IDEAS home Printed from https://ideas.repec.org/a/eee/exehis/v88y2023ics0014498323000086.html
   My bibliography  Save this article

Exploring 200 years of U.S. commodity market integration: A structural time series model approach

Author

Listed:
  • Harrison, James M.

Abstract

This paper uses a structural time series model to explore U.S. commodity market convergence, efficiency, and intertemporal smoothing from 1750–1949. I find near-continuous convergence that is largely concentrated in the frontier, broad antebellum efficiency gains, and intertemporal smoothing from the 1880s onward among the most perishable goods. The results reveal new periods of integration across all three metrics and underscore the rapid rate of integration on the frontier.

Suggested Citation

  • Harrison, James M., 2023. "Exploring 200 years of U.S. commodity market integration: A structural time series model approach," Explorations in Economic History, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:exehis:v:88:y:2023:i:c:s0014498323000086
    DOI: 10.1016/j.eeh.2023.101514
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0014498323000086
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eeh.2023.101514?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Davis, Lance E., 1965. "The Investment Market, 1870–1914: The Evolution of a National Market," The Journal of Economic History, Cambridge University Press, vol. 25(3), pages 355-399, September.
    2. Dave Donaldson & Richard Hornbeck, 2016. "Railroads and American Economic Growth: A "Market Access" Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 799-858.
    3. Ethel D. Hoover, 1960. "Retail Prices after 1850," NBER Chapters, in: Trends in the American Economy in the Nineteenth Century, pages 141, National Bureau of Economic Research, Inc.
    4. Federico, Giovanni & Schulze, Max-Stephan & Volckart, Oliver, 2021. "European Goods Market Integration in the Very Long Run: From the Black Death to the First World War," The Journal of Economic History, Cambridge University Press, vol. 81(1), pages 276-308, March.
    5. Williams,Jeffrey C. & Wright,Brian D., 2005. "Storage and Commodity Markets," Cambridge Books, Cambridge University Press, number 9780521023399.
    6. Uebele, Martin, 2011. "National and international market integration in the 19th century: Evidence from comovement," Explorations in Economic History, Elsevier, vol. 48(2), pages 226-242, April.
    7. Federico, Giovanni, 2011. "When did European markets integrate?," European Review of Economic History, Cambridge University Press, vol. 15(1), pages 93-126, April.
    8. Horace Davis, 1894. "California Breadstuffs," Journal of Political Economy, University of Chicago Press, vol. 2(4), pages 517-517.
    9. 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.
    10. Wolfgang Keller & Carol H. Shiue & Xin Wang, 2020. "Capital markets and grain prices: assessing the storage cost approach," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 14(2), pages 367-396, May.
    11. George Rogers Taylor, 1931. "Agrarian Discontent in the Mississippi Valley Preceding the War of 1812," Journal of Political Economy, University of Chicago Press, vol. 39(4), pages 471-471.
    12. Persson, Karl Gunnar, 2004. "Mind the gap! Transport costs and price convergence in the nineteenth century Atlantic economy," European Review of Economic History, Cambridge University Press, vol. 8(2), pages 125-147, August.
    13. Ebru Guven Solakoglu & Barry Goodwin, 2005. "The effects of railroad development on price convergence among the states of the USA from 1866 to 1906," Applied Economics, Taylor & Francis Journals, vol. 37(15), pages 1747-1761.
    14. Laura E. Jackson & M. Ayhan Kose & Christopher Otrok & Michael T. Owyang, 2016. "Specification and Estimation of Bayesian Dynamic Factor Models: A Monte Carlo Analysis with an Application to Global House Price Comovement," Advances in Econometrics, in: Dynamic Factor Models, volume 35, pages 361-400, Emerald Group Publishing Limited.
    15. Giovanni Federico, 2012. "How much do we know about market integration in Europe?," Economic History Review, Economic History Society, vol. 65(2), pages 470-497, May.
    16. Jacks, David S., 2006. "What drove 19th century commodity market integration?," Explorations in Economic History, Elsevier, vol. 43(3), pages 383-412, July.
    17. Claudia Steinwender, 2018. "Real Effects of Information Frictions: When the States and the Kingdom Became United," American Economic Review, American Economic Association, vol. 108(3), pages 657-696, March.
    18. Grubb, Farley, 2010. "Testing for the Economic Impact of the U.S. Constitution: Purchasing Power Parity Across the Colonies versus Across the States, 1748–1811," The Journal of Economic History, Cambridge University Press, vol. 70(1), pages 118-145, March.
    19. Mette Ejrnæs & Karl Gunnar Persson & Søren Rich, 2008. "Feeding the British: convergence and market efficiency in the nineteenth‐century grain trade," Economic History Review, Economic History Society, vol. 61(s1), pages 140-171, August.
    20. 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.
    21. Jacks, David S., 2005. "Intra- and international commodity market integration in the Atlantic economy, 1800-1913," Explorations in Economic History, Elsevier, vol. 42(3), pages 381-413, July.
    22. O'Rourke, K.H., 1999. "Globalization in Historical Perspectives," Papers 99/17, College Dublin, Department of Political Economy-.
    23. Giovanni Federico & Paul Sharp, 2013. "The cost of railroad regulation: the disintegration of American agricultural markets in the interwar period," Economic History Review, Economic History Society, vol. 66(4), pages 1017-1038, November.
    24. Howard Bodenhorn & Hugh Rockoff, 1992. "Regional Interest Rates in Antebellum America," NBER Chapters, in: Strategic Factors in Nineteenth Century American Economic History: A Volume to Honor Robert W. Fogel, pages 159-187, National Bureau of Economic Research, Inc.
    25. Goodwin, Barry K. & Grennes, Thomas J. & Craig, Lee A., 2002. "Mechanical Refrigeration and the Integration of Perishable Commodity Markets," Explorations in Economic History, Elsevier, vol. 39(2), pages 154-182, April.
