INTERNATIONAL TRADE
International Trade
International trade has changed our world drastically over the last couple of centuries. In this entry we begin by analyzing available data on historical trade patterns around the world, and then move on to discuss more recent data, outlining trade patterns from the last couple of decades. In the last section, we turn to analyze empirical evidence regarding the determinants and consequences of international trade.
From a historical perspective, international trade has grown remarkably in the last couple of centuries. After a long period characterized by persistently low international trade, over the course of the 19th century, technological advances triggered a period of marked growth in world trade (the 'first wave of globalisation'). This process of growth stopped, and was eventually reversed in the interwar period; but since the Second World War international trade started growing again, and in the last decades trade expansion has been faster than ever before. Today, the sum of exports and imports across nations is higher than 50% of global production. At the turn of the 19th century this figure was below 10%.
In the last couple of decades, transport and communication costs have decreased across the world, and preferential trade agreements have become more and more common, particularly among developing countries. In fact, trade among developing nations (often referred to as South–South trade), more than tripled in the period 1980–2011.
