The Golden Age and the Origins of Protectionism黄金时代与保护主义的起源.pptVIP

The Golden Age and the Origins of Protectionism Lecture # 6 Week 3 Structure of this class Export – led growth revisited Economic performance as of 1914 Ideology The origins of protectionism Conclusion Recall from last class: the stellar performance of Latin America during third quarter of 19th C And let’s ask the question again:In what way this export-led growth period differs from the current globalization trend? At least four differences: World markets more integrated now (trade and finance) The US and then China as major trading partners The emergence of trading blocks (NAFTA, MERCOSUR, CAFTA..) WTO However, export performance continues to be viewed as an important determinant of economic performance Export – growth highly correlated with GDP Growth And, as argued in the last class that during that period - last quarter 19th C - Latin America grew as fast as the US (“Golden Age”) Export – led growth continued during up until early 20th C Catching – up with the US did not take place as Latin America had lost two centuries of sustained growth Performance as of 1914 Then…. Commodity markets became more unstable ? ? VOLATILITY Transfer of British economic hegemony in Latin America to the US Export growth continued after the World War I but volatility persisted Industrial growth started under “weakly” protective environment (lacked coherent industrial policy) Great Depression in the 1930s: Trade and economic activity slowed down considerably overall, with some countries more vulnerable than others, deflation, defaults on sovereign debt, government spending increased overall, currency devaluations → political unrest, and emergence of radical parties Six arguments for protection (Cardoso – Helwege (1992)) Volatility of primary commodity prices Declining terms of trade (Prebisch – Singer dependencia School in the 1950s) Infant industry Low wages due to FDI into labor – intensive export sector No demand spillovers Ideology “Inf