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Abstract:
Is inequality largely the result of the Industrial Revolution? Or, were pre-industrial incomes and life expectancies as unequal as they are today? For want of sufficient data, these questions have not yet been answered. This paper infers inequality for 14 ancient, pre-industrial societies using what are known as social tables, stretching from the Roman Empire 14 AD, to Byzantium in 1000, to England in 1688, to Nueva España around 1790, to China in 1880 and to British India in 1947. It applies two new concepts in making those assessments - what the authors call the inequality possibility frontier and the inequality extraction ratio. Rather than simply offering measures of actual inequality, the authors compare the latter with the maximum feasible inequality (or surplus) that could have been extracted by the elite. The results, especially when compared with modern poor countries, give new insights in to the connection between inequality and economic development in the very long run.

Inequality, Rural Poverty Reduction, Poverty Impact Evaluation, Services & Transfers to Poor

Abstract:
The world economy has become more unequal over the last two centuries. Since within-country inequality exhibits no ubiquitous trend, it follows that virtually all of the observed rise in world income inequality has been driven by widening gaps between nations, while almost none of it has driven by widening gaps within nations. Meanwhile, the world economy has become much more globally integrated over the past two centuries. If correlation meant causation, these facts would imply that globalization has raised inequality between nations, but that it has had no clear effect on inequality within nations. This paper argues that the likely impact of globalization on world inequality has been very different from what these simple correlations suggest. Globalization probably mitigated rising inequality between participating nations. The nations that gained the most from globalization are those poor ones that changed their policies to exploit it, while the ones that gained the least did not, or were too isolated to do so. The effect of globalization on inequality within nations has gone both ways, but here too those who have lost the most from globalization typically have been the excluded non-participants. In any case far too small to explain the observed long run rise in world inequality.

Abstract:
The number of refugees worldwide is now 12 million, up from 3 million in the early 1970s. And the number seeking asylum in the developed world increased tenfold, from about 50,000 per annum to half a million over the same period. Governments and international agencies have grappled with the twin problems of providing adequate humanitarian assistance in the Third World and avoiding floods of unwanted asylum seekers arriving on the doorsteps of the First World. This is an issue that is long on rhetoric, as newspaper reports testify, but surprisingly short on economic analysis. This paper draws on the recent literature, and ongoing research, to address a series of questions that are relevant to the debate. First, we examine the causes of refugee displacements and asylum flows, focusing on the effects of conflict, political upheaval and economic incentives to migrate. Second, we examine the evolution of policies towards asylum seekers and the effects of those policies, particularly in Europe. Finally, we ask whether greater international coordination could produce better outcomes for refugee-receiving countries and for the refugees themselves.

Asylum seekers, refugees, migration policy

Abstract:
The number of refugees worldwide is now 12 million, up from 3 million in the early 1970s. And the number seeking asylum in the developed world increased tenfold, from about 50,000 per annum to half a million over the same period. Governments and international agencies have grappled with the twin problems of providing adequate humanitarian assistance in the Third World and avoiding floods of unwanted asylum seekers arriving on the doorsteps of the First World. This is an issue that is long on rhetoric, as newspaper reports testify, but surprisingly short on economic analysis. This paper draws on the recent literature, and ongoing research, to address a series of questions that are relevant to the debate. First, we examine the causes of refugee displacements and asylum flows, focusing on the effects of conflict, political upheaval and economic incentives to migrate. Second, we examine the evolution of policies towards asylum seekers and the effects of those policies, particularly in Europe. Finally, we ask whether greater international coordination could produce better outcomes for refugee-receiving countries and for the refugees themselves.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
The number of refugees worldwide is now 12 million, up from 3 million in the early 1970s. And the number seeking asylum in the developed world increased tenfold, from about 50,000 per annum to half a million over the same period. Governments and international agencies have grappled with the twin problems of providing adequate humanitarian assistance in the Third World and avoiding floods of unwanted asylum seekers arriving on the doorsteps of the First World. This is an issue that is long on rhetoric, as newspaper reports testify, but surprisingly short on economic analysis. This paper draws on the recent literature, and ongoing research, to address a series of questions that are relevant to the debate. First, we examine the causes of refugee displacements and asylum flows, focusing on the effects of conflict, political upheaval and economic incentives to migrate. Second, we examine the evolution of policies towards asylum seekers and the effects of those policies, particularly in Europe. Finally, we ask whether greater international coordination could produce better outcomes for refugee-receiving countries and for the refugees themselves.

refugees, asylum seekers, asylum policy, international policy coordination

Abstract:
India was a major player in the world export market for textiles in the early 18th century, but by the middle of the 19th century it had lost all of its export market and much of its domestic market. Other local industries also suffered some decline, and India underwent secular de-industrialization as a consequence. While India produced about 25% of world industrial output in 1750, this figure fell to only 2% by 1900. We use an open, specific-factor model to organize our thinking about the relative role played by domestic and foreign forces in India's de-industrialization. The construction of new relative price evidence is central to our analysis. We document trends in the ratio of export to import prices (the external terms of trade) from 1800 to 1913, and that of tradable to non-tradable goods and own-wages in the tradable sectors going back to 1765. With this new relative price evidence in hand, we ask how much of the de-industrialization was due to local supply-side influences (such as the demise of the Mughal empire) and how much to world price shocks (such as world market integration and rapid productivity advance in European manufacturing), both of which had to deal with an offset - the huge net transfer from India to Britain before 1815. Whether the Indian de-industrialization shocks and responses were big or small is then assessed by comparisons with other parts of the periphery.

De-industrialization, price shocks, globalization, India, 18th and 19th century

Abstract:
India was a major player in the world export market for textiles in the early 18th century, but by the middle of the 19th century it had lost all of its export market and much of its domestic market. Other local industries also suffered some decline, and India underwent secular de-industrialization as a consequence. While India produced about 25 percent of world industrial output in 1750, this figure fell to only 2 percent by 1900. We use an open, specific-factor model to organize our thinking about the relative role played by domestic and foreign forces in India's de-industrialization. The construction of new relative price evidence is central to our analysis. We document trends in the ratio of export to import prices (the external terms of trade) from 1800 to 1913, and that of tradable to non-tradable goods and own-wages in the tradable sectors going back to 1765. With this new relative price evidence in hand, we ask how much of the de-industrialization was due to local supply-side influences (such as the demise of the Mughal empire) and how much to world price shocks (such as world market integration and rapid productivity advance in European manufacturing), both of which had to deal with an offset - the huge net transfer from India to Britain before 1815. Whether the Indian de-industrialization shocks and responses were big or small is then assessed by comparisons with other parts of the periphery.

Abstract:
India was a major player in the world export market for textiles in the early 18th century, but by the middle of the 19th century it had lost all of its export market and much of its domestic market. Other local industries also suffered some decline, and India underwent secular de-industrialization as a consequence. While India produced about 25 percent of world industrial output in 1750, this figure fell to only 2 percent by 1900. We use an open, specific-factor model to organize our thinking about the relative role played by domestic and foreign forces in India's de-industrialization. The construction of new relative price evidence is central to our analysis. We document trends in the ratio of export to import prices (the external terms of trade) from 1800 to 1913, and that of tradable to non-tradable goods and own-wages in the tradable sectors going back to 1765. With this new relative price evidence in hand, we ask how much of the de-industrialization was due to local supply-side influences (such as the demise of the Mughal empire) and how much to world price shocks (such as world market integration and rapid productivity advance in European manufacturing), both of which had to deal with an offset - the huge net transfer from India to Britain before 1815. Whether the Indian de-industrialization shocks and responses were big or small is then assessed by comparisons with other parts of the periphery.

De-industrialization, price shocks, globalization, India , l8th and l9th century

Abstract:
Klaus Deininger and Lyn Squire have recently produced an inequality data base for a panel of countries from the 1960s to the 1990s. We use these data to decompose the sources of inequality into three central parts: the demographic or cohort size effect; the so-called Kuznets Curve or demand effects; and the commitment to globalization or policy effects. We also control for education supply, the so-called natural resource curse and other variables suggested by the literature. While the Kuznets Curve comes out of hiding when the inequality relationship is conditioned by the other two, cohort size seems to be the most important force at work. We resolve the apparent conflict between this macro finding on cohort size and the contrary implications of recent research based on micro data.

Abstract:
Klaus Deininger and Lyn Squire have recently produced an inequality data base for a panel of countries from the 1960s to the 1990s. We use these data to decompose the sources of inequality into three central parts: the demographic or cohort size effect; the so-called Kuznets Curve or demand effects; and the commitment to globalization or policy effects. We also control for education supply, the so-called natural resource curse and other variables suggested by the literature. While the Kuznets Curve comes out of hiding when the inequality relationship is conditioned by the other two, cohort size seems to be the most important force at work. We resolve the apparent conflict between this macro finding on cohort size and the contrary implications of recent research based on micro data.

Abstract:
What accounts for the differences in rates of emigration from Latin America compared with those from other sending regions such as Asia and Africa? Why do cross-border migration rates vary so much across Latin America? What explains those rates? This paper looks at evidence covering the period between the early 1970s and the late 1990s. It represents the start of a project seeking answers to these questions.

Abstract:
Most labor scarce overseas countries moved decisively to restrict their immigration during the first third of the 20th century. This autarchic retreat from unrestricted and even publicly-subsidized immigration in the first global century before World War I to the quotas and bans introduced afterwards was the result of a combination of factors: public hostility towards new immigrants of lower quality, public assessment of the impact of those immigrants on a deteriorating labor market, political participation of those impacted, and, as a triggering mechanism, the sudden shocks to the labor market delivered by the 1890s depression, the Great War, postwar adjustment and the great depression. The paper documents the secular drift from very positive to much more negative immigrant selection which took place in the first global century after 1820 and in the second global century after 1950, and seeks explanations for it. It then explores the political economy of immigrant restriction in the past and seeks historical lessons for the present.

