This study builds the first internationally comparable index of real wages for Mexico City bridging the 18 th and the early 20 th century. Real wages started out in relatively high international levels in the mid 18 th century, but declined from the late 1770s on, with some partial and temporal rebounds after the 1810s. After the 1860s, real wages recovered and eventually reached 18 th -century levels in the early 20 th century. Real wages of Mexico City's workers subsequently fell behind those of high-wage economies to converge with the lower fringes of middle-wage economies. The age of the global Great Divergence was Mexico's own age of stagnation and decline relative to the world economy.
The new trade data used here document the significance of industrialisation in Argentina, Brazil, Chile and Mexico after 1870. By 1910 Brazil and Mexico, in particular, led most of the poor periphery in Asia, Africa and the Middle East. While some of this impressive industrialisation was due to fast productivity growth in manufacturing, perhaps yielding some catch-up on their competitors in the United States and Europe, this article argues that there were even more powerful forces at work. Much of the industrialisation that occurred in Latin America was due to a cessation in the seven-decade rise in its net barter terms of trade, trends that reversed the deindustrialisation and ' Dutch Disease ' forces that had dominated Latin America for almost a century. Equally important for Brazil and Mexico was favourable policy in the form of higher effective rates of protection for manufacturing, and a depreciation of the real exchange rate. These policies were missing in Argentina and Chile, and industrialisation suffered there as a consequence. Changing market conditions and policies seem to have been more important than changing fundamentals in accounting for Latin American industrialisation after 1870.
In Mexico, as in other parts of the world, the introduction of modern transportation and communications brought about major changes in the production and distribution of goods and in firms' management and structure. Between 1880 and 1910, the Mexican textile sector was modernized through the efforts of entrepreneurial French immigrants from Barcelonnette, whose closely knit network enabled them to succeed in overcoming limitations in the Mexican institutional framework.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.