Working Paper: CEPR ID: DP8758
Authors: Giovanni Federico; Nikolaus Wolf
Abstract: The growth of the Italian economy over the past 150 years since unification was accompanied by a dramatic increase in the country?s integration with European and global commodity markets: foreign trade in the long run grew on average faster than the overall economy. Behind the dynamics of aggregate trade, Italy?s comparative advantage changed fundamentally over the last 150 years. The composition of trade, in terms of both commodities imported and exported and in terms of trading partners, developed from a high concentration of a few trading partners and a handful of rather simple commodities into a wide diversification of trading partners and more sophisticated commodities. In this paper we exploit a new long-term database on Italian foreign trade at a high level of disaggregation to document and analyze these changes. We conclude with an assessment of Italy?s growth prospects from a historical perspective.
Keywords: 19th and 20th century; comparative advantage; international trade; Italy
JEL Codes: F14; N73; N74
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| World War I (N44) | change in export composition (F14) |
| industrialization (O14) | improved comparative advantage (F11) |
| historical shocks (N13) | long-run change in trade patterns (F12) |
| shift towards medium technology products (O14) | transition in comparative advantage (F11) |
| local competition and endowments (D29) | comparative advantage (F11) |