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Financial Market Integration in Late Medieval Europe: Results from a Threshold Error Correction Model for the Rhinegulden and Basle Pound 1365-1429

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  • Peter Kugler

Abstract

This paper analyzes the integration of the foreign exchange market for the Basle Pound and the Rhinegulden and the market for gold and silver bullion for the period 1365–1429. The application of a threshold error correction model indicates that transaction costs prevent arbitrage when the difference between the gold-silver ratio and the exchange rate is within a 7.4% band, whereas larger deviation exchange rate movements close this gap within one year.

Suggested Citation

  • Peter Kugler, 2011. "Financial Market Integration in Late Medieval Europe: Results from a Threshold Error Correction Model for the Rhinegulden and Basle Pound 1365-1429," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(III), pages 337-352, September.
    • Handle: RePEc:ses:arsjes:2011-iii-3
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    References listed on IDEAS

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    Cited by:

    1. Adrian R. Bell & Chris Brooks & Tony K. Moore, 2017. "Did Purchasing Power Parity Hold in Medieval Europe?," Manchester School, University of Manchester, vol. 85(6), pages 682-709, December.
    2. Ernst Baltensperger & Peter Kugler, 2016. "The historical origins of the safe haven status of the Swiss franc:," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 67(02), pages 1-30, August.

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    More about this item

    Keywords

    Financial market integration; transaction costs; threshold error correction; Basle pound; Rhinegulden;
    All these keywords.

    JEL classification:

    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913

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