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The Making of a National Currency: Spatial Transaction Costs and Money Market Integration in Spain (1825–1874)

Author

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  • Nogues-Marco, Pilar
  • Herranz-Loncán, Alfonso
  • Aslanidis, Nektarios

Abstract

This article analyzes the integration of the Spanish money market in the nineteenth century. We use a Band-Threshold Autoregression model of prices of bills-of-exchange in ten cities to measure market convergence and efficiency in 1825–1875. While price gaps generally decreased during the period, progress in efficiency was limited to a small group of cities. We suggest that convergence was associated to the reduction in transaction costs, which started well before the railways through improvements in roads and postal services. By contrast, the heterogeneous behavior of efficiency might be associated to economic geography changes and their effects on monetary leadership.

Suggested Citation

  • Nogues-Marco, Pilar & Herranz-Loncán, Alfonso & Aslanidis, Nektarios, 2019. "The Making of a National Currency: Spatial Transaction Costs and Money Market Integration in Spain (1825–1874)," The Journal of Economic History, Cambridge University Press, vol. 79(4), pages 1094-1128, December.
    • Handle: RePEc:cup:jechis:v:79:y:2019:i:4:p:1094-1128_6
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    Citations

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    Cited by:

    1. Pablo Martín-Aceña, 2018. "Money in Spain. New historical statistics. 1830-1998," Working Papers 1806, Banco de España.
    2. Emma M., Iglesias & J. Carles, Maixé-Altés, 2021. "Money Market Integration in Spain in the Ninetheen Century: The Role of the 1875-1885 Decade," MPRA Paper 109219, University Library of Munich, Germany.
    3. Du, Shuaishuai & He, Shijun & Huang, Guitian & Kong, Dongmin, 2024. "Financial development and money market integration in Qing China, 1800–1911," Finance Research Letters, Elsevier, vol. 63(C).
    4. Irigoin, Alejandra, 2016. "Representation Without Taxation, Taxation Without Consent: The Legacy Of Spanish Colonialism In America," Revista de Historia Económica / Journal of Iberian and Latin American Economic History, Cambridge University Press, vol. 34(2), pages 169-208, September.
    5. Carlos Santiago-Caballero, 2021. "Domestic migrations in Spain during its first industrialisation, 1840s–1870s," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 15(3), pages 535-563, September.
    6. repec:ehl:wpaper:64804 is not listed on IDEAS
    7. Garcia-López, Miquel-Àngel & Herranz-Loncán, Alfonso & Tassinari, Filippo & Viladecans-Marsal, Elisabet, 2023. "Paving the way to modern growth: The Spanish Bourbon roads," Explorations in Economic History, Elsevier, vol. 90(C).
    8. Basco, Sergi & Roses, Joan R., 2025. "Pandemics, capital allocation and structural change," LSE Research Online Documents on Economics 128853, London School of Economics and Political Science, LSE Library.
    9. Basco, Sergi & Domènech, Jordi & Rosés, Joan R., 2021. "The redistributive effects of pandemics: Evidence on the Spanish flu," World Development, Elsevier, vol. 141(C).
    10. Miquel-Àngel Garcia-López & Alfonso Herranz-Loncán & Filippo Tassinari & Elisabet Viladecans-Marsal, 2021. "Paving the way to modern growth. Evidence from Bourbon roads in Spain," Working Papers 0209, European Historical Economics Society (EHES).

    More about this item

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F15 - International Economics - - Trade - - - Economic Integration
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N73 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: Pre-1913

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