The extraordinary growth in trade seen prior to the First World War and after the Second World War has often been attributed to a decline in the cost of transport. However, a new paper available from the National Bureau of Economic Research called Global Trade and the Maritime Transport Revolution suggests that the decline in the cost of transport had little influence on the growth of trade prior to the First World War:
[W]e find little systematic evidence suggesting that the maritime transport revolution was a primary driver of the late nineteenth century global trade boom. Rather, the most powerful forces driving the boom were those of income growth and convergence. Finally, we suggest that a significant portion of the observed decline in maritime transport costs may have been induced by the trade boom itself.
This is obviously a bit of speculation on my part, but I wonder if this finding suggests that the current rising cost of fuel will do little to dampen global trade nowadays?
Clarification: I should make clear that I am speculating about the impact of the cost of fuel on the cost of transportation and how that would effect global trade. Obviously, the rising cost of fuel will also have consequences for GDP growth, which may also harm global trade flows.