In this paper we use the Johansen and Juselius cointegration technique to examine the long-run convergence between imports and exports for a number of industrialized countries. The results indicate that there exists a long-run steady-state relationship between imports and exports for most countries in the sample. The policy implications of our findings are that the countries are not in violation of their international budget constraints and, more importantly, there is no productivity gap between the domestic economy and the rest of the world, implying a lack of permanent technological shocks to the domestic economy.

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Using new and uniquely detailed data, we examine how construction workers’ wages in Sweden developed between 1831 and 1900. Wages grew rapidly from the 1850s, and comparisons with Northwestern Europe show that Swedish workers benefited more from growth than workers elsewhere. Globalization forces, most notably overseas migration, in combination with flexible and well-integrated labor markets—signified by strong regional convergence, falling skill differentials, and small urban-rural wage gaps—pushed up wages in Sweden.

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