Karl Gunnar Persson (Institute of Economics, University of Copenhagen)
Abstract
This paper challenges the widely held view that sharply falling real transport costs closed the transatlantic gap in grain prices in the second half of the 19th century. Several new results emerge from an analysis of a new data set of weekly wheat prices and freight costs from New York to UK markets. Firstly, there was a decline in the transatlantic price gap but it was not sharp and the gap remained substantial. Secondly, the fall in the transatlantic price differential had more to do with improved market and marketing efficiency than with falling transport costs. Thirdly, spurious price convergence (or divergence) can appear if quality differences associated with allegedly homogeneous commodities like wheat are not controlled for.
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Publisher Info
Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number
02-02.
Length: 24 pages Date of creation: Jun 2002 Date of revision: Handle: RePEc:kud:kuiedp:0202
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Find related papers by JEL classification: N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
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