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Speech
ChairmanBenS.Bernanke
AttheFederalReserveBankofKansasCity'sThirtiethAnnualEconomicSymposium,
JacksonHole,Wyoming
August25,2006

GlobalEconomicIntegration:What'sNewandWhat'sNot?

Whengeographersstudytheearthanditsfeatures,distanceisoneofthebasicmeasurestheyuseto
describethepatternstheyobserve.Distanceisanelasticconcept,however.Thephysicaldistance
alongagreatcirclefromWausau,WisconsintoWuhan,Chinaisfixedat7,020miles.Buttoan
economist,thedistancefromWausautoWuhancanalsobeexpressedinothermetrics,suchasthe
costofshippinggoodsbetweenthetwocities,thetimeittakesforamessagetotravelthose7,020
miles,andthecostofsendingandreceivingthemessage.Economicallyrelevantdistancesbetween
WausauandWuhanmayalsodependonwhattradeeconomistsrefertoasthe"widthoftheborder,"
whichreflectstheextracostsofeconomicexchangeimposedbyfactorssuchastariffandnontariff
barriers,aswellascostsarisingfromdifferencesinlanguage,culture,legaltraditions,andpolitical
systems.

Oneofthedefiningcharacteristicsoftheworldinwhichwenowliveisthat,bymosteconomically
relevantmeasures,distancesareshrinkingrapidly.Theshrinkingglobehasbeenamajorsourceof
thepowerfulwaveofworldwideeconomicintegrationandincreasedeconomicinterdependencethat
wearecurrentlyexperiencing.Thecausesandimplicationsofdecliningeconomicdistancesand
increasedeconomicintegrationare,ofcourse,thesubjectofthisconference.

Thepaceofglobaleconomicchangeinrecentdecadeshasbeenbreathtakingindeed,andthefull
implicationsofthesedevelopmentsforallaspectsofourliveswillnotbeknownformanyyears.
Historymayprovidesomeguidance,however.Theprocessofglobaleconomicintegrationhasbeen
goingonforthousandsofyears,andthesourcesandconsequencesofthisintegrationhaveoften
borneatleastaqualitativeresemblancetothoseassociatedwiththecurrentepisode.Inmyremarks
todayIwillbrieflyreviewsomepastepisodesofglobaleconomicintegration,identifysome
commonthemes,andthenputforwardsomewaysinwhichIseethecurrentepisodeassimilarto
anddifferentfromthepast.Indoingso,Ihopetoprovidesomebackgroundandcontextforthe
importantdiscussionsthatwewillbehavingoverthenextfewdays.

AShortHistoryofGlobalEconomicIntegration
AsIjustnoted,theeconomicintegrationofwidelyseparatedregionsishardlyanewphenomenon.
Twothousandyearsago,theRomansunifiedtheirfarflungempirethroughanextensive
transportationnetworkandacommonlanguage,legalsystem,andcurrency.Onehistorianrecently
observedthat"acitizenoftheempiretravelingfromBritaintotheEuphratesinthemidsecond
centuryCEwouldhavefoundinvirtuallyeverytownalongthejourneyfoods,goods,landscapes,
buildings,institutions,laws,entertainment,andsacredelementsnotdissimilartothoseinhisown
community."(Hitchner,2003,p.398).Thisunificationpromotedtradeandeconomicdevelopment.

