Title : International trade and the economy, 1600-1870
2017 Dauphine Toflit Program Final
Loïc Charles (Paris-8 and INED), Tamira Combrink (IISH), Anne Conchon (Paris-1), Guillaume Daudin (Dauphine), Béatrice Dedinger (SciencesPo), Christopher Gad (Sweden), Pierre Gervais (Paris-3), Paul Girard (SciencesPo), Henric Häggqvist (Uppsala), Pierre Hollegien (S&P Global Ratings), Alejandra Irigoin (LSE), Lionel Kesztenbaum (INED and PSE), Paul Maneuvrier-Hervieu (Caen and Rouen), Dominique Margairaz (Paris-I), Martina Miotto (Warwick), Nicholas O’Neill (Chicago), Guillaume Plique (SciencesPo), Zamil Said Abdallah (Paris-8), Timo Tiainen (Jyväskylä), Roger Vicquery (LSE)
October 19th 2017
9.30-10.20 : Roger H Vicquéry. (London School of Economics, UK) « The Currency Union Effect on Trade: Evidence from the Italian Unification and the Franc Germinal Bloc (1848-1876) »
Vicquery – Does a Currency Union Affect Trade
That paper attempts to estimate the effect of monetary integration on international trade, first identified by Rose (2000)’s seminal paper, during the first globalization. It exploits as a quasi-experiment the process of the Italian unification, which saw a number of sovereign Italian states to be annexed by the Savoy monarchy between 1858 and 1870. Indeed, Italian political integration overlapped with two distinct processes of monetary integration. At the national level, the Italian Lira was introduced as the only legal tender starting in 1862. At the international level, a process of monetary integration around the French Franc Germinal had been ongoing since the Napoleonic conquest of Europe. Belgium and Piedmont both continued using a currency intrinsically equivalent to the French Franc after 1815. When the annexed Italian pre-unitary states adopted the Lira in 1862, they therefore joined at the same time a larger monetary bloc composed by Italy, France, Belgium and Switzerland. The bloc was formally acknowledged through the 1865 monetary convention which gave birth to what has been since known as the Latin Monetary Union.
The paper exploits those events within the differences-in-differences framework widely used in the “Rose effect” literature (Micco et al., 2003). In order to do so, it employs newly compiled archival data sources1. In particular, the paper provides for the first time international trade data for Italian regions post-unification. The paper would contribute to both the economics and economic history literature on a number of counts. First, the Italian unification represents a unique example of an exogenous monetary unification, driven by military events. This means that the paper’s estimate of the Rose effect are not be biased by the endogeneity problem which generally pervades the literature on currency union. Second, the paper’s estimate would distinguish between the effect of national and international monetary integration. Finally, the paper sheds lights on the effects of the Italian unification, and particularly the extension of the Northern tariff to the South, which is often said to have induced permanent damages to the Southern Italian economy (Daniele and Malanima, 2011). While it exists a debate in the literature on whether the extension of the Northern tariff damaged Southern trade (Felice, 2013) the paper not only provides a tentative quantification but also disentangles the tariff effect from the monetary unification one.
10.20-11.10 Alejandra Irigoin (London School of Economics, UK) « UK Standard Error: the problems for economic historians from (mis)taking silver as commodity money, 1718-1830»
Irigoin – Standard error Silver as commodity or money
As shown elsewhere for the case of 1800s China and the US (Irigoin 2009, 2013), silver in the form of the Spanish American peso enjoyed a price in different markets which was relatively independent of its intrinsic value. In other words silver had also a monetary value; this finding goes against economic historians of silver as commodity money. Revisiting an under researched high frequency series of the price of silver bullion and specie in Britain between 1718 and 1831, the paper first: estimates the premium – and its variation- that specie had over bullion in the London market and second, discusses the broad implications of using of silver grains as denominator for price and wages across economies performed with different monetary regimes. Thirdly and more importantly it also qualifies established interpretations about the economic development of the Atlantic economy during the Napoleonic Wars. The estimate shows that in the course of the 18th century the silver peso had a sizable premium over the mint price in Britain, and of around 20% in Asia. During the Restriction Period (1797-1821) the premium was extraordinarily high –higher even than that of gold bullion – nearing 30% in London market between 1808 and 1816. Whereas the causes of such appreciation in Britain have not been fully researched yet, the use of the silver peso/ dollar in the international economy – and the prevalence of different exchange rates in Asia, Britain and Latin America gave way to a substantial currency trade – yet to be analysed more systematically. In this light the paper explores the implications of such overvaluation of the silver peso exchange rate for the terms of trade of South American economies. and the particular growth of the exports to, and imports from, Britain which economic historians this far have explained solely on political grounds as the effects of (a misconstrued) free trade policies. The paper explores the effects in the expansion of commodity exports out of South America and of the boom of British textile exports to Brazil, Chile, the River Plate and Cuba in the period.
