Did Vasco da Gama Matter for European Markets? Testing Frederick Lane's Hypotheses Fifty Years Later
AbstractIn his seminal publications between the 1930s and 1960s, Frederick Lane offered three hypotheses regarding the impact of the Voyages of Discovery that have guided debate ever since. First, pepper and other spice prices did not rise in European markets in the century before the 1490s, and thus could not have ‘pulled in’ the oceanic explorations by their rising scarcity. Second, Portuguese circumnavigation of Africa did not lower European spice prices across the 16th century, implying that the discovery of the Cape route had no permanent effect on Euro-Asian market integration. Third, 15th century Venetian spice markets were already well integrated with those in Iberia and northern Europe, implying that Portugal could not have had an intra-European market integrating influence in the 16th century. Lane developed these influential hypotheses by relying heavily on nominal spice prices from Venice and the Levant. This paper revisits Lane’s hypotheses by using instead relative spice prices, that is, accounting for inflation. It also draws on evidence from Iberia and northern Europe. In addition, it explores European market integration before and after 1503, the year when da Gama returned from his financially successful second voyage. Lane’s three hypotheses are rejected: the impact of the Portuguese was profound on all fronts. We conclude by using a simple model of monopoly and oligopoly to decompose the sources of the Cape route’s impact on European markets.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5418.
Date of creation: Dec 2005
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Other versions of this item:
- Jeffrey G. Williamson & Kevin H. O'Rourke, 2006. "Did Vasco da Gama Matter for European Markets? Testing Frederick Lane's Hypotheses Fifty Years Later," The Institute for International Integration Studies Discussion Paper Series iiisdp118, IIIS.
- Kevin H. O'Rourke & Jeffrey G. Williamson, 2005. "Did Vasco da Gama Matter for European Markets? Testing Frederick Lane's Hypotheses Fifty Years Later," NBER Working Papers 11884, National Bureau of Economic Research, Inc.
- Kevin H. O'Rourke & Jeffrey G. Williamson, 2006. "Did Vasco da Gama Matter for European Markets? Testing Frederick Lane's Hypotheses Fifty Years Later," Trinity Economics Papers tep2007, Trinity College Dublin, Department of Economics.
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- O'Rourke K. and Williamson J. (2006) Did Vasco da Gama matter for European markets?
by Ben in Economic History Blog on 2008-08-10 14:56:00
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