Land frontier expansion in settler economies (1830- 1950): Was it a Ricardian process?

Produced by: 
Universidad de la República - Uruguay
Available from: 
November 2016
Paper author(s): 
Henry Willebald (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
Javier Juambeltz (Universidad del Trabajo del Uruguay (Uruguay). Ingeniería Tecnológica)
Topic: 
Macroeconomics - Economic growth - Monetary Policy
Theory
Year: 
2017
tags: 

Settler economies (Argentina, Australia, Canada, Chile, New Zealand, South Africa and Uruguay) benefited from the consequences of the Second Industrial Revolution as their temperate climate and fertile soils were especially suitable for the production of meat, wheat, wool and other commodities. The main domestic contribution to economic growth was the incorporation of “new” land, of variable quality, into the commercial and productive relationships of the first expansion of the world capitalism. Therefore our aim is to understand this process in the long-run (1830-1950) using the land frontier expansion as pivotal concept. Initially, we discuss the economic theories about the role of land in the economic activity and then, present an analytical model based on the classical Ricardian view to explain the land frontier expansion in terms of extensive and intensive margins in the agrarian production. Our empirical strategy uses a quantification method based on Geographic Information Systems (GIS) and we consider different agrarian land aptitudes and distances to centres of gravity to test our hypotheses. Our evidence supports the predominance of the extensive margin in the land frontier expansion of Argentina, Uruguay and New Zealand and the intensive margin in the two first economies and Chile but not in the other members of the “club”.

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