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West versus East: Early globalization and the great divergence

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2013-07
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Facultad de Ciencias Económicas y Empresariales. Decanato
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This paper extends our previous work on grain market integration across Europe and the Americas in the eighteenth and nineteenth centuries (Dobado, García-Hiernaux and Guerrero, 2012). By using the same econometric methodology, we now present: 1) a search for statistical evidence in the East of an “Early Globalization” comparable to the one ongoing in the West by mid eighteenth century; 2) a study on the integration of grain markets in China and Japan and its functioning in comparison to Western countries; 3) a discussion of the relevance of our findings for the debate on the Great Divergence. Our main conclusions are: 1) substantial differences in the degree of integration and the functioning of grain markets are observed between East and West; 2) a certain degree of integration may be reached through different combinations of factors (agents, policies, etc.) and with dissimilar effects on long-run economic growth; 3) the absence of an “Early Globalization” in the East reveals the existence of some economic and institutional limitations in this part of the world and contributed to its “Great Divergence” with the West from at least the eighteenth century.
Este trabajo expande nuestra investigación previa sobre la integración del mercado de granos en Europa y América (Dobado, García-Hiernaux y Guerrero, 2012). Usando la misma metodología econométrica, presentamos ahora: 1) la búsqueda de evidencia estadística en el Este de una “Globalización temprana” semejante a la encontrada en el Oeste desde mediados del siglo XVIII; 2) un estudio de la integración de los mercados en china y Japón y su funcionamiento en comparación con los países occidentales; 3) una discusión de la relevancia de nuestros resultados respecto al debate sobre la “Gran Divergencia”. Nuestras principales conclusiones son: 1) encontramos diferencias sustanciales entre Este y Oeste en lo que al grado de integración y al funcionamiento de los mercados de grano se refiere; 2) un cierto grado de integración puede ser alcanzado mediante combinaciones diferentes de factores (agentes, políticas, etc.) y con efectos distintos sobre el crecimiento económico a largo plazo; 3) la ausencia de una “Globalización temprana” en el Este revela la existencia de limitaciones económicas e institucionales en esta parte del mundo y contribuyó a la “Gran Divergencia” con el Oeste desde al menos el siglo XVIII.
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JEL:C22, F15, N10, N70. Very preliminary draft, please do not quote without the authors’ permission. Rafael Dobado- González acknowledges support from the Ministry of Education of Spain under grant ECO2011- 26286. Alfredo García-Hiernaux acknowledges support from Ramón Areces Foundation.
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