Amillenniumandahalflater,attheendofthefifteenthcentury,thevoyagesofColumbus,Vasco
daGama,andotherexplorersinitiatedaperiodoftradeoverevenvasterdistances.Thesevoyages
ofdiscoveryweremadepossiblebyadvancesinEuropeanshiptechnologyandnavigation,
includingimprovementsinthecompass,intherudder,andinsaildesign.Thesealanesopenedby
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thesevoyagesfacilitatedathrivingintercontinentaltradealthoughthehighcostsofandtherisks
associatedwithlongvoyagestendedtolimittradetoarelativelysmallsetofcommoditiesofhigh
valuerelativetotheirweightandbulk,suchassugar,tobacco,spices,tea,silk,andpreciousmetals.
Muchofthistradeultimatelycameunderthecontrolofthetradingcompaniescreatedbythe
EnglishandtheDutch.Thesestatesanctionedmonopoliesenjoyedandaggressivelyprotected
highmarkupsandprofits.Influencedbytheprevailingmercantilistviewoftradeasazerosum
game,Europeannationstatescompetedtodominatelucrativemarkets,acompetitionthat
sometimesspilledoverintomilitaryconflict.

Theexpansionofinternationaltradeinthesixteenthcenturyfacedsomedomesticopposition.For
example,inaninterestingcombinationofmercantilistthoughtandsocialcommentary,thereformer
MartinLutherwrotein1524:

"Butforeigntrade,whichbringsfromCalcuttaandIndiaandsuchplaceswareslike
costlysilks,articlesofgold,andspiceswhichministeronlytoostentationbutserveno
usefulpurpose,andwhichdrainawaythemoneyofthelandandpeoplewouldnotbe
permittedifwehadpropergovernmentandprinces...GodhascastusGermansoffto
suchanextentthatwehavetoflingourgoldandsilverintoforeignlandsandmakethe
wholeworldrich,whileweourselvesremainbeggars."(James,2001,p.8)

Globaleconomicintegrationtookanothermajorleapforwardduringtheperiodbetweentheendof
theNapoleonicWarsin1815andthebeginningofWorldWarI.Internationaltradeagainexpanded
significantlyasdidcrossborderflowsoffinancialcapitalandlabor.Onceagain,newtechnologies
playedanimportantroleinfacilitatingintegration:Transportcostsplungedassteampowerreplaced
thesailandrailroadsreplacedthewagonorthebarge,andanambitiouspublicworksproject,the
openingoftheSuezCanal,significantlyreducedtraveltimesbetweenEuropeandAsia.
Communicationcostslikewisefellasthetelegraphcameintocommonuse.Oneobserverinthelate
1860sdescribedthejustcompletedtransAtlantictelegraphcableashaving"annihilatedbothspace
andtimeinthetransmissionofintelligence"(Standage,1998,p.90).Tradeexpandedthevarietyof
availablegoods,bothinEuropeandelsewhere,andasthetrademonopoliesofearliertimeswere
replacedbyintensecompetition,pricesconvergedgloballyforawiderangeofcommodities,
includingspices,wheat,cotton,pigiron,andjute(FindlayandO'Rourke,2002).

ThestructureoftradeduringthepostNapoleonicperiodfolloweda"coreperiphery"pattern.
CapitalrichWesternEuropeancountries,particularlyBritain,werethecenter,orcore,ofthetrading
systemandtheinternationalmonetarysystem.Countriesinwhichnaturalresourcesandlandwere
relativelyabundantformedtheperiphery.Manufacturedgoods,financialcapital,andlabortendedto
flowfromthecoretotheperiphery,withnaturalresourcesandagriculturalproductsflowingfrom
theperipherytothecore.Thecompositionofthecoreandtheperipheryremainedfairlystable,with
oneimportantexceptionbeingtheUnitedStates,which,overthecourseofthenineteenthcentury,
madethetransitionfromtheperipherytothecore.TheshareofmanufacturedgoodsinU.S.exports
rosefromlessthan30percentin1840to60percentin1913,andtheUnitedStatesbecameanet
exporteroffinancialcapitalbeginninginthelate1890s.1

Forthemostpart,governmentpoliciesduringthiserafosteredopennesstotrade,capitalmobility,
andmigration.Britainunilaterallyrepealeditstariffsongrains(thesocalledcornlaws)in1846,
andaseriesofbilateraltreatiessubsequentlydismantledmanybarrierstotradeinEurope.A
growingappreciationfortheprincipleofcomparativeadvantage,asforcefullyarticulatedbyAdam
SmithandDavidRicardo,mayhavemadegovernmentsmorereceptivetotheviewthat
internationaltradeisnotazerosumgamebutcanbebeneficialtoallparticipants.

