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The Marshall Plan and the Spanish postwar economy: a welfare loss analysis 1
Author(s) -
CARRASCOGALLEGO JOSÉ A.
Publication year - 2012
Publication title -
the economic history review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.014
H-Index - 49
eISSN - 1468-0289
pISSN - 0013-0117
DOI - 10.1111/j.1468-0289.2010.00576.x
Subject(s) - autarky , economics , deadweight loss , welfare , international economics , treaty , international trade , political science , market economy , law
This article uses historical fact as a natural experiment to measure a country's welfare loss from shifting from an allowed to a restricted trade situation, based on international trade theory. A welfare loss of 8 per cent of GDP is found. The evolution of domestic import and export prices in Spain in 1940–58 fits international trade theory assumptions. The main years of autarky are not those commonly considered, but 1947–55, marked by the exclusion of Spain from the Marshall Plan and the Madrid Treaty between Franco's regime and the US. The upper‐bound welfare loss for 1947–55 is 26 per cent of GDP.