Cliometric Approaches to International Trade

Abstract

This chapter gives a broad overview of the literature on the cliometrics of international trade and market integration. We start by motivating this by looking at the lessons from economic theory and, in particular, through the work which considers the effect of trade, openness, and trade policy on growth. Here theory, as well as empirical results, suggests no clear-cut relationship and points to the richness of historical experiences. We then turn to the issue of how to quantify trade and market integration. The former usually relies on customs records and the latter on the availability of prices in different markets. We then go one step back and look at the determinants of trade, usually tested within the framework of the gravity equation, and discuss what factors were behind periods of trade increases and declines and of market integration and disintegration. Finally, as one of the most important determinants of trade, and perhaps the most policy relevant, we include a separate section on trade policy: we both consider the difficulties of constructing a simple quantitative measure and look at what might explain it.