Thatsaid,domesticoppositiontofreetradeeventuallyintensified,ascheapgrainfromtheperiphery
putdownwardpressureontheincomesoflandownersinthecore.Beginninginthelate1870s,many
Europeancountriesraisedtariffs,withBritainbeingaprominentexception.Britaindidrespondto
protectionistpressuresbypassinglegislationthatrequiredthatgoodsbestampedwiththeircountry
oforigin.Thisstepprovidedadditionalgristfortradeprotesters,however,astheauthorofone
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Britishantifreetradepamphletinthe1890slamentedthateventhepencilheusedtowritehis
protestwasmarked"madeinGermany"(James,2001,p.15).IntheUnitedStates,tariffson
manufactureswereraisedinthe1860storelativelyhighlevels,wheretheyremaineduntilwellinto
thetwentiethcentury.Despitetheseincreasedbarrierstotheimportationofgoods,theUnitedStates
wasremarkablyopentoimmigrationthroughoutthisperiod.

Unfortunately,theinternationaleconomicintegrationachievedduringthenineteenthcenturywas
largelyunraveledinthetwentiethbytwoworldwarsandtheGreatDepression.AfterWorldWarII,
themajorpowersundertookthedifficulttasksofrebuildingboththephysicalinfrastructureandthe
internationaltradeandmonetarysystems.TheindustrialcorenowincludinganemergentJapanas
wellastheUnitedStatesandWesternEuropeultimatelysucceededinrestoringasubstantial
degreeofeconomicintegration,thoughdecadespassedbeforetradeasashareofglobaloutput
reachedpreWorldWarIlevels.

Onemanifestationofthisreintegrationwastheriseofsocalledintraindustrytrade.Researchersin
thelate1960sandthe1970snotedthatanincreasingshareofglobaltradewastakingplacebetween
countrieswithsimilarresourceendowments,tradingsimilartypesofgoodsmainlymanufactured
productstradedamongindustrialcountries.2Unlikeinternationaltradeinthenineteenthcentury,
theseflowscouldnotbereadilyexplainedbytheperspectivesofRicardooroftheSwedish
economistsEliHeckscherandBertilOhlinthatemphasizednationaldifferencesinendowmentsof
naturalresourcesorfactorsofproduction.Ininfluentialwork,PaulKrugmanandothershavesince
arguedthatintraindustrytradecanbeattributedtofirms'effortstoexploiteconomiesofscale,
coupledwithatasteforvarietybypurchasers.

Postwareconomicreintegrationwassupportedbyseveralfactors,bothtechnologicalandpolitical.
Technologicaladvancesfurtherreducedthecostsoftransportationandcommunication,astheair
freightfleetwasconvertedfrompropellertojetandintermodalshippingtechniques(including
containerization)becamecommon.Telephonecommunicationexpanded,anddigitalelectronic
computingcameintouse.Takentogether,theseadvancesallowedaneverbroadeningsetof
productstobetradedinternationally.Inthepolicysphere,tariffbarrierswhichhadbeen
dramaticallyincreasedduringtheGreatDepressionwerelowered,withmanyofthesereductions
negotiatedwithinthemultilateralframeworkprovidedbytheGeneralAgreementonTariffsand
Trade.Globalizationwas,tosomeextent,alsosupportedbygeopoliticalconsiderations,as
economicintegrationamongtheWesternmarketeconomiesbecameviewedaspartofthestrategy
forwagingtheColdWar.However,althoughtradeexpandedsignificantlyintheearlypostWorld
WarIIperiod,manycountriesrecallingtheexchangerateandfinancialcrisesofthe1930s
adoptedregulationsaimedatlimitingthemobilityoffinancialcapitalacrossnationalborders.