Abstract:
Most labor scarce overseas countries moved decisively to restrict their immigration during the first third of the 20th century. This autarchic retreat from unrestricted and even publicly-subsidized immigration in the first global century before World War I to the quotas and bans introduced afterwards was the result of a combination of factors: public hostility towards new immigrants of lower quality public assessment of the impact of those immigrants on a deteriorating labor market, political participation of those impacted, and, as a triggering mechanism, the sudden shocks to the labor market delivered by the 1890s depression, the Great War, postwar adjustment and the great depression. The paper documents the secular drift from very positive to much more negative immigrant selection which took place in the first global century after 1820 and in the second global century after 1950, and seeks explanations for it. It then explores the political economy of immigrant restriction in the past and seeks historical lessons for the present.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
This paper uses a new database to establish a set of tariff facts that have not been well appreciated: tariff rates in Latin America were far higher than anywhere else in the century before the Great Depression; while lower than Latin America, tariffs were far higher in the European periphery and the
English-speaking new world than they were in the European core; tariff rates rose everywhere in the periphery up to 1900, and then moderated a bit up to WWI; and the great anti-global leap during the 1930s in Latin American and the European periphery was not new policy territory since these two regions had plenty of previous experience with very high tariffs. These world tariff facts need an explanation, especially since economic historians have pretty much ignored them while devoting so much attention to Europe. As we search for the explanations, we find that modern endogenous tariff theory isn't quite up to the task. The paper uses this world wide sample of 35 countries as a panel to explore competing hypotheses as to what drove policy in the century before WWII: revenue motivation; optimal tariffs; strategic tariffs; deindustrialization fears; Stolper-Samuelson forces; and many more. The world environment mattered. Trading partners mattered. Domestic geography, factor endowments, institutions and politics mattered.

Abstract:
Most countries in the periphery specialized in the export of just a handful of primary products for most of their history. Some of these commodities have been more volatile than others, and those with more volatile prices have grown slowly relative both to the industrial leaders and to other primary product exporters. This fact helps explain the growth puzzle noted by Easterly, Kremer, Pritchett and Summers more than a decade ago: that the contending fundamental determinants of growth - institutions, geography and culture - exhibit far more persistence than do the growth rates they are supposed to explain. Using a new panel database for 35 countries, this paper estimates the impact of terms of trade volatility and secular change on country performance between 1870 and 1939. Volatility was much more important for accumulation and growth than was secular change. Additionally, both effects were asymmetric between Core and Periphery, findings that speak directly to the terms of trade debates that have raged since Prebisch and Singer wrote more than 50 years ago. The paper also investigates one channel of impact, and finds that foreign capital inflows declined steeply where commodity prices were volatile.

Terms of trade, volatility, growth, periphery

Abstract:
Most countries in the periphery specialized in the export of just a handful of primary products for most of their history. Some of these commodities have been more volatile than others, and those with more volatile prices have grown slowly relative both to the industrial leaders and to other primary product exporters. This fact helps explain the growth puzzle noted by Easterly, Kremer, Pritchett and Summers more than a decade ago: that the contending fundamental determinants of growth-institutions, geography and culture - exhibit far more persistence than do the growth rates they are supposed to explain. Using a new panel database for 35 countries, this paper estimates the impact of terms of trade volatility and secular change on country performance between 1870 and 1939. Volatility was much more important for accumulation and growth than was secular change. Additionally, both effects were asymmetric between Core and Periphery, findings that speak directly to the terms of trade debates that have raged since Prebisch and Singer wrote more than 50 years ago. The paper also investigates one channel of impact, and finds that foreign capital inflows declined steeply where commodity prices were volatile.

Terms of Trade, volatility, growth, periphery

Abstract:
The world has seen two globalization booms over the past two centuries, and one bust. The first global century ended with World War I and the second started at the end of World War II, while the years in between were ones of anti-global backlash. This lecture reports what we know about the winners and losers during the two global centuries, including aspects almost always ignored in modern debate how prices of consumption goods on the expenditure side are affected, and how the economic position of the poor is influenced. It also reports two responses of the winners to the losers' complaints. Some concessions to the losers took the form of anti-global policy manifested by immigration restriction in the high-wage countries and trade restriction pretty much everywhere. Some concessions to the losers were also manifested by a race towards the top' whereby legislation strengthened losers' safety nets and increased their sense of political participation. The lecture concludes with four lessons of history and an agenda for international economists, including more attention to the impact of globalization on commodity price structure, the causes of protection, the impact of world migration on poverty eradication, and the role of political participation in the whole process.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
Two of the main forces driving European emigration in the late nineteenth century were real wage gaps between sending and receiving regions and demographic booms in the low-wage sending regions. Our new estimates of net migration for the countries of sub-Saharan Africa show that exactly the same forces driving African across-border migration are at work today. The results suggest that rapid growth in the cohort of potential young emigrants, population pressure on the resource base, and slow economic growth are likely to intensify the pressure for migration out of Africa and into high-wage OECD countries over the next two decades.

Abstract:
Two of the main forces driving European emigration in the late nineteenth century were real wage gaps between sending and receiving regions and demographic booms in the low-wage sending regions (directly augmenting the supply of potential movers as well as indirectly making already-measured employment conditions less attractive). These two features are even more prominent in Africa today, but do or can Africans respond to them with the same elasticity as in the days of "free" migration? Our new estimates of net migration and labor market performance for the countries of sub-Saharan Africa suggest that exactly the same forces are at work driving African across-border migration today. Rapid growth in the cohort of young potential migrants, population pressure on the resource base, and poor economic performance are the main forces driving African migration. A century ago, more modest demographic forces in Europe were accompanied by strong catching-up economic growth in the low-wage emigrant regions, followed by a slowdown in already-modest demographic growth. Yet, migrations were still mass. In Africa today, economic growth has faltered, its economies have fallen further behind the high-wage OECD leaders, and there is a demographic speed up in the making. Our estimates suggest that the pressure on emigration out of Africa will intensify, manifested in part by a growing demand for entrance into high-wage OECD labor markets.

International migration, demographic pressure, African population

Abstract:
Two of the main forces driving European emigration in the late nineteenth century were real wage gaps between sending and receiving regions and demographic booms in the low-wage sending regions (directly augmenting the supply of potential movers as well as indirectly making already-measured employment conditions less attractive). These two features are even more prominent in Africa today, but do or can Africans respond to them with the same elasticity as in the days of 'free' migration? Our new estimates of net migration and labor market performance for the countries of sub-Saharan Africa suggest that exactly the same forces are at work driving African across-border migration today. Rapid growth in the cohort of young potential migrants, population pressure on the resource base, and poor economic performance are the main forces driving African migration. A century ago, more modest demographic forces in Europe were accompanied by strong catching-up economic growth in the low-wage emigrant regions, followed by a slowdown in already-modest demographic growth. Yet, migrations were still mass. In Africa today, economic growth has faltered, its economies have fallen further behind the high-wage OECD leaders, and there is a demographic speed up in the making. Our estimates suggest that the pressure on emigration out of Africa will intensify, manifested in part by a growing demand for entrance into high-wage OECD labor markets.

Abstract:
OECD governments note rising immigration with alarm and grapple with policies aimed at selecting certain migrants and keeping out others. Economists appear to be well armed to advise governments since they are responsible for an impressive literature that examines the characteristics of individual immigrants, their absorption and the consequences of their migration on both sending and receiving regions. Economists are, however, much less well armed to speak to the determinants of the world migrations that give rise to public alarm. This Paper offers a quantitative assessment of the economic and demographic fundamentals that have driven and are driving world migration, across different historical epochs and around the world. The Paper is organized around three questions: how do the standard theories of migration perform when confronted with evidence drawn from more than a century of world migration experience? How do inequality and poverty influence world migration? Is it useful to distinguish between migration pressure and migration ex-post, or between the potential demand for visas and the actual use of them?

International migration

Abstract:
OECD governments note rising immigration with alarm and grapple with policies aimed at selecting certain migrants and keeping out others. Economists appear to be well armed to advise governments since they are responsible for an impressive literature that examines the characteristics of individual immigrants, their absorption and the consequences of their migration on both sending and receiving regions. Economists are, however, much less well armed to speak to the determinants of the world migrations that give rise to public alarm. This paper offers a quantitative assessment of the economic and demographic fundamentals that have driven and are driving world migration, across different historical epochs and around the world. The paper is organized around three questions: How do the standard theories of migration perform when confronted with evidence drawn from more than a century of world migration experience? How do inequality and poverty influence world migration? Is it useful to distinguish between migration pressure and migration ex-post, or between the potential demand for visas and the actual use of them?

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
Some world historians attach globalization big bang' significance to 1492 (Christopher Colombus stumbles on the Americas in search of spices) and 1498 (Vasco da Gama makes an end run around Africa and snatches monopoly rents away from the Arab and Venetian spice traders). Such scholars are on the side of Adam Smith who believed that these were the two most important events in recorded history. Other world historians insist that globalization stretches back even earlier. There is a third view which argues that the world economy was fragmented and completely de-globalized before the 19th century. None of these three competing views has explicitly shown the difference between trade expansion driven by booming demand and supply within the trading economies (e.g., the underlying fundamental, population growth), and trade expansion driven by the integration of markets between trading economies (e.g., the central manifestation of globalization, commodity price convergence). This paper makes that distinction, and then offers two novel empirical tests which allow us to discriminate between these three competing views. Both tests show: there is no evidence supporting the view that the world economy was globally integrated prior to 1492 and/or 1498; there is also no evidence supporting the view that these two dates had the economic impact on the global economy that world historians assign to them; but there is abundant evidence supporting the view that the 19th century contained a very big globalization bang. These tests involve a close look at the connections between factor prices, commodity prices and endowments world wide.

