American Economic Association
An Empirical Assessment of the Comparative Advantage Gains from Trade: Evidence from
Japan
Author(s): Daniel M. Bernhofen and John C. Brown
Source: The American Economic Review, Vol. 95, No. 1 (Mar., 2005), pp. 208-225
Published by: American Economic Association
Stable URL: http://www.jstor.org/stable/4132677 .
Accessed: 29/09/2014 07:48
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp
.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact [email protected].
.
American Economic Association is collaborating with JSTOR to digitize, preserve and extend access to The
American Economic Review.
http://www.jstor.org
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
AnEmpirical
AssessmentoftheComparative
Gains
Advantage
from
Trade:Evidencefrom
Japan
By DANIEL
M. BERNHOFEN AND JOHN C. BROWN*
Weprovidean empiricalassessment
advantagegainsfromtrade
ofthecomparative
We use Japan'snineteenth-century
as a
argument.
openingup to worldcommerce
naturalexperiment
to answerthefollowingcounterfactual:
"By howmuchwould
real incomehave had to increase in Japan duringits final autarkyyears of
1851-1853 to affordtheconsumption
bundletheeconomycouldhaveobtainedifit
wereengagedin international
tradeduringthatperiod?" Usingdetailedhistorical
data on tradeflows,autarky
prices,and Japan'sreal GDP, we obtainupperbounds
on thegainsfromtradeof about8 to 9 percentofJapan's GDP. (JEL F11, F14,
N10, N75)
The one pointon whichmosteconomists
will
trade
agree is thatopeningup to international
will increase a country'seconomic welfare.
Economistsbase theirfaithin the benefitsof
free tradeprimarilyon theoretical
reasoning,
the theoryof comparativeadpredominantly
vantage.1While the theoreticalcase for the
gains fromtradeis well established,we still
knowverylittleabouttheempirical
magnitudes
tradeand the
of the gains frominternational
mechanisms
thesegains.This paper
generating
estimatesthemagnitudeof thegainsresulting
fromone of themostdramatictradeliberalizations in recordedeconomichistory:Japan's
nineteenth-century
reopeningto world commerce afterover 200 years of self-imposed
isolation.
A commoncharacteristic
of any theoretical
discussionof the gains fromtradeis thatit
cause of international
presumesan underlying
trade:"firstone explainsthecauses of trade...
and thenone explainsthe gains, given these
causes" (W. Max Corden, 1984, p. 72). By
empirical
specifyingand estimatingdifferent
modelsofcomparative
theempirical
advantage,
tradeliterature
has madeconsiderable
progress
in identifying
thecausesofinternational
trade.2
in terms
Sincecomparative
advantageis defined
of relativeautarkyprices,whichare generally
not observable,the empiricalcomparative
adliterature
had
to
interhas
take
the
vantage
mediate step of relatingautarkyprices to
observablefeaturessuchas factorsuppliesand
measures of technologicaldifferences.Alhas yieldedimportant
thoughthetradeliterature
resultson theempiricalimportance
of thefactors thatexplain the patternof international
andtrade,ithas notyetprovided
specialization
any evidenceon how muchspecializationacto
advantagecontributes
cordingtocomparative
an economy'soverallincome.This paperfills
It providesthe first
thisgap in the literature.
* Bernhofen:
of Economics,ClarkUniverDepartment
sity,Worcester,MA 01610 (e-mail: dbernhofen@clarku.
of Economics,ClarkUniversity,
edu); Brown:Department
We
Worcester,MA 01610 (e-mail:[email protected]).
are indebtedto Yukie Okuyama,SumikoOtsuka,and Stephen Papadopoulosforexcellentresearchassistance.We
thankMichael Burda, Alan Deardorff,
AlbrechtRitschl,
Dave Richardson,
Mark Spirer,two anonymousreferees,
at BrandeisUniversity,
ClarkUniand seminarparticipants
IndianaUniversity,
Humboldt
SyracuseUniversity,
versity,
theAnnualClioUniversitdit
Berlin,Universitit
Tiibingen,
metricsConference
at NorthCarolinaStateUniversity,
the
in International
TradeConference
EmpiricalInvestigations
at PurdueUniversity,
and theMidwestInternational
EcoforhelpfulcomnomicsMeetingsat PennStateUniversity
ments. Osamu Saito and Yasakuchi Yasuba provided
forsources.
invaluablesuggestions
2
1The seminalpaperson thegainsfromtradeare Paul
Alan Deardorff(1984); Edward Leamer and James
Levinsohn(1995); Donald Davis and David Weinstein
Samuelson(1939, 1962) and MurrayKemp (1962). Max
treatment
of the
Corden(1984) containsa comprehensive
(2003); and JamesHarrigan(2003) provideexcellentsurtheoretical
gainsfromtradeliterature.
veysof thisliterature.
208
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
VOL. 95 NO. 1
BERNHOFEN AND BROWN:COMPARATIVEADVANTAGEGAINSFROM TRADE
hardevidenceon the magnitudeof the static
gains fromtraderesultingfromcomparative
advantage.
For themostpart,computablegeneralequilibrium(CGE) modelshave been used to generate estimatesof economy-widegains from
CGE modelsrely
trade.To developestimates,
andbehavioralpaon specificfunctional
forms,
rametersare ofteneitherassumedor adapted
fromestimates
thatstemfromelsewhere.While
generalequilibrium
modelingis an
computable
tool
for
indispensable
policyanalysisand foreof
the
results
these
studiesdo notprocasting,
vide hardevidenceon thegainsfromtrade.3
The gains-from-trade
argumentalso motion the relavates anotherempiricalliterature
trade
and
between
economic
growth.
tionship
studieshave establishedoverCross-country
corevidenceof a positivestatistical
whelming
relationbetween trade and growthin real
income.4This literaturehas been wrestling,
however,withtwomajorempiricalchallenges:
theendogeneity
of bothtradeand incomeand
of controlling
thedifficulty
for"theotherfaca country'sincomelevel.5
tors"thatdetermine
A. Frankeland David Romer (1999)
Jeffrey
haverecently
suggesteda simplebutinnovative
approachto dealingwiththesetwoissues.Usof countries
ing thegeographiccharacteristics
fortrade,theyobtaininstrumenas instruments
tal variableestimatesof theeffectof tradeand
provideplausibleevidenceforthe hypothesis
thattradehas a positiveeffecton income.They
notethatspecializationaccordingto comparative advantageis only one channelthrough
whichtradecan influence
income;otherchanreturns
andgeographic
nelsareincreasing
proximity.They concede that "[their]approach
cannotidentify
thespecificmechanism
through
whichtradeaffectsincome"(Frankeland Romer,1999,p. 381).
thisstudyembedstheanalysisof
By contrast,
studiesincludeGlennHarrison,
3 Recentrepresentative
ThomasRutherford,
and David Tarr(1996); JosephFrancois, BradleyMcDonald,and HakanNordstroem
(1996).
(1996) providesa criticalsurveyof this
4 AnnHarrison
literature.
tradeliberal5 For example,countriesoftenundertake
izationas partof a comprehensive
programof financial
to
and privatization.
It is difficult
reform,deregulation,
theseparateeffectof tradeliberalization.
identify
209
thegainsfromtradewithina theoretical
frameworkthatalso identifies
theunderlying
cause of
international
trade.It uses Japan'snineteenthtradeliberalization
as a naturalexpericentury
mentto estimatetheeffects
oftradeon national
income.In our previouswork(Bernhofen
and
Brown,2004), we have providedsupportive
evidenceforthe hypothesisthatthe Japanese
trading
during1868-1875was in accord
pattern
withthe positivepredictionof the theoryof
comparativeadvantage. Given that Japan's
tradeafterits openingup was governedby the
law of comparative
advantage,thispapertakes
the next step and providesestimatesof the
gains fromtrade resultingfromcomparative
advantage.
oftheJapanesecase make
Threekeyfeatures
it an attractive
naturalexperiment.
First,both
beforeandafteritsopeningup inthelate
shortly
1850s the economyarguablymetthe key asoftheneoclassicaltrademodel:comsumptions
and
markets,
petitive
producthomogeneity,
behavioron international
markets.
price-taking
Second,thefreetradeperiodusedforempirical
analysis--thelate 1860s throughthe mid1870s-predates the importationof foreign
and therapidtransforproduction
technologies
mationofthesetoftechnologies
availabletothe
Japaneseeconomythat characterizedsubsequent economicgrowth.It also occurs after
non-tariff
barriersto tradeestablishedduring
theinitialopeningup had been eliminated.In
theopeningup tointernational
tradecharshort,
acterizesthe main change in the economy
duringthisperiod.Third,theopeningup confronted
theJapaneseeconomywitha dramatic
changein the vectorof relativepricesthatit
faced.6The Westernpowersso compromised
Japan'stariff
autonomythatit had littleleverto
theaffectedsectorsof its econcushion
age
omy fromthese price shocks. Thus, within
sevenyearsthecountry
wentfromnearlycomto virtually
freetrade.
pleteautarky
Our empiricalanalysisis rootedin a general
framework
thatlinkstheDeardorffequilibrium
Dixit-Norman
ad(DDN) indexofcomparative
vantage(theinnerproductbetweennetimports
6
See YasakuchiYasuba (1996, p. 546) who arguesthat
theJapanesetermsof traderoseabout2.8 timesduringthe
six yearsafteropeningup.
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
210
THE AMERICANECONOMIC REVIEW
andautarky
prices)to theSlutskycompensation
measureofwelfare.'The availability
ofdetailed
and high-quality
dataon commodity
pricesand
tradeflowsenablesus to construct
thisindexof
advantageand applyit to thefolcomparative
"By how much would
lowing counterfactual:
real incomehave had to increase in Japan
duringtheautarky
yearsof1851-1853toafford
the consumptionbundle the economycould
have obtainedif it were engagedin internationaltradeduringthatperiod?" Usingalternativeapproachesto estimating
Japan'sGDP
the
final
of
we estimate
during
years autarky,
thatat mostthegainin realincomewas 8 to 9
percentof GDP.
