NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

How Did the United States Become a Net Exporter of Manufactured Goods?

Douglas A. Irwin

NBER Working Paper No. 7638
Issued in April 2000
NBER Program(s):Development of the American Economy, International Trade and Investment

The United States became a net exporter of manufactured goods around 1910 after a dramatic surge in iron and steel exports began in the mid-1890s. This paper argues that natural resource abundance fueled the expansion of iron and steel exports in part by enabling a sharp reduction in the price of U.S. exports relative to other competitors. The commercial exploitation of the Mesabi iron ore range, for example, reduced domestic ore prices by 60 percent in the mid-1890s and was equivalent to nearly 30 years of industry productivity growth in its effect on iron and steel export prices. The results are consistent with Wright's (1990) finding that U.S. manufactured exports were natural resource intensive at this time and have implications for recent work suggesting that resource abundance may be a curse rather than a blessing for economic development.

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Document Object Identifier (DOI): 10.3386/w7638

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