Abstract:
There are two contrasting views of pre-19th century trade and globalization. First, there are the world history scholars like Andre Gunder Frank who attach globalization 'big bang' significance to the dates 1492 (Christopher Colombus stumbles on the Americas in search of spices) and 1498 (Vasco da Gama makes an end run around Africa and snatches monopoly rents away from the Arab and Venetian spice traders). Such scholars are on the side of Adam Smith who believed that these were the two most important events in recorded history. Second, there is the view that the world economy was fragmented and completely de- globalized before the 19th century. This paper offers a novel way to discriminate between these two competing views and we use it to show that there is no evidence that the Ages of Discovery and Commerce had the economic impact on the global economy that world historians assign to them, while there is plenty of evidence of a very big bang in the 19th century. The test involves a close look at the connections between factor prices, commodity prices and endowments world wide.

Abstract:
There are two contrasting views of pre-19th century trade and globalization. First, there are the world history scholars like Andre Gunder Frank who attach globalization 'big bang' significance to the dates 1492 (Christopher Colombus stumbles on the Americas in search of spices) and 1498 (Vasco da Gama makes an end run around Africa and snatches monopoly rents away from the Arab and Venetian spice traders). Such scholars are on the side of Adam Smith who believed that these were the two most important events in recorded history. Second, there is the view that the world economy was fragmented and completely de-globalized before the 19th century. This paper offers a novel way to discriminate between these two competing views and we use it to show that there is no evidence that the Ages of Discovery and Commerce had the economic impact on the global economy that world historians assign to them, while there is plenty of evidence of a very big bang in the 19th century. The test involves a close look at the connections between factor prices, commodity prices and endowments world wide.

Abstract:
Today's labor-scarce economies have open trade and closed immigration policies, while a century ago they had just the opposite, open immigration and closed trade policies. Why the inverse policy correlation, and why has it persisted for almost two centuries? This paper seeks answers to this dual policy paradox by exploring the fundamentals which have influenced the evolution of policy: the decline in the costs of migration and its impact on immigrant selectivity, a secular switch in the net fiscal impact of trade relative to immigration, and changes in the median voter. The paper also offers explanations for the between-country variance in voter anti-trade and anti-migration attitude, and links this to the fundamentals pushing policy.

tariffs, immigration restriction, international policy, economic history

Abstract:
Today's labor-scarce economies have open trade and closed immigration policies, while a century ago they had just the opposite, open immigration and closed trade policies. Why the inverse policy correlation, and why has it persisted for almost two centuries? This paper seeks answers to this dual policy paradox by exploring the fundamentals which have influenced the evolution of policy: the decline in the costs of migration and its impact on immigrant selectivity, a secular switch in the net fiscal impact of trade relative to immigration, and changes in the median voter. The paper also offers explanations for the between-country variance in voter anti-trade and anti-migration attitude, and links this to the fundamentals pushing policy.

Tariffs, immigration restriction, policy, history

Abstract:
There were three epochs of growth experience after the mid 19th century for what is now called the OECD 'club'; the late 19th century, the middle years between 1914 and 1950, and the late 20th century. The late 19th and the late 20th century epochs were ones of overall fast growth and convergence: poor countries tended to grow even faster than rich and the economic gap between rich and poor countries diminished. The middle years were ones of overall slow growth and divergence: poor countries tended to grow even slower than rich and the economic gap between rich and poor countries widened. Since the middle years were also ones of economic autarky and 'de-globalization', while the rest were ones of increasing globalization in world commodity and factor markets, history offers an unambiguous positive correlation between globalization and convergence. But is the correlation spurious? When the pre-World War I years are examined in detail, the correlation turns out to be causal: the globalization of commodity and factor markets served to play a critical, perhaps the critical, role in contributing to convergence. A century and a half of OECD club history also suggests that economists should pay more attention to who gains and who loses from convergence since the answers may help determine whether pro-globalization or anti- globalization policies will persist.

Abstract:
Clark, Hatton, and Williamson develop and estimate a model explaining the level and country-source composition of United States immigration since the early 1970s. The model incorporates ratios of source country income, education, and demographic structure, as well as relative inequality. The authors' model also incorporates both network effects, as reflected in the stock of previous immigrants, and various controls for immigration quota policy. The model is estimated on a panel of 81 source countries for 1971-98. The results strongly support the influence of economic, demographic, and geographic variables as well as policy. The regression results are used to identify those factors that most influenced the changing composition of U.S. immigration by source.

This paper - a product of Investment Climate, Development Research Group - is part of a larger effort in the group to understand globalization.

Abstract:
This Paper documents the size and timing of the world intercontinental trade boom following the great voyages in the 1490s of Columbus, da Gama and their followers. Indeed, a trade boom followed over the next three centuries. But what was its cause? The conventional wisdom in the world history literature offers globalization as the answer: it alleges that declining trade barriers, falling transport costs and overseas 'discovery' explains the boom. In contrast, this Paper reports the evidence that confirms that there was no commodity price convergence between continents, something that would have emerged had globalization been a force that mattered. Thus, the trade boom must have been caused by some combination of European import demand and foreign export supply from Asia and the Americas. The behaviour of the relative price of foreign importables in European cities should tell us which mattered most and when. We offer detailed evidence on the relative prices of such importables in European markets over the five centuries 1350-1850. We then offer a model which is used to decompose the sources of the trade boom 1500-1800.

Demand and supply, history, trade growth

Abstract:
This paper documents the size and timing of the world inter-continental trade boom following the great voyages in the 1490s of Columbus, da Gama and their followers. Indeed, a trade boom followed over the subsequent three centuries. But what was its cause? The conventional wisdom in the world history literature offers globalization as the answer: it alleges that declining trade barriers, falling transport costs and overseas 'discovery' explains the boom. In contrast, this paper reports the evidence that confirms unambiguously that there was no commodity price convergence between continents, something that would have emerged had globalization been a force that mattered. Thus, the trade boom must have been caused by some combination of European import demand and foreign export supply from Asia and the Americas. Furthermore, the behavior of the relative price of foreign importables in European cities should tell us which mattered most and when. We offer detailed evidence on the relative prices of such importables in European markets over the five centuries 1350-1850. We then offer a model which is used to decompose the sources of the trade boom 1500-1800.

Abstract:
The endogenous growth literature has explored the transition from a Malthusian world where real wages, living standards and labour productivity are all linked to factor endowments, to one where (endogenous) productivity change embedded in modern industrial growth breaks that link. Recently, economic historians have presented evidence from England showing that the dramatic reversal in distributional trends - from a steep secular fall in wage-land rent ratios before 1800 to a steep secular rise thereafter - must be explained both by industrial revolutionary growth forces and by global forces that opened up the English economy to international trade. This paper explores whether and how the relationship was different for Spain, a country which had relatively poor productivity growth in agriculture and low living standards prior to 1800, was a late-comer to industrialization afterwards, and adopted very restrictive policies towards imports for much of the 19th century. The failure of Spanish wage-rental ratios to undergo a sustained rise after 1840 can be attributed to the delayed fall in relative agricultural prices (due to those protective policies) and to the decline in Spanish manufacturing productivity after 1898.

Distribution, globalization, growth, Spain

Abstract:
The endogenous growth literature has explored the transition from a Malthusian world where real wages, living standards and labor productivity are all linked to factor endowments, to one where (endogenous) productivity change embedded in modern industrial growth breaks that link. Recently, economic historians have presented evidence from England showing that the dramatic reversal in distributional trends - from a steep secular fall in wage-land rent ratios before 1800 to a steep secular rise thereafter - must be explained both by industrial revolutionary growth forces and by global forces that opened up the English economy to international trade. This paper explores whether and how the relationship was different for Spain, a country which had relatively poor productivity growth in agriculture and low living standards prior to 1800, was a late-comer to industrialization afterwards, and adopted very restrictive policies towards imports for much of the 19th century. The failure of Spanish wage-rental ratios to undergo a sustained rise after 1840 can be attributed to the delayed fall in relative agricultural prices (due to those protective policies) and to the decline in Spanish manufacturing productivity after 1898.

Abstract:
The endogenous growth literature has explored the transition from a Malthusian world where real wages, living standards and labor productivity are all linked to factor endowments, to one where (endogenous) productivity change embedded in modern industrial growth breaks that link. Recently, economic historians have presented evidence from England showing that the dramatic reversal in distributional trends - from a steep secular fall in wage-land rent ratios before 1800 to a steep secular rise thereafter - must be explained both by industrial revolutionary growth forces and by global forces that opened up the English economy to international trade. This paper explores whether and how the relationship was different for Spain, a country which had relatively poor productivity growth in agriculture and low living standards prior to 1800, was a late-comer to industrialization afterwards, and adopted very restrictive policies towards imports for much of the 19th century. The failure of Spanish wage-rental ratios to undergo a sustained rise after 1840 can be attributed to the delayed fall in relative agricultural prices (due to those protective policies) and to the decline in Spanish manufacturing productivity after 1898.

Growth, distribution, globalization, Spain

Abstract:
The United States has experienced rising immigration levels and changing source since the 1950s. The changes in source have been attributed to the 1965 Amendments to the Immigration Act that abolished country-quotas and replaced them with a system that emphasized family reunification. Some believed that the Amendments would not change the 'traditional' sources of US immigrants. Given this view, it seems all the more remarkable that the sources of immigration changed so dramatically. This paper isolates the economic and demographic fundamentals that determined immigration rates by source from 1971 to 1998 - income, education, demographic composition and inequality. The paper also allows for persistence - big US foreign-born stocks implying a strong 'friends and neighbors' pull on current immigrant flows. Specific policy variables are included which are derived directly from the quotas allocated to different visa categories. Parameter estimates from the panel data are then used to implement counterfactual simulations that serve to isolate the effects of immigration policy as well as source-country economic and demographic conditions.

Abstract:
A recent endogenous growth literature has focused on the transition from a Malthusian world where real wages were linked to factor endowments, to one where modern growth has broken that link. In this Paper we present evidence on another, related phenomenon: the dramatic reversal in distributional trends - from a steep secular fall to a steep secular rise in wage-land rent ratios - which occurred some time early in the 19th century. What explains this reversal? While it may seem logical to locate the causes in the Industrial Revolutionary forces emphasized by endogenous growth theorists, we provide evidence that something else mattered just as much: the opening up of the European economy to international trade.

