The Influence of Information Costs on the Integration of Financial Markets: Northern Europe, 1350-1560
AbstractIn this paper, the influence of information costs on the integration of Northern European financial markets between ca. 1350 and 1560 is explored. The approach is based on splitting information costs into their constitutive components and on measuring one of these, i.e. the costs of transmitting information, which have particular importance for market integration. The analysis has two main results: First, under pre-industrial conditions, when transmitting information was extremely labour intensive and very little capital intensive, transmission costs can be largely identified with labour costs, and were subject to the same influences. Next, the integration of financial markets depended crucially on the level of transmission costs, high costs being strongly and significantly correlated with weak integration, while lower costs favoured convergence.
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Bibliographic InfoPaper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2006-049.
Length: 72 pages
Date of creation: May 2006
Date of revision:
Financial markets; integration; information costs; economic history;
Find related papers by JEL classification:
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-07-02 (All new papers)
- NEP-FMK-2006-07-02 (Financial Markets)
- NEP-HIS-2006-07-02 (Business, Economic & Financial History)
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