Globalisation and Economic Growth: A Historical Perspective

14 Pages Posted: 23 Mar 2004

See all articles by Nicholas Crafts

Nicholas Crafts

University of Warwick; Centre for Economic Policy Research (CEPR)

Abstract

This paper reviews the historical evidence on the relationship between globalisation and economic growth. Divergence in the growth of income and industrialisation in the twentieth century is documented but it is also noted that international income inequality appears to have decreased since about 1870 and that long-run trends in the Human Development Index are much less pessimistic about the experience of developing countries. It is argued that trade liberalisation has been good for growth on average but that successful capital liberalisation requires high institutional quality and that the developmental state may have an important role to play in the early stages of development. The recent claim by Robert Lucas that the 21st century will see a massive reduction in income inequality across countries in a globalised world economy is sceptically discussed in the context of empirical evidence that bad institutions are often persistent and that geography is still a major factor in explaining international income differences.

Suggested Citation

Crafts, Nicholas, Globalisation and Economic Growth: A Historical Perspective. Available at SSRN: https://ssrn.com/abstract=514042

Nicholas Crafts (Contact Author)

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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