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Feeding the British: convergence and market efficiency in the nineteenth‐century grain trade

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  • METTE EJRNÆS
  • KARL GUNNAR PERSSON
  • SØREN RICH

Abstract

This 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 bilateral focus in market integration studies has been extended to a multivariate approach, which generates new insights into 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, the United States, dominated international price movements at the end of the nineteenth century.

Suggested Citation

  • Mette Ejrnæs & Karl Gunnar Persson & Søren Rich, 2008. "Feeding the British: convergence and market efficiency in the nineteenth‐century grain trade," Economic History Review, Economic History Society, vol. 61(s1), pages 140-171, August.
    • Handle: RePEc:bla:ehsrev:v:61:y:2008:i:s1:p:140-171
    DOI: 10.1111/j.1468-0289.2007.00386.x
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    References listed on IDEAS

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    Cited by:

    1. Hamulczuk, Mariusz, 2020. "Spatial Integration of Agricultural Commodity Markets – Methodological Problems," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 311225, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    2. Chilosi, David & Volckart, Oliver, 2009. "Money, states and empire: financial integration cycles and institutional change in Central Europe, 1400-1520," Economic History Working Papers 27884, London School of Economics and Political Science, Department of Economic History.
    3. Sharp, Paul & Weisdorf, Jacob, 2013. "Globalization revisited: Market integration and the wheat trade between North America and Britain from the eighteenth century," Explorations in Economic History, Elsevier, vol. 50(1), pages 88-98.
    4. Cannon, Edmund & Brunt, Liam, 2013. "Integration in the English wheat market 1770-1820," CEPR Discussion Papers 9504, C.E.P.R. Discussion Papers.
    5. Velkar, Aashish, 2010. "‘Deep’ integration of 19th century grain markets: coordination and standardisation in a global value chain," Economic History Working Papers 28988, London School of Economics and Political Science, Department of Economic History.
    6. Daniel Cassidy & Nick Hanley, 2022. "Union, border effects, and market integration in Britain," Working Papers 0228, European Historical Economics Society (EHES).
    7. Cassidy, Daniel & Hanley, Nick, 2020. "Regional market integration and the emergence of a Scottish national grain market," eabh Papers 20-05, The European Association for Banking and Financial History (EABH).
    8. Harrison, James M., 2023. "Exploring 200 years of U.S. commodity market integration: A structural time series model approach," Explorations in Economic History, Elsevier, vol. 88(C).

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