Malthus, growth, trade, distribution

Abstract:
A recent endogenous growth literature has focused on the transition from a Malthusian world where real wages were linked to factor endowments, to one where modern growth has broken that link. In this paper we present evidence on another, related phenomenon: the dramatic reversal in distributional trends -- from a steep secular fall to a steep secular rise in wage-land rent ratios -- which occurred some time early in the 19th century. What explains this reversal? While it may seem logical to locate the causes in the Industrial Revolutionary forces emphasized by endogenous growth theorists, we provide evidence that something else mattered just as much: the opening up of the European economy to international trade.

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Abstract:
The late 19th and the late 20th century shared more than simply globalization and convergence. Globalization also seems to have had the same impact on income distribution: in the late 19th century, inequality rose in rich countries and fell in poor countries; according to Adrian Wood, the same has been true of the late 20th century. Furthermore, while George Borjas and Wood think that globalization accounted for something like a third to a half of the rise in inequality in America and other OECD countries since the 1970s, the late 19th century evidence suggests at least the same, perhaps more. However, those modern economists who favor a rising inequality explanation coming from (unskilled)-labor-saving technological change will be pleased to hear that it probably accounted for more than a third of the rising inequality in the New World and for more than a half of the falling inequality in Europe. It also appears that the inequality trends which globalization produced prior to World War I were at least partly responsible for the interwar retreat from globalization. Will the world economy of the next century also retreat from its commitment to globalization because of its inequality side effects?

Abstract:
How much of the good growth performance in Latin America between 1870 and 1913 can be assigned to the forces of globalization? Why was industrialization so weak? Why was inequality on the rise? This paper offers an answer to these questions. It starts by exploring the disadvantages associated with geographic isolation from world markets and the transport revolutions that helped liberate Latin America from that isolation, a pro-global force. It then asks how independence contributed to massive de-globalization during the decades of 'lost growth' between the 1820s and the 1870s. Next, it documents what happened to the external terms of trade in Latin America between 1820 and 1950: from the 1890s onwards the terms of trade deteriorated, but it also underwent spectacular improvement before the 1890s, suggesting that it had something to do with the 'fairly fast' Latin America growth during so much of the belle epoque. While booming relative prices of exports certainly fostered trade, policy suppressed it: tariff rates were higher in Latin America than almost anywhere else in the world between 1820 and 1929, long before the Great Depression. The paper then asks why. The answer is to be found mainly with revenue needs rather than with some precocious import substitution policy. High tariffs still had a powerful protective effect, regardless of motivation. However, protective policy was modified by those powerful and positive terms of trade shocks, yielding on net weak early industrialization. Finally, the paper documents that inequality rose in most of Latin America up to World War I, while it fell thereafter. The correlation between globalization and inequality is likely to have been causal.

Abstract:
Africa and Latin America secured their independence from European colonial rule a century and half apart: most of Latin America after 1820 and most of Africa after 1960. Despite the distance in time and space, they share important similarities. In each case independence was followed by political instability, violent conflict and economic stagnation lasting for about a half-century (lost decades). The parallels suggest that Africa might be exiting from a period of post-imperial collapse and entering a period of relative political stability and economic growth, as did Latin America a century and a half earlier.

Lost decades, Africa, Latin America, development, economic history

Abstract:
Africa and Latin America secured their independence from European colonial rule a century and half apart: most of Latin America after 1820 and most of Africa after 1960. Despite the distance in time and space, they share important similarities. In each case independence was followed by political instability, violent conflict and economic stagnation lasting for about a half-century (lost decades). The parallels suggest that Africa might be exiting from a period of post-imperial collapse and entering a period of relative political stability and economic growth, as did Latin America a century and a half earlier.

Abstract:
In his seminal publications between the 1930s and 1960s, Frederick Lane offered three hypotheses regarding the impact of the Voyages of Discovery that have guided debate ever since. First, pepper and other spice prices did not rise in European markets in the century before the 1490s, and thus could not have 'pulled in' the oceanic explorations by their rising scarcity. Second, Portuguese circumnavigation of Africa did not lower European spice prices across the 16th century, implying that the discovery of the Cape route had no permanent effect on Euro-Asian market integration. Third, 15th century Venetian spice markets were already well integrated with those in Iberia and northern Europe, implying that Portugal could not have had an intra-European market integrating influence in the 16th century. Lane developed these influential hypotheses by relying heavily on nominal spice prices from Venice and the Levant. This paper revisits Lane's hypotheses by using instead relative spice prices, that is, accounting for inflation. It also draws on evidence from Iberia and northern Europe. In addition, it explores European market integration before and after 1503, the year when da Gama returned from his financially successful second voyage. Lane's three hypotheses are rejected: the impact of the Portuguese was profound on all fronts. We conclude by using a simple model of monopoly and oligopoly to decompose the sources of the Cape route's impact on European markets.

Abstract:
In his seminal publications between the 1930s and 1960s, Frederick Lane offered three hypotheses regarding the impact of the Voyages of Discovery that have guided debate ever since. First, pepper and other spice prices did not rise in European markets in the century before the 1490s, and thus could not have 'pulled in' the oceanic explorations by their rising scarcity. Second, Portuguese circumnavigation of Africa did not lower European spice prices across the 16th century, implying that the discovery of the Cape route had no permanent effect on Euro-Asian market integration. Third, 15th century Venetian spice markets were already well integrated with those in Iberia and northern Europe, implying that Portugal could not have had an intra-European market integrating influence in the 16th century. Lane developed these influential hypotheses by relying heavily on nominal spice prices from Venice and the Levant. This paper revisits Lane's hypotheses by using instead relative spice prices, that is, accounting for inflation. It also draws on evidence from Iberia and northern Europe. In addition, it explores European market integration before and after 1503, the year when da Gama returned from his financially successful second voyage. Lane's three hypotheses are rejected: the impact of the Portuguese was profound on all fronts. We conclude by using a simple model of monopoly and oligopoly to decompose the sources of the Cape route's impact on European markets.

Market integration, spice trade, Voyages of Discovery

Abstract:
This paper uses a new database to establish two findings covering the first globalization boom before World War I, the second since World War II, and the autarkic interlude in between. First, there is strong evidence supporting a Tariff-Growth Paradox: protection was associated with fast growth before World War II, while it was associated with slow growth thereafter. Second, there is strong evidence supporting regional asymmetry: while the tariff-growth association was powerful and positive in the Core and rich New World before World War II, it was typically weak and negative in the poor Periphery. The paper offers explanations for the Paradox by controlling for a changing world economic environment. It shows how the oft-quoted Sachs-Warner results for 1970-1989 are significantly revised when one controls for trading partners' growth, trading partners' tariffs and the effective distance between them over the longer half-century 1950-1997. Falling partners' tariffs was the most important force accounting for the switch in sign on the tariff-growth connection after 1950. An increase in own tariffs after 1950 hurt growth, but it would not have hurt growth in a world where partners' tariffs were much higher, trading partners' growth much slower, and the world less closely connected by transportation. World environment matters. Leader-country reaction to big world events (like the Great Depression) matter. Followers take notice.

Abstract:
A decade has passed since Robert Lucas asked why capital does not flow from rich to poor countries. Lucas used a contemporary example to illustrate his Paradox, the very modest flow of capital from the United States to India during the second great global capital market boom, after 1970. Had he paid more attention to the first great global capital market boom, after 1870, he might have been less surprised. Very little of British capital exports went to poor, labor-abundant countries. Indeed, about two-thirds of it went to the labor-scarce New World where only a tenth of the world's population lived, and only about a quarter of it went to labor-abundant Asia and Africa where almost two-thirds of the world's population lived. Why? Was it caused by some international market failure, or was it due to some shortfall in underlying economic, demographic or geographic fundamentals that made capital's productivity low in poor countries? This paper constructs a panel data set for 34 countries who as a group got 92 percent of British capital, and uses it to conclude that international capital market failure (including whether the country was on or off the Gold Standard) was not involved. It then ranks the three big fundamentals that mattered schooling, natural resources and demography.

Abstract:
Poor countries are more volatile than rich countries, and we know this volatility impedes their growth. We also know that commodity price volatility is a key source of those shocks. This paper explores commodity and manufactures prices over the past three centuries to answer three questions: Has commodity price volatility increased over time? The answer is no: there is little evidence of trend since 1700. Have commodities always shown greater price volatility than manufactures? The answer is yes. Higher commodity price volatility is not the modern product of asymmetric industrial organizations - oligopolistic manufacturing versus competitive commodity markets - that only appeared with the industrial revolution. It was a fact of life deep into the 18th century. Does world market integration breed more or less commodity price volatility? The answer is less. Three centuries of history show unambiguously that economic isolation caused by war or autarkic policy has been associated with much greater commodity price volatility, while world market integration associated with peace and pro-global policy has been associated with less commodity price volatility. Given specialization and comparative advantage, globalization has been good for growth in poor countries at least by diminishing price volatility. But comparative advantage has never been constant. Globalization increased poor country specialization in commodities when the world went open after the early 19th century; but it did not do so after the 1970s as the Third World shifted to labor-intensive manufactures. Whether price volatility or specialization dominates terms of trade and thus aggregate volatility in poor countries is thus conditional on the century.

