Working Paper: CEPR ID: DP7189
Authors: William Hynes; David S. Jacks; Kevin H. O'Rourke
Abstract: Using data collected by the International Institute of Agriculture, we document the disintegration of international commodity markets between 1913 and 1938. There was dramatic disintegration during World War I, gradual reintegration during the 1920s, and then a very substantial disintegration after 1929. The period saw the unravelling of a great many of the integration gains of the 1870-1913 period. While increased transport costs certainly help to explain the wartime disintegration, they cannot explain the post-1929 increase in trade costs. Protectionism seems the most likely alternative candidate.
Keywords: commodity markets; deglobalization; disintegration; great depression; interwar economy; trade
JEL Codes: F13; F15; F59; N70
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increased transportation costs (L91) | wartime disintegration (H56) |
| protectionism (F52) | increase in trade costs during the Great Depression (F69) |
| interwar protectionism (F52) | severe disintegration of international commodity markets (F02) |
| price differentials across various city pairs (R12) | identification of changes in trade costs (F19) |