Severalconclusionsemergefromthisbriefhistoricalreview.Perhapstheclearestconclusionisthat
newtechnologiesthatreducethecostsoftransportationandcommunicationhavebeenamajor
factorsupportingglobaleconomicintegration.Ofcourse,technologicaladvanceisitselfaffectedby
theeconomicincentivesforinventiveactivitytheseincentivesincreasewiththesizeofthemarket,
creatingsomethingofavirtuouscircle.Forexample,inthenineteenthcentury,thehighpotential
returntoimprovingcommunicationsbetweenEuropeandtheUnitedStatespromptedintensive
worktobetterunderstandelectricityandtoimprovetelegraphtechnologyeffortsthattogether
helpedmakethetransAtlanticcablepossible.

Asecondconclusionfromhistoryisthatnationalpolicychoicesmaybecriticaldeterminantsofthe
extentofinternationaleconomicintegration.Britain'sembraceoffreetradeandfreecapitalflows
helpedtocatalyzeinternationalintegrationinthenineteenthcentury.FifteenthcenturyChina
providesanopposingexample.Intheearlydecadesofthatcentury,theChinesesailedgreatfleetsto
theportsofAsiaandEastAfrica,includingshipsmuchlargerthanthosethattheEuropeanswereto
uselaterinthevoyagesofdiscovery.Theseexpeditionsapparentlyhadonlylimitedeconomic
impact,however.Ultimately,internalpoliticalstrugglesledtoacurtailmentoffurtherChinese
exploration(Findlay,1992).Evidently,inthiscase,differentchoicesbypoliticalleadersmighthave
ledtoverydifferenthistoricaloutcomes.
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Athirdobservationisthatsocialdislocation,andconsequentlyoftensocialresistance,mayresult
wheneconomiesbecomemoreopen.Animportantsourceofdislocationisthatastheprincipleof
comparativeadvantagesuggeststheexpansionoftradeopportunitiestendstochangethemixof
goodsthateachcountryproducesandtherelativereturnstocapitalandlabor.Theresultingshiftsin
thestructureofproductionimposecostsonworkersandbusinessownersinsomeindustriesand
thuscreateaconstituencythatopposestheprocessofeconomicintegration.Morebroadly,increased
economicinterdependencemayalsoengenderoppositionbystimulatingsocialorculturalchange,or
bybeingperceivedasbenefitingsomegroupsmuchmorethanothers.

TheCurrentEpisodeofGlobalEconomicIntegration
Howdoesthecurrentwaveofglobaleconomicintegrationcomparewithpreviousepisodes?Ina
numberofways,theremarkableeconomicchangesthatweobservetodayarebeingdrivenbythe
samebasicforcesandarehavingsimilareffectsasinthepast.Perhapsmostimportant,
technologicaladvancescontinuetoplayanimportantroleinfacilitatingglobalintegration.For
example,dramaticimprovementsinsupplychainmanagement,madepossiblebyadvancesin
communicationandcomputertechnologies,havesignificantlyreducedthecostsofcoordinating
productionamonggloballydistributedsuppliers.

Anothercommonfeatureofthecontemporaryeconomiclandscapeandtheexperienceofthepastis
thecontinuedbroadeningoftherangeofproductsthatareviewedastradable.Inpart,this
broadeningsimplyreflectsthewiderrangeofgoodsavailabletodayhightechconsumergoods,for
exampleaswellasongoingdeclinesintransportationcosts.Particularlystriking,however,isthe
extenttowhichinformationandcommunicationtechnologiesnowfacilitateactiveinternational
tradeinawiderangeofservices,fromcallcenteroperationstosophisticatedfinancial,legal,
medical,andengineeringservices.

