Appendix 2 - The ratio of exports to gross domestic product, the purchasing power of exports, and the volume of exports, circa 1850 to circa 1912

Summary

The criteria used in Chapter 3 for measuring the success or failure of export-led growth require information on the ratio of exports to GDP and the purchasing power of exports before 1914. This appendix explains the methods I used to calculate the statistics.

The ratio of exports to GDP

Calculation of the required rate of growth of exports in equation (3.1) involves estimation of the ratio of exports to GDP (w). Because w can be assumed to change over time, it is necessary to estimate it at the beginning (circa 1850) and at the end (circa 1912) of the period.

The ratio of exports to GDP is the same as the ratio of exports per head to GDP per head. Table 3.5 provides data on exports per head in current dollars for all countries at different time intervals, and Figure 5.1 provides data on GDP per head circa 1912 for fourteen countries at constant (1970) dollars (see Appendix 3). Estimates for w in 1912 can therefore be obtained by converting the GDP data to current dollars using a deflator obtained from U.S. price indexes. See Mitchell (1993). Assuming that 1970 equals 100, the 1912 price index can be calculated as 35. Thus the GDP data were converted to current dollars by multiplying by 0.35. This allows calculation of w in 1912 for the fourteen countries that provided GDP data.