Trade and Economic Growth: Historical Evidence

Moritz Schularick () and Solomos Solomou ()

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Is free trade good for growth? Some of the most disturbing evidence to the contrary comes from a period that is often described as the first era of globalization. Studies of the period 1870-1914 have emphasised that protectionist tariff policy was associated with higher rates of economic growth. In this paper we reassess the empirical evidence about the relationship between tariffs and growth in this era. Our key findings challenge the idea of the 19th century tariff-growth paradox. High tariffs did not stimulate economic growth. But there is equally little evidence that trade and other external factors were key determinants of economic growth. The paradox of this era of globalization is not that free trade was bad for growth; it is that the international environment seems to have mattered little to countries' growth trajectories.

Keywords: economic growth; international trade; economic history; growth econometrics; globalization (search for similar items in EconPapers)
JEL-codes: F10 F13 N10 O11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fdg and nep-his
Date: 2009-09-24

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Persistent link: http://EconPapers.repec.org/RePEc:cam:camdae:0936

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