Thecriticalroleofgovernmentpolicyinsupporting,oratleastpermitting,globaleconomic
integration,isathirdsimilaritybetweenthepastandthepresent.Progressintradeliberalizationhas
continuedinrecentdecadesthoughnotalwaysatasteadypace,astherecentDohaRound
negotiationsdemonstrate.Moreover,theinstitutionalframeworksupportingglobaltrade,most
importantlytheWorldTradeOrganization,hasexpandedandstrengthenedovertime.Regional
frameworksandagreements,suchastheNorthAmericanFreeTradeAgreementandtheEuropean
Union's"singlemarket,"havealsopromotedtrade.Governmentrestrictionsoninternationalcapital
flowshavegenerallydeclined,andthe"softinfrastructure"supportingthoseflowsforexample,
legalframeworksandaccountingruleshaveimproved,inpartthroughinternationalcooperation.

Inyetanotherparallelwiththepast,however,socialandpoliticaloppositiontorapideconomic
integrationhasalsoemerged.Asinthepast,muchofthisoppositionisdrivenbythedistributional
impactofchangesinthepatternofproduction,butotherconcernshavebeenexpressedaswellfor
example,abouttheeffectsofglobaleconomicintegrationontheenvironmentoronthepoorest
countries.

What,then,isnewaboutthecurrentepisode?Eachobserverwillhavehisorherownperspective,
but,tome,fourdifferencesbetweenthecurrentwaveofglobaleconomicintegrationandpast
episodesseemmostimportant.First,thescaleandpaceofthecurrentepisodeisunprecedented.For
example,inrecentyears,globalmerchandiseexportshavebeenabove20percentofworldgross
domesticproduct,comparedwithabout8percentin1913andlessthan15percentasrecentlyas
1990andinternationalfinancialflowshaveexpandedevenmorequickly.3Butthesedata
understatethemagnitudeofthechangethatwearenowexperiencing.TheemergenceofChina,
India,andtheformercommunistbloccountriesimpliesthatthegreaterpartoftheearth'spopulation
isnowengaged,atleastpotentially,intheglobaleconomy.Therearenohistoricalantecedentsfor
thisdevelopment.Columbus'svoyagetotheNewWorldultimatelyledtoenormouseconomic
change,ofcourse,butthefullintegrationoftheNewandtheOldWorldstookcenturies.Incontrast,
theeconomicopeningofChina,whichbeganinearnestlessthanthreedecadesago,isproceeding
rapidlyand,ifanything,seemstobeaccelerating.

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Second,thetraditionaldistinctionbetweenthecoreandtheperipheryisbecomingincreasinglyless
relevant,asthematureindustrialeconomiesandtheemergingmarketeconomiesbecomemore
integratedandinterdependent.Notably,thenineteenthcenturypattern,inwhichthecoreexported
manufacturestotheperipheryinexchangeforcommodities,nolongerholds,asanincreasingshare
ofworldmanufacturingcapacityisnowfoundinemergingmarkets.Anevenmorestrikingaspect
ofthebreakdownofthecoreperipheryparadigmisthedirectionofcapitalflows:Inthenineteenth
century,thecountryatthecenteroftheworld'seconomy,GreatBritain,rancurrentaccount
surplusesandexportedfinancialcapitaltotheperiphery.Today,theworld'slargesteconomy,thatof
theUnitedStates,runsacurrentaccountdeficit,financedtoasubstantialextentbycapitalexports
fromemergingmarketnations.

