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International Trade with Historical Data

Paper Session

Friday, Jan. 3, 2025 2:30 PM - 4:30 PM (PST)

Hilton San Francisco Union Square, Union Square 15 and 16
Hosted By: American Economic Association
  • Chair: Stefania Garetto, Boston University

The Impact of Trade on Real Incomes during the First Era of Globalization

Bruce Blonigen
,
University of Oregon
Woan Foong Wong
,
University of Oregon

Abstract

We study the impact of international trade activity on real incomes in seaports during the first era of globalization. There has been substantial evidence that the significant increase in international trade over the past three decades has had large impacts on real income on average, but with substantial differences across worker types. However, we have relatively little evidence for the impact of international trade on real incomes during the first era of globalization. The few studies which have examined this issue find mixed results, but also rely on relatively aggregate and potentially imprecise data measures. Our primary sources of historical data have highly detailed data on wages by worker type and prices of commonly-used goods at ports over from about 1860 to the start of the first world war. This allows us to examine the impact of international trade on income for well-defined geographic units (port cities) with highly precise data of wages and prices. Importantly, we can study how international trade forces may be differentially impacting different (skilled versus unskilled) workers during this period.

Reversing Protectionism: A First Look at Product-level Trade Data from Smoot-Hawley to the GATT

Kristy Buzard
,
Syracuse University
Ross Jestrab
,
U.S. International Trade Commission
Zeyuan Xiong
,
Syracuse University

Abstract

This paper studies U.S. trade policy from the Smoot-Hawley Tariffs through the 1947 General Agreement on Tariffs and Trade. Given the recent return to broad-based import protection policies, it is more important than ever that we understand the historical dynamics behind the U.S.’s largest trade liberalization in the last century. Our novel dataset of product-level tariff commitments and imports enables the first detailed empirical study of this dynamic period in trade policy, providing new stylized facts about U.S. tariffs and empirical evidence that changes in these tariffs are consistent with predictions from the terms-of-trade theory.

Suez

David Jacks
,
National University of Singapore
Christopher M. Meissner
,
University of California-Davis
Nikolaus Wolf
,
Humboldt University of Berlin

Abstract

For all of its importance in the historical literature and contemporary trade, we still lack a complete quantitative of the Suez canal’s opening and subsequent operation. Using multiple sources of data, we find that Suez had an outsized role in shaping the first wave of globalization. Its introduction led to a roughly 50% increase in bilateral exports for treated country-pairs, an effect which persisted decades after its opening in 1869 and which suggests a roughly 10% increase in world trade due to Suez alone. We also identify changes in the composition of trade and explore the canal’s role in amplifying the “Great Specialization”. To understand mechanisms, we revisit shipping cost calculations related to the transition from sail to steam, showing that the canal’s effects would have increased over time as more trade routes and more types of goods were affected in light of incremental improvements in steam technology.

No Sugar Coating: Quantifying the Welfare Losses from the US-Cuba Trade Policy

Stefania Garetto
,
Boston University
Marie Petkus
,
Centre College
Franco Maldonado Carlin
,
Boston University

Abstract

Using newly digitized historical trade data from the United States Foreign Commerce Yearbooks, we estimate revealed comparative advantage for a sizable set of industries and countries, including Cuba, at the beginning of the 20th century. Through the lens of a quantitative Ricardian model of trade, we conduct a counterfactual analysis to provide a quantitative answer to a long-standing question about the Cuban economy: the “road not taken”. What would the Cuban economy look like 30 years later if its economic integration and political network had remained the same as in 1912? How did the US involvement in the Cuban sugar industry affect Cuban specialization and growth? What would the Cuban economy look like 50 years later if the US trade embargo did not occur? The answers to these questions shed light on our understanding of the consequences of extreme specialization for developing countries in situations of political instability.

Discussant(s)
Keith Head
,
University of British Columbia
Robert W. Staiger
,
Dartmouth College
Dan Bogart
,
University of California-Irvine
Alan Dye
,
Barnard College
JEL Classifications
  • F1 - Trade
  • N7 - Transport, Trade, Energy, Technology, and Other Services