    26. Horace Davis, 1894. "Appendix I: Tables Relating to California Breadstuffs," Journal of Political Economy, University of Chicago Press, vol. 2(4), pages 600-600.
    27. Andersson, Fredrik N.G. & Ljungberg, Jonas, 2015. "Grain Market Integration in the Baltic Sea Region in the Nineteenth Century," The Journal of Economic History, Cambridge University Press, vol. 75(3), pages 749-790, September.
    28. Gonzalo, Jesus, 1993. "Cointegration and aggregation," Ricerche Economiche, Elsevier, vol. 47(3), pages 281-291, September.
    29. 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.
    30. Matthew Slaughter, 2001. "Does trade liberalization converge factor prices? Evidence from the antebellum transportation revolution," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 10(3), pages 339-362.
    31. Jushan Bai & Pierre Perron, 2003. "Computation and analysis of multiple structural change models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(1), pages 1-22.
    32. Pippenger, John & Phillips, Llad, 2008. "Some pitfalls in testing the law of one price in commodity markets," Journal of International Money and Finance, Elsevier, vol. 27(6), pages 915-925, October.
    33. Rothenberg, Winifred B., 1979. "A Price Index for Rural Massachusetts, 1750–1855," The Journal of Economic History, Cambridge University Press, vol. 39(4), pages 975-1001, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cassidy, Daniel & Hanley, Nick, 2020. "Regional market integration and the emergence of a Scottish national grain market," eabh Papers 20-05, The European Association for Banking and Financial History (EABH).
    2. 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.
    3. Wolfgang Keller & Carol H. Shiue & Xin Wang, 2020. "Capital markets and grain prices: assessing the storage cost approach," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 14(2), pages 367-396, May.
    4. John E. Murray & Javier Silvestre, 2020. "Integration in European coal markets, 1833–1913," Economic History Review, Economic History Society, vol. 73(3), pages 668-702, August.
    5. Chilosi, David & Federico, Giovanni, 2015. "Early globalizations: The integration of Asia in the world economy, 1800–1938," Explorations in Economic History, Elsevier, vol. 57(C), pages 1-18.
    6. Brunt, Liam & Cannon, Edmund, 2013. "Integration in the English wheat market 1770-1820," Discussion Paper Series in Economics 12/2013, Norwegian School of Economics, Department of Economics.
    7. Daniel Cassidy & Nick Hanley, 2022. "Union, border effects, and market integration in Britain," Working Papers 0228, European Historical Economics Society (EHES).
    8. 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.
    9. Alexander Pütz & Pierre L. Siklos & Christoph Sulewski, 2019. "“Who pays the piper calls the tune” – Networks and transaction costs in commodity markets," CQE Working Papers 8819, Center for Quantitative Economics (CQE), University of Muenster.
    10. Giovanni Federico & Paul Sharp, 2013. "The cost of railroad regulation: the disintegration of American agricultural markets in the interwar period," Economic History Review, Economic History Society, vol. 66(4), pages 1017-1038, November.
    11. Martin Uebele & Daniel Gallardo-Albarr�n, 2015. "Paving the way to modernity: Prussian roads and grain market integration in Westphalia, 1821-1855," Scandinavian Economic History Review, Taylor & Francis Journals, vol. 63(1), pages 69-92, March.
    12. Tahir Andrabi & Sheetal Bharat & Michael Kuehlwein, 2021. "Information And Price Convergence:Telegraphs In British India," BASE University Working Papers 04/2021, BASE University, Bengaluru, India.
    13. Li, Zhuo & Panza, Laura & Song, Yong, 2019. "The evolution of ottoman–European market linkages, 1469–1914: Evidence from dynamic factor models," Explorations in Economic History, Elsevier, vol. 71(C), pages 112-134.
    14. Kouli, Yaman & König, Jörg, 2021. "Measuring European economic integration 1880 - 1913: A new approach," DICE Discussion Papers 374, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    15. 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.
    16. Wolfgang Keller & Carol H. Shiue & Xin Wang, 2018. "Capital Markets and Grain Prices: Assessing the Storage Approach," NBER Working Papers 24388, National Bureau of Economic Research, Inc.
    17. Ihle, Rico & von Cramon-Taubadel, Stephan, 2008. "A Comparison of Threshold Cointegration and Markov-Switching Vector Error Correction Models in Price Transmission Analysis," 2008 Conference, April 21-22, 2008, St. Louis, Missouri 37603, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    18. Aslanidis, Nektarios & Martínez Ibáñez, Oscar & Tadei, Federico, 2020. "The Integration of West Africa in the Global Economy, 1842-1938," Working Papers 2072/417678, Universitat Rovira i Virgili, Department of Economics.
    19. Bruce Blonigen & Anca Cristea, 2013. "The Effects of the Interstate Commerce Act on Transport Costs: Evidence from Wheat Prices," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 43(1), pages 41-62, August.
    20. Mikołaj Malinowski, 2018. "Economic consequences of state failure; Legal capacity, regulatory activity, and market integration in Poland, 1505-1772," Working Papers 0143, European Historical Economics Society (EHES).

    More about this item

    Keywords

    U.S. economic history; Commodities; Market integration; Trade costs; Price convergence; Market efficiency;
    All these keywords.

    JEL classification:

    • N11 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: Pre-1913
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • N51 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - U.S.; Canada: Pre-1913
    • N52 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - U.S.; Canada: 1913-
    • N71 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: Pre-1913
    • N72 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: 1913-

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:exehis:v:88:y:2023:i:c:s0014498323000086. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622830 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.