Globalisation and Economic Growth: A Historical Perspective

For present purposes globalisation can be thought of as a process of integration of goods and capital markets across the world in which barriers to international trade and foreign investment are reduced. Globalisation can be a result either of technological developments that reduce transport costs, improve information flows etc. or of policy changes that reduce protectionism, liberalise foreign investment rules and make migration easier. Although since the mid-19th century when the steamship, railroad and telegraph arrived, technological change has consistently been pro-globalisation, trends in economic policy have been much more variable. In particular, the interwar period saw a globalisation backlash characterised by trade wars and capital controls. The reversal of these interventions was quite long drawn out although eventually the GATT played a major role; after