In Box

Strange Trade

Recent research reveals the surprising unintended consequences of free trade

ISMOYO/AFP/Getty Images
ISMOYO/AFP/Getty Images

Free trade advocates say it’s an engine of economic growth; opponents think it perpetuates global inequality. But the unintended effects of all that cross-border traffic — which has nearly quadrupled around the world since 1990 — may be even more interesting. Here’s a look at some of the most surprising conclusions from recent research on trade.

1. Trade makes countries shrink.
Increased international trade lowers a country’s birth rate, in part because it exposes countries to gender norms that bring women out of the home and into the workplace.

–John A. Doces, International Interactions


2. Trade is less important than marriage.
Facing a shortage of available wives, Chinese families are increasing their savings rates to increase their sons’ competitiveness in the marriage market. This drives down China’s exchange rate, contributing to a global trade imbalance.

Qingyuan Du and Shang-Jin Wei, National Bureau of Economic Research


3. Trade built the ancient civilizations of Mesoamerica.
"Far from being isolated developmentally, [the cacao trade] integrally tied populations in the American Southwest to the socio-political and economic activities of Mesoamerican states."

Dorothy K. Washburn, William N. Washburn, and Petia A. Shipkova, Journal of Archaeological Science


4. Trade doesn’t turn low-tech countries into high-tech ones.
Despite hopes that globalization would allow developing countries to innovate themselves into prosperity, 30 years of increased trade has only brought steeper and more intransigent gaps between low-tech and high-tech countries, with the high-tech countries maintaining their edge through specialization that can take years to match.  

Thomas Kemeny, Journal of Economic Geography


5. Trade can improve your basketball game.
An increase in the number of foreigners playing in domestic basketball leagues correlates with improved performance for the national team, even if it’s composed only of domestic players.

J. Alvarez, D. Forrest, I. Sanz, and J.D. Tena, Labour Economics


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