Christopher Meissner

University of California, Davis | UCD · Department of Economics

The Cobden-Chevalier treaty of 1860 eliminated French import prohibitions and lowered tariffs between France and Great Britain. The policy change was largely unexpected and unusually free from direct lobbying. A series of commercial treaties with other nations followed. Post-1860, we find a significant rise in French intra-industry trade. Sectors t...

Objectives The aim of the study was to test the hypothesis that worsening mortality rates in the early 1930s were associated with increasing votes for the Nazi Party. Study design The study consist of panel data with fixed effects. Methods We used district- and city-level regression models of Nazi vote shares on changes in all-cause mortality rat...

We study the link between fiscal austerity and Nazi electoral success. Voting data from a thousand districts and a hundred cities for four elections between 1930 and 1933 show that areas more affected by austerity (spending cuts and tax increases) had relatively higher vote shares for the Nazi Party. We also find that the localities with relatively...

This paper studies French international trade main patterns in long run perspective (1836-1938). By using a new database of dis-aggregated exports, imports, custom tariffs, we document French product and geographical diversification. The originality of the paper is to provide global trend of specialization, concentration and intra-industry trade in...

The London Debt Agreement (LDA) eliminated half of West Germany's external debt. Subsequent years witnessed unprecedented economic growth. The LDA likely contributed to economic growth by creating fiscal space for public investment and social spending, restoring the full convertibility of the Deutsche Mark, and stabilising inflation. The LDA was as...

We study economic performance in France 1836–1938 through the prism of international trade. Using a new database of disaggregated exports, we document that French revealed comparative advantage moved from traditional to new manufactures and some non-manufactured goods. A strong diversification of exports begins in 1860 which decelerates from 1880....

The Cobden-Chevalier treaty of 1860 eliminated French import prohibitions and lowered tariffs on France in Britain. Policy change was unexpected by French industry and entirely free from lobbying. A series of commercial treaties with other nations followed because of the (first-ever) use of an MFN clause. Post-1860 we find a significant rise in int...

Between 1880 and 1910, Japanese exports increased in volume, changed composition, and shifted from leading industrialized countries toward poorer Asian neighbors. Using a new dataset disaggregated by product and trade partner for the universe of Japanese exports, we find extensive margins accounted for 30 percent of export growth, with trade costs...

Regional trade in South America since independence has long been much smaller than would be expected if geography were the only constraint on trade. Several potential explanations exist, including low technological and demand complementarities; low productivity; and high natural and policy barriers to trade. Focusing on the latter explanations, pol...

Belle Époque Belgium recorded an unprecedented trade boom. Exploiting a new granular trade dataset, we find that the number of products delivered abroad and destinations serviced more than doubled in less than 40 years. To explain this remarkable achievement, we study the relationship between trade costs and the intensive and extensive margins of t...

Interconnections between banking crises and fiscal crises have a long history. We document the long-run evolution from classic banking panics toward modern banking crises where financial guarantees are associated with crisis resolution. Recent crises feature a feedback loop between bank guarantees and bank holdings of local sovereign debt thereby l...

In 1953 the Western Allied powers implemented a radical debt-relief plan that would, in due course, eliminate half of West Germany’s external debt and create a series of favourable debt repayment conditions. The London Debt Agreement (LDA) correlated with West Germany experiencing the highest rate of economic growth recorded in Europe in the 1950s...

Regional trade in South America since independence has long been much smaller than would be expected if geography were the only constraint on trade. Several potential explanations exist: low technological and demand complementarities; low productivity; high barriers to trade. We first argue that none of these are mutually exclusive and different ex...

What is the connection between different forms of globalization, economic growth, and welfare? International trade, cross-border capital flows, and labor movements are three areas in which economic historians have focused their research. I critically summarize various measures of international integration in each of these spheres. I then move on to...

Is existing provision of health services in Europe affordable during the recession or could cuts damage economic growth? This debate centres on whether government spending has positive or negative effects on economic growth. In this study, we evaluate the economic effects of alternative types of government spending by estimating "fiscal multipliers...

The United States and the Global Economy: From Bretton Woods to the Current Crisis.. By WeaverFrederick S.. Lanham, MD: Rowman & Littlefield Publishers. 2011. Pp. 192. $34.95, hardcover. - Volume 73 Issue 2 - Christopher M. Meissner

The classical gold standard period, 1880-1913, witnessed deep economic integration. High capital imports were related to better growth performance but may also have created greater volatility via financial crises. I first document the substantial output losses from various types of crises. I then explore the relationship between crises and two forc...

