The Impact of Globalization on Pre-Industrial, Technologically Quiescent Economies

Jeffrey Williamson ()

No 7146, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper uses a new pre-1940 Third World data base documenting real wages and relative factor prices to explore their determinants. There are three possibilities: external price shocks, factor endowment changes, and technological change. As the paper's title suggests, technological change is an unlikely explanation. The paper lays out an explicit econometric agenda for the future, although more casual empiricism suggests that external price shocks were doing most of the work, and declining-transport-cost-induced commodity price convergence in particular. Real wages in Asia, the Middle East, and Latin America never showed any signs of catching up with the European industrial leaders prior to 1914 hold their own. The ratio of wages to land rents, on the other hand, declined up to World War I and so did the ratio of wages to GDP per capita. The trend reversed thereafter. These relative factor price movements help sharpen our understanding of the sources of growth (or lack of it) in Asia and Latin America prior to 1940. They also offer strong hints about changes in income distribution there.

JEL-codes: N1 O4 (search for similar items in EconPapers)
Date: 1999-05
New Economics Papers: this item is included in nep-dev and nep-his
Note: ITI EFG DAE
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Citations: View citations in EconPapers (1)

Published as as "Land, Labor, and Globalization in the Third World, 1870-1940" The Journal of Economic History, Vol. 62, No. 1, Mar., 2002

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Working Paper: The Impact of Globalization on Pre-Industrial, Technologically Quiescent Economies (1999)
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