Were Trade and Factor Mobility Substitutes in History?

William Collins, Kevin O'Rourke and Jeffrey Williamson ()

No 6059, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Trade theorists have come to understand that their theory is ambiguous on the question: Are trade and factor flows substitutes? While this sounds like an open invitation for empirical research, hardly any serious econometric work has appeared in the literature. This paper uses history to fill the gap. It treats the experience of the Atlantic economy between 1870 and 1940 as panel data with almost seven hundred observations. When shorter run business cycles and long swings' are extracted from the panel data, substitutability is soundly rejected. When secular relationships are extracted over longer time periods and across trading partners, once again substitutability is soundly rejected. Finally, the paper explores immigration policy and finds that policy makers never behaved as if they viewed trade and immigration as substitutes.

JEL-codes: F1 F2 (search for similar items in EconPapers)
Date: 1997-06
Note: DAE ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published as Migration: The Controversies and the Evidence, Faini, R., J. DeMelo and K. Zimmerman, eds., Cambridge: Cambridge University Press, 1999.

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Related works:
Working Paper: Were Trade and Factor Mobility Substitutes in History? (1997)
Working Paper: Were Trade and Factor Mobility Substitutes in History? (1997)
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