Commodity prices, development, history, volatility

Abstract:
Poor countries are more volatile than rich countries, and we know this volatility impedes their growth. We also know that commodity price volatility is a key source of those shocks. This paper explores commodity and manufactures price over the past three centuries to answer three questions: Has commodity price volatility increased over time? The answer is no: there is little evidence of trend since 1700. Have commodities always shown greater price volatility than manufactures? The answer is yes. Higher commodity price volatility is not the modern product of asymmetric industrial organizations - oligopolistic manufacturing versus competitive commodity markets - that only appeared with the industrial revolution. It was a fact of life deep into the 18th century. Does world market integration breed more or less commodity price volatility? The answer is less. Three centuries of history shows unambiguously that economic isolation caused by war or autarkic policy has been associated with much greater commodity price volatility, while world market integration associated with peace and pro-global policy has been associated with less commodity price volatility. Given specialization and comparative advantage, globalization has been good for growth in poor countries at least by diminishing price volatility. But comparative advantage has never been constant. Globalization increased poor country specialization in commodities when the world went open after the early 19th century; but it did not do so after the 1970s as the Third World shifted to labor-intensive manufactures. Whether price volatility or specialization dominates terms of trade and thus aggregate volatility in poor countries is thus conditional on the century.

Abstract:
Contrary to conventional wisdom, the doors did not suddenly slam shut on American immigrants when Congress passed the Emergency Quota Act of May 1921. Rather, the United States started imposing restrictions a half century earlier. Argentina, Australia, Brazil, and Canada enacted similar measures, although the anti-immigration policy drift often took the form of an enormous drop in (or even the disappearance of) large immigrant subsidies. Contrary to conventional wisdom, there wasn't simply one big regime switch around World War I. What explains immigration policy between 1860-1930? This paper identifies the fundamentals that underlay the formation of immigration policy, distinguishes between the impact of these long run fundamentals and short run timing, and clarifies the difference between market and non-market forces. The key bottom line is this: Over the long haul, immigrant countries tried to maintain the relative economic position of unskilled labor, compared with skilled labor, landowner and industrialist. The morals for the present are obvious.

Abstract:
This paper uncovers a fact that has not been well appreciated: tariffs in Latin America were far higher than anywhere else in the century before the Great Depression. This is a surprising fact given that this region has been said to have exploited globalization forces better than most during the pre-1914 belle epoque and for which the Great Depression has always been viewed as a critical policy turning point towards protection and de-linking from the world economy. This paper shows that the explanation cannot lie with output gains from protection, since, while such gains were present in Europe and its non-Latin offshoots, they were not present in Latin America. The paper then explores Latin American tariffs as a revenue source, as a protective device for special interests, and as the result of other political economy struggles. We conclude by asking whether the same pro-protection conditions exist today as those which existed more than a century ago.

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Abstract:
The contending fundamental determinants of growth - institutions, geography and culture - exhibit far more persistence than do the growth rates they are supposed to explain. So, what exogenous shocks might account for the variance around those persistent fundamentals? The terms of trade seems to be one good place to look. Using a panel data base for 35 countries, this paper estimates the impact of terms of trade volatility and secular change between 1870 and 1938. We find that volatility was much more important than secular change. Additionally, both effects were asymmetric between core and periphery, findings that speak directly to the terms of trade debates that have raged since Prebisch and Singer wrote more than 50 years ago.

Abstract:
Most analysts of the modern Latin American economy hold to a pessimistic belief in historical persistence -- they believe that Latin America has always had very high levels of inequality, suggesting it will be hard for modern social policy to create a more egalitarian society. This paper argues that this conclusion is not supported by what little evidence we have. The persistence view is based on an historical literature which has made little or no effort to be comparative. Modern analysts see a more unequal Latin America compared with Asia and the rich post-industrial nations and then assume that this must always have been true. Indeed, some have argued that high inequality appeared very early in the post-conquest Americas, and that this fact supported rent-seeking and anti-growth institutions which help explain the disappointing growth performance we observe there even today. This paper argues to the contrary. Compared with the rest of the world, inequality was not high in pre-conquest 1491, nor was it high in the postconquest decades following 1492. Indeed, it was not even high in the mid-19th century just prior Latin America's belle époque. It only became high thereafter. Historical persistence in Latin American inequality is a myth.

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Abstract:
The demographic transition a change from high to low rates of mortality and fertility has been more dramatic in East Asia during this century than in any other region or historical period. By introducing demographic variables into an empirical model of economic growth, this essay shows that this transition has contributed substantially to East Asia's so-called economic miracle. The 'miracle' occurred in part because East Asia's demographic transition resulted in its working-age population growing at a much faster pace than its dependent population during the period 1965-1990, thereby expanding the per capita productive capacity of East Asian economies. This effect was not inevitable; rather, it occured because East Asian countries had social, economic, and political institutions and policies that allowed them to realize the growth potential created by the transition. The empirical analyses indicate that population growth has a purely transitional effect on economic growth; this effect operates only when the dependent and working-age populations are growing at different rates. An important implication of these results is that future demographic change will tend to depress growth rates in East Asia, while it will promote more rapid economic growth in Southeast and South Asia.

Abstract:
India was a major player in the world export market for textiles in the early 18th century, but by the middle of the 19th century it had lost all of its export market and much of its domestic market. India underwent secular deindustrialization as a consequence. While India produced about 25 percent of world industrial output in 1750, this figure had fallen to only 2 percent by 1900. We ask how much of India's deindustrialization was due to local supply-side forces -- such as political fragmentation in the 18th century and rising incidence of drought between the early 18th and 19th century, and how much to world price shocks. We use an open, three-sector neo-Ricardian model to organize our thinking about the relative role played by domestic and foreign forces. A newly compiled database of relative price evidence is central to our analysis. We document trends in the ratio of export to import prices (the external terms of trade) from 1800 to 1913, and that of tradable to non-tradable goods and own-wages in the tradable sectors back to 1765. Whether Indian deindustrialization shocks and responses were big or small is then assessed by comparisons with other parts of the periphery.

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Abstract:
This paper uses history to explore the empirical content of two determinants of tariff policy that have a long pedigree: the Stolper-Samuelson corollary to the Heckscher-Ohlin theorem, and the infant-industry argument for protection. It reports a set of world tariff facts for the 150 years between 1789 and 1938 that have not been well appreciated. First, tariff rates varied enormously around the globe with high tariff regions including the United States, Latin America, and industrially-lagging Europe, and the low tariff regions including Asia and the European industrial leaders. Second, while tariff rates rose on the European continent after the 1870s, they rose far more steeply and earlier in Latin America and industrially-lagging Europe, and more steeply even in Asia. Furthermore, after world tariff rates rose between 1865 and 1900, they then fell by half between 1900 and 1920, before tripling between 1920 and 1934. The most popular explanations for these world tariff facts come from two sources: Stolper-Samuelson - scarce factors should lobby for protection when exposed to more intense world competition, and scarce factors should win the political battle if their votes carry heavy weight; and national industrial policy - since late 20th century ISI policies must surely have their roots in the 19th century infant industry arguments. Looking at the same history that Eli Heckscher and Bertil Ohlin did to produce their famous theorem, or that Alexander Hamilton and Frederick List did to produce their equally famous infant industry argument, I find that latter is pretty much irrelevant until the 20th century, while the former starts playing an important role a little earlier when global forces open up in the 19th century. Throughout the 150 years, tariff policy was driven consistently (and often more importantly) by revenue needs and strategic tariff behavior. Geography, home market size, world economic environment, trading partner behavior, gunboats and tariff autonomy all mattered. So did Stolper-Samuelson.

Abstract:
In the first global century before 1914, trade and especially migration had profound effects on both low-wage, labour abundant Europe and the high-wage, labour scarce New World. Those global forces contributed to a reduction in unskilled labour scarcity in the New World and to a rise in unskilled labour scarcity in Europe. Thus, it contributed to rising inequality in overseas countries, like the United States, and falling inequality in most of Europe. Falling unskilled labour scarcity and rising skill scarcity contributed to the high school revolution in the US. Rising unskilled scarcity also contributed to the primary schooling and literacy revolution in Europe. Under what conditions would we expect the same responses to globalization in today's world? This paper argues that modern debates about inequality and schooling responses to globalization should pay more attention to history.

Emigration, immigration, schooling, brain drain, inequality

Abstract:
In the first global century before 1914, trade and especially migration had profound effects on both low-wage, labor abundant Europe and the high-wage, labor scarce New World. Those global forces contributed to a reduction in unskilled labor scarcity in the New World and to a rise in unskilled labor scarcity in Europe. Thus, it contributed to rising inequality in overseas countries, like the United States, and falling inequality in most of Europe. Falling unskilled labor scarcity and rising skill scarcity contributed to the high school revolution in the US. Rising unskilled scarcity also contributed to the primary schooling and literacy revolution in Europe. Under what conditions would we expect the same responses to globalization in today's world? This paper argues that modern debates about inequality and schooling responses to globalization should pay more attention to history.

Abstract:
Can history shed light on the modern debate about immigration's labor market impact in high wage economies? This paper examines the relationship between migration and capital flows in the age of mass migration before 1914, the so-called first global century. It then assesses the effects of immigration on wages and employment with and without international capital mobility in first global century and today, that is, the second global century. The paper then explores the links between these economic relationships and immigration policy. It concludes with an explanation for the apparent difference in immigration's impact in the two global centuries, and thus on policy.

Abstract:
Today's labor-scarce economies have open trade and closed immigration policies, while a century ago they had just the opposite, open immigration and closed trade policies. Why the inverse policy correlation, and why has it persisted for almost two centuries? This paper seeks answers to this dual policy paradox by exploring the fundamentals which have influenced the evolution of policy: the decline in the costs of migration and its impact on immigrant selectivity, a secular switch in the net fiscal impact of trade relative to immigration, and changes in the median voter. The paper also offers explanations for the between-country variance in voter anti-trade and anti-migration attitude, and links this to the fundamentals pushing policy.

