Coping with Shocks and Shifts: The Multilateral Trading System in Historical Perspective

41 Pages Posted: 21 Nov 2011 Last revised: 10 Nov 2013

See all articles by Douglas A. Irwin

Douglas A. Irwin

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

Kevin O'Rourke

University of Oxford

Date Written: November 2011

Abstract

This paper provides a historical look at how the multilateral trading system has coped with the challenge of shocks and shifts. By shocks we mean sudden jolts to the world economy in the form of financial crises and deep recessions, or wars and political conflicts. By shifts we mean slow-moving, long-term changes in comparative advantage or shifts in the geopolitical equilibrium that force economies to undergo disruptive and potentially painful adjustments. We conclude that most shocks (financial crises and regional wars) have had relatively little effect on trade policy, but that shifts pose a greater challenge to the system of open, multilateral trade.

Suggested Citation

Irwin, Douglas A. and O'Rourke, Kevin, Coping with Shocks and Shifts: The Multilateral Trading System in Historical Perspective (November 2011). NBER Working Paper No. w17598. Available at SSRN: https://ssrn.com/abstract=1962489

Douglas A. Irwin (Contact Author)

Dartmouth College - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Kevin O'Rourke

University of Oxford ( email )

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Oxford, Oxfordshire OX1 4AU
United Kingdom

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