Use the symmetry-integration diagram as in Figure 8-4 (19-4) to explore the evolution of international monetary regimes
Question:
a. From 1870 to 1913, world trade flows doubled in size relative to GDP, from about 10% to 20%. Many economic historians think this was driven by exogenous declines in transaction costs, some of which were caused by changes in transport technology. How would you depict this shift for a pair of countries in the symmetry-integration diagram that started off just below the FIX line in 1870? Use the letter A to label your starting point in 1870 and use B to label the end point in 1913.
b. From 1913 to 1939, world trade flows collapsed, falling in half relative to GDP, from about 20% back to 10%. Many economic historians think this was driven by exogenous increases in transaction costs from rising transport costs and increases in tariffs and quotas. How would you depict this shift for a pair of countries in the symmetry-integration diagram that started off just above the FIX line in 1913? Use the letter B to label your starting point in 1913 and use C to label the end point in 1939.
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Related Book For
International Economics
ISBN: 978-1429278447
3rd edition
Authors: Robert C. Feenstra, Alan M. Taylor
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