Trade and the adoption of a universal language E. Kwan Choi* Department of Economics, Iowa State University, Ames, IA 50011, USA Received 12 October 2000; accepted 16 October 2000 Abstract This paper investigates long-run consequences of international trade between two economies inhabited by two distinct races using different languages. If wages are not equal in autarky, free trade encourages the workers of the low-wage country to learn the language of the high-wage country. As the bilingual population increases in the low-wage country, products are increasingly produced in the dominant-language version. In the long run the language of the high-wage country becomes universally adopted. D 2002 Elsevier Science Inc. All rights reserved. JEL classification: F1 Keywords: Universal language; Trade 1. Introduction Trade seems to have occurred naturally between tribes and nations since time immemorial. Gunpowder and stirrup invented in China spread to the Western world and changed the course of military history. Cotton developed in the Indus Valley gradually spread to the rest of the world, and immensely improved the quality of life for humanity. However, trade volume has not been really significant until the last few decades. Nations have been trading goods and resources on an unprecedented scale since the early 1970s; the total value of world trade increased from US$332 billion in 1970 to US$3708 billion in 1993 (Yearbook of International Trade Statistics, various years). In the United States, imports represented only about 4% or less 1059-0560/02/$ – see front matter D 2002 Elsevier Science Inc. All rights reserved. PII:S1059-0560(01)00084-3 * Tel.: +1-515-294-5999; fax: +1-515-294-9913. E-mail address: kchoi@iastate.edu (E.K. Choi). International Review of Economics and Finance 11 (2002) 265–275