American divergence: Lost decades and Emancipation collapse in Latin America and the Caribbean 1820–1870

Abstract

The period 1820-1870, commonly referred to as the 'lost decades', is widely regarded as the key moment in the opening of the gap between Latin America and the Unites States. We test this statement with a new export series and some tentative estimates of GDP trends. The overall performance of Latin American countries was quite good, although not outstanding. Mexico was hit by a foreign policy crisis, but the only real losers were the British and French colonies in the Caribbean. The emancipation of slaves caused a collapse in their exports, favoring other tropical countries, including Cuba and Brazil. Further South, independent countries such as Argentine and Chile increased their share of world trade. Overall, most of the divergence during the period 1820-1870 in the Americas was between tropical countries rather than between Latin America and North America.