The US advantage in per capita output, apparent from the late 19th century, is frequently attributed to its relatively large domestic market. We construct market potential measures for the US and 26 other countries between 1880 and 1913 based on a general equilibrium model of production and trade. When compared to other leading economies in 1900, t...

The recent global crisis has sparked interest in the relationship between income inequality, credit booms, and financial crises. Rajan (2010) and Kumhof and Rancière (2011) propose that rising inequality led to a credit boom and eventually to a financial crisis in the US in the first decade of the 21st century as it did in the 1920s. Data from 14 a...

Recent analysis focuses on the gold standard as a channel for the transmission of the Great Depression. Trade linkages, which loom large in the recent literature, play a smaller role. Both the gold standard and trade were associated with higher co-movement at the bilateral level during the entire interwar period. We document that fixed exchange rat...

We explore the association between income and international capital flows between 1880 and 1913. Capital inflows are associated with higher incomes per capita in the long run, but capital flows also brought incomes down in the short run via financial crises. Countries just barely made up for these losses over time, so that there is no conditional l...

A large body of cross-country empirical evidence identifies monetary policy and trade integration as key determinants of business cycle co-movement. Partially consistent with this, many argue that the re-emergence of the gold standard allowed for the global transmission of a deflationary shock in 1929 that culminated in the Great Depression. It is...

We explore the association between income and international capital flows between 1880 and 1913. Capital inflows are associated with higher incomes per capita in the long run, but capital flows also brought incomes down in the short run via financial crises. Countries just barely made up for these losses over time, so that there is no conditional l...

Power and Plenty: Trade, War, and the World Economy in the Second Millennium. By FindlayRonald and O'RourkeKevin H.. Princeton, NJ: Princeton University Press, 2007. Pp. x, 619. $29.95, paper. - Volume 71 Issue 1 - CHRISTOPHER M. MEISSNER

Previous research suggests that the Great Depression led to improvements in public health. However, these studies rely on highly aggregated national data (using fewer than 25 data points) and potentially biased measures of the Great Depression. The authors assess the effects of the Great Depression using city-level estimates of US mortality and an...

We focus on two international aspects of the Great Depression—financial crises and international trade— and try to discern lessons for the current economic crisis. Both downturns featured global banking crises which were generated by boom-slump macroeconomic cycles. During both crises, world trade collapsed faster than world incomes and the trade d...

In contrast to goods market frictions, the role of financial market frictions is not well understood in the international macroeconomics literature. This paper provides evidence on the significance of financial frictions in explaining the lack of international consumption risk sharing, in addition to goods market frictions. Using the gravity estima...

Foreign currency debt is widely believed to increase risks of financial crisis, especially after being implicated as a cause of the East Asian crisis in the late 1990s. In this paper, we study the effects of foreign currency debt on currency and debt crises and its indirect effects on short-term growth and long-run output effects in both 1880–1913...

A natural experiment is used to study exchange rate depreciation and perceived sovereign risk. France suspended coinage of silver in 1876 provoking a significant exogenous depreciation of all silver standard countries versus gold standard currencies like the British pound – the currency in which their debt was payable. The evidence suggests an exch...

What has driven trade booms and trade busts in the past and present? We employ a micro-founded measure of trade frictions consistent with leading trade theories to gauge the importance of bilateral trade costs in determining international trade flows. We construct a new balanced sample of bilateral trade flows for 130 country pairs across the Ameri...

The received view pins the adoption of labor regulation before 1914 on domestic forces. Using directed dyad-year event history analysis, we find that trade was also a pathway of diffusion. Market access served as an important instrument to encourage a level playing field. The type of trade mattered as much as the volume. In the European core, state...

We extend existing estimators for duration data that suffer from non-random sample selection to allow for time-varying covariates. Rather than a continuous-time duration model, we propose a discrete-time alternative that models the effects of sample selection at the time of selection across all subsequent years of the resulting spell. Properties of...

We develop a dynamic discrete choice model of a self-interested and unchecked ruler making decisions regarding the development of a resource rich country. Resource wealth serves as collateral and facilitates the acquisition of loans. The ruler makes the recursive choice of either staying in power to live off the productivity of the country while fa...

