Graff Michael - Growth of the International Economy, 1820-2015

Growth of the International Economy, 18202015

Kenwood and Lougheed's classic book has been the benchmark introduction to the development of the global economy for decades. For this fifth edition, Michael Graff has brought the story up to date to include events from the early part of the twenty-first century continued globalization, the emergence of Asia as an economic power and the greater role played by business on the international scene.

Beginning with the Industrial Revolution, the book charts the long nineteenth century, the impact of colonialism, the fast pace of technology growth and the impact of global wars.

New features in this edition include:

a prologue explaining the initial conditions faced by the world economy in 1820, detailing the beginnings of international trade and the influence of slavery;

greater coverage of developing countries;

increased coverage of the First and Second World Wars and of the twentieth century;

a number of appendices outlining the economic concepts and theories underlying the text.

This new edition of Growth of the International Economy provides the reader with a clear understanding of the factors which have been instrumental in creating the economic environment we face 200 years after the Industrial Revolution.

Michael Graff is Head of the Business Cycle Research Division at KOF Swiss Economic Institute, ETH Zurich, Switzerland. He is also Professor of Development Economics at Jacobs University Bremen, Germany.

A. G. Kenwood retired as Head of the Department of Economics at the University of Queensland, Australia in 1989. He retained his interest in teaching (at universities in Queensland and Papua New Guinea), research and publishing in his areas of interest Australian and British economic history and development. George was also an Honorary Research Consultant at the University of Queensland until he passed away in 2005.

A. L. Lougheed was an educator, first as a primary and secondary teacher, then as Lecturer and Reader in Economics at the University of Queensland, Australia. Alan retained his keen interest in research, publishing and teaching (at universities in Queensland) after his retirement in 1992. He was an Honorary Research Consultant at the University of Queensland until he passed away in 2002.

Growth of the

International Economy, 18202015

Fifth edition

Michael Graff, A. G. Kenwood and A. L. Lougheed

First published 2014 by
George Allen & Unwin Publishers Ltd.
This edition published 2014
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

Simultaneously published in the USA and Canada
by Routledge
711 Third Avenue, New York, NY 10017

Routledge is an imprint of the Taylor & Francis Group, an informa business

2014 Michael Graff, A. G. Kenwood and A. L. Lougheed

The right of Michael Graff, A.G. Kenwood and A.L. Lougheed to be
identified as authors of this work has been asserted by them in accordance
with the Copyright, Designs and Patent Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced or
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British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library

British Library Cataloguing in Publication Data
Kenwood, A. G.
Growth of the international economy, 18202015/
A.G. Kenwood, A.L. Lougheed, and Michael Graff. [Fifth edition].
pages cm
Includes bibliographical references and index.
1. International economic relationsHistory.
2. Economic history.
I. Lougheed, A. L. II. Graff, Michael. III. Title.
HF1359.K465 2013
337dc23 2013002986

ISBN: 978-0-415-47609-6 (hbk)
ISBN: 978-0-415-47610-2 (pbk)
ISBN: 978-0-203-74444-4 (ebk)

Typeset in Bellgothic and Perpetua
by Sunrise Setting Ltd, Paignton, UK

Contents

George Kenwood and Alan Lougheed published the first edition of The Growth of the International Economy, 18201960 in 1971 and subsequently updated and revised the text repeatedly. The fourth and last revision by these authors, The Growth of the International Economy, 18202000 , came out in 1999. For this, they could refer to data and events up to 19989. The previous edition thus covered the collapse of the GDR (East Germany) in 1989 and of the Soviet Union in 1991 and the first years of transition of what had been the centrally planned economies of Eastern and Central Europe into capitalist market economies. The establishment of the World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA), both in 1994, were included, and the 1997 Asian financial crisis was briefly mentioned, too, although not in much detail, as its outcome had not been obvious when the manuscript was finished.

Although increasing inequality and unemployment and the risk of instability in the international economy of the closing millennium were reflected in the final chapters, as were the sufferings brought about by the dismantling of the social security provision in the former Soviet bloc countries, the book by and large maintained a thoroughly optimistic attitude towards the advance of the market economy and its effects on living conditions around the globe.

Since then, the Russian financial crises of 19989, the information technology bubble of 19972000 and, most importantly, the 2007 burst of the US subprime mortgage bubble that dragged the world economy into recession have occurred. The recent experience has thus generally led to a more sceptical view of globalization, in particular regarding the financial sector. In international trade, persistent deficits and, correspondingly, surpluses are recorded, and neither economists nor politicians are sure whether the inevitable reversal will proceed smoothly or not. High rates of GDP growth have lifted millions of people above the poverty line, but far too many are still left behind. Migrants from the poorer parts of the world are drowning by the thousands every year in desperate attempts to reach the shores of wealthier economies, and a better life. Climate change is all but evident, but no decisive steps to bring it to a halt have been agreed upon so far, and neither are any in sight.

We do not know how far George Kenwood and Alan Lougheed would have revised their views, given the experience of the last one and a half decades, had they not both passed away before they could prepare another revision of the book. The task of preparing this fifth edition is hence a delicate one, since they are not here to discuss and cannot object. Given this, I have left their structure and text as intact as possible. In offers a tentative outlook into the future.