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Did Vasco da Gama matter for European markets?1

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  • KEVIN H. O'ROURKE
  • JEFFREY G. WILLIAMSON

Abstract

This article explores the impact of the ‘Voyages of Discovery’ on European spice markets, asking whether the exploits of Vasco da Gama and others brought European and Asian spice markets closer together. To this end we compare trends in pepper and fine spice prices before and after 1503, the year when da Gama returned from his financially successful second voyage. Other authors have examined trends in nominal spice prices, but this article uses relative spice prices, that is, accounting for inflation. We find that the Voyages of Discovery had a major impact on European spice markets, and provide a simple model of monopoly and oligopoly to decompose the sources of the Cape route's impact on European markets. Finally, we offer some speculations regarding the impact of the Cape route on intra‐European market integration.

Suggested Citation

  • Kevin H. O'Rourke & Jeffrey G. Williamson, 2009. "Did Vasco da Gama matter for European markets?1," Economic History Review, Economic History Society, vol. 62(3), pages 655-684, August.
    • Handle: RePEc:bla:ehsrev:v:62:y:2009:i:3:p:655-684
    DOI: 10.1111/j.1468-0289.2009.00468.x
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    1. Chaudhuri,K. N., 1985. "Trade and Civilisation in the Indian Ocean," Cambridge Books, Cambridge University Press, number 9780521285421, November.
    2. Irwin, Douglas A, 1991. "Mercantilism as Strategic Trade Policy: The Anglo-Dutch Rivalry for the East India Trade," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1296-1314, December.
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    4. Chaudhuri,K. N., 1985. "Trade and Civilisation in the Indian Ocean," Cambridge Books, Cambridge University Press, number 9780521242264, November.
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    7. Lane, Frederic C., 1968. "Pepper Prices Before Da Gama," The Journal of Economic History, Cambridge University Press, vol. 28(4), pages 590-597, December.
    8. Jan Kieniewicz, 1969. "The Portuguese Factory and Trade in Pepper in Malabar during the 16th Century," The Indian Economic & Social History Review, , vol. 6(1), pages 61-84, March.
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    Cited by:

    1. Kevin Hjortshøj O’Rourke, 2018. "Two Great Trade Collapses: The Interwar Period and Great Recession Compared," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 66(3), pages 418-439, September.
    2. Diego Puga & Daniel Trefler, 2014. "International Trade and Institutional Change: Medieval Venice’s Response to Globalization," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(2), pages 753-821.
    3. O’Rourke, Kevin Hjortshøj, 2019. "Economic History and Contemporary Challenges to Globalization," The Journal of Economic History, Cambridge University Press, vol. 79(2), pages 356-382, June.
    4. Kevin Hjortshøj O'Rourke, 2018. "Economic history and contemporary challenges to globalization," Oxford Economic and Social History Working Papers _167, University of Oxford, Department of Economics.
    5. O'Rourke, Kevin, 2017. "Two Great Trade Collapses: The Interwar Period & Great Recession Compared," CEPR Discussion Papers 12286, C.E.P.R. Discussion Papers.
    6. Wallis, Patrick, 2010. "Exotic drugs and English medicine: England’s drug trade, c.1550-c.1800," Economic History Working Papers 28577, London School of Economics and Political Science, Department of Economic History.
    7. Rei, Claudia, 2011. "Incentives in Merchant Empires: Portuguese and Dutch Labor Compensation," MPRA Paper 28712, University Library of Munich, Germany.
    8. Alberto Bisin & Giovanni Federico, 2021. "Merger or Acquisition? Introduction to the Handbook of Historical Economics," NBER Working Papers 28786, National Bureau of Economic Research, Inc.

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