National and international market integration in the 19th century: Evidence from comovement
AbstractThis paper analyzes relative wheat price fluctuations to investigate market integration among 72 European and US cities. Applying a Dynamic Factor Model, which has seldom been used in market integration analysis, prices are decomposed into international, national and local components. Thus, national and international market integration are identified by a statistical restriction, and results for each single market are obtained. The first result is that globalization has accelerated faster in the first than in the second half of the 19th century, putting the post-1850 transport revolution into perspective. The USA integrated only later into the European market, discounting the role of the "grain invasion" for trade history. I also show that the European nations that turned protectionist after 1880 reduced the impact of foreign shocks, while free traders fully integrated into the international economy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Explorations in Economic History.
Volume (Year): 48 (2011)
Issue (Month): 2 (April)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622830
Market integration 19th century Dynamic factor analysis Wheat prices;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Engel, C. & Rogers, J.H., 1995.
"How Wide is the Border?,"
4-95-16, Pennsylvania State - Department of Economics.
- Charles Engel & John H. Rogers, 1994. "How Wide is the Border?," NBER Working Papers 4829, National Bureau of Economic Research, Inc.
- Charles Engel & John H. Rogers, 1995. "How wide is the border?," Research Working Paper 95-09, Federal Reserve Bank of Kansas City.
- Charles Engel & John H. Rogers, 1995. "How wide is the border?," International Finance Discussion Papers 498, Board of Governors of the Federal Reserve System (U.S.).
- Webb, Steven B., 1982. "Agricultural Protection in Wilhelminian Germany: Forging an Empire with Pork and Rye," The Journal of Economic History, Cambridge University Press, vol. 42(02), pages 309-326, June.
- Federico, Giovanni, 2007. "Market integration and market efficiency: The case of 19th century Italy," Explorations in Economic History, Elsevier, vol. 44(2), pages 293-316, April.
- Lawrence J. Christiano & Terry J. Fitzgerald, 1999.
"The Band Pass Filter,"
NBER Working Papers
7257, National Bureau of Economic Research, Inc.
- James E. Anderson & Eric van Wincoop, 2003.
"Gravity with Gravitas: A Solution to the Border Puzzle,"
American Economic Review,
American Economic Association, vol. 93(1), pages 170-192, March.
- James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
- James E. Anderson & Eric van Wincoop, 2000. "Gravity with Gravitas: A Solution to the Border Puzzle," Boston College Working Papers in Economics 485, Boston College Department of Economics.
- P. D., 1988. "Introduction," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 10(4), pages 527, July.
- Kaukiainen, Yrj, 2001. "Shrinking the world: Improvements in the speed of information transmission, c. 1820 1870," European Review of Economic History, Cambridge University Press, vol. 5(01), pages 1-28, April.
- Harley, C. Knick, 1988.
"Ocean Freight Rates and Productivity, 1740–1913: The Primacy of Mechanical Invention Reaffirmed,"
The Journal of Economic History,
Cambridge University Press, vol. 48(04), pages 851-876, December.
- Harley, C.K., 1988. "Ocean Freight Rates And Productivity, 1740-1913: The Primacy Of Mechanical Invention Reaffirmed," UWO Department of Economics Working Papers 8802, University of Western Ontario, Department of Economics.
- Charles Engel & John H. Rogers & Shing-Yi B. Wang, 2003. "Revisiting the Border: an assessment of the law of one price using very disaggregated consumer price data," International Finance Discussion Papers 777, Board of Governors of the Federal Reserve System (U.S.).
- Martin Uebele, 2010. "Demand Matters: German Wheat Market Integration 1806-1855 in a European Context," CQE Working Papers 1110, Center for Quantitative Economics (CQE), University of Muenster.
- Cheryl Schonhardt-Bailey, 2006. "From the Corn Laws to Free Trade: Interests, Ideas, and Institutions in Historical Perspective," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262195437, January.
