Colonial America

The first permanent British settlement in what became the United States was established in 1607, nearly 170 years prior to the American declaration of independence. This chapter examines the economic development of the British North American colonies that became the United States. As it describes, abundant natural resources and scarce labor and capital contributed to the remarkable growth in the size of the colonial economy, and allowed the free white colonial population to enjoy a relatively high standard of living. There was not, however, much improvement over time in living standards. Patterns of factor abundance also played an important role in shaping colonial institutions, encouraging reliance on indentured and enslaved labor as well as the development of representative government. For most of the colonial era, the colonists happily accepted their relationship to Britain. After 1763, however, changes in British policies following the end of the Seven Years War created growing tensions with the colonists and ultimately led to the colonies to declare their independence

Cliometric Approaches to International Trade

This chapter gives a broad overview of the literature on the cliometrics of international trade and market integration. We start by motivating this by looking at the lessons from economic theory and, in particular, through the work which considers the effect of trade, openness, and trade policy on growth. Here theory, as well as empirical results, suggests no clear-cut relationship and points to the richness of historical experiences. We then turn to the issue of how to quantify trade and market integration. The former usually relies on customs records and the latter on the availability of prices in different markets. We then go one step back and look at the determinants of trade, usually tested within the framework of the gravity equation, and discuss what factors were behind periods of trade increases and declines and of market integration and disintegration. Finally, as one of the most important determinants of trade, and perhaps the most policy relevant, we include a separate section on trade policy: we both consider the difficulties of constructing a simple quantitative measure and look at what might explain it.</p