Foreign Trade and Economic Growth: Lessons from Britain and France, 1850 to 1913

Abstract

xpanding exports can stimulate economic growth or retard it. The same is true of increasing imports, and of tariffs which reduce imports. And a decline in the rate of growth of exports can slow down the rate of economic growth, or speed it up. The purpose of this paper is to set out some simple models 2 of the relations between foreign trade and national economic growth, to list the differences in their assumptions, and to illustrate them with reference to the experience of Britain and France prior to World War I. In the course of the exercise, opportunity will be taken to review the work of a number of historians and economists who have explained domestic economic growth in these countries in terms of foreign trade. If expanding exports can either speed or slow down economic growth, depending upon the assumptions of the model, it is of course no explanation of historical experience to state that growth is or is not the result of changes in exports, without specifying the assumptions of the model employed and their relevance to the historical scene.