Global Trade and the Maritime Transport Revolution

42 Pages Posted: 30 Jun 2008  

David S. Jacks

Simon Fraser University (SFU) - Department of Economics; National Bureau of Economic Research (NBER)

Krishna Pendakur

Simon Fraser University (SFU) - Department of Economics

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Date Written: June 2008

Abstract

What is the role of transport improvements in globalization? We argue that the nineteenth century is the ideal testing ground for this question: freight rates fell on average by 50% while global trade increased 400% from 1870 to 1913. We estimate the first indices of bilateral freight rates for the period and directly incorporate these into a standard gravity model. We also take the endogeneity of bilateral trade and freight rates seriously and propose an instrumental variables approach. The results are striking as we find no evidence that the maritime transport revolution was the primary driver of the late nineteenth century global trade boom. Rather, the most powerful forces driving the boom were those of income growth and convergence.

Suggested Citation

Jacks, David S. and Pendakur, Krishna, Global Trade and the Maritime Transport Revolution (June 2008). NBER Working Paper No. w14139. Available at SSRN: https://ssrn.com/abstract=1152680

David S. Jacks (Contact Author)

Simon Fraser University (SFU) - Department of Economics ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Krishna Pendakur

Simon Fraser University (SFU) - Department of Economics ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada

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