Ourestimates
reassessprovidean important
mentof theworkby J.RichardHuber(1971),
who was the firstto attemptto quantifythe
gainstotheJapaneseeconomyfromopeningup
to worldcommerce.Huber'sapproachwas primarilydescriptive.He focuseson some key
commodities
and his approachlacksa theoreticoherent
framework
for measuringthe
cally
gains fromtrade.He claimsthat"Japan'sreal
income(fora constantpopulation)may have
increasedby as muchas 65 percentin thetransitionfromautarkyto trade"(Huber,1971,p.
614). Huberimplicitly
justifiestheselargeestimated gains by pointingto the significant
changesin someoftherelativepricesfollowing
Ourresultssuggest
Japan'stradeliberalization.
thatfocusingon price changesalone can be
misleading;assessingthewelfaregainsresulting froma reallocationof resourcesrequires
information
on theinteraction
betweenrelative
The
ofcomparand
trade
flows.
measure
prices
ativeadvantageemployedin thisstudycaptures
thisinteraction.
I. Theoretical
Framework
The gains-from-trade
is aboutcauargument
on the gains
literature
sality.The theoretical
fromtradehas establishedsuchcausalityusing
an analyticalparadigmthatcomparesan economy in a stateof autarkyto a stateof unrestricted
international
trade.Usingthisanalytical
framework
as a guideforan empiricalanalysis
byDear7 Thisindexhas beendevelopedindependently
dorff(1980) and AvinashDixitandVictorNorman(1980).
TABLE 1-Two
MARCH2005
OF JAPAN'S
THOUGHTEXPERIMENTS
OPENING
UP
Firstwelfare
comparison
Factualworld
1850sunder
autarky
Counterfactual 1850s underfree
world
trade
Second welfare
comparison
1870s underfree
trade
1870s under
autarky
of theautarkyrequiresa correctinterpretation
freetradecomparison.This paperfollowsthe
adviceof ElhananHelpmanand Paul Krugman
(1985, p. 39), who pointout thatthe autarkyfreetradeframework
is notaboutthecomparison of an economy"before"and "after"trade
but rathera comparisonof an
liberalization,
"if
hadnotbeenallowed"versus
trade
economy
"if tradehad been allowed." Our subsequent
methodologicaldiscussionis based on this
counterfactual
of theautarky-free
interpretation
tradeparadigm.8
The naturalexperiment
of Japanprovidesa
ofan observedautarky
comparison
regimeduring theearly1850swithan observedfreetrade
regimein about 1870. The case of Japansugforinvestigating
geststwothought
experiments
the gains fromtrade,whichare illustrated
in
Table 1. First,one can considertheincomeof
theJapaneseeconomyduringits observedautarkyperiodrelativeto theeconomy'scounterfactualincomeif tradehad occurredduringthe
1850s.Alternatively,
one can considerthereal
incomeoftheJapaneseeconomyduringitsfree
tradeperiodrelativeto theeconomy'scounterfactualincomeifJapanhadoperatedinisolation
duringthe 1870s. Froma theoretical
pointof
view,bothwelfarecomparisonsare legitimate
foraddressingthe gains fromtrade.Froman
of the
empiricalpointof view,the credibility
on
to
construct
the
our
analysishinges
ability
counterfactuals
with a satisfactory
degree of
precision.
8 The termcounterfactual
is used quiteoftenby econonotclearin itsmeaning.We use
mists,butit is sometimes
the termcounterfactual
fora contrary-to-fact
stateof the
in theanalytical
literature.
world,as itis defined
philosophy
has been inframework
Specifically,our methodological
JonElster
spiredby the seminalworkof thephilosopher
(1977). Donald McCloskey(1987) providesa succinctdiscussionof counterfactual
reasoningin economics.
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
VOL. 95 NO. 1
BERNHOFENAND BROWN: COMPARATIVEADVANTAGEGAINSFROM TRADE
To establishcausality,theconstruction
of a
counterfactual
requiresa specifictheorythat
trade.Traditionally,
the
explainsinternational
tradeliterature
has developedtheories
thatfocus
on a singlecause of trade,whicharethenassokindsof gainsfromtrade.
ciatedwithdifferent
The mostprominent
are thetheoryof comparative advantageand the "new" theoriesthat
explaintradein the presenceof scale economies. Section II provideshistoricalevidence
that the Japaneseeconomyat the time was
compatiblewith the key assumptionsof the
comparativeadvantage trade model, which
based
rulesoutgainsfromtradeconsiderations
on arguments
regardingincreasingreturnsto
scale.
The comparativeadvantage trade model
has another advantage for measuringthe
gainsfromtrade.The welfaregainsthatresult
fromthereallocationof resourcesthatlies at
the heartof the model can be expressedin
incomeequivalents.In economictheory,welfare is measuredin termsof utilityattained
fromconsumption.
Althoughwelfarechanges
expressedin utilitylevels are notobservable,
changesin utilitycan be linkedto changesin
income throughthe compensationmeasures
of welfare.Economic theorysuggests two
alternativemeasuresof compensation:Hicksian compensationand Slutsky compensation.9The Hicksian compensationmeasure,
whichthetheoreticalgains-from-trade
literatureuses almostexclusively,linkschangesin
utilityto changes in income. Alternatively,
the Slutsky compensation measure links
changesin equilibriumconsumptionbundles
to changesin overallincome.Froman empirical standpoint,
theSlutskynotionofcompensation is preferableto the Hicksian notion
sinceit does notrequireanyknowledgeof the
The only assumption
underlying
preferences.
requiredis thatconsumptionchoices satisfy
the weak axiom of revealedpreference.
The Slutskycompensation
measureof welin termsof an expendifarecan be formulated
turefunctione(p,c), whichis definedas the
minimum
incometheeconomyhas to spendto
obtain the consumptionbundle c facingthe
9 Fora generaldiscussionofthesetwowelfaremeasures,
see Hal Varian(1982,pp. 135-37).
211
function
can
pricevectorp.10The expenditure
be used to describethegainsfromtrade,AW,
associatedwith each counterfactual
listed in
Table 1. The firstcounterfactual
is theamount
of incomethe Japaneseeconomywould have
seen as equivalentto the gain it would have
achievedif international
tradehad takenplace
the
1850s:
during
(1)
= e(Ps850s,
AW1850s
c{850s)- e(p80ssos,
c850s)
where Pa85Os denotes the vectorof autarky
prices prevalentduringthe autarkyregime,
bundletheeconcs850sdenotestheconsumption
omyactuallyattainedin theautarky
regimeand
denotesthecounterfactual
consumption
cf85os the
bundle
economycouldhaveattainediftrade
hadtakenplaceduringthe1850s.Followingthe
weak axiom of revealedpreference,
the free
tradeconsumption
bundle
mustnothave
cf850s
beenaffordable
to theJapanese
economyat the
vector
The
autarky
price
equivalentvariPa85os.
ationmeasurein equation(1) capturestheincreaseinincomethatwouldhavemadethisfree
tradeconsumption
bundleaffordable
underautarkyprices.
the expenditure
functioncan
Alternatively,
be used to describethegainsfromtradeassociatedwiththesecondcounterfactual:
theloss
of incomethatwouldhave occurredif international trade had been suspendedduringthe
1870s:
(2) AW1870s= e(ps70s,c870) - e(p1870s,c1870s)
wherep~870sdenotesthevectorof worldprices
underfreetrade,
denotestheequilibrium
cf870s
bundle
the economyactuallyatconsumption
tainedunderfreetradeand cf870sdenotesthe
bundle
economy'scounterfactual
consumption
iftradehad notoccurredduringthe1870s.The
measurein equation(2) givesthe
compensation
incometheJapaneseeconomywouldhavebeen
willingto give up to avoidbeingmovedto the
vector
at freetrade
autarkyconsumption
ca870s
prices.
functionin termsof con1oDefiningan expenditure
sumptioninstead of utilityimplies immediatelythat
e(p,c) = pc. We nevertheless
preferto writee(p,c) instead
ofpc to remindthereaderthattheincomelevelis theresult
of an optimization
problem.
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
212
THE AMERICANECONOMIC REVIEW
MARCH2005
Ideally,we wouldhave likedto analyzethe Good2 P
gains fromtradeusing both counterfactuals.
However,since data on consumptionspendingare notavailable forthisperiod,empirical
estimationof (1) and (2) requiresthatthese
welfaremeasuresbe linkedto available data
on prices and trade flows. Below we will
show that the DDN index of comparative
o
Go
advantage-theinnerproductbetweennetiman upper
portsand autarkyprices-constitutes
boundforthe equivalentvariationmeasureof
welfarefromequation(1). It is straightforward
Good 1
to derivea lowerboundforthecompensation
FIGURE1. RELATINGTHE INDEX OF COMPARATIVE
variationmeasure:the innerproductbetween
ADVANTAGETO THE GAINS FROMTRADE
net importsand worldprices.However,balanced tradeimpliesthatthisgives the trivial
forwhyit is
lowerboundof zero.The intuition
- x85ssos).GDP maximization
P85s (xss85os
to
estimate
but
not
i.e.,
(2) is thatthe impliesthatthelettertermis nonnegative,
(1)
possible
latterexpressesincome at free trade prices
85sosx850s-osPs185osx1850os
whiletheformer
prices.
expressesit at autarky
Figure1 illustratesequation(4) in thecase
Since thewelfaregainsarisefromcomparative of two goods."1 Under autarky,the econoadvantage,autarkypricesprovidetherelevant my's productionpointcoincideswithits conabout opportunity
costs that are
information
sumptionpoint, denoted by Xa. Since the
from
relative
centraltothecomparative
advantagegains
price of good 1 is assumed to be
tradeargument.
largerunderfreetradethanunderautarky,or
Denote by xl85os the economy'sproduction pf > pa, the economy has a comparative
vectorunderautarky
(i = a) andfreetrade(i =
advantagein good 1. Throughinternational
theeconomycan obtainconsumptionat
trade
Under
the
f).
autarky, economy'sconsumption
be
to
from
that
differsfromits productionpointXf.
must
its
income
equal
spending
Cf
orp osc
Since
P5o85s.
