NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Capital Goods Prices, Global Capital Markets and Accumulation: 1870-1950

William J. Collins, Jeffrey G. Williamson

NBER Working Paper No. 7145
Issued in May 1999
NBER Program(s):   EFG   ITI   DAE

Conventional wisdom has it that global financial markets were as well integrated in the 1890s as in the 1990s, but that it took several post-war decades to regenerate the connections that existed before 1914. This view has emerged from a variety of tests for world financial capital market integration ranging from the correlation of saving and investment aggregates to the dispersion of security prices and real interest rates. Presumably, we care about global capital market integration because it can have an impact on accumulation performance and the global distribution of the capital stock. Oddly enough, however, the relative price of capital goods, an important component of the user cost of capital, has never been incorporated into studies of capital market integration and almost never in comparative studies of pre-1950 economic growth. This could be an important omission. This paper explores the issue with a panel data base 1870-1950 for eleven OECD countries. It turns out that capital goods prices have been central to accumulation, and therefore to growth and convergence. They have also been as important to the evolution of global capital markets as have been interest rates and other financial costs.

download in pdf format
   (447 K)

email paper

This paper is available as PDF (447 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w7145

Published: Collins, William J. and Jeffrey G. Williamson. "Capital-Goods Prices And Investment, 1879-1950," Journal of Economic History, 2001, v61(1,Mar), 59-94.

Users who downloaded this paper also downloaded these:
Obstfeld w6559 The Global Capital Market: Benefactor or Menace?
Findlay and O'Rourke Commodity Market Integration, 1500–2000
Hulten w5569 Quality Change in Capital Goods and Its Impact on Economic Growth
Lee w4725 Capital Goods Imports and Long-Run Growth
Eaton and Kortum w8070 Trade in Capital Goods
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us