Trade diversion and labor market adjustment: Vietnam and the U.S.-China trade war
Abstract: This paper investigates the effects of the U.S.-China trade war on labor market outcomes in a third country, Vietnam. We exploit variation in the extent of U.S. tariff hikes on Chinese imports across industries as well as pre-existing industry employment patterns in Vietnam. We find that Vietnamese individuals and districts that are more exposed […]
Have We Under-Estimated Inflation Persistence Before WW1? US and International Evidence
Abstract: We argue that measurement error in historical price data has led researchers to erroneously believe that there was little persistence of inflation during the 19th century. Using a statistical technique that accounts for these errors, we estimate the persistence of (a) US inflation and (b) inflation in 14 other economies over the period 1842-1913. […]
Devaluation, Exports, and Recovery from the Great Depression
Abstract: This paper evaluates how a major policy shift—the suspension of the gold standard in September 1931—affected employment outcomes in interwar Britain. We use a new high-frequency industry-level dataset and difference-in-differences techniques to isolate the impact of devaluation on exporters. At the micro level, the break from gold reduced the unemployment rate by 2.7 percentage […]
The Aftermath of Sovereign Debt Crises: A Narrative Approach
Abstract: This paper investigates the causal effects of sovereign debt crises in a sample of 50 defaulting economies between 1870 and 2010. As default is potentially endogenous, we use the narrative approach to identify plausibly exogenous episodes. We find economically and statistically significant costs of up to 3.2 percent of GDP before recovering to the […]
Remote Investing in Latin America, 1869-1929
Abstract: Substantial amounts of British capital flowed to Latin America during the first era of globalisation. Companies financed by this capital were typically headquartered in the UK, but operated thousands of miles away. This paper asks how this geographic separation between governance and business activities affected the valuation of these firms. We find that the […]
Credibility is not enough: Fiscal monetization and currency depreciation in early-modern Venice
Abstract: This paper focuses on an early unique experiment of managed float of State-issued money, implemented in Venice between 1619 and 1666. Building on a new hand-collected database from a previously unused archival source, we show that, despite the Venetian Banco ducat’s status as an international currency and the government’s fiscal credibility, the exchange rate […]
Decoding Trump’s trade strategy: The historical pattern beneath the headlines
U.S. President Donald Trump loves throwing opponents off balance. This unpredictability makes foretelling his administration’s policy priorities all the harder. Nowhere is this more evident than in trade policy. Three distinct interpretations have emerged: the Bluff Thesis, the Reckless Driver Theory and the Geopolitical Realignment Strategy. Read more here: Globe and Mail.
The Empire project: Trade policy in interwar Canada
Abstract: This paper uses a new dataset on the universe of Canadian imports and tariffs between 1924 and 1936, disaggregated into 1697 goods originating in 112 countries, to analyse the impact on Canadian imports of interwar Canadian trade policy, including the 1932 Ottawa trade agreements. Rather than use a dummy variable approach, we compute the […]
Zombie International Currency: The Pound Sterling 1945–1971
Abstract: This paper examines the international role of sterling during the Bretton Woods era and argues that it was not a competitor to the U.S. dollar. I construct a novel dataset to measure the reserve role of sterling in Europe and sterling area countries. The postwar reserve role of sterling was limited to the sterling […]
Forced Migration and Local Economic Development: Evidence from Postwar Hungary
Abstract: We investigate the effects of forced migration on sending economies using the post-WW2 expulsion of German minorities from Hungary as a natural experiment. We combine historical and contemporary data sources to show that the forced migrations led to lasting reductions in economic activity. Plausible mechanisms driving this result appear to be sectoral change (shift […]
Early modern globalization and the extent of indigenous agency: Trade, commodities and ecology
Abstract: This paper examines the responses of Indigenous nations and European companies to new trading opportunities: the Cree nations with the Hudson’s Bay Company (HBC) and the Khoe nations with the Dutch East India Company [Verenigde Oostindische Compagnie (VOC)]. This case study is important because of the disparate outcomes. Within a few decades the Cree […]
Rueff Versus de Lattre: A French Money Doctors’ Duel for Influence Over de Gaulle
Abstract: In the early sixties, the U.S. and U.K. balance of payments deficits threatened the stability of Bretton Woods international monetary system. Jacques Rueff campaigned for its termination and the return to a system based only on gold, as in the nineteenth century. He encouraged French president Charles de Gaulle to publicly advocate the abandonment […]
Is gold a safe haven for investors?