Pa
OCfXfis thefamiliartradetriangle;OXfmeaproduction,
sures the exportvolume of good 1 and OCf
theequivalentvariation
measureof welfarecan
- P eaa
measurestheimportvolumeof good 2. Startoco
as
be written
we obtain AW15=p0
ing fromtheeconomy'sautarkyconsumption
point, the welfare gain from international
tradeis the increasein income necessaryto
(3)
s
AW1850s= P1850s(c
1850s
affordthefreetradeconsumption
pointCf at
in
If
income
is
measured
the
autarkypricepa.
+ 1850(x85os
unitsof good 1, the welfaregain is equal to
x1850s).
thelengthof theline segmentRS.
The DDN index of comparativeadvantage
Definingthe net importvectoras T185os =
- x
where
comsubtracts
the economy'sexportsfromits impositive(negative)
fs
fo,
which
of
to
are valued at autarkyprices.In
ponents T185os pertain imports(exports), ports,
thewelfaregainis
Figure1,thisis captured
byOS-OXf=XfS. The
DDN indexexceedsthewelfaregainbytheline
arisessincetrade
segmentXfR.The difference
(4)
AW1850s= P1850sT1850s
a
of
vectransformation
the
production
requires
torXa intoXf whichcan driveup theoppora
-a P8
X-f85S)
tunitycosts of production.If the economy's
S1850s1850sx-X1850s)
The equivalentvariationmeasureof welfareis
advanequal to theDDN indexof comparative
term
minus
the
additional
tage, p7850sT,850s,
1 Forthesakeofexposition,
thegraphicaldiscussionof
the2-goodcase suppressesall timesubscripts.
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
VOL. 95 NO. 1
BERNHOFEN AND BROWN:COMPARATIVEADVANTAGEGAINSFROM TRADE
curvewerecharacterized
production
possibility
costs of production,
by constantopportunity
to
advanspecializationaccording comparative
costsand
tage would not increaseopportunity
theDDN indexwouldprovidean exactmeasure
of the gains fromtrade.Underincreasingopindex
costs,thecomparative
advantage
portunity
to
the
from
trade.
an
bound
gains
provides upper
Using equations(1) and (4) to expressincomechangesrelativeto nationalincomeunder
we obtain:
autarky,
- e(pssos, a
ea
Cf850a)
c850s)
15e(P850ss,
c185ssos)
GDP1850s
Ps850sT1850s
GDP185os
Since Japandid notactuallyengagein internationaltradeduringthe early 1850s, the term
in (5) pertainsto the income
e(p850o, c'85os)
on
counterfactual
conthe
(or fictitious)
spent
sumptionpointCa850s thatthe economycould
netimport
havereachedwiththecounterfactual
vectorT,850s.
The left-hand
side of equation(5) formalizes
thatwe considerin thispathecounterfactual
increasein real incomethe
per:thepercentage
Japaneseeconomywouldhaveneededto afford
the counterfactual
consumptionpoint Co850s.
The subsequent
empiricaldiscussionarguesthat
the case of Japanprovidesus witha unique
to estimatethe right-hand
naturalexperiment
sidein (5) andthattheavailableevidenceseems
to indicatethatit comes close to providinga
reasonablepoint estimateof the gains from
trade.
II. Japan'sOpeningUp as a Natural
Experiment
The tale of Japan'sopeningup to international tradein 1859 afterover 200 years of
The Tokueconomicisolationis wellknown.12
of
initiated
the
rulers
gawa
Japan
policy of
seclusionin 1639 as a responseto theperceived
convertsin Japanand
threat
posedby Christian
12
Howe(1996,ch.3) andShinya
Sugiyama
Christopher
(1987).
213
Itforbadeall JaptheirPortuguese
supporters.'3
outsidethehome islands
anese fromtraveling
and allowed only the Dutch and Chinese to
tradeunderstringent
restrictions
on thevolume
and content.14Treatyarrangements
limitedthe
Dutchto one shipperyear.The Dutchpresence
to Deshima,a tinyislandin the
was restricted
harborofNagasaki,wheregoodswereunloaded
forpurchaseby merchants
who wereagentsof
theshogun'streasury.
The shogunthensoldthe
goods to Japanesewholesale merchants.No
otherJapanesewere allowedto tradewiththe
Dutch,norweretheDutchallowedto travelin
Japanforcommercialpurposes.The Chinese
facedsimilarrestrictions.
Duringtheheydayof
10
theChinesetradein theeighteenth
century,
to 15 junkswouldmakethetripto Japaneach
year.By the 1820s, about 3.5 junks per year
madethetrip.
The chiefexportgood forthetradeof both
the Dutch and Chinesewas Japanesecopper.
Small amountsof camphorand seaweedmade
up most of the remainder.The miniscule
amountof tradeallowedbytreaty
declinedfurtherafter1800. By 1825,theexporttradewas
about1.4 centspercapita;by themid-1840s,it
had declinedto 1.2 centsper capita.15Sugar
dominated
theimporttrade,although
theDutch
and Chinesealso importedsmallquantitiesof
woolensand silk.Totalimports
wereabout0.4
centspercapitaby themid-1840s.By contrast,
exportswere 5 cents per capita for the first
one-half
yearofopentradein 1859and 17 cents
per capitaby 1860,thefirstfullyearof trade.
Importswere 2 to 3 centsper capita forthe
one-halfyearof tradein 1859 and rose to 7.2
centspercapitaforthefirst
fullyearof trade.16
13
The Tokugawawas a powerfulclan thatdominated
and politicallyfrom1603 untilits overJapanmilitarily
throwin 1868,whendirectrulebytheemperor
was restored
in the Meiji revolution.
The systemunderthe Tokugawa
was a centralized
statethatnonetheless
grantedlordssome
controlovertheirown domains.The head of thegovernmentwas theshogun.
14 See G. F. Meylan(1861) fora standard
contemporary
account.
15 Values are expressedin termsof theMexicansilver
fortradein
unitof currency
dollar,whichwas thestandard
East Asia duringthisperiod.The Mexicandollarwas worth
just a bitmorethantheU.S. dollar.
16 Theseestimates
arebasedprimarily
uponthevalueof
the exportedcopper and othergoods (for exports)and
estimatesof the declaredvalue of imports.
contemporary
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
214
THE AMERICANECONOMIC REVIEW
For 200 years,seclusioncut Japanofffrom
mostoftheeconomicandtechnological
change
in therestof theworldeconomy.Throughthe
Dutch,theJapanesehad some access to informationaboutWesterntechnologies
and Western science,but verylittleof it was actually
appliedin theeconomy.17
Prompted
by theapof
a
American
naval
pearance
powerful
squadronin Tokyoharborin 1853,Japaneventually
thatendedtheautarky
agreedto an 1858 treaty
regimeon July4, 1859.18
to freetradeafter
Japan'smovefromautarky
1859 offersa uniquenaturalexperiment
to estimatethe comparativeadvantagegains from
trade.The argumentrequiresus to examine
several importantconditions.First, Japan's
economyshouldconformto the termsof the
neoclassicaltrademodeloutlinedin SectionI.
itselfshouldconform
Second,the"experiment"
fora natural
reasonablywell to thekeycriteria
the impetusforthe experiment
is
experiment:
essentiallyexogenousto theeconomyand the
changeis veryrapid.The speedofthetransition
us to construct
an estimateT1850softhe
permits
counterfactual
vectorof netimports
T185os. We
of thetransition
exploittherapidity
bydrawing
upon the period (the late 1860s throughthe
mid-1870s)whenwe can makefulluse of the
detailof theJapanesetradedata,and it can be
reasonablyarguedthatthetradebehaviorofthe
economyreflectsprimarilyits adjustmentto
new relativeprices.In addition,we can be reasonablyassuredthatby the late 1860s earlier
efforts
of thegovernment
to imposenon-tariff
barriersto tradehad given way to a regime
characterized
freetrade.
by essentially
Considertheconformity
ofJapan'seconomy
to thekeyassumptions
oftheneoclassicaltrade
model: price-taking
behaviorin domesticand
international
markets
andproduct
homogeneity.
Historianshave revisedour understanding
of
See YOkoNagazumi(1987) forthevolumeofChinesetrade
through1833,JohnPhipps(1836,pp. 192-95 and 276-77)
and ErnestW. Clement(1906, pp. 274-75) forpricesof
Japaneseexportsca. 1833 and thevolumeof Dutchtrade;
GreatBritain,ConsularReportsforthevolumeof tradein
1859; and Sugiyama(1988, Table 3-4) forthevolumeof
tradein 1860.
17 See ErichPauer(1987 and 1992).
18 See Sugiyama(1988, p. 35). Initially
twoportswere
openedup. Anothertwowereaddedby 1863.
MARCH2005
howtheJapaneseeconomyfunctioned
justprior
to and afterthe openingup in 1859. Earlier
historiansof Japandrewa sharpcontrastbetweenthefeudalJapanoftheperiodof autarky
and the non-feudaland modemJapanof the
Meiji era thatbegan in 1868. More recentresearchemphasizescontinuity;
bythelateTokuera
of
gawa
prices
goods and factorsof
were
production
generallyset by competitive
markets.Competitivemarketshad also hollowedoutmanyoftheformalrestrictions
ofthe
systemby thetimeJapanopenedup, including
thepowerof themerchant
associaeliminating
tions to set monopsonyprices by the 1840s
(Satoru Nakamura,1990, pp. 90-92). Susan
Hanley and Kozo Yamamura(1977, p. 86)
reacheda similarconclusionaboutlabormarkets: "Labor markets,
bothin the agricultural
and non-agricultural
sectors,were competitive
by the beginningof the eighteenth
century."
to maintainthe
Finally,local lords attempted
incometheyderivedfromtheall-important
tax
on riceproduction
the
transfer
of
byprohibiting
land out of rice. Nonetheless,
withthe expansionof internal
tradeand opportunities
forspecializationin suchotheragricultural
as
products
silk, tea, or cotton,farmers"producedin re(ConradTotsponseto marketopportunities"
man, 2000, p. 250) and most growthin
in
agricultural
outputafter1700was apparently
non-foodcrops.