Third,productionprocessesarebecominggeographicallyfragmentedtoanunprecedenteddegree.4
Ratherthanproducinggoodsinasingleprocessinasinglelocation,firmsareincreasinglybreaking
theproductionprocessintodiscretestepsandperformingeachstepinwhateverlocationallows
themtominimizecosts.Forexample,theU.S.chipproducerAMDlocatesmostofitsresearchand
developmentinCaliforniaproducesinTexas,Germany,andJapandoesfinalprocessingand
testinginThailand,Singapore,Malaysia,andChinaandthensellstomarketsaroundtheglobe.To
besure,internationalproductionchainsarenotentirelynew:In1911,HenryFordopenedhis
company'sfirstoverseasfactoryinManchester,England,tobeclosertoagrowingsourceof
demand.ThefactoryproducedbodiesfortheModelAautomobile,butimportedthechassisand
mechanicalpartsfromtheUnitedStatesforassemblyinManchester.Althoughexampleslikethis
oneillustratethehistoricalcontinuityoftheprocessofeconomicintegration,todaythegeographical
extensionofproductionprocessesisfarmoreadvancedandpervasivethaneverbefore.Asanaside,
someinterestingeconomicquestionsareraisedbythefactthatinsomecasesinternational
productionchainsaremanagedalmostentirelywithinasinglemultinationalcorporation(roughly40
percentofU.S.merchandisetradeisclassifiedasintrafirm)andinotherstheyarebuiltthrough
arm'slengthtransactionsamongunrelatedfirms.Buttheempiricalevidenceinbothcasessuggests
thatsubstantialproductivitygainscanoftenbeachievedthroughthedevelopmentofglobalsupply
chains.5

Thefinalitemonmylistofwhatisnewaboutthecurrentepisodeisthatinternationalcapital
marketshavebecomesubstantiallymoremature.Althoughthenetcapitalflowsofacenturyago,
measuredrelativetoglobaloutput,arecomparabletothoseofthepresent,grossflowstodayare
muchlarger.Moreover,capitalflowsnowtakemanymoreformsthaninthepast:Inthenineteenth
century,internationalportfolioinvestmentswereconcentratedinthefinanceofinfrastructure
projects(suchastheAmericanrailroads)andinthepurchaseofgovernmentdebt.Today,
internationalinvestorsholdanarrayofdebtinstruments,equities,andderivatives,includingclaims
onabroadrangeofsectors.Flowsofforeigndirectinvestmentarealsomuchlargerrelativeto
outputthantheywerefiftyorahundredyearsago.6AsInotedearlier,theincreaseincapitalflows
owesmuchtocapitalmarketliberalizationandfactorssuchasthegreaterstandardizationof
accountingpracticesaswellastotechnologicaladvances.

Conclusion
Byalmostanyeconomicallyrelevantmetric,distanceshaveshrunkconsiderablyinrecentdecades.
Asaconsequence,economicallyspeaking,WausauandWuhanaretodaycloserandmore
interdependentthaneverbefore.Economicandtechnologicalchangesarelikelytoshrinkeffective
distancesstillfurtherincomingyears,creatingthepotentialforcontinuedimprovementsin
productivityandlivingstandardsandforareductioninglobalpoverty.

Furtherprogressinglobaleconomicintegrationshouldnotbetakenforgranted,however.
Geopoliticalconcerns,includinginternationaltensionsandtherisksofterrorism,alreadyconstrain
thepaceofworldwideeconomicintegrationandmaydosoevenmoreinthefuture.And,asinthe
past,thesocialandpoliticaloppositiontoopennesscanbestrong.Althoughthisoppositionhas
manysources,Ihavesuggestedthatmuchofitarisesbecausechangesinthepatternsofproduction
arelikelytothreatenthelivelihoodsofsomeworkersandtheprofitsofsomefirms,evenwhenthese

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changesleadtogreaterproductivityandoutputoverall.Thenaturalreactionofthosesoaffectedis
toresistchange,forexample,byseekingthepassageofprotectionistmeasures.Thechallengefor
policymakersistoensurethatthebenefitsofglobaleconomicintegrationaresufficientlywidely
sharedforexample,byhelpingdisplacedworkersgetthenecessarytrainingtotakeadvantageof
newopportunitiesthataconsensusforwelfareenhancingchangecanbeobtained.Buildingsucha
consensusmaybefarfromeasy,atboththenationalandthegloballevels.However,theeffortis
wellworthmaking,asthepotentialbenefitsofincreasedglobaleconomicintegrationarelarge
indeed.