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Abstract:
W. Arthur Lewis argued that a new international economic order emerged between 1870 and 1913, and that global terms of trade forces produced rising primary product specialization and de-industrialization in the poor periphery. More recently, modern economists argue that volatility reduces growth in the poor periphery. This paper assess these de-industrialization and volatility forces between 1782 and 1913 during the Great Divergence. First, it argues that the new economic order had been firmly established by 1870, and that the transition took place in the century before, not after. Second, based on econometric evidence from 1870-1939, we know that while a terms of trade improvement raised long run growth in the rich core, it did not do so in the poor periphery. Given that the secular terms of trade boom in the poor periphery was much bigger over the century before 1870 than after, it seems plausible to infer that it might help explain the great 19th century divergence between core and periphery. Third, the boom and its de-industrialization impact was only part of the story; growth-reducing terms of trade volatility was the other. Between 1820 and 1870, terms of trade volatility was much greater in the poor periphery than the core. It was still very big after 1870, certainly far bigger than in the core. Based on econometric evidence from 1870-2000, we know that terms of trade volatility lowers long run growth in the poor periphery, and that the negative impact is big. Given that terms of trade volatility in the poor periphery was even bigger during the century before 1870, it seems plausible to infer that it also helps explain the great 19th century divergence between core and periphery.

Abstract:
Why do rich countries receive the lion's share of international investment flows? Although this wealth bias is strong today, it was even stronger during the first global capital market boom before 1913. Very little of British capital exports went to poor countries, whether colonies or not. This paper constructs panel data for 34 countries that as a group received 92% of British capital. It concludes that international capital market failure had only second-order effects on the geographical distribution of British capital. The three local fundamentals that mattered most were schooling, natural resources and demography.

Abstract:
The standard source for pre-WWII global freight rate trends is the Isserlis British tramp shipping index. We think it is flawed, and that its sources offer vastly more information than the Isserlis aggregate contains. The new data confirm the precipitous decline in nominal freight rates before the World War I, but it also extends the series to the 1940s. Furthermore, our new series is linked to the post-World War II era (documented by David Hummels), so that we can be more precise about what has happened over the very long run. We also create route-specific deflators by using the prices of commodities transported. Previous scholars have deflated their nominal freight rate indices by a price index that includes tradables not carried on all routes and non-tradables not carried on any route. Our deflated indices offer a more effective measure of the contribution of declining freight rates to commodity-price convergence across trading regions. Using the pricedual method and new indices for factor prices, we then calculate total factor productivity growth pre-war and interwar for five global routes. Finally, we identify the sources of the total factor productivity growth.

Abstract:
Debate over trends in the terms of trade between primary commodities and manufactures, their causes and their impact has dominated the literature for more than a century. Classical economists claimed that the terms of trade of primary commodities should improve since land and natural resources are always in inelastic supply. Following the Great Depression, a new view emerged. What came to be known as the Prebisch-Singer thesis was instead that the terms of trade for primary products had deteriorated up to the 1950s. The subsequent literature has almost exclusively and obsessively asked whether a deterioration has actually taken place over the 130 years following 1870. Nowhere in this literature has the impact of these terms of trade shocks on long run growth been assessed, although it is certainly full of lively speculation and debate. This paper fills part of this empirical gap by constructing a country-specific panel data base 1870-1940, by documenting terms of trade trends by country and region, and, finally, by estimating the impact of the price shocks on long run economic performance. We find the impact to have been asymmetric between center and periphery.

Abstract:
This paper uses a new database to establish a key finding: high tariffs were associated with fast growth before World War II, while associated with slow growth thereafter. The paper offers some explanations for the sign switch by controlling for novel measures of the changing world economic environment. Rejecting alternative explanations based on changing export market growth or transportation cost declines, it shows how the oft-quoted Sachs-Warner result might be turned on its head in a world environment characterized by a moderately higher level of generalized tariff protection. We confirm the spirit of recent findings by Rodrik and Rodriguez that postwar tariffs need not be negatively correlated with growth in an unconditional fashion. Just a 4% increase in average tariff rates among trading partners might suffice to reverse any negative relationship between an average country's tariffs and its growth. An increase in own tariffs after 1970 hurt or at least didn't help growth, but it would have helped growth in a world where average trading partners' tariffs were moderately higher. The world environment matters. Leader-country reaction to big world events matters.

Abstract:
This paper asks whether history can shed light on the modern debate about immigration's labour market impact in high wage economies. It examines the relationship between migration and capital flows in the age of mass migration before 1914, the so-called first global century. It then assesses the effects of immigration on wages and employment with and without international capital mobility in first global century and today, that is, the second global century. The paper then explores the links between these economic relationships and immigration policy. It concludes with an explanation for the apparent difference in immigration's impact in the two global centuries, and thus on policy.

Immigration, capital mobility, labour market impact, policy, history

Abstract:
Like the rest of the poor periphery, Mexico had to deal with de-industrialization forces between 1750 and 1913, those critical 150 years when the economic gap between the industrial core and the primary-product-producing periphery widened to such huge dimensions. Yet, from independence to mid-century Mexico did better on this score than did most countries around the periphery. This paper explores the sources of Mexican exceptionalism with de-industrialization. It decomposes those sources into those attributable to productivity events in the core and to globalization forces connecting core to periphery, and to those attributable to domestic forces specific to Mexico. It uses a neo-Ricardian model (with non-tradable foodstuffs) to implement the decomposition, and advocates a price dual approach, and develops a new price and wage data base 1750-1878. There were three forces at work that account for Mexican exceptionalism: first, the terms of trade and Dutch disease effects were much weaker; second, Mexico maintained secular wage competitiveness with the core; and third, Mexico had the autonomy to devise effective ways to foster industry. The first appears to have been the most important.

Abstract:
Is inequality largely the result of the Industrial Revolution? Or, were pre-industrial incomes and life expectancies as unequal as they are today? For want of sufficient data, these questions have not yet been answered. This paper infers inequality for 14 ancient, pre-industrial societies using what are known as social tables, stretching from the Roman Empire 14 AD, to Byzantium in 1000, to England in 1688, to Nueva España around 1790, to China in 1880 and to British India in 1947. It applies two new concepts in making those assessments -- what we call the inequality possibility frontier and the inequality extraction ratio. Rather than simply offering measures of actual inequality, we compare the latter with the maximum feasible inequality (or surplus) that could have been extracted by the elite. The results, especially when compared with modern poor countries, give new insights in to the connection between inequality and economic development in the very long run.

Abstract:
As part of a process that has been at work since 1850, real wages among the current OECD countries converged during the late 19th century. The convergence was pronounced as that which we have seen in the post World War Il period. This paper uses computable general equilibrium models to isolate the sources of that economic convergence by assessing the relative performance of the two most important economies in the Old World and the New -- Britain and the USA. It turns out that between 1870 and 1910, the convergence forces that mattered were those that generated by commodity price convergence, stresses by Eli Heckscher and Bertil Ohlin, and mass migration, stressed by Knut Wicksell. It turns out that offsetting forces were contributing to late 19th century divergence, a finding consistent with economic historians' traditional attention to Britain's alleged failure and America's spectacular rise to industrial supremacy. The convergence forces, however, dominated for most of the period.

Abstract:
India and Britain were much bigger players in the 18th century world market for textiles than was Egypt, the Levant and the core of the Ottoman Empire, but these eastern Mediterranean regions did export carpets, silks and other textiles to Europe and the East. By the middle of the 19th century, they had lost most of their export market and much of their domestic market to globalization forces and rapid productivity growth in European manufacturing. Other local industries also suffered decline, and these regions underwent de-industrialization as a consequence. How different was Ottoman experience from the rest of the poor periphery? Was de-industrialization more or less pronounced? Was the terms of trade shock bigger or smaller? How much of Ottoman de-industrialization was due to falling world trade barriers -- ocean transport revolutions and European liberal trade policy, how much due to factory-based productivity advance in Europe, how much to declining Ottoman competitiveness in manufacturing, how much to Ottoman railroads penetrating the interior, and how much to Ottoman policy? The paper uses a price-dual approach to seek the answers. It documents trends in export and import prices, relative to each other and to non-tradables, as well as to the unskilled wage. The impact of globalization, European productivity advance, Ottoman wage costs and policy are assessed by using a simple neo-Ricardian three sector model, and by comparison with what was taking place in the rest of the poor periphery.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
Within-country ethnic diversity in high-wage immigrant nations is driven by long distance migration. This paper documents the migration-diversity connection for the first global century before 1914 and the second global century after 1950. It distinguishes between ethnic diversity among the foreign-born, between the foreign-born and native-born and for total populations using country-of-birth data. It exploits the polarization index made popular in the recent diversity-growth debate and exploits an emigration life cycle model to predict the connection. It also shows how policy matters.

Abstract:
Conventional wisdom has it that global financial markets were as well integrated in the 1890s as in the 1990s, but that it took several post-war decades to regenerate the connections that existed before 1914. This view has emerged from a variety of tests for world financial capital market integration ranging from the correlation of saving and investment aggregates to the dispersion of security prices and real interest rates. Presumably, we care about global capital market integration because it can have an impact on accumulation performance and the global distribution of the capital stock. Oddly enough however, the relative price of capital goods, an important component of the user cost of capital has never been incorporated into studies of capital market integration and almost never in comparative studies of pre-1950 economic growth. This could be an important omission. This paper explores the issue with a panel data base 1870-1950 for eleven OECD countries. It turns out that capital goods prices have been central to accumulation, and therefore to growth and convergence. They have also been as important to the evolution of global capital markets as have been interest rates and other financial costs.

Abstract:
This paper augments the new historical literature on factor price convergence. The focus is on the late nineteenth century, when economic convergence among the current OECD countries was dramatic; and the focus is on the convergence between Old World and New, by far the biggest participants in the global convergence during the period; and the focus is on land and labor, the two most important factors of production in the nineteenth century. Wage-rental ratios boomed in the Old World and collapsed in the New, moving the resource-rich and labor scarce New World closer to the resource-scarce and labor-abundant Old World. The paper uses both computable general equilibrium models and econometrics to identify the forces causing the convergence. These include: commodity price convergence and the Heckscher-Ohlin Theorem of factor price equalization; migration, capital-deepening and frontier disappearance, factors stressed by Malthus, Ricardo, Wicksell and Viner; and factor-saving biases associated with induced-innovational theory, an endogenous response to relative factor scarcities.