Goods tradedon international
marketswere
also boughtand sold undercompetitive
conditions.The treaties
thatopenedJapanto international traderequiredacceptanceof a liberal
trading
regime.The Japanesewereonlyable to
of tradeinitiallyto desnegotiatea restriction
on theimporignatedtreaty
ports,a prohibition
tationof opium,a prohibition
on theexportof
raw copper,and restrictions
on the exportof
rice. Westerninterests
forcedthe Japaneseto
accept verylow tariffs.
By 1866, ad valorem
tariffratesaveraged2 to 3.5 percentwitha
maximumof 5 percent(Ippei Yamazawa and
YamamotoYiizo, 1979, Table 22; Karl von
Scherzer,1872). Exporttariffswere set at a
maximumof about3 to 4 percent.Historians
recountsomegovernment
to employreefforts
strictions
on tradein raw silk,whichwas JaOther
pan's mostvaluableexportcommodity.
observers
influence
the
pointedto thecontinued
exertedover tradingarJapanesegovernment
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
VOL. 95 NO. 1
BERNHOFENAND BROWN: COMPARATIVEADVANTAGEGAINSFROM TRADE
The shellingof Shimenosekiin
rangements.
1864 by Westernshipsand continuedpressure
fromthe West put an end to theseefforts
by
1866.19A densenetworkof Westernand Chinese traderslinkeddomesticJapanesemarkets
withinternational
markets
and ensuredthatimEfforts
would
be
by
ports
pricedcompetitively.
thePrinceof Satsumato maintaina monopoly
in camphor(thesourceofwhichgrewnaturally
in his domain)were also a failure(C. Brennwald,1865,pp. 68-99). The remaining
exports
(chiefamongthem,silkandtea) wereproduced
conditions.
underhighlycompetitive
Finally,goodsthatJapantradedwereforthe
mostparthomogenous.The mainexportcommoditieswere silk and tea. They could be
only by the
graded,but were distinguishable
Threekindsof
nottheproducer.
sourcedistrict,
Aboutone-third
was
imports.
goods dominated
variouskinds of cloth,most of which were
and cottonyam. Anotherfifth
was
unfinished,
did
not
that
the
produce
Japanesesimply
goods
woolenclothandblankets)andsome
(primarily
more sophisticated
weaponry.The remainder
and raw materialsof all kinds,
was foodstuffs
includingrice, beans, raw cotton,sugar,and
vegetableoil.
Japan's openingup offersan unusual natural experimentfor studyingthe gains from
trade. Mark R. Rosenzweig and KennethI.
Wolpin(2000, p. 828) offerkey insightsinto
can
thepotentialrolethatnaturalexperiments
economin
empirical
analysis.
Empirical
play
ics sometimesemployswhatmightbe termed
naturalexperiments:serendip"non-natural"
itousdifferences
in rulesgoverningeconomic
behaviorover timeor over space thatallow
significantcontrol over other confounding
meritcritvariables.Non-natural
experiments
ical appraisal.To act as a treatment,
changes
in rules must trulyhave "arisen serendipitously."In thecase of Japan,theseconsider19Note the commentsof the
actingBritishconsul in
Kanagawa(Yokohoma):"The Year 1864 will be memorable as thatin whicheveryreasonableman in thiscountry
musthavebeenconvincedoftheutterfollyofanyJapanese
Princeor partyattempting
to disputeby forcetherightsof
in Japan."(Reportof ActingCouncilFlowers,
foreigners
and ErichPauer
1865,p. 292). See ReginaMathias-Pauer
of Dutchagentsin
(1992, p. xvi) and thecorrespondence
Japanat thetime.
215
ations imply that the initial change in
policy-the openingup to trade-must have
effect
arisen exogenouslyand the treatment
(the relativeprice shock and the degree of
exposure to prevailingworld prices) must
therealhave been strongenoughto identify
locationof resourcespositedby thetheoryof
comparativeadvantage.
of JapanprovidesamThe economichistory
ple evidencethatthis case meets these two
criteria.
Althoughtheclosureof Japanwas pria
marily responseto domesticpoliticalconfromautarkyto freetrade
cerns,thetransition
and the termsof thattransition
were for all
practicalpurposesbeyondJapan'scontrol.The
BritishvictoriesoverChinain theOpiumWars
of 1841-1842endedtheclosedregimeofAsia's
nationand servedas an example
mostpowerful
to theremainder
of East Asia. Japan'smilitary
to reweaknessprecludedany seriousattempt
sistthedemandsof theWesternpowersto pry
open itsmarkets.
Whenitreopeneditseconomyafter200 years
of isolation,Japanencountered
some significant differencesin relative prices brought
revolution
and increased
aboutbytheindustrial
of
markets
for bulk
international
integration
commodities.20Betweenthe 1780s and 1840,
in cottontextileshad cut the real
innovations
priceof cottonclothand cottonyarnby threeandtherealpriceofironbythree-fifths
quarters
Knick
(C.
Harley,1998,Tables3 and4; Harley,
1982,p. 272). AlthoughtheJapanesewereinin
formedof manyof the new developments
theDutch,theirproduction
technology
through
of cottonyarnand clothreliedon methodsof
of the
handspinningand weavingreminiscent
mid-eighteenth
century.Productiontechnologies in iron used low-volumebatchmethods
offifteenth-century
reminiscent
Europe(Ishime
Toruand Yoneda Horoguki,1995).
The speed of adjustmentof the Japanese
in relativeprices
economyto thesedifferences
is evidentin the100-foldgrowth
ofimports
per
the
1870s.
This rate of
capita through early
experigrowthwas farin excess of anything
enced elsewherein Asia. Afterone and a half
20 See Kevin H. O'Rourkeand Jeffrey
G. Williamson
coststhat
(2002,pp. 36-37) ontherapiddeclineintransport
mayhave startedas earlyas 1820.
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
216
THE AMERICANECONOMIC REVIEW
decades of open trade,Japanwas on par with
Thailandas the East Asian economywiththe
most significant
(JamesC.
importpenetration
Ingram,1971,pp. 7 and 332-33). At thesame
time,theperiodof freetradefollowingautarky
was of sufficient
lengthto allow forthereallocationof resourcesin responseto new opportunities.To take full advantageof export
for example,silk producersreopportunities,
quiredaboutthreeyearsto bringthemulberry
treesthatwereusedforfeedingsilkwormsinto
Producersoftearequiredfouryears
production.
fornew tea bushesto be fullyproductive(S.
Syrski,1872,pp. 211 and 231).
III. EmpiricalImplementation
A. Data Sourcesand Construction
of
Variables
Threevariablesareneededforcalculating
the
side of (5): the vectorof autarky
right-hand
pricesPa85Os,an estimateof thecounterfactual
net importvectorT1850s, and an estimateof
economichistorianshave
GDP185os. Japanese
uncovered
priceseriesformanytradedandnontradedgoodsthatspantheperiodofautarky
and
freetrade.In addition,thepricereportsof the
BritishconsulatesandotherEuropeanobservers
providesome added marketpricedata forthe
end of the autarkyperiod. Together,these
sourcessupplymarketpricesforabout52 key
commodities
thatwereinvolvedin international
trade.The qualityof the autarkyprice data
permitscarefulmatchingwiththecorrespondFor some
ing importand exportquantities.21
different
cotton
kinds
of
cloth,
goods,primarily
thedegreeoffinishandthetypeofweavecould
influencethe relativeprice. HoshimiUchida
cloth,which
(1988,p. 162) notesthatyarn-dyed
the
of
additional
required
step dyingthe yarn
beforeit was woven intothetraditional
Japanese "cottonstripes,"
costabouttwiceas much
21 The sourcesincludeNobuhikoNakai (1989), Mataji
Miyamoto(1963), Takeo Ono (1979), KinyfiKenkyuikai
(1937), and Ryiiz6 Yamazaki (1983). The sourcesfrom
includeGreatBritain,Consular
contemporary
publications
Reports,fortheportsof Nagasakiand Kanagawain 1859
and in 1860; von Scherzer(1872, p. 262) forsilk worm
(1857, pp. 248-249)
eggs; and FriedrichAugustLtihdorf
forseveralothercommodities.
MARCH 2005
as whiteclothduringthefirsthalfof thenineteenthcentury.
Priceswereadjustedupwardof
the base bleached cloth (KinyUiKenkyilkai,
1937) to reflectthesehighercosts of finishing
underautarky.Von Scherzer(1872, p. 393)
suggeststhattheimportclothclosestto domesticJapaneseclothforwhichpricedataexistwas
thetaffachela.
This was thebase clothchosen
fortheanalysis.
Autarkyprice data are available forabout
96.5 percentof exportsby value and 61 percent of imports.For the remainingtraded
goods, two strategieswere employedto approximateautarkyprices. For about 15 percent of importsand the remainingexports,
theJapaneseeconomyprovidedreadysubstitutes,but detailedpricedata were simplynot
available. Autarkyprices during1851-1853
forthese goods were approximatedwiththe
average import(or export)price duringthe
period 1868-1875, deflatedby HiroshiShinbo's indices of import(or export) prices
(1978, Table 5-10).2
A second groupof importsincludesproducts thatthe Japaneseeconomydid not produce under autarky.Such goods as glass,
bootsand shoes,operaglasses,butter,
watches,
of
anda smallamountofmachinery
(0.7 percent
forthe conimports)were imported
primarily
of Westerners
sumption
livingin Japan,or were
stillconsiderednoveltiesduringtheearlyfree
trade period.23The prices for these goods,
whichmade up about2.5 percentof imports,
werealso approximated
withthedeflatedaverage importpriceduringthetestperiod.
thatwerenotproducedin
Two otherimports
accounted
for
the
remainder
ofthegoods
Japan
woolensand musnotproducedunderautarky:
kets.The Japanesedid notraisesheep,so there
was no domesticproduction
of woolens.After
know-how
importing
Portuguese
throughthe
early 1600s, Japaneseweapons technologies
22
Productsin thisgroupincludeddyesand paints,medoil.
icines,and safflower
23
Minorexceptionsto thisgeneralization
includeeleall of
phanttusks,whalebone,some hides,and vermilion,
whichappearon the listsof goods importedfromChina
duringthe periodpriorto openingup. See von Scherzer
forglass.Brennwald
(1872,p. 403) on thelimitedprospects
(1865, p. 47) is equallypessimisticabout the near-term
of watchesand clocks.
prospectsforSwiss producers
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
VOL. 95 NO. 1
BERNHOFENAND BROWN: COMPARATIVEADVANTAGEGAINSFROM TRADE
stagnatedforthe nexttwo hundredyearsand
weapons producedin the West were highly
valued.
