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The Distributional Consequences of Trade: Evidence from the Grain Invasion

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  • Stephan Heblich
  • Stephen J. Redding
  • Yanos Zylberberg

Abstract

We provide new evidence on the income distributional consequences of trade using the New World Grain Invasion in the 19th Century and variation in agroclimatic suitability for wheat across locations within England and Wales. We show that this large-scale agricultural trade shock led to structural transformation away from agriculture and a redistribution of population from rural to urban areas. We develop a quantitative spatial model to rationalize our empirical findings and evaluate the aggregate implications of this international trade shock. We use our model to undertake counterfactuals for the Grain invasion, holding constant other exogenous determinants of economic activity. We find modest aggregate welfare gains combined with much larger income distributional effects, with geography an important dimension along which these income distributional effects occur.

Suggested Citation

  • Stephan Heblich & Stephen J. Redding & Yanos Zylberberg, 2024. "The Distributional Consequences of Trade: Evidence from the Grain Invasion," NBER Working Papers 32958, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:32958
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    Cited by:

    1. Korn, Tobias & Lacroix, Jean, 2024. "The Bankruptcy Express: Market Integration, Organizational Changes, and Financial distress in 19th century Britain," Hannover Economic Papers (HEP) dp-731, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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