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National and international market integration in the 19th century: Evidence from comovement

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  • Uebele, Martin

Abstract

This paper analyzes relative wheat price fluctuations to investigate market integration among 72 European and US cities. Applying a Dynamic Factor Model, which has seldom been used in market integration analysis, prices are decomposed into international, national and local components. Thus, national and international market integration are identified by a statistical restriction, and results for each single market are obtained. The first result is that globalization has accelerated faster in the first than in the second half of the 19th century, putting the post-1850 transport revolution into perspective. The USA integrated only later into the European market, discounting the role of the "grain invasion" for trade history. I also show that the European nations that turned protectionist after 1880 reduced the impact of foreign shocks, while free traders fully integrated into the international economy.

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  • Uebele, Martin, 2011. "National and international market integration in the 19th century: Evidence from comovement," Explorations in Economic History, Elsevier, vol. 48(2), pages 226-242, April.
  • Handle: RePEc:eee:exehis:v:48:y:2011:i:2:p:226-242
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    10. Åberg, M. & Fälting, L. & Forssell, A., 2016. "Is Swedish district heating operating on an integrated market? – Differences in pricing, price convergence, and marketing strategy between public and private district heating companies," Energy Policy, Elsevier, vol. 90(C), pages 222-232.
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    12. Martin T. Bohl & Alexander Pütz & Pierre L. Siklos & Christoph Sulewski, 2021. "Information transmission under increasing political tensions—Evidence from the Berlin Produce Exchange 1887–1896," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 41(2), pages 226-244, February.
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    14. Sharp, Paul & Uebele, Martin, 2013. "Rural Infrastructure and Agricultural Market Integration in the United States: A long run perspective," Discussion Papers of Business and Economics 10/2013, University of Southern Denmark, Department of Business and Economics.
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    Keywords

    Market integration 19th century Dynamic factor analysis Wheat prices;

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