Abstract:
A Third World data base documenting commodity and factor prices 1870-1940 has been collected, yielding annual time series on wage/rental ratios, land/labor ratios, the terms of trade, and other explanatory variables for: Argentina, Burma, Egypt, Japan, Korea, the Punjab, Taiwan, Thailand and Uruguay. These 9 have been added to a previously-collected data base for 10 in the so-called greater Atlantic economy: Australia, Britain, Canada, Denmark, France, Germany, Ireland, Spain, Sweden and the USA. These 19 countries form the panel data base which is used to explore the determinants of wage/rental ratios the world round between 1870 and 1940. The data offer a useful way to identify the impact of globalization on the pre-industrial Third World. This paper finds commodity price convergence to have been bigger in the Third World than the Atlantic economy. It also identifies the sources of a previously-unnoticed but enormous convergence in wage/rental ratios. Commodity price convergence and factor supply responses appear to be an important source of the relative factor price convergence in the Third World, more clearly exposed by the absence of significant industrialization and capital-deepening forces there prior to 1940.

Abstract:
On average, the poor European periphery converged on the rich industrial core in the four or five decades prior to World War I. 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 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.

Abstract:
Ansley Coale and Edgar Hoover were right about Asia. Rising fertility and declining infant mortality have had a profound impact on Asian savings, investment and foreign capital dependency since Coale and Hoover wrote in 1958. We argue that: Much of the impressive rise in Asian savings rates since the 1960s can be explained by the equally impressive decline in youth dependency burdens; Where Asia has kicked the foreign capital dependence habit is where youth dependency burdens have fallen most dramatically; Aging will not diminish Japan's capacity to export capital in the next century, but little of it will go to the rest of Asia since the rest will become net capital exporters, at least if demography is allowed to have its way. These conclusions emerge from a model which rejects steady-state analysis in favor of transition analysis, and extends the conventional focus of the dependency rate literature on savings to investment and net capital flows.

Abstract:
If we have learned anything from the recent outpouring of empirical growth equations is that life is far too complex to expect unconditional convergence among all countries and at all times. This fact motivates two questions. First, why has it taken economists so long to learn the same lesson from the Kuznets Curve debate? No economist should expect an unconditional Kuznets Curve to emerge from the growth experience of all countries and at all times. The industrial revolutionary forces thought to have an impact on inequality can be offset or reinforced by demography, skill supply and globalization. This paper assesses the role of globalization and demography via mass migrations. Second, why has it taken economists so long to learn that demography influences growth? When treated properly, demography can be shown to have a significant impact on GDP per capita growth. The answers to these two questions are sought by looking at inequality and growth experience in the Old World, the New World last century and a half.

Abstract:
Most countries in the periphery specialized in the export of just a handful of primary products for most of their history. Some of these commodities have been more volatile than others, and those with more volatile prices have grown slowly relative both to the industrial leaders and to other primary product exporters. This fact helps explain the growth puzzle noted by Easterly, Kremer, Pritchett and Summers more than a decade ago: that the contending fundamental determinants of growth institutions, geography and culture exhibit far more persistence than do the growth rates they are supposed to explain. Using a new panel database for 35 countries, this paper estimates the impact of terms of trade volatility and secular change on country performance between 1870 and 1939. Volatility was much more important for accumulation and growth than was secular change. Additionally, both effects were asymmetric between Core and Periphery, findings that speak directly to the terms of trade debates that have raged since Prebisch and Singer wrote more than 50 years ago. The paper also investigates one channel of impact, and finds that foreign capital inflows declined steeply where commodity prices were volatile.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
This paper examines the determinants of overseas mass migration from eleven European countries in the late 19th century. They typically passed through something like a half-century life-cycle: a steep rise in emigration rates from low levels in preindustrial decades, followed by a plateau of very high emigration, and then a subsequent fall during more mature stages of industrialization. Using a new real wage data base, we are able to isolate the impact of economic and demographic forces (associated with the industrial revolution) on this emigration experience. The steep rise in emigration rates was driven mainly by fertility boom and infant mortality decline, events early in the demographic transition which, with a two decade lag, tended to glut the age cohort most responsive to wage gaps between the labor-abundant Old World and the labor-scarce New World. The steep fall in emigration rates was driven mainly by the forces of convergence and catching up -- more rapid real wage growth at home encouraged an increasingly large share to stay at home. Since we show elsewhere that these mass migrations contributed significantly to an impressive late 19th century economic convergence, they can be viewed as an important part of a long run equilibrium adjustment manifested by an evolving global labor market.

Abstract:
Despite an enormous literature that has analyzed the comparative experiences of Latin America and Asia in post-World War II trade policy, almost no attention has been paid to the comparative experience prior to the wars. Even a cursory look at the best available empirical evidence reveals tremendous contrasts between the two regions. Latin America had the highest tariff barriers on earth before 1914; Asia had the lowest. Protected Latin America's belle epoque also boasted some of the most explosive growth performance on earth, while Asia registered some of the worst. What brought the two regions to the opposite ends of the tariff policy spectrum? And why are these quantum differences in economic performance so at odds with postwar conventional wisdom? We begin by describing a novel tariff database we have constructed from largely original sources. We explore the impact of colonial rule and 'unequal treaties' on Asian tariffs, as well as the impact of geography and political economy on Latin American tariffs. Limits to tariff policy autonomy explain one third of the vast difference between the two regions' tariffs before 1914; differences in the extent and structure of internal markets as well as the world tariff environment explain much of the rest. We conclude with an agenda for the future.

Abstract:
Conventional wisdom has it that global financial markets were as well integrated in the 1890s as in the 1990s, but that it took several post-war decades to regenerate the connections that existed before 1914. This view has emerged from a variety of tests for world financial capital market integration ranging from the correlation of saving and investment aggregates to the dispersion of security prices and real interest rates. Presumably, we care about global capital market integration because it can have an impact on accumulation performance and the global distribution of the capital stock. Oddly enough, however, the relative price of capital goods, an important component of the user cost of capital, has never been incorporated into studies of capital market integration and almost never in comparative studies of pre-1950 economic growth. This could be an important omission. This paper explores the issue with a panel data base 1870-1950 for eleven OECD countries. It turns out that capital goods prices have been central to accumulation, and therefore to growth and convergence. They have also been as important to the evolution of global capital markets as have been interest rates and other financial costs.

Abstract:
This paper uses a new pre-1940 Third World data base documenting real wages and relative factor prices to explore their determinants. There are three possibilities: external price shocks, factor endowment changes, and technological change. As the paper's title suggests, technological change is an unlikely explanation. The paper lays out an explicit econometric agenda for the future, although more casual empiricism suggests that external price shocks were doing most of the work, and declining-transport-cost-induced commodity price convergence in particular. Real wages in Asia, the Middle East, and Latin America never showed any signs of catching up with the European industrial leaders prior to 1914 hold their own. The ratio of wages to land rents, on the other hand, declined up to World War I and so did the ratio of wages to GDP per capita. The trend reversed thereafter. These relative factor price movements help sharpen our understanding of the sources of growth (or lack of it) in Asia and Latin America prior to 1940. They also offer strong hints about changes in income distribution there.

Abstract:
Even though Australia has experienced frequent and large commodity export price shocks like the Third World, it seems to have dealt with the volatility better. Why? This paper explores Australian terms of trade volatility since 1901. It identifies two major price shock episodes before the recent mining-led boom and bust. It assesses their relative magnitude, their de-industrialization and distributional impact, and policy responses. In what way has Australia been different from other commodity exporters experiencing volatile prices?

Abstract:
Why did international capital flows rise to such heights in the late 19th century, the years between 1907 and 1913 in particular? Britain placed half of her annual savings abroad during those seven years, and 76 percent of it went to the New World countries of Canada, Australia, the USA, Argentina and the rest of Latin America. The resource abundant New World was endowed with dual scarcity, labor and capital. The labor supply response to labor scarcity took the form of both immigration and high fertility. This served to create much higher child dependency burdens in the New World than in the Old. Econometric analysis shows that these dependency burdens served to choke off domestic savings in the New World, thus creating an external demand for savings. The influence was very large. Indeed, it appears that the vast majority of those international capital flows from Old World to New can be explained by those dependency rate gaps. As a consequence, it is appropriate to view those large international capital flows as an intergenerational transfer.

Abstract:
This paper uses a new pre-1940 Third World data base documenting real wages and relative factor prices to explore their determinants. There are three possibilities: external price shocks, factor endowment changes, and technological change. As the paper's title suggests, technological change is an unlikely explanation. The paper lays out an explicit econometric agenda for the future, although more casual empiricism suggests that external price shocks were doing most of the work, and declining-transport-cost-induced commodity price convergence in particular. Real wages in Asia, the Middle East, and Latin America never showed any signs of catching up with the European industrial leaders prior to 1914 hold their own. The ratio of wages to land rents, on the other hand, declined up to World War I and so did the ratio of wages to GDP per capita. The trend reversed thereafter. These relative factor price movements help sharpen our understanding of the sources of growth (or lack of it) in Asia and Latin America prior to 1940. They also offer strong hints about changes in income distribution there.

Abstract:
Trade theorists have come to understand that their theory is ambiguous on the question: Are trade and factor flows substitutes? While this sounds like an open invitation for empirical research, hardly any serious econometric work has appeared in the literature. This paper uses history to fill the gap. It treats the experience of the Atlantic economy between 1870 and 1940 as panel data with almost seven hundred observations. When shorter run business cycles and long swings' are extracted from the panel data, substitutability is soundly rejected. When secular relationships are extracted over longer time periods and across trading partners, once again substitutability is soundly rejected. Finally, the paper explores immigration policy and finds that policy makers never behaved as if they viewed trade and immigration as substitutes.