11.30-12.20 Martina Miotto (Warwick ,UK) « World Trade, Technology Diffusion and the Chronometer » (co-authors: A. Iaria and L. Pascali)
Miotto – World Trade, the Chronometer and Technology Diffusion
For centuries seafaring explorers and merchants struggled with the problem of measuring a ship’s longitude. The invention of the chronometer solved such problem opening a new era for the shipping industry. How did a mechanical time keeper improve navigation? What was the role of this innovation in triggering the nineteenth century trade boom? We isolate a causality channel exploiting the fact that the chronometer produced an asymmetric change in trade distances among countries. Before this invention longitude was determined observing the moon and the stars, but this method was impracticable with overcast skies. Using actual voyages data from the eighteenth and nineteenth century we find that, after 1835, ships speed and number of voyages passing through more cloudy routes increased compared to the previous period and to non cloudy routes, indicating that the mechanical time-keeper reduced shipping distances and times differently across countries and trade routes. Using this source of variation and new data on trade and shipping times for the period 1784-1856, we estimate a gravity model of country-pairs trade on travel times letting travel times coefficients change over time, and we assess that trade patterns are shaped by shipping times using lunar observations only till the 1830s, and by shipping times using the chronometer thereafter. Future developments of the pr. I entairsan undstanding the role of trade in the diffusion of new technologies and ideas.
Timo Tiainen (Jyväskylä, Finland) « Long-distance international trade from or to ports of Finland 1634–1853-some time-series analyses with French trade anatomized »
Tiainen – Long distance international trade from and to ports of Finland 1634-1853
This paper provides time-series analyses of different variables of Finnish long-distance international trade covering time period of 1634-1853. The Sound Toll Registers give a great opportunity to have a full sample of all passages and cargoes from and to ports in Finland. They showed clear evidence of developments of both Finnish merchant shipping industry and international trade reflecting the overallan undlying economic growth of Finland in this period. The growths in many variables can be regarded as segmented (trend-stationary) processes by estimating general linear segmented models with some break dates by ordinary and autoregressive least squares. The effects of breaks were predictable: 1) some negative effects of the Swedish Navigation Act of 1724, 2) the positive effects of 1765 after when more staple town rights were gradually given to new towns, and 3) accelerating trend growth after the Napoleonic Wars like economic theory suggests. Segmented trend models estimated asserted some evidence in some cases that shocks have been typically transitory except at small number of break points where the trends were shifted permanently.
14.50-15.40 Torsten Arnold (Viadrina, Germany) «Trade between the French and Portuguese Atlantic and Central Europe: A comparison of the bilateral socio-economic relations between Hamburg, France and Portugal during the last decades of the 18th century ». Co-author: Maria Cristina Moreira (Minho Portugal)
dos Santos Arnold — Trade between the French and Portugese Atlantic and Central Europe (late 18th century)
Europe within these commercial structures during the early modern period have been subject to quite an extensive historiographical production of macro and micro perspectives. However, most of the studies are rather situated within a ‘national’ English, French, Portuguese or Spanish framework than being of a comparative nature. This paper will analise the socio-economic relations between the French and Portuguese Atlantic and Hamburg, the latter being one of the major hubs for the Central European hinterland regions during the last decades of the 18th century. Based on statistical data from the French Chambre du Commerce and the Portuguese Junta do Comércio on the one hand and the Hamburg Admiralty Customs Records (Admiralitätszoll), this paper will demonstrate the historical development of the French and Portuguese sugar and cotton trade with Central Europe, one of the major consumer markets for colonial produce at that time.
