Throughout history, empires have facilitated trade within their territories by building and securing trade and migration routes, and by imposing common norms, languages, religions, and legal systems, all of which led to the accumulation of imperial capital.
This column, based on novel data on the rise and fall of empires over the last 5,000 years, shows that imperial capital has a positive effect on current trade beyond historical legacies such as sharing a language or a religion. This suggests a persistent and previously unexplored influence of long-gone empires on current trade.
Notes: Example of imperial capital for two countries, Egypt and Iraq. Imperial capital grows by one unit for each year that the two current day countries are, at least partially, covered by a common empire. Capital depreciates continuously by 0.1% per year, which is roughly 5% per 50 years. The deep imperial capital line differentiates capital accumulation using three empire characteristics: a centralised administration, a centralised religion, and a monopoly on coin minting. Each characteristic gives an imperial capital amount of 0.33 per year, with the maximum of 1 for all three characteristics. The Metropole line takes into account only the years when one of the two countries is considered the metropole, or the administrative centre, of the empire.
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imperial_capital, empires, trade, long-run_persistence, gravity,
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