Global economic history lecture 7 (economic globalisation: what, when and how?)

What is mercantilism?

Mercantilism was the dominant way of thinking before in the 1800s that saw international trade as a bad thing. As much as possible, domestic production had to be promoted rather than importing. Mercantilists want to restrict trade policies to increase national income production and employment.

What is meant by the law of one price? And what condition does it have?

The law of one price is an economic concept that states the following: In a perfectly integrated global economy prices of the same product are the same wages for the same job are equal interest rates will be similar and exchange rates superfluous (Money is worth the same everywhere).

Condition: free trade of goods, knowledge and information —> free market/no transaction costs

How global is early modern globalisation? 3

1. Clear signs of price integration in luxury goods and textiles. Maritime trade lower trade costs (pepper, textiles), But not for bulk goods

2. Silver greasing the wheels of commerce

3. Slave trade as driver (sugar)

Lol