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International Trade and Finance under the Two Hegemons: Complementaries in the United Kingdom 1870-1913 and the United States 1920-30

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  • Alan M. Taylor
  • Janine L. F. Wilson

Abstract

Do international trade and finance flow together? In theory, trade and finance can be substitutes or complements, so the matter must be resolved empirically. We study trade and financial flows from the United Kingdom from 1870 to 1913 and the United States in the interwar years. Trade and finance are robustly correlated, even after allowing for simultaneity. Evidence from the British Empire casts doubt on the idea that trade is a punishment device in the event of a default.

Suggested Citation

  • Alan M. Taylor & Janine L. F. Wilson, 2006. "International Trade and Finance under the Two Hegemons: Complementaries in the United Kingdom 1870-1913 and the United States 1920-30," NBER Working Papers 12543, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:12543
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    Cited by:

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    2. van Bergeijk, P.A.G., 2015. "The heterogeneity of world trade collapses," ISS Working Papers - General Series 606, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    3. Rajag M. Nag & Johannes F. Linn & Harinder S. Kohli (ed.), 2016. "Central Asia 2050: Unleashing the Region's Potential," Books, Emerging Markets Forum, edition 1, number centasia2050, Summer.
    4. Abhijit Sen Gupta & Pragya Atri, 2018. "Does Financial Sector Development Augment Cross-Border Capital Flows?," International Economic Journal, Taylor & Francis Journals, vol. 32(4), pages 499-523, October.
    5. Rui Esteves, 2011. "The Political Economy of Global Financial Liberalisation in Historical Perspective," Oxford Economic and Social History Working Papers _089, University of Oxford, Department of Economics.
    6. van Bergeijk, P.A.G., 2011. "One is not enough!," ISS Working Papers - General Series 22964, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    7. Srinivasa Madhur, 2016. "Pursuing Open Regionalism for Shared Prosperity," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 8(2), pages 216-246, May.
    8. Rui P. Esteves, 2011. "The Political Economy of Global Financial Liberalisation in Historical Perspective," Oxford University Economic and Social History Series _089, Economics Group, Nuffield College, University of Oxford.
    9. Peter A.G. van Bergeijk, 2019. "Deglobalization 2.0," Books, Edward Elgar Publishing, number 18560.

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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F30 - International Economics - - International Finance - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative

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