These goods meritan alternative
approach.
An upperboundestimateof themarketparticto pay fortheseimports
unipants'willingness
derautarky
is thevirtualprice:theheightofthe
(import)demandcurveat or nearzero imports.
Althoughdata thatwould permiteconometric
estimationof the virtualprice do not exist,
anotherfeatureof theJapanesenaturalexperimentallows forapproximating
it.24Although
mostof theminisculeamountof tradecarried
outbytheDutchandtheChinesepriorto openof sugarand
ing up involvedthe importation
silksin exchangeforJapanesecopper,theyalso
importedsmall amounts of woolens and
weapons.
Because of theirrarity,woolen cloth and
worsteds(clothproducedwithcombedlongstaple wool) commandedrelativelyhigh prices.
Priorto openingup, importswereprimarily
a
lower-qualitymediumwoolen cloth (Laken)
used formilitary
and a worstedcloth
uniforms,
officials
(camlets)whichwas usedbyyakunins,
of theshogunate.(Camletscould be made entirelyofwoolenyarnor containa cottonwarp.)
Duringtheearlyyearsoftrade,thesetwokinds
of clothsconstituted
an important
shareof the
trade.
thevolumeof these
import
Ascertaining
imports
requireslookingatbothDutchandChinese importdata, since the small amountof
Chineseimport
tradealso includedre-exports
of
woolensalongwiththeirchiefimportsintoJapan: sugarand silks. Detailed accountingsof
these importsby cloth type and volume are
availableforthetwo Dutchtripsthatoccurred
over the period 1827 to 1830 and the three
Chinesetripsfor1827, 1829,and 1831. These
data,alongwithtradevolumesforwoolencloth
(mediumand broadcloths)and worstedcloth
(camlets)duringthe firstyearsof open trade,
are reported
in Figure2. Overtheperiod18271831, annualaverageimportswere verylow:
about 230 pieces (or about 8,000 yards) of
woolencloth(imported
by boththeDutchand
the Chinese) and about 85 pieces (or 3,100
24
JerryA. Hausman (1997) reviews the conceptual
and approachesforeconometric
estimation
of
background
thevirtualprice.
m Woolen
6
Cloth A Worsted Cloth
ca.1830
4411861
--
2-
217
1863
ca. 1830
S1859
0
S
1863
1862
ib0do Thousands
10 ofYards 1000
A
5000
FIGURE 2. PRICES AND IMPORTS OF WOOLEN AND WORSTED
CLOTHBEFORE
1870
imyards)of worstedcloth.25For comparison,
portsof all woolensduringthe firstone-half
yearof tradein 1859 exceeded15,000pieces.
The reporton Asian marketsfor woolens
compiledby M. NatalisRondot(1847) on behalfoftheFrenchwoolenindustry
suggeststhat
the Dutch were able to capturea significant
on thegoodstheysoldto theJapanese
premium
market.The prices in Figure 2 (in Mexican
dollars) reportedfor 1827-1830 for worsted
cloth (camlets)and woolen broad clothwere
twoandone-halfto almostfivetimestheprices
forsimilargoodsprevailing
in Cantonat about
the same time(Rondot,1847, p. 116; Phipps,
1836, p. 194). Even afterthe openingup in
1859, the premiumforcamletsin Japanover
in Cantonwas 65 percent(Japricesprevailing
cob, 1861,p. 15).
To the extentpossible, Figure 2 presents
price-quantity
pairsforthehalfdecade subsequentto openingup. The notabledeclinein the
dollarpriceforbothcamletsand woolencloth
is consistentwith the suggestionsthat the
pricesfromtheperiodpriorto theopeningup
are reasonableapproximations
of the virtual
thispriceinformation
into
price.Incorporating
25 See Nagazumi,(1987, Table B) forthe volumeof
ChinesetradebaseduponDutchrecordsandRondot(1847,
of woolenand
pp. 220-29) fordetailon theDutchimports
worstedclothintoJapanduringtheperiod1827-1830.This
estimatemay overstatethe volume of annual imports.
WhiletheChinesetypicallysentthemaximumnumberof
to tradewithJapanat Nagasaki on the
junks permitted
biannualvisits,voyagesby DutchvesselsbecameincreasMorethantwo
inglyirregular
duringthenineteenth
century.
yearscould elapse betweenthesevisits.
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
218
THE AMERICANECONOMIC REVIEW
counterfactual
pricesforwoolensunderan autarkyregimerequiresthreeadditionalsteps.
First,pricesin Mexican dollarsmustbe convertedintotheJapanesecurrency,
theryo.Japaneseprohibitions
on theexportofanycurrency
on painofdeathmeantthattheactualexchange
rate betweenthe ryo and dollarcan only be
estimated.
G.F. Meylan(1861,p. 222) placedit
at 6.5 dollarsperryoin thelate 1820sbased on
theweightof gold in theryo,butthecurrency
debasements
oftheTempoperiod(1830-1843)
of about40 percentthroughout
led to inflation
thefinalyearsof autarky.
The secondstepis to
theprobablewholeadjustthesepricestoreflect
sale prices of cloth on the Japanesemarket.
Meylan (1861, p.195) suggests that Dutch
goods were sold by the shogun'streasuryto
forpricesthatwere a bit
Japanesemerchants
overtwicethepricereceivedbytheDutch.The
finalstepis to estimate
pricesforall 11 kindsof
woolensimported.
Detailedinformation
on the
and
cloth
of
traded
in
durChina
quality prices
the
in
and
the
1840s
1860s
ing
Japanduring
allowed calculationof the pricesof all other
relativeto thepricein Japanofcamlets
imports
and broad clothsthatwere importedby the
Dutch.26
Less documentation
is availableon the import of weapons. FriedrichAugust Ltihdorf
(1857, pp. 135 and 141) suppliestheevidence
on the price the Dutch receivedforweapons
theyimportedinto Japanduringthe autarky
period.
A plausibleconstruction
ofthecounterfactual
net importvectorT185os should conformas
closely as possibleto the key ceterisparibus
thatis,
assumptionof the naturalexperiment,
thatthe changesin the pre-and post-autarky
tothechangein
economyareconfined
primarily
tradepolicy.This perspectivearguesforconthecounterfactual
vectorfromJapan's
structing
actualtradevectoronce it fullydevelopedinto
an openeconomy(ca. 1866). Some keylimitationson thedataavailableatthattimerequireus
touse datafroma fewyearslater(1868-1875),
had been
by whichtimetheMeiji government
able to establisha customsservicethatwas able
26
See Rondot(1847), Brennwald(1865,pp. 37-39) and
von Scherzer(1872, pp. 396-99). The price of woolen
blanketswas estimated
at threetimestheprevailing
pricein
Canton.
MARCH2005
toreport
dataon a consistent
basisfromthefour
treatyportsthatwerethenopen.27
The researchexaminestwo concernsabout
as the counterfactual
using T1868-1875
T185os.
intheeconFirst,one wouldexpectthatgrowth
omy between1851-1853 and 1868-1875 increased the productionpossibilitiesof the
economyand hence the "size" of thisvector
beyondwhatwould have prevailedunderauwe constructed
thecountarky.Consequently,
terfactual
by a
T1868-1875
T185os by deflating
estimated
annualgrowthrateof
conservatively
GDP from1851-1853of0.4 percent.Shunsaku
Nishikawa(1987,p. 323) suggeststhatthisis a
reasonableaveragegrowth
rateforthelargeand
economicallydiversedomainof Choshiifrom
the 1770s through
the 1840s.
The secondconcernis morecritical.Substantialtransfers
oftechnology
betweentheopening
up and the test period could have modified
Japan's technologyset to the point thatthe
of exportsandimports
reflected
theimpattern
of
and
both
in
pact
prices
changes productive
techniques.Indeed,the successfuladoptionof
Westerntechnologies
suchas mechanicalspinis a hallmarkof economic
ningand metallurgy
growthduringthe laterMeiji period.28Erich
Pauer (1987) summarizesthe documentation
thatis availableforthecases of thewholesale
anditsadaptaadoptionofWesterntechnology
tion.He arguesthatthisprocessdid not get
underwayuntilaftertheperiodchosenforthe
efforts
to promote
analysis.Formalgovernment
transfer,
includingsendingdeletechnological
gationsoverseasand invitingforeigntechnology expertsto visitJapan,were not initiated
untilthe mid-1870s.Importsof new Western
embodiedin machinery
technologies
(spinning
forexample)werevirtually
nonexmachinery,
istentforthefirst15 yearsofopentrade(Pauer,
1992; ShinyaSugiyama,1988). The onlytwo
exceptionsare the government-run
shipyards
27 The data are takenfrom
Japan(1893). Priorto 1868,
theBritishconsulin each treaty
portcollectedinformation
on imports
andexportsfromthebillsofladingof shipsand
othersources.The main drawbackof these data is the
of quantities
and gaps in therecords
inconsistent
reporting
of someof theports.A firealso destroyed
recordsfor1866
at thechiefportforimports,
Kanagawa(Yokohama).
