Commercial Hysteresis: Persistence and Reorganization in Europe’s Bilateral Trade Geography during the Great Depression

This
paper examines whether the Great Depression fundamentally remapped Europe’s
bilateral trade geography or whether pre-crisis partner structures remained
durable through the 1930s. Using a newly constructed bilateral trade panel for
twenty-one European countries, 1927–1938, it studies persistence and
reallocation in bilateral trade relations. The results show strong continuity:
by 1937, partner rankings still resembled those of 1928, and most countries
retained at least two pre-crisis core partners. Yet post-1931 shocks weakened
inherited structures, especially on the import side. Germany became a
distinctive focal partner within this selective reorganization. Interwar Europe
thus exhibited commercial hysteresis rather than wholesale remapping.