In this episode we chat with Luigi Pascali about his paper “The Wind of Change: Maritime Technology, Trade, and Economic Development”. Luigi finds that the introduction of the steamship in the shipping industry produced an asymmetric change in trade distances among countries. Before this invention, trade routes depended on wind patterns. The steamship reduced shipping costs and time in a disproportionate manner across countries and trade routes. He also argues that only a small number of countries, characterized by more inclusive institutions, benefited from trade integration; and that globalization was the major driver of the economic divergence between the rich and the poor portions of the world in the years 1850-1900.
Paper link: DOI: https://doi.org/10.1257/aer.20140832
Learn more about Luigi: https://www.luigipascali.com/
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