Final Report Summary - TRADEDEPRESSION (Trade and the Great Depression in a Long Run Perspective) The economic literature on the Great Depression has focussed on the macroeconomic policies which led to it, with trade being relegated to a minor role in most cliometric accounts. Despite the notoriety of Smoot-Hawley, we know remarkably little about the extent to which international commodity markets disintegrated during the period; about the causes of the slump in trade, and the role of protectionism; and about the consequences of interwar protection for employment and growth.This project explores the inter-relationships between output and employment, trade, and trade policy during the Depression. It has compile a large-scale database providing information on trade which is far more fine-grained than anything currently existing. First, bilateral trade flows between countries have been collected at the commodity level, allowing us to explore the impact of trade policies on the structure of trade flows. Second, we have collected detailed country and commodity-level information on tariffs and other trade policies. Third, monthly bilateral trade data have been be collected which can be matched with monthly time series on a wide range of economic and financial variables, as well as with information on the timing of key policy shocks drawn from qualitative sources. The project has to date concentrated on data collection, but preliminary analysis suggests that trade policy had a far larger effect on UK trade flows than the traditional cliometric literature might have led you to believe, once you take into account quantitative trade barriers as well as tariffs, and analyse commodity level trade data. Later work will replicate the analysis for the US and other countries, and analyse the cross-country dataset as a whole. It will also use time series methods to analyse the monthly trade database.A second strand of the project looks at the spread of modern industry to the global periphery, something which may have been helped by the import substitution policies of the interwar period. We find that industrial growth in the global periphery did indeed accelerate during the interwar period, but that the roots of modern industrial growth in the developing world stretch surprisingly far back into the 19th century, and that the highpoint of developing world industrial catch up on the rich countries was the 1950-73 period. A forthcoming book based on a series of country and region studies will provide a more fine-grained look at the problem: one of its findings is that the impact of policies (such as trade policies) differed a lot across countries, depending for example on their resource endowments.A third strand of the project looks at the impact of the Great Depression on domestic politics. We found that prolonged periods of recession were important in boosting the right wing extremist vote during the Great Depression, but sufficiently long-established democracies were immune from this effect.
