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Global Trade Shrinks dissects the drastic decline in global trade during the early 1930s, an economic crisis that precipitated the Great Depression. The book explores the intricate dynamics of international economics and world history, revealing how factors like protectionism and the instability of the gold standard contributed to a near two-thirds reduction in global commerce.
Understanding this trade collapse is crucial, as it highlights the fragility of the global economy and the potential for similar crises in the future. This book uniquely emphasizes policy missteps, such as ""beggar-thy-neighbor"" approaches, rather than solely blaming the stock market crash. For instance, the rise in protectionist trade policies exacerbated the crisis, demonstrating how interconnected the global economy truly was.
Analyzing data from the League of Nations and archival sources, the book progresses by first establishing the state of global trade in the 1920s, then examining the rise of protectionism and the instability of the gold standard, before concluding with lessons for policymakers today.
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