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National and international market integration in the 19th century: Evidence from comovement

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  • Uebele, Martin

Abstract

This 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.

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Bibliographic Info

Article provided by Elsevier in its journal Explorations in Economic History.

Volume (Year): 48 (2011)
Issue (Month): 2 (April)
Pages: 226-242

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Handle: RePEc:eee:exehis:v:48:y:2011:i:2:p:226-242

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Web page: http://www.elsevier.com/locate/inca/622830

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Keywords: Market integration 19th century Dynamic factor analysis Wheat prices;

References

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Citations

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Cited by:
  1. Martin Stuermer, 2013. "Industrialization and the demand for mineral commodities," Bonn Econ Discussion Papers bgse13_2013, University of Bonn, Germany.
  2. 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.
  3. David Chilosi & Tommy E. Murphy & Roman Studer, 2011. "Europe’s Many Integrations: Geography and Grain Markets, 1620-1913," Working Papers 412, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  4. 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).
  5. 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.

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