A Tale of Two Globalizations: Gains from Trade and Openness 1800-2010

57 Pages Posted: 18 Apr 2016

See all articles by Giovanni Federico

Giovanni Federico

University of Pisa

Antonio Tena-Junguito

Charles III University of Madrid

Date Written: February 2016

Abstract

This paper compares the wave of globalization before the outbreak of the Great Recession in 2007 with its alleged historical antecedent before the outbreak of World War One. We describe trends in trade and openness, estimate the gains from trade and investigate the proximate causes of the growth of openness. We argue that the conventional wisdom has to be revised. The first wave of globalization started around 1820 and culminated around 1870. In the next century, trade continued to grow, with the exception of the Great Depression, but openness and gains fluctuated widely. Growth resumed in the early 1970s. By 2007, the world was more open than a century earlier and its inhabitants gained from trade substantially more than their ancestors did. The current wave of globalization, in spite of some similarities with previous trends, has no historical antecedents.

Keywords: openness, Trade, welfare gains

JEL Classification: F14, F43, N70

Suggested Citation

Federico, Giovanni and Tena-Junguito, Antonio, A Tale of Two Globalizations: Gains from Trade and Openness 1800-2010 (February 2016). CEPR Discussion Paper No. DP11128, Available at SSRN: https://ssrn.com/abstract=2766419

Giovanni Federico (Contact Author)

University of Pisa ( email )

Lungarno Pacinotti, 43
Pisa PI, 56126
Italy

Antonio Tena-Junguito

Charles III University of Madrid

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