16.00-17.30 Loïc Charles and Paul Girard, TOFLIT18 demo and hands-on session
Charles and Girard – Intro to hands-on session
Loïc Charles and Paul Girard showcased the TOFLIT18 “datascape” thanks to a hands-on session. New techniques developed in digital humanities allow researchers to widen their understanding of international trade through both quantitative and qualitative analysis. The hands-on session allowed participants to use web tools to explore the large TOFLIT18 database of French trade flows between 1714 and 1821 by product and partners to gain new insights on issues such as the economic life and representations of eighteenth-century French consumers, producers and administrators and how they were transformed throughout the century.
9.30-10.20 Henric Häggqvist (Uppsala, Sweden) «Taxed to Stagnation? Tariffs and Export Performance in Sweden and Denmark 1783–1853»
Häggqvist – Taxed to Stagnation? Danish and Swedish Export and Tariffs 1780-1860
Tariffs on exports were a key component of mercantilist trade policies around Europe before industrialization. This paper sets out to measure their intensity as well as assess whether they had any direct impact on export growth. It does so by analyzing Denmark and Sweden between 1780 and 1860 which both covers the main period of existence of export tariffs as well as the kick-off of the “first era of globalization.”
The 1830s signaled changes to trade policy and the development of foreign trade in both Denmark and Sweden. Obstacles to trade were slowly being dismantled and both import and export grew as a result, particularly so from the 1840s. Duties on exports were lowered or even removed during the 1830s, 1840s and 1850s in both countries and real export growth started to pick up from roughly the same time. The paper shows that the decrease of export tariffs correlated with a growth in exports, although it did not impact all commodities equally.
The paper concludes that export tariffs were a retarding factor on foreign trade in pre-industrial Scandinavia, and possibly even retarding economic growth. The decrease and eventual removal of export taxes was by all accounts a trade-promoting move, even though it needs to be set against the possible impact of other factors such as the British liberalization of its import tariffs during the same period.
10.20-11.10 Béatrice Dedinger and Paul Girard (SciencesPo) « About the Ricardo Database)
Dedinger and Girard – RICARDO
The RICardo project was initiated in 2004 at Sciences Po by a team of economic historians in order to create a historical trade database. It started from the observation that existing databases are usually built by individual researchers for the purpose of personal research, that these databases do not cover all countries of the world, that they do not go back before 1870 and that they can only be used by skilled communities. Ten years later, a new team involving historians, developers and designers from Sciences Po expands the project to create a website dedicated to bilateral trade flows of all the world’s countries between 1800 and 1938. Since the end of World War II, these statistics are collected and published by international organizations: Direction of Trade Statistics from the IMF (data from 1947) data.imf.org
; UN Comtrade (data from 1962) comtrade.un.org
The goal of the RICardo project is to collect bilateral trade data of all countries in the world from the early nineteenth century (first data go back to 1787) until 1938 and make them available to a large audience for a wide range of uses. RICardo visualizations allow to show in « one-click » what were the Indian exports to France in 1841, how the total trade of China evolved between 1864 and 1913, or to have an estimate of world exports between 1800 and 1938. It facilitates access to a historical and synthetic vision of international trade while offering researchers the opportunity to use the data for further research. RICardo is an evolving database. Our ambition is to keep improving and completing it through further collection of new trade statistics sources. Users of the database are therefore welcome to send their comments and contribute to its development. firstname.lastname@example.org
11.30-12.20 Pierre Gervais and Guillaume Plique (Paris 3 & SciencesPo, France) Specialization, nomenclatures, and market power
Gervais Plique – Specialization, nomenclatures, and market power
For the first time ever, the database built by ANR TOFLIT enables one to track the nomenclatures used by public agents in their daily work controlling trade inflows and outflows. While not a perfect mirror of actual practices, these nomenclatures must have reflected to a certain extent the composition of trade flows in the main ports of entry and exit in and out of the French market. However, we argue here that making the jump from customs records to physical exchanges is possible only if a preliminary question is answered first: what connection if any existed between the structure of the nomenclature and of trade flows in one place? Trade theory posits that specialization is inversely correlated with the number of products traded in any one place, and such a conclusion seems self-evident. Eighteenth-century nomenclatures, however, operated in an environment in which there was little standardization of products, but rather a wide universe of product subsets and varieties, associated with highly complex scales of quality and prices. The hypothesis here is that specialization in one product would actually translate into the availability of a wider range of qualifiers corresponding to a wider range of varieties and qualities; in other words, specialization in such a universe would generate larger, not narrower, nomenclatures on any one product. Of course specialization would also lead to a smaller number of product categories, pushing nomenclatures in the opposite direction, towards simplification. The first goal of the paper will thus be to test empirically the relationship between specialization in wider product categories and complexification of the nomenclaturesansed to describe these categories, and to build at least a provisional view of the possible interaction between the two, so as to know where in the process of aggregation one can reasonably draw the line between products. If indeed more specialization means more complex nomenclatures, one could end up misreading a complexified nomenclature for a product, say cotton cloth in a variety of more qualitative names, as pointing to less specialization than on another market where cotton cloth is described under one name, even though this limited nomenclature actually translates less specialization in that product, not more. Testing a robust process whereby products can be clustered and compared thus becomes essential; and this raises the question of the relationship between local and national nomenclatures —are national categories built precisely for comparative purposes? Can we rely on them, especially to test for segmentation and specialization? The analysis of nomenclatures thus appears as a preliminary for any exploration of the twin questions of market specialization and market overlap.