What determines the currency to which countries peg or "anchor" their exchange rate? Data for over 100 countries between 1980 and 1998 reveal trade network externalities are a key determinant of anchor currency choice. This implies currency anchoring strategies could be sub-optimal. Hence, certain currencies could be oversubscribed as anchors, and...

What has driven trade booms and trade busts in the past century and a half? Was it changes in global output or in the costs of international trade? To address this question, we derive a micro-founded measure of aggregate bilateral trade costs based on a standard model of trade in differentiated goods. These trade costs gauge the difference between...

To assess whether a banking system crisis increases short-term population cardiovascular mortality rates. International, longitudinal multivariate regression analysis of cardiovascular disease mortality data from 1960 to 2002 A system-wide banking crisis increases population heart disease mortality rates by 6.4% (95% CI: 2.5% to 10.2%, p < 0.01) in...

We present a new approach to study empirically the effect of the introduction of the euro on currency invoicing. Our approach uses a compositional multinomial logit model, in which currency choice depends on the characteristics of both the currency and the country. We use unique quarterly panel data of Norwegian imports from OECD countries for the...

We study the determinants and output effects of sudden stops in capital inflows during an era of intensified globalization from 1880 to 1913. Higher levels of exposure to foreign currency debt and large current account deficits associated with reliance on foreign capital greatly increased the likelihood of experiencing a sudden stop. Trade openness...

The emerging country experience was in contrast to that of the advanced core countries, which were financially mature, had credibility, could issue bonds denominated in terms of their own currency, and where there were few crises. This chapter examines whether these very different debt structures might play a role in explaining the difference in cr...

This paper shows that increases in the minimum wage rate can have ambiguous effects on the working hours and welfare of employed workers in competitive labor markets. The reason is that employers may not comply with the minimum wage legislation and instead pay a lower subminimum wage rate. If workers are risk neutral, we prove that working hours an...

We show that exposure to foreign currency debt does not necessarily increase the risk of having a financial crisis. Some countries do not suffer from financial fragility despite original sin. Before 1913 British offshoots and Scandinavia afflicted with it avoided financial meltdowns. Today many advanced countries have original sin, but few have had...

We study whether international trade fosters democracy. The likely endogeneity between democracy and trade is addressed with an instrumental variables strategy. Our instrument is a measure of natural openness obtained via the gravity model of trade à la Frankel and Romer (1999). We use this powerful instrument to obtain estimates of the causal impa...

What factors drove globalization in the late 19th century? We employ a new micro-founded measure of bilateral trade costs based on a standard model of trade in differentiated goods to address this question. These trade costs gauge the difference between observed bilateral trade and frictionless trade. They comprise tariffs, transportation costs, an...

Conditional on choosing a pegged exchange rate regime, what determines the currency to which countries peg or “anchor” their exchange rate? This paper aims to answer this question using a panel multinomial logit framework, covering more than 100 countries for the period 1980-1998. We find that trade network externalities are a key determinant of an...

We focus on the two eras of globalization: “then” (the period 1870 to 1913) and “now” (the period since the 1970s). We look at the special position in the global macroeconomy of the hegemons in each era: Britain then, and the United States now. And adducing historical data to match what we know from the contemporary record, we proceed in the tradit...

L'int�r�t de l'approche par les jeux globaux ("global games'') est pr�cis�ment d'ancrer les anticipations sur des variables exog�nes r�elles. On peut ainsi garder l'aspect auto-r�alisateur des anticipations mais en restaurant l'unicit� de l'�quilibre et donc un meilleur pouvoir pr�dictif du mod�le. Nous illustrons ces m�canismes sur deux exemples....

Tourism has been, and still is, a very profitable industry in Spain. But the Spanish model of tourism development, following a pattern set in the 1950s, is now in crisis. The crisis is apparent in the widespread overdevelopment of tourist resorts and residential facilities in coastal areas, generating high environmental, social and economic costs....

The gold standard gradually became an international monetary regime after 1870. Similarly, some nations in the European Union are waiting to adopt the euro while others have joined immediately. What explains the timing of exchange rate regime adoption? To find out, the international diffusion of the gold standard is analyzed. Duration analysis show...

We study whether international trade fosters democracy. The likely endogeneity between democracy and trade is addressed via the gravity model of trade, allowing us to obtain a measure of natural openness. This serves as our instrumental variable for actual trade openness à la Frankel and Romer (1999). We use this powerful instrument to obtain estim...