28 But see Yasuba (1996, pp. 547-48) for a critical
reassessment
of thisperspective
forthelaterperiod
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
VOL. 95 NO. 1
BERNHOFENAND BROWN: COMPARATIVEADVANTAGEGAINSFROM TRADE
219
TABLE 2-CALCULATIONS OF THE PER CAPITAGAINS FROM TRADE
(Ingoldry3)
1868
1869
(i = 1868... 1875)
P1850osT
1870 1871 1872 1873
1874
1875
(1) Goods withobservedautarky
prices -0.05
0.02
(2) Goods withestimated
autarky
prices
0.08
(3) Woolensand muskets
0.03
0.02
0.08
0.16
0.02
0.12
0.08
0.02
0.15
-0.01
0.04
0.22
0.02
0.07
0.26
0.03
0.05
0.17
0.05
0.08
0.19
0.037
0.035
0.141
Gains percapitain ryo
0.13
0.30
0.25
0.24
0.34
0.26
0.32
0.219
Groupof goods
0.05
pa
Sources: Nakai (1989), Miyamoto(1963), Ono (1979), KinyuKenkyukai(1937), Yamazaki (1983), and GreatBritain,
ConsularReports,fortheportsof Nagasakiand Kanagawain 1859 and in 1860; von Scherzer(1872, p. 262) and Ltihdorf
(1857, pp. 141, 248-249) forpricedata. See thetextfortheestimateof theautarkyvaluationof importsof woolensand
and of goodswithoutobservedautarky
importsof muskets,
prices.Crawcourand Yamamura(1970, Table Al) providethe
exchangerateused to converttheinnerproductfrommommeintory6.
Notes:The innerproductis decomposedintothreegroupsof commodities:
thegoodsforwhichautarky
pricesareavailable
fromtheexistinghistoricalsources;woolens;and goods withestimatedautarkyprices.pao850T1850s
is theaverageof the
annualestimatesfrom1868 through1875 withtheadditionalassumption
thatGDP percapitagrewby an annualrate0.4
percentfrom1851-1853to thetestperiod.
and armoriesthatweresetup duringthe1850s
to upgrade Japanesedefenses;theirimpact
wouldnotbe feltuntilthe 1870s.29
The finalpiece of information
requiredfor
the
of
the
evaluating
magnitude
gains from
tradeis theGDP of Japanin theautarky
years
1851-1853.Unfortunately,
a completeseriesof
nationalincomeaccountsis not available for
thisperiod.Instead,theapproachto evaluating
the welfareconsequencesof the move from
autarkyto freetradewill rely on controlled
conjecturesthatdrawupon estimatesof GDP
fora particularly
well-developed
regionof Jaforthelate1870s.
paninthe1840sandestimates
It is a simpleaverageofthefirst
eightyearsfor
whichthetradedataareavailable,deflated
bya
estimateof thegrowthof producconservative
tionpossibilitiesbetween1851 and 1853 and
theearlyfreetradeperiod.
Since estimatesof per capita GDP do not
existfortheautarky
period1851-1853,we emto arriveat
ploy two different
methodologies
reasonable conjectures.The forecastingapproachdrawsuponan estimatefor1840 thatis
availableforone of TokugawaJapan'sregions
and appliesa rangeof estimatesof thegrowth
rateof percapitaGDP to arriveat an estimate
for 1851-1853. This "backcasting"approach
takeswhatevidenceis availableon theGDP per
B. EmpiricalResults
capitafromthe 1870s and uses the same estimatesof thereal growthof per capitaGDP to
Table 2 providesthevaluesofP~s5OsTi. They arriveat alternative
estimatesfor1851-1853.
areexpressedin termsofgoldryopercapitafor
The forecasting
approachdrawsupon estieach of thefirst
matesof GDP thatweredevelopedon thebasis
eightyearsforwhichtheMeiji
tradedata are available.In all years,thegains of theBFC, a collectionofvillage-levelreports
werepositive,whichconfirms
theprediction
of fromtheadvancedsouthern
Japanesedomainof
thecomparative
trade
model.
OverChoshti.30
This
domain
had
a populationof
advantage
to
about520,000in the1840s,oraboutone-sixtieth
all,thegainswereon theorderofone-fiftieth
one-fifth
ofJapanatthetime.It
ryopercapita.The finalcolumnoffers oftheestimated
population
our "mostconfident"
estimateof
Ta85so.
p1850s
29
Pauer (1987) documentsthelimitedextentto which
new shipbuilding
theeconomy
techniquesdiffused
through
because the skills of craftsmen
could not be adaptedto
Westerntechniques.His fundamental
is thatthe
argument
(and skillset)was insufficient
Japaneselevelof technology
to absorbWesterntechnologies
immediately.
30
A series of papers (Nishikawa,1978; Nishikawa,
1981; and Nishikawa,1987) presentstheresultsof an ambitiousreconstruction
of the Chashii economyfromthis
source to English-speaking
economichistorians.We are
appreciativeof the suggestionsof YasakuchiYasuba and
OsamuSaito,whofirst
directed
ourattention
toNishikawa's
research.
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
220
THE AMERICANECONOMIC REVIEW
was one of the moreeconomicallydeveloped
regionsof Tokugawa(pre-1868)Japan.Since
theregionhad a highlydevelopedmixedagriculturaland smallindustrial
economythatproducedcottongoods,salt,andpaper,theshareof
domesticproductfromagriculture
was about61
percent,comparedwith about 67 percentin
Japanas a wholeduringthemuchlaterperiodof
1878-1882 (KazushiOhkawa,et.al., 1957,Table 8,p. 26). The estimate
ofthepercapitaGDP
used in thisstudyfortheforecasting
approach
was adjustedto reflectthe slightlylowerproofthepopulationofJapanas a whole.
ductivity
The percapitaoutputofgoodsandservicescan
be estimated
to be about2.3 goldry6in 1840.31
The backcasting
approachtakestheestimate
of GDP per capitain yen forall of Japanfor
1878-1882 (KazushiOhkawaet.al.1957,Table
1) and convertsit to gold ryoof 1851-1853at
an exchangeratethatreflects
thedepreciation
of
theyenrelativeto gold,usinga priceindexthat
reflects
thesubstantial
inflation
overtheperiod.
Subsequentresearchcitedin Ohkawa(1978, p.
shouldbe
27) suggeststhattheseearlyestimates
After
these
adjustedupward.
making
changes,
estimated
realGDP percapitain thelate 1870s
is 4.76 gold ryo.32
Table 3 reportstheresultsof applyinga reasonablerangeof assumptions
on thegrowthof
GDP
to
estimates
for1851percapita
develop
1853. The rateof 0.15 percentis based on the
long-rungrowthin rice productionand other
commodities
forJapanas a wholeoverthelast
one and one-halfcenturiesof Tokugawarule
(Osamu Saito,2003, Table 3). The rateof 0.4
percentis Nishikawa'sestimateforgrowthin
Choshiifromthemid-eighteenth
to the
century
1840s
The
rate
1981,
(Nishikawa,
14).
early
p.
of 1.5 percentis the growthJapanachieved
in
duringthelatterpartofthenineteenth
century
thewakeof a substantial
transfer
oftechnology
31 The adjustment
assumedthat85 percentinsteadof 80
whereproducpercentofthepopulationwas in agriculture,
tivitywas underone-halfthelevel in servicesand manuFor comparison,per capita consumption
fora
facturing.
farmingfamilywas about 2.13 ry6. The additionalper
forthesamurai,
capitaGDP wouldcovertheconsumption
the retainersof the samurai,and the clergy,as well as
investment.
32 The conversion
usesthedollar-yen
exchangeratefrom
Yamazawa and Yfizo(1979, Table 26) and thepriceindex
fortheperiodfromShinbo(1995, Table 4).
MARCH2005
TABLE3-ALTERNATIVE
ESTIMATES
OFPERCAPITA
GDP
FORTHEAUTARKY
YEARSOF 1851-1853
(In gold rye)
Assumedannualgrowthrate
of GDP percapita
Methodand period
Backcastestimates
from1878-1882to
1851-1853
Forecastestimatesfrom
1840 to 1851-1853
0.15%
0.4%
1.5%
2.0%
4.07
3.79
2.79
2.44
2.40
2.47
2.82
2.99
Notes: The "backcast"estimatesuse the GDP per capita
estimatefromOhkawa(1957, Table 1) in current
yen for
1878-1882 adjustedfor the new estimatesof GNP per
capitaforthemid-1870scitedinOhkawa(1978,p. 27). It is
converted
to goldry6usingtheexchangerateforthesilver
yenfoundin YamazawaandYuzo (1979,Table 26) andthe
priceindexfoundin Shinbo(1995, Table 4). The estimates
oftheGDP percapitaforthe"forecast"
estimates
arebased
on data in Nishikawa(1987) for the feudal domain of
of2.43 ryoin 1840have
Choshii.Thesepercapitaestimates
been adjusteddownwardto reflect
thepossibility
thatonly
15 percentof theeconomicallyactivepopulationin Japan
(not20 percentin themoredevelopedregionof Ch6shii)
was involvedin production
outsideof agriculture.
and capitalinvestment.
Finally,the rate of 2
percentis thegeometric
averageof thegrowth
ratethatHuber(1971) positsfortheeconomyin
the wake of openingup. It is most sensibly
appliedtothebackcasting
approach.Theresults
ofthesealternative
approachesyieldreasonable
ofpercapitaGDP thatrange
ballparkestimates
fromabout2.4 to 4.0 gold ryofortheautarky
period.
thevariousesFinally,Table 4 summarizes
timatesof theright-hand
side of (5), usingthe
different
methodsforcalculating
realGDP durthe
ingthefinalautarky
years.In ourjudgment,
highestconfidencecan be placed in the estimatesthatassumegrowthratesof 0.4 and 1.5
percent.Our resultssuggestthatreal income
wouldhavehadtoincreasebyatmost9 percent
duringJapan'sfinalautarky
yearsfortheeconlevel it
omy to affordthe same consumption
couldhaveobtainedifitwereengagedin internationaltradeduringthatperiod.
As discussedin SectionI, theindexof comparativeadvantagewill be an "exact"measure
ofthegainsfromtradeif specialization
according to comparative
advantagedoesn'tincrease
theopportunity
costsofproduction.
The histor-
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
VOL. 95 NO. 1
BERNHOFENAND BROWN: COMPARATIVEADVANTAGEGAINSFROM TRADE
221
provide a reasonableestimateof the upper
boundof 8 to 9 percent.
It is of interestto comparetheseestimates
with
the calculationofferedby Huber(1971),
Assumedannualgrowthrate
whopositedrealbenefits
fromtheopeningup to
of GDP percapita
trade
of
as
much
as
65
Huber'sestipercent.34
Methodand period
0.15% 0.4%
1.5% 2.0%
materestson one sourceof confusionand on
Usingthe"backcast"
oneerror.
