Working Paper: NBER ID: w8579
Authors: Ronald Findlay; Kevin H. O'Rourke
Abstract: This paper provides a summary of what is known about trends in international commodity market integration during the second half of the second millennium. The range of goods which have been traded between continents since the Voyages of Discovery has steadily increased over time, and there has been substantial commodity market integration over the period, driven by technology in the 19th century and politics in the late 20th century. However, this trend towards greater market integration was not monotonic; it was periodically interrupted by shocks such as wars and world depressions, or by endogenous political responses to the distributional effects of globalization itself. In some periods politics has reinforced the effects of technology, while in other periods it has offset them. In several cases, severe shocks have had long-run effects on the international integration of commodity markets, as a result of politically induced hysteresis. Finally, we know remarkably little about international commodity market integration during the 20th century.
Keywords: Commodity Market Integration; Globalization; International Trade
JEL Codes: F1; N7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Technological advancements in the 19th century (O14) | International commodity market integration (F15) |
| Political factors in the late 20th century (P16) | International commodity market integration (F15) |
| Wars and economic depressions (N44) | International commodity market integration (F15) |
| Severe shocks (H84) | Long-run effects on integration (F15) |