References

Bloom,Nick,RaffaellaSadun,andJohnVanReenen(2006)."ItAin'tWhatYouDoIt'stheWay
ThatYouDoI.T.InvestigatingtheProductivityMiracleUsingtheOverseasActivitiesofU.S.
Multinationals,"unpublishedpaper,CentreforEconomicPerformance,March.

Bordo,Michael,BarryEichengreen,andDouglasIrwin(1999)."IsGlobalizationTodayReally
DifferentthanGlobalizationaHundredYearsAgo?"NBERWorkingPaperNo.7195,June.

Corrado,Carol,PaulLengermann,andLarrySlifman(2005)."TheContributionofMNCstoU.S.
ProductivityGrowth,19772000,"unpublishedpaper,BoardofGovernorsoftheFederalReserve
System,July.

Criscuolo,Chiara,andRalfMartin(2005)."MultinationalsandU.S.ProductivityLeadership:
EvidencefromGreatBritain,"CentreforEconomicPerformance,DiscussionPaperNo.672,
January.

Doms,MarkE.andJ.BradfordJensen(1998)."ComparingWages,Skills,andProductivity
betweenDomesticallyandForeignOwnedManufacturingEstablishmentsintheUnitedStates,"in
R.E.Baldwin,R.E.Lipsey,andJ.DavidRichardson,eds.,GeographyandOwnershipasBasesfor
EconomicAccounting,NBERStudiesinIncomeandWealth,vol.59,Chicago,Ill.:Universityof
ChicagoPress,pp.23558.

Findlay,Ronald(1992)."TheRootsofDivergence:WesternEconomicHistoryinComparative
Perspective,"AEAPapersandProceedings,vol.82:2,May,pp.15861.

Findlay,Ronald,andKevinO'Rourke(2002)."CommodityMarketIntegration15002000,"Centre
forEconomicPolicyResearch,DiscussionPaperNo.3125,January.

Grubel,Herbert,andP.J.Lloyd(1975).IntraIndustryTrade,NewYork,NewYork:JohnWiley&
Sons.

Hanson,Gordon,RaymondMataloni,andMatthewSlaughter(2005)."VerticalProduction
NetworksinMultinationalFirms,"ReviewofEconomicsandStatistics,vol.87:4,November.

HistoricalStatisticsoftheUnitedStates:EarliestTimestoPresent(MillennialEdition)(2006).New
York,NewYork:CambridgeUniversityPress.

Hitchner,Bruce(2003)."RomanEmpire,"inJoelMokyred.,TheOxfordEncyclopediaofEconomic
History,Oxford,England:OxfordUniversityPress,vol.4,pp.397400.

James,Harold(2001)TheEndofGlobalization:LessonsfromtheGreatDepression,Cambridge,
Massachusetts:HarvardUniversityPress.

Kurz,Christopher(2006)."OutstandingOutsourcers:AFirmandPlantLevelAnalysisof
ProductionSharing,"FinanceandEconomicsDiscussionSeries200604,FederalReserveBoard,
March.

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Maddison,Angus(2001).TheWorldEconomy:AMillenialPerspective,Paris,France:OECD
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Standage,Tom(1998).TheVictorianInternet,NewYork,NewYork:WalkerPublishingCompany.

Footnotes

1.DataarefromHistoricalStatisticsoftheUnitedStates(2006).Returntotext

2.See,forexample,GrubelandLloyd(1975).Returntotext

3.Maddison(2001)andInternationalMonetaryFunddata.Returntotext

4.See,forexample,Hanson,Mataloni,andSlaughter(2005).Returntotext

5.SomeofthekeyempiricalpapersinthisliteratureareDomsandJensen(1998)Criscuoloand
Martin(2005)Corrado,Lengermann,andSlifman(2005)Bloom,Sadun,andVanReenen(2006),
andKurz(2006).Returntotext

6.See,forexample,Bordo,Eichengreen,andIrwin(1999).Returntotext

Returntotop

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