Thetheory-based
counterfactual
anal5.4
5.8
7.8
9.0
estimatesof GDP
here
avoids
both
of
these
ysis
adopted
objecUsingthe"forecast"
tions.First,theperiodoftimein hiscomparison
estimatesof GDP
9.1
8.9
7.8
7.3
(1845 throughthe late 1870s) explicitlyinSources:Tables 2 and 3.
cludes a periodafterthemid-1870swhenimportsof Westerntechnology
beganto growin
a
Such
in
importance.
change production
possiical literature
makes a strongcase thatthese bilitiesbroughtaboutthrough
importsof techthestrictly
reallocative
effect
upper-bound
gains occurredin the wake of a
nologyconfounds
of resourcesawayfrom thatis thesourceoftheclassicgainsfromtrade.
reallocation
significant
traditional
activities
towardthenewgrowth
secis notbased uponestiSecond,his comparison
torsof silk and tea. Nakamura(1990, p. 95)
matedchangesin welfare,butinsteadon estiestimates
thatthefloodofimported
cottoncloth matedchangesin real wagesto urbanworkers.
and yarnprompteda massive shiftof up to
For two reasons,subsequentresearchsuggests
one-fifth
of the mostlyrurallaborforceaway thatthisapproachis incorrect.
First,itis apparfromtheproduction
of cottontextilesto other entthatopeningup mayhave had a substantial
goods.Atthesametime,theJapaneseeconomy impacton relativereturnsto factors,but that
belied the expectationsof observersthat it
shouldnotbe confusedwiththeoverallgainsto
wouldnotbe in a positionto supplymuchsilk theeconomythatcan be measuredonlywithan
definedmeasure of economic
beyonditsownneeds.It morethandoubledthe appropriately
raw
of
silk
within
ten
the
welfare.
Second,
production
years.By
subsequentresearchby Japaearly1870s,over90 percentof tea production nese scholarshas concludedthat,at best,real
was beingexportedoverseas(Sugiyama,1987).
OsamuSaito (1993)
wagesroseonlymodestly.
thisreallocation
couldhavebeen
Potentially,
suggeststhattherewereno realincreasesinreal
effi- wages duringtheperiodand,perhaps,substanpurchasedat thecost of some productive
and
a
cost.
Detailed
tial declines.35
risingopportunity
ciency
cost and production
data thatwouldprovidea
definitive
answerare not available. NonetheIV. Conclusion
less, thepriceevidencesuggeststhattheeconThis paperaddressesone of theoldestquesomy achievedthisreallocationwithoutfacing
steeplyrisingcosts.A comparisonof theprice tions in economics: how does international
of high-quality
Maebashisilkwiththepriceof
tradeaffectthewealthof a nation?In economic
rice suggeststhatafteralmosttripling,
therel- theory,
thisis answeredby comparing
an econative price of silk settleddown to about 50
in
a
of
state
relative
to
a
stateof
omy
autarky
trade.Since a marketeconpercenthigherthanits value duringthe early freeinternational
1850s.Silk production
could apparently
be exomyis almostalwaysengagedin someforeign
theempirical
tradeliterature
has
trade,however,
pandedwithoutnoticeablyhigherpricesonce
theeconomyadjustedto thenew (world)rela- notbeenable to generateestimates
ofthegains
tiveprice.The evidenceon thepriceof tea is
fromtradethatare based on the autarky-free
For thesereasons,we would expect paradigmof the theoreticaltrade literature.
similar.33
thattheequivalentvariation
measureis likelyto
TABLE4--ALTERNATIVE
ESTIMATES
OFTHEGAINSFROM
TRADEFORTHEAUTARKY
YEARS1851-1853
(As a percentageof GDP)
33 See
(1937, Table 1 and p. 82) for
KinyuiKenkyfikai
thepriceofriceandtea andYamazaki(1983, Table 96) for
thepriceof Maebashisilkand Zanier(1986).
that
34 See Yasuba (1996, p. 548) foran earliercritique
focuseson thereal-wageevidence.
35 Urbandaylaborers
wouldhaveexperienced
a halving
of realwages,forexample(Saito, 1993,p. 337).
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
222
THE AMERICANECONOMIC REVIEW
transition
from
Japan'srapidnineteenth-century
a stateof autarky
to openinternational
tradeis
an exceptionand providesan unusualopportuassessment
of thegains
nityfora theory-based
fromtrade.SincetheJapaneseeconomyfitsthe
oftheneoclassicaltrademodeland
assumptions
itstrading
is in accordwiththetheory
of
pattern
are
we
able
to
estimate
comparative
advantage,
thegainsfromtraderesulting
fromcomparative
advantage.
We findthatthegainsto theJapaneseeconadvanomy resultingfromstaticcomparative
most
were
8
no
than
or 9
tage
likely larger
of
GDP
at
the
time.
Our
estipercent Japan's
matesindicatethatsignificant
changesin cominto
moditypricesdo notnecessarilytranslate
largewelfaregains.It also suggestscautionin
freetradeon thegroundsof welfare
justifying
gains based on staticcomparativeadvantage.
Sincethedynamicaspectsofinternational
trade
probablyhavea muchlargerimpacton national
income,future
empiricalresearchon thenature
and magnitudeof these dynamicgains is
indispensable.
MARCH2005
AlanV. "The GeneralValidityofthe
Deardorff,
Law of Comparative
Advantage."Journalof
Political Economy,1980, 88(5), pp. 94157.
AlanV. "TestingTradeTheoriesand
Deardorff,
TradeFlows,"in RonaldW. Jones
Predicting
andPeterB. Kenen,eds.,Handbookofinternational economics,Vol. 1. Amsterdam:
1984,pp. 467-517.
North-Holland,
Dixit,Avinashand Norman,Victor.Theoryof
international
trade:A dual, generalequilibriumapproach.Cambridge:CambridgeUniversityPress,1980.
Elster,John.Logic and society:Contradictions
and possibleworlds.New York:JohnWiley
& Sons, 1978.
Francois,JosephF.; McDonald,Bradleyand
Hakan."The UruguayRound:A
Nordstroem,
Based Qualitative
Assessment,"
Numerically
in WillMartinandL. AlanWinters,
eds.,The
UruguayRound and the developingcountries. Cambridge: Cambridge University
Press,1996,pp. 253-91.
A. and Romer,David. "Does
Frankel,Jeffrey
Trade Cause Growth?"AmericanEconomic
Review,1999,89(3), pp. 379-99.
REFERENCES
GreatBritain,
ForeignOffice.
"Reportof Acting
CouncilFlowers."Britishparliamentary
paDaniel M. and Brown,JohnC. "A
Bernhofen,
pers,Vol. 53, 1865.
DirectTest of the Theoryof Comparative GreatBritain,ForeignOffice."ConsularTrade
Advantage:The Case of Japan."Journalof
Reports:CommercialReportsfromConsuPoliticalEconomy,2004,112(1), pp. 48-67.
lates."Britishparliamentary
papers,various
C. Rapportgeneralesur la partie
Brennwald,
volumes,1859-1867.
commerciale
de la missionsuisse au Japon. Hanley,Susanand Yamamura,Kozo.Economic
Berne:J.A. Weingart,
1865.
and demographic
Jachangeinpreindustrial
ErnestW. Japanas it was and is: A
Clement,
pan, 1600-1868. Princeton:PrincetonUnihandbookofold Japan.Chicago:A. C. McversityPress,1977.
Clungand Co., 1906.
Harley, C. Knick. "BritishIndustrialization
before 1841: Evidence of Slower Growth
Corden,W. Max. "The NormativeTheoryof
International
Trade,"in RonaldW. Jonesand
duringthe IndustrialRevolution."Journal
PeterB. Kenen,eds., Handbookof internaofEconomicHistory,1982,42(2), pp. 267tionaleconomics,
Vol. 1. Amsterdam:
North89.
Holland,1984,pp. 63-130.
Harley,C. Knick."CottonTextilePricesandthe
E. S. andYamamura,
Kozo."The ToIndustrialRevolution."Economic History
Crawcour,
Review,1998,51(1), pp. 49-83.
kugawaMonetary
System:1787-1868."Economic Developmentand CulturalChange, Harrigan,James."Specializationand the VolPart1, 1970,18(4), pp. 489-518.
umeofTrade:Do theData ObeytheLaws?"
David E. "The
Davis,DonaldR. and Weinstein,
in E. Kwan Choi and JamesHarrigan,eds.,
FactorContentof Trade,"in E. Kwan Choi
Handbookofinternational
trade,Vol. 1. Oxford:Blackwell,2003.
andJamesHarrigan,
eds.,Handbookofinternational trade,Vol 1. Oxford:Blackwell, Harrison,
Ann."OpennessandGrowth:
A Time2004.
Series,Cross-Country
AnalysisforDevelop-
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
VOL. 95 NO. 1
BERNHOFENAND BROWN: COMPARATIVEADVANTAGEGAINSFROM TRADE
ing Countries."Journal of Development
Economics,1996,48(2), pp. 419-47.
ThomasF. and
GlennW.; Rutherford,
Harrison,
the Uruguay
Tarr, David G. "Quantifying
Round,"in Will MartinandL. AlanWinters,
eds.,The UruguayRoundand thedeveloping
countries.
Cambridge:CambridgeUniversity
Press,1996,pp. 216-52.
Hausman,JerryA. "Valuationof New Goods
underPerfectand Imperfect
Competition,"
in TimothyBresnahanand RobertJ. Gordon, eds., The economics of new goods
(National Bureau of Economic Research
Studies in Income and Wealth). Chicago:
Universityof Chicago Press, 1997, pp.
209-37.
Paul. Market
Helpman,Elhananand Krugman,
and foreigntrade: Increasingrestructure
and theinternaturns,imperfect
competition,
MA: MIT Press,
tionaleconomy.
Cambridge,
1985.
The originsof Japanese
Howe, Christopher.
and technoltradesupremacy:
Development
ogy in Asia from1540 to thePacific War.
London:C. Hurstand Company,1995.
Huber,J. Richard."The Effecton Prices of
Japan's Entryinto World Commerceafter
1858." Journalof PoliticalEconomy,1971,
79(3), pp. 614-28.
