Trade Policy, Exchange Rates, and the Globalization Surge of the 1990s

Douglas A. Irwin

The Journal of Economic History, 2025, vol. 85, issue 2, 303-335

Abstract: The decision by developing countries to open up their economies to foreign trade and investment in the 1980s and 1990s was a momentous event in world history. How and why did this trade policy revolution take place? Most accounts of trade politics stress domestic interest groups or trade agreements as driving policy changes, but these explanations fail in this period. This paper notes that many import restrictions were imposed for balance of payments purposes, as a way of avoiding a devaluation and protecting foreign exchange reserves from depletion under fixed exchange rates. A shortage of foreign exchange in the mid-1980s forced countries, under the guidance of economists, to shift to a more flexible exchange rate system that boosted export earnings and made import controls unnecessary for payments balance. Just as seen during the Great Depression, the exchange rate regime was a key factor in a country’s trade policy.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:jechis:v:85:y:2025:i:2:p:303-335_1

Access Statistics for this article

More articles in The Journal of Economic History from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().