Freight Rates and Productivity Gains in British Tramp Shipping 1869-1950

67 Pages Posted: 6 Mar 2003 Last revised: 18 Jul 2022

See all articles by Saif I. Shah Mohammed

Saif I. Shah Mohammed

Cornerstone Research

Jeffrey G. Williamson

Harvard University - Department of Economics, Laird Bell Professor of Economics, Emeritus; Honorary Fellow, University of Wisconsin - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Date Written: March 2003

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.

Suggested Citation

Mohammed, Saif I. Shah and Williamson, Jeffrey G., Freight Rates and Productivity Gains in British Tramp Shipping 1869-1950 (March 2003). NBER Working Paper No. w9531, Available at SSRN: https://ssrn.com/abstract=385064

Saif I. Shah Mohammed

Cornerstone Research ( email )

Boston, MA 02115
United States

Jeffrey G. Williamson (Contact Author)

Harvard University - Department of Economics, Laird Bell Professor of Economics, Emeritus ( email )

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Honorary Fellow, University of Wisconsin - Department of Economics

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National Bureau of Economic Research (NBER)

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