JamesC. EconomicchangeinThailand,
Ingram,
1850-1970. Stanford:StanfordUniversity
Press,1971.
Irwin,DouglasA. "The WelfareCosts of AuTrade
tarky:EvidencefromtheJeffersonian
Embargo,1807-1809." UnpublishedPaper,
2001.
Jacob,C. "Berichtuiberdie Handels-Verhiltnisse von Japan,"in Regina Mathias-Pauer
and Reich Pauer,eds., Hansasttidte
undJaDokumente.
pan, 1855-1867: Ausgewahlten
Marburg: Fordervein Marburger JapanReihe,1992,pp. 279-305.
Returns
Japan,BureauofRevenue.
oftheforeign
trade of Japan: For the twenty-five
years
from1868 to 1892 inclusive.Tokyo:Insetsu
Kyoku,1893.
Kemp,MurrayC. "The Gain fromInternational
Trade." EconomicJournal,1962, (72) pp.
803-19.
Kinyti.
Wagakunishahinsoba takei
Kenkyfikai,
hyl (Statistics
ofnationalcommodity
prices).
1937.
Tokyo:KinytiKenkytikai,
223
James."InLeamer,EdwardE. and Levinsohn,
ternational
TradeTheory:The Evidence,"in
Gene M. Grossmanand KennethRogoff,
economics,
eds., Handbookof international
Vol. 3. Amsterdam:
North-Holland,
1995,pp.
1339-94.
Friedrich
August.AchtMonatein JaLiihdorf,
nach
des Vertrages
vonKanapan
Abschlufi
gawa. Leipzig:HeinrichStrack,1857.
Mathias-Pauer,
ReginaandPauer,Erich.HansastddteundJapan,1855-1867:Ausgewdhlten
Dokumente.
Marburg:Fordervein
Marburger
1992.
Japan-Reihe,
in John
Donald."Counterfacturals,"
McCloskey,
Eatwell,MurrayMilgateand PeterNewnan,
eds., ThenewPalgrave:A dictionary
ofeconomics,Vol. 1. London: Macmillan,1987,
pp. 701-03.
Meylan,G. F. Geschichtedes Handelsder EuropderinJapan.Leipzig:VoigtandGiinther,
1861. (Translation
by F. W. Diederich.)
Nakai,Nobuhiko
(MitsuiBunko,ed.).Kinseikoki
ni okerushuyibukkano ddtai(Movement
of
the prices of staple commodities).
Tokyo:
of TokyoPress,1989.
University
Miyamoto,
Mataji. Kensei Osaka no bukkato
rishi (Prices and profitin early modern
Osaka). Tokyo:S6bunsha,1963.
Nagazumi,Yiko. Tosen yushutsunyahin
saryi
ichiran,1637-1833-Nen(Summaryof importsand exportson Chineseshipsfor the
years1637-1833). Tokyo:S6bunsha,1987.
of Rural
Satoru."The Development
Nakamura,
in Chie Nakane and Shinzaburo
Industry,"
Oishi,eds.,TokugawaJapan:Thesocial and
economicantecedents
ofmodernJapan.Toof
kyo: University Tokyo Press, 1990, pp.
81-96.
SubsisNishikawa,Shunsaku. "Productivity,
in the Midtence, and By-Employment
Ninetheenth
CenturyChishi." Explorations
in EconomicHistory,
1978,15(1),pp. 69-83.
Shunsaku."Protoindustrialization
in
Nishikawa,
theDomainofChashtiin theEighteenth
and
Nineteenth
Centuries."Keio EconomicStudies, 1981 18(2), pp. 13-26.
"TheEconomyofChoshfi
Shunsaku.
Nishikawa,
on the Eve of Industrialization."
The Economic Studies Quarterly,1987, 38(4), pp.
323-37.
withM. ShinoOhkawa,Kazushi(in association
M. Ito and T. Noda).The
hara;M. Umemura;
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
224
THE AMERICANECONOMIC REVIEW
MARCH2005
Growthrateof theJapaneseeconomysince
well-beinginAsia and Europe.Oxford:OxfordUniversity
Press(forthcoming).
1878. Tokyo:KinokuiyaBookstoreCo., Ltd.,
1957.
Samuelson,Paul A. "The Gains fromInternationalTrade."CanadianJournalofEconomOhkawa, Kazushi. "Initial Conditions:Ecoics and Political Science, 1939, 5(2), pp.
in KazushiOhnomicLevel and Structure,"
195-205.
kawa and Gustav Ranis, eds., Papers and
the
on
Conference Japan's Samuelson,Paul A. "The Gains fromInternaproceedingsof
tionalTrade Once Again."EconomicJourHistoricalDevelopment
Experienceand the
nal, 1962, 72(288),pp. 820-29.
DevelopingCountries:Issues
Contemporary
for comparativeanalysis. Tokyo: Interna- Shinbo,Hiroshi.Kinseino bukkato keizaihatten:Zenkogoy5shakaie no sfuryoteki
sekkin
tionalDevelopmentCenterof Japan,1978,
economic
in
and
25-38.
(Prices
development early
pp.
modernJapan: A quantitative
Ono,Takeo.Edo bukkajiten(Dictionaryof the
approach to
pre-industrial
society).Tokyo:Toyo Keizai
price of productsin Tokyo).Tokyo: Tenbosha,1979.
Shinposha,1978.
G.
Shinbo,Hiroshi.Kindai Nihonkeizaishi(EcoO'Rourke,KevinH. and Williamson,
Jeffrey
nomic historyof modernJapan). Tokyo:
"WhenDid GlobalizationBegin?"European
ReviewofEconomicHistory,
Sobunsha,1995.
2002, 6(1), pp.
23-50.
Sugiyama,
Shinya."The Impactof theOpening
of thePortson DomesticJapaneseIndustry:
Pauer, Eric. "TraditionalTechnologyand Its
The Case of Silk and Cotton."Economic
duringtheEarly
Impacton Japan'sIndustry
Studies Quarterly,1987, 38(4), pp. 338Period of the IndustrialRevolution."The
53.
EconomicStudiesQuarterly,
1987,38(4), pp.
in
354-71.
Sugiyama,Shinya.Japan's industrialization
the world economy,1859-1899: Export
DeutschPauer, Erich. "Technologietransfer
in
trade and overseas competition.London:
von 1850 bis zur Gegenwart,"
land-Japan
ErichPauer,ed.,TechnologietransferDeutsch- AthlonePress,1988.
in Japan,"
land-Japanvon 1850 bis zur Gegenwart. Syrski,Szymon."Ober Seidenkultur
in Karl von Scherzer,ed., Fachmdnnische
Munich: Ludicum Verlag, 1992, pp. 48Berichteuberdie isterreichisch-ungarische
72.
Expeditionnach Siam, China, und Japan.
Phipps,John.Practical treatiseon the China
the
and Far Eastern trade,compromising
Stuttgart:Julius Maier, 1872, pp. 22886.
Britain
Great
and
commerce
India,
particof
Thru,IshimeandYoneda,Hirogaki.
"Changesin
ularlyBengaland Singapore,withChinaand
the EasternIslands. London: W. H. Allen
Iron-CastingTechniques,"in Erich Pauer,
and
and Co., 1836.
ed., Papers on the historyof industry
Rondot,M. Natalis.Etudepratiquedes tissusde
technologyin Japan, Vol. 1. Marburg:
Forderverein
1995,
laineconvenables
Japan-Reihe,
Margurger
pourla Chine,le Japon,la
etl'Archipel
Indien.Paris:GuilCochinchine
pp. 153-74.
laminet Cie., 1847.
Totman,Conrad.A historyof Japan.Malden:
2000.
BlackwellPublishers,
Mark
R.
and
Kenneth
I.
Wolpin,
Rosenzweig,
in Econom- Uchida,Hoshimi."NarrowCottonStripesand
"'Natural'NaturalExperiments
Their Substitutes: Fashion, Technical
ics." Journalof EconomicLiterature,
2000,
in
38(4), pp. 827-74.
Organization
Progressand Manufacturing
Sait6, Osamu. "Bakamatsu-Meijino Chingin
Japanese Popular Clothing, 1850-1920."
TextileHistory,1988,19(2), pp. 159-97.
of Late
Hendo Daiko (A Reconsideration
Hal. Microeconomic
KenKeizai
Varian,
analysis.3rd Ed..
Edo-MeijiWage Fluctuations)."
New York:W. W. Norton,1992.
kyA,1993,44(4), pp. 330-38.
Berichte
Saiti,Osamu."Wages,InequalityandPre-mod- von Scherzer,Karl. Fachmdinnische
Expediiiber die iisterreichisch-ungarische
ernGrowthin Japan,1727-1894,"in R. C.
tionnachSiam,China,undJapan.Stuttgart:
Allen,T. BentssonandM. Dribe,eds.,Living
JuliusMaier,1872.
standardsin thepast: New perspectiveson
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions
VOL. 95 NO. 1
BERNHOFEN AND BROWN: COMPARATIVEADVANTAGEGAINSFROM TRADE
Yamazaki, Ryfiz6.Kinsei bukkashi kenkya
(Price historyof the Edo Era). Tokyo:
Hanawa Shobo, 1983.
Yamazawa,Ippei and Yfiz6,Yamamoto.Choki
keizai tokei14. (Long-term
economicstatistics of Japan,Vol. 14.): B6eki to kokusai
shishi. (Foreigntradeand balance of pay1979.
ments.)Tokyo:ToyoKeizai Shinposha,
Yasuba, Yasakuchi."Did Japan Ever Suffer
froma ShortageofNaturalResourcesbefore
225
WorldWarI?" JournalofEconomicHistory,
1996,56(3), pp. 543-60.
Zanier,Claudio."Japanand the Pebrinecrisis
of Europeansericulture
duringthe 1860s,"
in Erich Pauer, ed., Silkworms,oil, and
chips:Proceedings
oftheeconomicsand economichistory
sectionof theFourthInternational Conferenceon Japanese Studies,
Paris, September1985. Bonn: M. Wehle,
1986.
This content downloaded from 129.170.96.89 on Mon, 29 Sep 2014 07:48:23 AM
All use subject to JSTOR Terms and Conditions