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Week 1 - Globalisation, Liverpool-Chicago - Wheat difference fell from 57…
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1820-1870 (Globalisation Rush)
Corn Laws repealed in 1846
Steam ships
Railways facilitated free trade
However, cheap wheat was flooding from USA and Russia
In UK land rents fell 50% so demanded tariffs
France and Germany introduced tariffs
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The first true era of globalisation occurred in the 19th century, marked by sustained price convergence across international markets — driven primarily by falling transport costs, supported by trade liberalisation and rising global demand.
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Wage convergence, wage dispersion between US and Europe fell quickly
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However, using a gravity model gold standard membership did increase by 20-30% trade
Gold standard increased credibility for some countries but not more emerging markets as they were still not trusted
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Eichengreen (2008)
- The gold standard was the main enabler of the Global Capital Market integration
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Look at distributional impact of migration
30% went home, which showed migration was less persistent
Migration caused political backlash eg the 1921 and 1924 immigration laws in US
Only worked well where institutions allowed for upward mobility
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