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Capital Markets in China and Britain, 18th and 19th Century: Evidence from Grain Prices

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  • Wolfgang Keller
  • Carol H. Shiue
  • Xin Wang

Abstract

Based on the most comprehensive grain prices available, we employ a storage model to estimate consistent interest rates and compare capital market development in Britain and China. Interest rates for Britain were lower than China’s on average by about three percentage points from 1770 to 1860. Regional capital market integration in the Yangzi Delta comes close to the British average at distances below 200 kilometers, but at larger distances interest rate correlations in Britain are twice those of the Delta, and three or more times as high as elsewhere in China. Overall, our results suggest capital market divergence at an early date.

Suggested Citation

  • Wolfgang Keller & Carol H. Shiue & Xin Wang, 2015. "Capital Markets in China and Britain, 18th and 19th Century: Evidence from Grain Prices," NBER Working Papers 21349, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:21349
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    References listed on IDEAS

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    1. North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(4), pages 803-832, December.
    2. Bogart, Dan, 2005. "Did Turnpike Trusts Increase Transportation Investment in Eighteenth-Century England?," The Journal of Economic History, Cambridge University Press, vol. 65(2), pages 439-468, June.
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    Cited by:

    1. Ishizu, Mina, 2021. "Metropolitan financial agents and the emergence of inter-regional financial linkages in England and Japan, 1760-1860," Economic History Working Papers 110963, London School of Economics and Political Science, Department of Economic History.
    2. Ishizu, Mina, 2021. "Metropolitan financial agents and the emergence of inter-regional financial linkages in England and Japan, 1760-1860," LSE Research Online Documents on Economics 110963, London School of Economics and Political Science, LSE Library.

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    More about this item

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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