Long-run patterns in market efficiency and the genesis of the market economy: Markets around the Mediterranean from Nebuchadnezzar to Napoleon (580 BC and 1800AD)
AbstractPrice volatility, reflecting the ability to absorb exogenous supply- or demand shocks, is an important dimension of market performance. In this paper we present a model to study the factors determining the price volatility of markets of basic foodstuffs in pre industrial societies. This model is used to explain the development of price volatility on markets in countries around the Mediterranean between 580 BC and 1800 AD. This is the region for which we have the oldest evidence of functioning markets (from Mesopotamia), so that we can track their development in time over a period of more than 2000 years. We find a break in market performance: medieval markets had a much lower level of volatility than ancient markets--a fact we try to explain within our model. Moreover, we suggest that this reduction in price volatility may have had important consequences for the economic behavior of farmers: price variability had to be reduced to the level that we find for the post-1000 period to induce farmers to specialize.
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.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8521.
Date of creation: Aug 2011
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Find related papers by JEL classification:
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
- N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
- N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
This paper has been announced in the following NEP Reports:
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.:
- Giovanni Federico & Paolo Malanima, 2004. "Progress, decline, growth: product and productivity in Italian agriculture, 1000-2000," Economic History Review, Economic History Society, vol. 57(3), pages 437-464, 08.
- Peter Foldvari & Bas Van Leeuwen, 2012. "Comparing Per Capita Income In The Hellenistic World: The Case Of Mesopotamia," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 58(3), pages 550-568, 09.
- Péter Földvári & Bas van Leeuwen, 2011. "What can price volatility tell us about market efficiency? Conditional heteroscedasticity in historical commodity price series," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 5(2), pages 165-186, June.
- Jacks, David, 2000. "Market integration in the North and Baltic Seas, 1500-1800," Economic History Working Papers 22383, London School of Economics and Political Science, Department of Economic History.
- van Leeuwen, Bas & Földvári, Peter & Pirngruber, Reinhard, 2011. "Markets in pre-industrial societies: storage in Hellenistic Babylonia in the medieval English mirror," Journal of Global History, Cambridge University Press, vol. 6(02), pages 169-193, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.