Geography, Policy, or Productivity? Regional Trade in five South American Countries, 1910-1950 / Marc Badia-Miró, Anna Carreras-Marín, Christopher M. Meissner, Christopher M. Meissner.

Format:

Book

Author/Creator:

Badia-Miró, Marc.

Contributor:

National Bureau of Economic Research.

Carreras-Marín, Anna.

Meissner, Christopher M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20790.

NBER working paper series no. w20790

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

Regional trade in South America since independence has long been much smaller than would be expected if geography were the only constraint on trade. Several potential explanations exist: low technological and demand complementarities; low productivity; high natural and policy barriers to trade. Focusing on the latter explanations, policy makers have long advocated a South American/Southern Cone Free Trade Area-proposed as early as 1889. Would reductions in trade costs have been sufficient to significantly raise trade, or was trade low for other reasons? We study bilateral trade between 1910 and 1950, when large external shocks altered global supply and demand. These shocks help us show that intra-regional trade could have been boosted with reductions in trade costs. South American regional trade could have benefitted from more benign trade policy or better infrastructure. Regional trade in textiles, which took off from the 1930s, supports our argument that trade improved when trade costs fell.

Notes:

Print version record

December 2014.