Trade, Convergence and Globalisation: the dynamics of change in the international income distribution, 1950-1998

Much of the literature on economic change in the post-1945 world is permeated by two ideas: the temporal convergence of per capita incomes across economies and the spatial advance of free trade. For many economists and historians the two are linked: the reduction of trade barriers in the post-war world ushered in a new era of globalisation and that globalisation in turn helped, indeed may have been the major engine of, convergence (e.g. O’Rourke and Williamson, 1999). If this were true then it would represent one of the most important transitions of the twentieth century. Free trade was championed by the liberal market democracies and the inducement held out to other economies was that by embracing free trade they too might reach the levels of income enjoyed by the richest nations.[...]