This chapter presents an historical case study for a group of countries that successfully entered the club and had largely overcome the problem of original sin by the third quarter of the twentieth century. The group consists of several former colonies of Great Britain: the United States, Canada, Australia, New Zealand, and South Africa. The chapte...

This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection a...

This paper shows that increases in the minimum wage rate can have ambiguous effects on the working hours and welfare of employed workers in competitive labor markets. The reason is that employers may not comply with the minimum wage legislation and instead pay a lower subminimum wage rate. If workers are risk neutral, we prove that working hours an...

L'int�r�t de l'approche par les jeux globaux ("global games'') est pr�cis�ment d'ancrer les anticipations sur des variables exog�nes r�elles. On peut ainsi garder l'aspect auto-r�alisateur des anticipations mais en restaurant l'unicit� de l'�quilibre et donc un meilleur pouvoir pr�dictif du mod�le. Nous illustrons ces m�canismes sur deux exemples....

This paper examines the historical origins of "Original Sin" or why countries are unable to issue long term debt domestically or borrow abroad in terms of the domestic currency. We conduct an historical case study for a group of countries that had largely overcome the problem of Original Sin by the third quarter of the twentieth century. The group...

In this paper we show that the spread of the classical gold standard in the late nineteenth century increased international trade flows. This positive effect was compounded whenever a group of countries formed a monetary union. Applying the gravity model of trade to more than 1,100 country pairs during the 1870-1910 period, we find that two countri...

Early nineteenth century New England banking exhibited high levels of lending to directors and their associates (i.e., connected lending). Today many think this arrangement can lead to inefficiency and financial fragility. This paper explores the decision making processes inside these banks and argues that connected lending was viable when many peo...

The classical gold standard only gradually became an international monetary regime after 1870. This paper provides a cross-country analysis of why countries adopted when they did. I use duration analysis to show that network externalities operating through trade channels help explain the pattern of diffusion of the gold standard. Countries adopted...

In the book Battles for the Standard: Bimetallism and the Spread of the Gold Standard in the Nineteenth Century , Ted Wilson aims to explain why the gold standard moved from an exclusively British institution at the beginning of the nineteenth century to the most widely used monetary arrangement in the world by 1910. The author offers a number of c...

We focus on three aspects of the Great Depression with important international dimensions--the gold standard, financial crises, and international trade and capital flows— and try to discern lessons for the current economic crisis. The gold standard played an important role in propagating the Great Depression and its suspension was central to recove...

I analyze the past 150 years of the international monetary system. Recent research suggests nations choose their regimes based on optimal currency area criteria. This gives rise to strategic complementarities in regime choice and multiple equilibria. The evolution of the international monetary system may involve abrupt and quick changes but may als...

Books reviewed: Henryk J. Sokalski, An Ounce of Prevention: Macedonia and the UN Experience in Preventive Diplomacy Evan, W. M. and Manion, M., Minding the Machine: Preventing Technological Disasters Feldstein, M., (ed.), Economic and Financial Crises in Emerging Market Economies Art, R. J., and Cronin, P. M., (eds), The United States and Coercive...

Globalisation is often accused of unleashing a race to the bottom in labour regulation and social protection. The evidence suggests otherwise. This column explains how, historically, trade itself was a path to better labour regulation and social entitlements. Globalisation is commonly perceived as unleashing a race-to-the-bottom in labour regulatio...

The largest global trade bust in the last 150 years (outside of wartime) occurred between early 2008 and mid-2009. The decline in trade was larger than during any one year in the Great Depression. The unique size of the trade collapse suggests that the structure of global trade has been significantly altered over recent years so as to render trade...

The international monetary 'system' serves to facilitate significant gains from trade and investment in the international economy. The last 130 years of economic history illustrate that large changes to the basis of such a system, for instance when one key currency is replaced by another, are typically associated significant negative shocks to the...

If there is a relation between trade and labor standards, it ought to turn up during the first wave of globalization. Between 1870 and 1914, the world moved from unregulated to regulated labor markets and levels of trade openness rose. In this paper, bringing together new international data sets on labor regulations and social entitlements, and tra...

Thesis (Ph. D.)--University of California, Berkeley, 2001. Includes bibliographical references (leaves 169-176).