Feeding the British: Convergence and Market Efficiency in 19th Century Grain Trade
AbstractThis paper traces the evolution of the international market for wheat from an emerging market structure after the repeal of the Corn Laws to a mature market characterized by efficient arbitrage after the introduction of the transatlantic telegraph and the growth of trade. Efficiency is documented using traditional price gap accounting as well as error correction modelling. Markets which traded directly with each other as well as markets which did not trade with each other were integrated. The traditional bi-lateral focus in market integration studies has been extended to a multi-variate approach which generates new insights as to the pattern of diffusion of price shocks in the international economy. Shocks in the major importing nation, Britain, dominated in the emerging market phase while shocks in the major exporting economy, United States, dominated international prices movements at the end of the 19th century.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 04-28.
Length: 30 pages
Date of creation: Nov 2004
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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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- O'Rourke, Kevin H., 1997.
"The European Grain Invasion, 1870–1913,"
The Journal of Economic History,
Cambridge University Press, vol. 57(04), pages 775-801, December.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
- Liam Brunt & Edmund Cannon, 2004. "The Irish grain trade from the Famine to the First World War," Economic History Review, Economic History Society, vol. 57(1), pages 33-79, 02.
- Kevin H. O'Rourke & Jeffrey G. Williamson, 2001. "Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650592, January.
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