over a period spanning the beginning of the Industrial Revolution to the eve of the Second World War. It combines a historical trade database covering the bilateral trade of all countries of the world and a website which invites to an exploration of the history of international trade through data visualizations. RICardo opens the way for new research, especially on the history and geography of trade. By relying as much as possible on primary trade statistics publications, the RICardo database reflects the complexity of both historical trade statistics and the historical world trade network. Combining economic history with digital technology, RICardo can help produce a new vision and understanding of the process of trade globalization over the nineteenth and mid-twentieth centuries.

Back to the Future: International Trade Costs and the Two Globalizations

Jules Hugot and Michel Fouquin

This article compares nineteenth century and post-World War II globalizations based on a systematic collection of 1.9 million bilateral trade observations for 1827-2014. We assess the degree of globalization using a gravity-based measure of bilateral relative trade costs that can be derived from various micro-founded trade models. Those trade costs are then aggregated to obtain indices for the world and along various trade routes. We show that trade costs fell more rapidly across countries than within countries from the 1840s until World War I. This finding questions the role played by late nineteenth century improvements in transportation and the Gold Standard in sparking this First Globalization. We also show that the fall of trade costs began in Europe before extending to the rest of the world. We further explore the geographical dynamics of trade cost by estimating a border and a distance effect. We find a dramatic rise in the...

This article compares nineteenth century and post-World War II globalizations based on a systematic collection of 1.9 million bilateral trade observations for 1827-2014. We assess the degree of globalization using a gravity-based measure of bilateral relative trade costs that can be derived from various micro-founded trade models. Those trade costs are then aggregated to obtain indices for the world and along various trade routes. We show that trade costs fell more rapidly across countries than within countries from the 1840s until World War I. This finding questions the role played by late nineteenth century improvements in transportation and the Gold Standard in sparking this First Globalization. We also show that the fall of trade costs began in Europe before extending to the rest of the world. We further explore the geographical dynamics of trade cost by estimating a border and a distance effect. We find a dramatic rise in the distance effect for both the nineteenth century and the post-World War II era. This result shows that both waves of globalization have been primarily fueled by a regionalization of world trade.

Geographical structure of inter and intracontinental trade intensity (1948-2014)

Béatrice Dedinger (SciencesPo) and Samuel Maveyraud (University of Bordeaux, GREThA UMR CNRS 5113)

This article proposes an analysis of the geographical and historical structure of trade by continent over the period 1948-2014. It relies on an annual database of bilateral exports from countries around the world built from the IMF's DOTS and IFS databases. The calculation of a relative intensity indicator for exports shows an overcurrent of intra-continental trade for all continents. This phenomenon is not new, but it has increased significantly since the end of the Second World War. The study reveals specific evolutions according to the continents.

This article proposes an analysis of the geographical and historical structure of trade by continent over the period 1948-2014. It relies on an annual database of bilateral exports from countries around the world built from the IMF's DOTS and IFS databases. The calculation of a relative intensity indicator for exports shows an overcurrent of intra-continental trade for all continents. This phenomenon is not new, but it has increased significantly since the end of the Second World War. The study reveals specific evolutions according to the continents.

Exports diversification during first globalization

Stéphane Becuwe (University of Bordeaux, GREThA UMR CNRS 5113), Bertrand Blancheton (University of Bordeaux, GREThA UMR CNRS 5113) and Samuel Maveyraud (University of Bordeaux, GREThA UMR CNRS 5113)

In this paper, we analyze the exports diversification dynamics during first globalization through a network analysis of intensive margins and extensive margins of bilateral trade.

In this paper, we analyze the exports diversification dynamics during first globalization through a network analysis of intensive margins and extensive margins of bilateral trade.