Working Paper: NBER ID: w14767
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; Interwar Period; Trade Costs; Protectionism; Market Integration
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 trade costs during the interwar period (F69) | protectionism (F52) |
| protectionist policies (F52) | disintegration of international commodity markets (F02) |
| collapse of the gold standard (N14) | exacerbation of trade costs (F69) |
| scarcity of trade finance (F65) | exacerbation of trade costs (F69) |
| increased trade costs (F19) | less integrated markets (F02) |
| disintegration of international commodity markets (F02) | widening of price gaps between markets (F61) |