- Goodwin, Barry K. & Grennes, Thomas J., 1998. "Tsarist Russia and the World Wheat Market," Explorations in Economic History, Elsevier, vol. 35(4), pages 405-430, October.
- Yuriy Gorodnichenko & Linda L. Tesar, 2009. "Border Effect or Country Effect? Seattle May Not Be So Far from Vancouver After All," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 219-41, January.
- Jacks, David S., 2006. "What drove 19th century commodity market integration?," Explorations in Economic History, Elsevier, vol. 43(3), pages 383-412, July.
- O'Rourke, Kevin H., 1997.
"The European Grain Invasion, 1870–1913,"
The Journal of Economic History,
Cambridge University Press, vol. 57(04), pages 775-801, December.
- Shiue, Carol H., 2005. "From political fragmentation towards a customs union: Border effects of the German Zollverein, 1815 to 1855," European Review of Economic History, Cambridge University Press, vol. 9(02), pages 129-162, August.
- Wolfgang Keller & Carol H. Shiue, 2008. "Institutions, Technology, and Trade," NBER Working Papers 13913, National Bureau of Economic Research, Inc.
- Uhlig, Harald, 1994. "What Macroeconomists Should Know about Unit Roots: A Bayesian Perspective," Econometric Theory, Cambridge University Press, vol. 10(3-4), pages 645-671, August.
- M. Ayhan Kose & Christopher Otrok & Charles H. Whiteman, 2003. "International Business Cycles: World, Region, and Country-Specific Factors," American Economic Review, American Economic Association, vol. 93(4), pages 1216-1239, September.
- David S. Jacks, 2009.
"On the Death of Distance and Borders: Evidence from the Nineteenth Century,"
NBER Working Papers
15250, National Bureau of Economic Research, Inc.
- Jacks, David S., 2009. "On the death of distance and borders: Evidence from the nineteenth century," Economics Letters, Elsevier, vol. 105(3), pages 230-233, December.
- Grantham, George, 1989. "Agricultural Supply During the Industrial Revolution: French Evidence and European Implications," The Journal of Economic History, Cambridge University Press, vol. 49(01), pages 43-72, March.
- Paul Sharp, 2006. "1846 and All That: The Rise and Fall of British Wheat Protection in the Nineteenth Century," Discussion Papers 06-14, University of Copenhagen. Department of Economics.
- Arthur F. Burns & Wesley C. Mitchell, 1946. "Measuring Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number burn46-1.
- Labys, W. C. & Achouch, A. & Terraza, M., 1999. "Metal prices and the business cycle," Resources Policy, Elsevier, vol. 25(4), pages 229-238, December.
- Max-Stephan Schulze & Nikolaus Wolf, 2009. "On the origins of border effects: insights from the Habsburg Empire," Journal of Economic Geography, Oxford University Press, vol. 9(1), pages 117-136, January.
- Markus Lampe & Paul Sharp, 2013. "Greasing the Wheels of Rural Transformation? Margarine and the Competition for the British Butter Market," Working Papers 0043, European Historical Economics Society (EHES).
- Sharp, Paul & Uebele, Martin, 2013. "Rural Infrastructure and Agricultural Market Integration in the United States: A long run perspective," Discussion Papers of Business and Economics 10/2013, Department of Business and Economics, University of Southern Denmark.
- David Chilosi & Tommy E. Murphy & Roman Studer, 2011.
"Europe’s Many Integrations: Geography and Grain Markets, 1620-1913,"
412, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Chilosi, David & Murphy, Tommy E. & Studer, Roman & Tunçer, A. Coşkun, 2013. "Europe's many integrations: Geography and grain markets, 1620–1913," Explorations in Economic History, Elsevier, vol. 50(1), pages 46-68.
- Sharp, Paul & Weisdorf, Jacob, 2013. "Globalization revisited: Market integration and the wheat trade between North America and Britain from the eighteenth century," Explorations in Economic History, Elsevier, vol. 50(1), pages 88-98.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.