14.00-14.50 Ulrich Pfister (Münster, Germany) « Foreign trade and the development of the German cotton industry, c.1730-1790 »
Pfister – Foreign trade and the development of the German cotton industry, c.1730-1790
From the 1730s to about 1780 documented imports of cotton goods through Hamburg, Germany’s most important harbour, fell massively, whereas imports of raw cotton and dyestuffs increased. This suggests a pattern of import-substituting industrialization, as it took place in other parts of Europe around that time. Information derived from import statistics and ledgers of inland markets suggest that cotton processing expanded at an annual growth rate of 1.0 per cent, much slower than in Britain and France. According to English and Dutch export statistics German imports of dyestuffs and materiarsansed in calico printing seem to have risen somewhat faster, though. This suggests that calico printing acted as an engine of growth for the entire cotton sector. Despite slow growth cotton manufacture expanded faster than the traditional textile branches, that is, linen and worsted production (around 0.7 per cent). Slow growth of domestic demand and a modest level of market integration appear as the main candidates to account for the relatively unspectacular performance of the German cotton sector in the 18th century compared to Britain and France.
14.50-15.40 Christopher Gad (Stockholm, Sweden) «Sweden Globalization and Stagnation? Analysis of a New Database on Foreign Trade in Sweden and Finland, 1738-1805». Co-author: Rodney Edvisson (Stokholm, Sweden)
Gad – Assessing Trade in the Mercantilist Era
This paper examines a newly constructed database on foreign trade of Sweden-Finland 1738-1805, consisting of more than 1000 types of goods. The traditional view as presented by Eli Heckscher is that the overseas trade of Sweden-Finland saw a trend of secular stagnation during the course of the eighteenth century. By contrast, we show that in conjunction with a substantial expansion of the population, total trade nearly increased twofold during the period of study. Despite that, there was a decrease of the value of exports in relation to GDP, mostly explained by a drop in the relative price of bar iron. The degree of specialization of Swedish exports saw a declining tendency in this period. While exports from Sweden had a higher degree of specialization than Finnish exports, imported goods to Finland were more concentrated than Swedish imports. Lastly, the composition of imports did not markedly alter, meaning that a consumer revolution did not take place in either Sweden or Finland.
16.00-16.50 Guillaume Daudin (Dauphine, France) « The Futility of Mercantilist Wars ». Co-author: Elisa Tirindelli
Daudin – The futility of mercantilist wars
This paper analysis the long-run effect of war on French trade from 1716 to 1824. It starts by analyzing the specific case of trade between France and Hamburg and then compare it to the general case of all other France trading partners. In addition it breaks trade down by product and looks at the difference in impact on colonial and non-colonial goods. It finds a striking difference according to the different goods, with some European merchandises even benefiting from the war. Finally I check for the presence of lagged effects of and prewar effects. I find no clear evidence of either of them but to some extent, we can observe an increase in trade after the conflict rather than a sluggish reprise (apart from the post 1815 period). All in all, French trade seem to have been rather resilient to its rough handling by the Royal Navy before 1807.