Recommended citation: Damásio, B., & Mendonça, S. (2022). Leader-follower dynamics in real historical time: A Markovian test of non-linear causality between sail and steam (co-) development. Applied Economics, 1-11 https://doi.org/10.1080/00036846.2022.2100868
Abstract: The most dramatic changes in modern shipping occurred with the application of new industrial- age technologies to oceanic transportation. In metal-hulled and engine-powered trading plat- forms, industrial-age steamers (especially tramps and liners) lead to marked increases in the average tonnage of a typical vessel crossing the seas of an expanding global economy. Some of the most important developments had to do with the substitution of traditional wind-driven ships by successive cohorts of vessels exploiting the comparative advantages of mechanization. In this paper, we deploy a set of both established and less-orthodox quantitative approaches to historical commercial shipping time-series so as to model the (complex) relationship between steam and sail performance. We find that, indeed, there is evidence of leader-follower dynamics during the later part of 19th century. This process of ‘creative destruction’ was non-linear.