Summary: The price of gold has risen in recent years, highlighting the role of this precious metal as a stable investment. While the value of gold is resilient and protected from inflation, its stability is not guaranteed in times of crisis. Cite as: Philip Fliers, Is gold a safe haven for investors? Economics Observatory (2024) […]
The Ends of 27 Big Depressions
Abstract: How did countries recover from the Great Depression? In this paper, we explore the argument that leaving the gold standard helped by boosting inflationary expectations, lowering real interest rates, and stimulating interest-sensitive expenditures. We do so for a sample of 27 countries, using modern nowcasting methods and a new dataset containing more than 230,000 […]
The Last Free Traders? Interwar Trade Policy in the Netherlands and Netherlands East Indies
Abstract: There has still been too little detailed work on the protectionism that emerged in the wake of the Great Depression. In this paper we explore the experiences of two countries that have been largely neglected in the literature, the Netherlands and Netherlands East Indies (NEI). How did these traditionally free-trading economies respond to the […]
Managed decline? Muddling through with the Sterling (dis)agreements, 1968-74
Abstract: How do policy makers manage the decline of an international currency? This paper examines British policy towards the pound sterling’s international role in the years 1968-74. Using previously uncited government archival sources, we revisit the view that the ‘sterling agreements’ of 1968-74, bilateral contracts made between the UK and governments holding sterling, formed a […]
How the Other Half Died: Immigration and Mortality in U.S. Cities
Abstract: Fears of immigrants as a threat to public health have a long and sordid history. At the turn of the 20th century, when immigrants made up one-third of the population in crowded American cities, contemporaries blamed high urban mortality rates on the newest arrivals. We evaluate how the implementation of country-specific immigration quotas in […]
The sleeping giant who left for America: Danish land inequality and emigration during the age of mass migration
Abstract: What is the role of access to land for the decision to emigrate? We consider the case of Denmark between 1868 and 1908, when a large number of people left for America. We exploit the fact that the Danish agrarian reforms between 1784 and 1807 had differential impacts on the class of landless laborers […]
Trade, Slavery, and State Coercion of Labor: Egypt during the First Globalization Era
Abstract: I investigate the effects of trade on labor coercion under the dual-coercive institutions of slavery and state coercion. Employing novel data from Egypt, I document that the cotton boom in 1861–1865 increased both imported slaveholdings of the rural middle class and state coercion of local workers by the elite. As state coercion reduced wage employment, […]
The Effect of Immigration Restrictions on Local Labor Markets: Lessons from the 1920s Border Closure
Abstract: In the 1920s, the United States substantially reduced immigration by imposing country-specific entry quotas. We compare local labor markets differentially exposed to the quotas due to variation in the national-origin mix of their immigrant population. US-born workers in areas losing immigrants did not benefit relative to workers in less exposed areas. Instead, in urban […]
The Smoot-Hawley Trade War
Abstract: We document the outbreak of a trade war after the United States adopted the Smoot-Hawley tariff in June 1930. U.S. trade partners initially protested, with many eventually choosing to retaliate with tariffs. Using a new quarterly dataset on bilateral trade for ninety-nine countries, we show that U.S. exports to retaliators fell by 28%–32%. Using […]
From Immigrants to Americans: Race and Assimilation during the Great Migration
Abstract: How does the arrival of a new minority group affect the social acceptance and outcomes of existing minorities? We study this question in the context of the First Great Migration. Between 1915 and 1930, 1.5 million African Americans moved from the U.S. South to Northern urban centres, which were home to millions of European […]
A Rising Tide? The Local Incidence of the Second Wave of Globalization
Abstract: We estimate the short- and long-run local labor market impacts of the large increase in U.S. imports and exports that occurred over the 1970s. We exploit the sequential opening of overseas shipping container ports over the period, which generated discontinuous changes in U.S. trade ows. We find that the impacts of the export shock […]
Bubbles in History
Abstract: Bubbles have become ubiquitous. This ubiquity has stimulated research over the past three decades into bubbles in history. In this article, we provide a systematic overview of research into historical bubbles. Our analysis reveals that there is no coherent approach to the study of bubbles and much of the debate has unhelpfully focussed on […]
Globalization, agricultural markets and mass migration: Italy, 1881–1912
Abstract: Despite the significant attention paid to the current consequences of globalization for migration behavior, there are few historical accounts of the effect of commodity market integration at the local level. We set our paper within the context of the first globalization era, when migration flows were largely unregulated, and highlight how exogenous shocks in […]
Occupational structure in Ireland in the nineteenth century: data sources and avenues of exploration
Abstract: This paper considers structural change in post-Famine Ireland through an examination of changes in the allocation of the labour force across three broad production sectors: primary, secondary and tertiary. To do so, it makes extensive use of the Irish Census of Population from 1821 to 1911 as a source of occupational information. While there […]
Slavery and the Making of Early American Libraries: British Literature, Political Thought, and the Transatlantic Book Trade, 1731-1814
Abstract: Early American libraries stood at the nexus of two transatlantic branches of commerce—the book trade and the slave trade. Slavery and the Making of Early American Libraries bridges the study of these trades by demonstrating how Americans’ profits from slavery were reinvested in imported British books and providing evidence that the colonial book market was shaped, […]
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