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Exports and Their Impact on the Economy. The Case of Peru, 1830–1930

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The First Export Era Revisited

Part of the book series: Palgrave Studies in Economic History ((PEHS))

Abstract

This chapter analyzes the evolution of exports of Peru between 1830 and 1930. In particular, it describes the boom of guano, the significant drop of exports during the War of the Pacific (1879–1883) and the posterior recovery, especially during World War I and the boom of the 1920s. In addition, the chapter analyzes several indicators in order to determine the direct and indirect impact of the export sector on the growth of the Peruvian economy.

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Notes

  1. 1.

    See for example Hunt (1973), Seminario (2015), Zegarra (2017).

  2. 2.

    The basket of export products is reported in Table 8.1.

  3. 3.

    Information comes from Johnston and Williamson (2016) and Seminario (2015).

  4. 4.

    As Basadre (1963), p. 104, argues, the European war determined from 1915 a prodigious increase in the value of Peruvian exports.

  5. 5.

    Thorp and Bertram (1985), p. 79.

  6. 6.

    Zegarra (2014b), p. 106.

  7. 7.

    Thorp and Bertram (1985), p. 79.

  8. 8.

    Thorp and Bertram (1985), p. 107.

  9. 9.

    Zegarra (2014b), pp. 107–08.

  10. 10.

    Basadre (1963), p. 105.

  11. 11.

    Zegarra (2014b), p. 108.

  12. 12.

    Thorp and Bertram (1985), p. 84.

  13. 13.

    Ministerio de Hacienda y Comercio (1919).

  14. 14.

    These indicators are useful in a partial-equilibrium analysis. Some of these indicators lack relevance when making a general-equilibrium analysis.

  15. 15.

    It is necessary to take into account that in macroeconomic terms the inhabitants of a country choose their consumption of imported goods not only as a consequence of how much the country exported in one single year. A country determines the level of imports not from the current value of exports, but from the future expectations of economic growth and, in particular, from the present value of exports. It is possible that in several years the trade balance is in deficit due to a slow growth of imports. In fact, in periods of strong investment and optimism about the future, the inhabitants of a country can demand large volumes of capital and consumption goods, independently of the value of exports. On the other hand, in some years an economy can experience significant growth of exports and trade surplus, paying previous debts with that surplus.

  16. 16.

    Let us compare two companies A and B. Company A generates a direct contribution to the national income equal to x times its export revenues NA, and company B generates a direct contribution to the national income equal to y times its export revenues NB. Assume that x < y and NA > NB. Let us also assume that company A is more productive than company B, that both companies demand the same level of domestic and foreign resources and that taxes are zero. As both companies used the same level of domestic resources, x NA = x NB. So even though company A left a lower portion of its sales to the domestic economy, the contribution in dollars of both companies is the same.

  17. 17.

    Thorp and Bertram (1985), p. 128.

  18. 18.

    Thorp and Bertram (1985), p. 154.

  19. 19.

    Contreras (2012), p. 375.

  20. 20.

    Basadre (1983), Vol. III, p. 90.

  21. 21.

    Zegarra (2014b), pp. 27–28.

  22. 22.

    Seminario (2015) shows that Peru exported some manufactured goods to Bolivia prior to 1870. Over time, however, those manufactures declined in importance. It is possible that real appreciation partially explains the decline of exporting manufacture.

  23. 23.

    Junta Municipal de Lima (1870).

  24. 24.

    One silver peso was equal to eight reales. One silver peso was equivalent to one silver sol. One feeble peso was equivalent to 0.8 silver soles.

  25. 25.

    Engelsen (1978), p. 107, 273.

  26. 26.

    Junta Municipal de Lima (1870), p. 10–11.

  27. 27.

    Junta Municipal de Lima (1870), p. 19–20.

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Authors and Affiliations

  1. CENTRUM Católica Graduate Business School, Pontificia Universidad Católica del Perú, Lima, Peru

    Luis Felipe Zegarra

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  1. Luis Felipe Zegarra
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  1. El Colegio de México, Mexico City, Mexico

    Sandra Kuntz-Ficker

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Zegarra, L.F. (2017). Exports and Their Impact on the Economy. The Case of Peru, 1830–1930. In: Kuntz-Ficker, S. (eds) The First Export Era Revisited. Palgrave Studies in Economic History. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-62340-5_8

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  • DOI: https://doi.org/10.1007/978-3-319-62340-5_8

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