The Impact of Globalization on Pre-Industrial, Technologically Quiescent Economies: Real Wages, Relative Factor Prices and Commodity Price Convergence in the Third World Before 1940
Paper uses a new pre-1940 Third World data base documenting real wages and relative factor prices to explore their determinants. There are three possibilities: external price shocks, factor endowment changes, and technological change. As the paper's title suggests, technological change is an unlikely explanation. The paper lays out an explicit econometric agenda for the future, although more casual empiricism suggests that external price shocks were doing most of the work, and declining-transport-cost-induced commodity price convergence in particular.