DP1319 Trade, Migration and Convergence: An Historical Perspective

Author(s): Kevin Hjortshøj O'Rourke
Publication Date: January 1996
Keyword(s): Convergence, Migration, Trade
JEL(s): F15, N30, N70
Programme Areas: Human Resources
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1319

Theory is ambiguous as to how globalization influences the relative performances of rich and poor countries. This paper surveys some recent literature on the historical links between international commodity and factor market integration and convergence. Focusing on the late nineteenth century, a period both of globalization and convergence, it shows that trade had an important impact on factor prices in some countries, just as Heckscher and Ohlin would have predicted. Migration was a more important force for convergence during this period, however. The analysis suggests that more attention should be paid to open economy forces when discussing convergence.