Kevin Hjortshoj O'Rourke of NYU Abu Dhabi reviews “Against the World: Anti-Globalism and Mass Politics between the World Wars” by Tara Zahra. The Econlit abstract of this book begins: “Explores the development of nationalism in the twentieth century after World War I, discussing significant events that contributed to the rise of anti-globalization policies and social movements.”

Many papers have explored the relationship between average tariff rates and economic growth when theory suggests that the structure of protection is what should matter. We therefore explore the relationship between economic growth and agricultural tariffs, industrial tariffs, and revenue tariffs for a sample of relatively well-developed countries between 1875 and 1913. Industrial tariffs were positively correlated with growth, and agricultural tariffs were generally negatively correlated with growth, although the results are not robust. Revenue tariffs were not related to growth at all.

Poor countries are more volatile than rich countries, and we know this volatility impedes their growth. We also know that commodity price volatility is a key source of those shocks. This paper explores commodity and manufactures price over the past three centuries to answer three questions: Has commodity price volatility increased over time? The answer is no: there is little evidence of trend since 1700. Have commodities always shown greater price volatility than manufactures? The answer is yes. Higher commodity price volatility is not the modern product of asymmetric industrial organizations -oligopolistic manufacturing versus competitive commodity markets -that only appeared with the industrial revolution. It was a fact of life deep into the 18th century. Does world market integration breed more or less commodity price volatility? The answer is less. Three centuries of history shows unambiguously that economic isolation caused by war or autarkic policy has been associated with much greater commodity price volatility, while world market integration associated with peace and pro-global policy has been associated with less commodity price volatility. Given specialization and comparative advantage, globalization has been good for growth in poor countries at least by diminishing price volatility. But comparative advantage has never been constant. Globalization increased poor country specialization in commodities when the world went open after the early 19th century; but it did not do so after the 1970s as the Third World shifted to labor-intensive manufactures. Whether price volatility or specialization dominates terms of trade and thus aggregate volatility in poor countries is thus conditional on the century.

For two decades, the consensus explanation of the British Industrial Revolution has placed technological change and the supply side at center stage, affording little or no role for demand or overseas trade. Recently, alternative explanations have placed an emphasis on the importance of trade with New World colonies, and the expanded supply of raw cotton it provided. We test both hypotheses using calibrated general equilibrium models of the British economy and the rest of the world for 1760 and 1850. Neither claim is supported. Trade was vital for the progress of the industrial revolution; but it was trade with the rest of the world, not the American colonies, that allowed Britain to export its rapidly expanding textile output and achieve growth through extreme specialization in response to shifting comparative advantage.

How did countries recover from the Great Depression? In this paper we explore the argument that leaving the gold standard helped by boosting inflationary expectations and lowering real interest rates. We do so for a sample of 30 countries, using modern nowcasting methods and a new dataset containing more than 230,000 monthly and quarterly observations for over 1,500 variables. In those cases where the departure from gold happened on clearly defined dates, it seems clear that inflationary expectations rose in the wake of departure. IV regressions and synthetic matching techniques suggest that the relationship is causal, a finding that is supported by DSGE model-based counterfactuals as well.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

International trade collapsed, and also became much less multilateral, during the 1930s. Previous studies, looking at aggregate trade flows, have argued that trade policies had relatively little to do with either phenomenon. Using a new dataset incorporating highly disaggregated information on the United Kingdom’s imports and trade policies, we find that while conventional wisdom is correct regarding the impact of trade policy on the total value of British imports, discriminatory trade policies can explain the majority of Britain’s shift toward Imperial imports in the 1930s.