The Anatomy of a Trade Collapse: The UK, 1929-33

33 Pages Posted: 29 Jan 2018

See all articles by Alan de Bromhead

Alan de Bromhead

Queen's University Management School

Alan Fernihough

Queen's University Belfast - Queen's Management School

Markus Lampe

Vienna University of Economics and Business

Kevin O'Rourke

University of Oxford

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Date Written: January 2018

Abstract

A recent literature explores the nature and causes of the collapse in international trade during 2008 and 2009. The decline was particularly great for automobiles and industrial supplies; it occurred largely along the intensive margin; quantities fell by more than prices; and prices fell less for differentiated products. Do these stylised facts apply to trade collapses more generally? This paper uses detailed, commodity specific information on UK imports between 1929 and 1933, to see to what extent the trade collapses of the Great Depression and Great Recession resembled each other. It also compares the free trading trade collapse of 1929-31 with the protectionist collapse of 1931-3, to see to what extent protection, and gradual recovery from the Great Depression, mattered for UK trade patterns. Deflation was a feature of the 1930s trade collapse, and after 1931 protectionism made the UK's trade collapse geographically unbalanced. Many other features of the two trade collapses are remarkably similar, however. Both took place along the intensive rather than the extensive margin; the same types of goods were particularly badly hit in both instances; and prices of differentiated durable manufactured goods barely fell on either occasion.

Suggested Citation

de Bromhead, Alan and Fernihough, Alan and Lampe, Markus and O'Rourke, Kevin, The Anatomy of a Trade Collapse: The UK, 1929-33 (January 2018). NBER Working Paper No. w24252, Available at SSRN: https://ssrn.com/abstract=3112039

Alan De Bromhead (Contact Author)

Queen's University Management School ( email )

25 University Square
Belfast, Northern Ireland BT7 1NN
Northern Ireland

Alan Fernihough

Queen's University Belfast - Queen's Management School ( email )

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

Markus Lampe

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

Kevin O'Rourke

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

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