Abstract:
Most analysts of the modern Latin American economy hold to a pessimistic belief in historical persistence -- they believe that Latin America has always had very high levels of inequality, suggesting it will be hard for modern social policy to create a more egalitarian society. This paper argues that this conclusion is not supported by what little evidence we have. The persistence view is based on an historical literature which has made little or no effort to be comparative. Modern analysts see a more unequal Latin America compared with Asia and the rich post-industrial nations and then assume that this must always have been true. Indeed, some have argued that high inequality appeared very early in the post-conquest Americas, and that this fact supported rent-seeking and anti-growth institutions which help explain the disappointing growth performance we observe there even today. This paper argues to the contrary. Compared with the rest of the world, inequality was not high in pre-conquest 1491, nor was it high in the post-conquest decades following 1492. Indeed, it was not even high in the mid-19th century just prior Latin America's belle époque. It only became high thereafter. Historical persistence in Latin American inequality is a myth.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
Scandinavia recorded very high growth rates between 1870 and 1914, catching up with the leaders. This paper estimates that about two-thirds of the Scandinavian catching up on Britain was due to the open economy forces of global factor and commodity market integration. All of the Scandinavian catching up on America was due to the same open economy forces. The question for the economist is: Why does the new growth theory spend so little time dealing with these open economy forces? The question for the economic historian is: Can the breakdown of global factor and commodity markets after 1914 explain a large share of the cessation of convergence up to 1950? Can the spectacular OECD convergence achieved after 1950 be explained by the resumption of the pre-1914 open economy conditions that contributed so much to Scandinavian catch-up?

Abstract:
Due primarily to transport improvements, commodity prices in Britain and America tended to equalize 1870-1913. This commodity price equalization was not simply manifested by the great New World grain invasion of Europe. Rather, it can be documented for intermediate primary products and manufactures as well. Heckscher and, Ohlin, writing in 1919 and 1924, thought that these events should have contributed to factor price equalization. Based on Williamson's research reported elsewhere, Anglo-American real wages did converge over this period, and it was part of a general convergence between the Old and New World. This paper applies the venerable Heckscher-Ohlin trade model to the late 19th century Anglo-American experience and finds that they were right: at least half of the real wage convergence observed can be assigned to commodity price equalization. Furthermore, these events also had profound influences on relative land and capital scarcities. It appears that this late 19th century episode was the dramatic start of world commodity and factor market integration that is still ongoing today.

Abstract:
Current debate on the impact and assimilation of immigrants into the American labor market sounds remarkably like the debate which eventually triggered the imposition of the quotas in the 1920s. Then as now observers failed to agree on exactly what the impact of the mass migration was on labor markets. Despite its relevance to current discussion, there has been almost no quantitative effort to assess late nineteenth century impact, while instead analysis has been obsessed with assimilation issues. This paper redresses this imbalance by confronting three macro-impact questions that are just as relevant today as they were almost a century ago: Did late nineteenth century American immigrants act as a flexible (guestworker) labor supply? Did they flow into occupations where job creation was fast, or did they displace natives in occupations where job creation was slow? Did immigrants reduce the growth of wages and living standards for natives while increasing their unemployment? We use econometrics and computable general equilibrium models to get surprising and unambiguous answers.

Abstract:
Within-country ethnic diversity in high-wage immigrant nations is driven by long distance migration. This paper documents the migration-diversity connection for the first global century before 1914 and the second global century after 1950. It distinguishes between ethnic diversity among the foreign-born, between the foreign-born and native-born and for total populations using country-of-birth data. It exploits the polarization index made popular in the recent diversity-growth debate and exploits an emigration life cycle model to predict the connection. It also shows how policy matters.

Migration, ethnic diversity, emigrant life cycle

Abstract:
In his seminal publications between the 1930s and 1960s, Frederick Lane offered three hypotheses regarding the impact of the Voyages of Discovery that have guided debate ever since. First, pepper and other spice prices did not rise in European markets in the century before the 1490s, and thus could not have %u2018pulled in%u2019 the oceanic explorations by their rising scarcity. Second, Portuguese circumnavigation of Africa did not lower European spice prices across the 16th century, implying that the discovery of the Cape route had no permanent effect on Euro-Asian market integration. Third, 15th century Venetian spice markets were already well integrated with those in Iberia and northern Europe, implying that Portugal could not have had an intra-European market integrating influence in the 16th century. Lane developed these influential hypotheses by relying heavily on nominal spice prices from Venice and the Levant. This paper revisits Lane%u2019s hypotheses by using instead relative spice prices, that is, accounting for inflation. It also draws on evidence from Iberia and northern Europe. In addition, it explores European market integration before and after 1503, the year when da Gama returned from his financially successful second voyage. Lane%u2019s three hypotheses are rejected: the impact of the Portuguese was profound on all fronts. We conclude by using a simple model of monopoly and oligopoly to decompose the sources of the Cape route%u2019s impact on European markets.

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Abstract:
Debate over the economic convergence of currently industrialized nations has suffered a number of shortcomings. First, the underlying data base has typically been limited to Agnus Maddison's GNP and GNP per worker hour. This paper offers a new data base, purchasing-power-parity adjusted real wage rates for unskilled labor. Second, the debate has typically focused on end points from the 19th century to the present, paying little attention to differential behavior in four distinct regimes: 1830 to the late 1850s, the 1850s to World War I, the interwar decades, and the post-World War II experience. Third, with some recent exceptions, the search for explanations has focused primarily on technological advance, while ignoring the potential role of global factor and commodity market integration (and disintegration). The new real wage data base confirms some old stylized facts and offers some new ones. It also points out how these four regimes differed. They differed enough to suggest that different explanations will be necessary to account for the convergence over the past century and a half.

Abstract:
This paper documents a stylized fact not well appreciated in the literature. The Third World has been undergoing an emigration life cycle since the 1960s, and, except for Africa, emigration rates have been level or even declining since a peak in the late 1980s and the early 1990s. The current economic crisis will serve only to accelerate those trends. The paper estimates the economic and demographic fundamentals driving these Third World emigration life cycles to the United States since 1970 -- the income gap between the US and the sending country, the education gap between the US and the sending country, the poverty trap, the size of the cohort at risk, and migrant stock dynamics. It then projects the life cycle up to 2024. The projections imply that pressure on Third World emigration over the next two decades will not increase. It also suggests that future US immigrants will be more African and less Hispanic than in the past.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
The Latin countries -- Italy, Portugal and Spain -- were industrial late-comers and only experienced mass emigration late in the 19th century. When they did join the European mass migration, they did so in great numbers. The fact that they joined the mass migrations late, that they were poor by West European standards, and that so many went to Latin America, has generated a number of debates on both sides of the Atlantic. This paper uses a late 19th century panel data set (including purchasing-power-parity adjusted real wages) for twelve European countries to find that Latin emigration behavior was no different than that of northwestern Europe: for example, Latin emigrant labor supplies were not relatively elastic, contrary to the hypothesis made famous by Sir Arthur Lewis. What made Latin experience different was the underlying economic and demographic fundamentals driving the experience.

Abstract:
The 1920s marked the end of a century of mass migration from Europe to the New World. This paper examines analytically this pre-quota experience. The discussion is divided into two parts. The first deals with the character and dimensions of overseas emigration from Europe chiefly from the mid 19th century to World War I. The second discussions the effects of these migrations on both sending and receiving countries. The traditional literature has far more to say about the first than the second. Here we deal with the evolution of global labor markets, first as they were directly influenced by the migrations, and second as they interacted with the evolution of world commodity and capital markets. The paper argues that the impressive economic convergence which took place between 1870 and World War I can be largely explained by these forces of economic integration, rather than by technological convergence or differential human capital growth.

Abstract:
Brazil, Mexico and a few other Latin American republics enjoyed faster industrialization after 1870 than did the rest of Latin America and even faster than the rest of the poor periphery (except East Asia). How much of this economic performance was due to more accommodating institutions and greater political stability, changes that would have facilitated greater technology transfer and accumulation? That is, how much to changing fundamentals? How much instead to a cessation in the secular rise in the net barter terms of trade which reversed de-industrialization forces, thus favoring manufacturing? How much instead to cheaper foodstuffs coming from more open commercial policies ('grain invasions'), and from railroad-induced integration of domestic grain markets, serving to keep urban grain prices and thus nominal wages in industry low, helping to maintain competitiveness? How much instead to more pro-industrial real exchange rate and tariff policy? Which of these forces contributed most to industrialization among the Latin American leaders, long before their mid 20th century adoption of ISI policies? Changing fundamentals, changing market conditions, or changing policies?

Abstract:
This paper documents a stylized fact not well appreciated in the literature. The Third World has been undergoing an emigration life cycle since the 1960s, and, except for Africa, emigration rates have been level or even declining since a peak in the late 1980s the early 1990s. The current economic crisis will serve only to accelerate those trends. The paper estimates the economic and demographic fundamentals driving these Third World emigration life cycles to the United States since 1970 - the income gap between the US and the sending country, the education gap between the US and the sending country, the poverty trap, the size of the cohort at risk, and migrant stock dynamics. It then projects the life cycle up to 2024. The projections imply that pressure on Third World emigration over the next two decades will not increase. It also suggests that future US immigrants will be more African and less Hispanic.

development, emigration, life cycle, Third World

Abstract:
Like the rest of the poor periphery, Mexico had to deal with de-industrialization forces between 1750 and 1913, those critical 150 years when the economic gap between the industrial core and the primary-product-producing periphery widened to such huge dimensions. Yet, from independence to mid-century Mexico did better on this score than did most countries around the periphery. This paper explores the sources of Mexican exceptionalism with deindustrialization. It decomposes those sources into those attributable to productivity events in the core and to globalization forces connecting core to periphery, and to those attributable to domestic forces specific to Mexico. It uses a neo-Ricardian model (with non-tradable foodstuffs) to implement the decomposition, and advocates a price dual approach, and develops a new price and wage database 1750-1878. There were three forces at work that account for Mexican exceptionalism: first, the terms of trade and Dutch disease effects were much weaker; second, Mexico maintained secular wage competitiveness with the core; and third, Mexico had the autonomy to devise effective ways to foster industry. The first appears to have been the most important.

Deindustrialization, globalization, growth, Mexico and trade