The making of a national currency. Spatial transaction costs and money market integration in Spain (1825-1874)

Pilar Nogues-Marco, Herranz-Loncán, Alfonso and Nektarios Aslanidis
Authors registered in the RePEc Author Service: Alfonso Herranz-Loncán

No 12453, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This article analyses the integration of the Spanish money market in the 19th century. We use a Band-TAR model of prices of bills of exchange in 10 Spanish cities to measure convergence and efficiency in the market between 1825 and 1875. While price gaps generally decreased during the period, progress in efficiency was concentrated in a small group of cities. We suggest that increasing convergence was associated to the reduction in transaction costs, which started before the railways and the telegraph through improvements in roads and postal services. By contrast, the heterogeneous behavior of efficiency might have been largely associated to changes in the economic geography of Spain and their effects on the monetary market leadership structure.

Keywords: Money market integration; Spanish national currency; Specie-point mechanism; Bills of exchange; Money market convergence; Money market efficiency; Transaction costs; Financial development (search for similar items in EconPapers)
JEL-codes: E02 E42 F02 F15 F31 F36 K00 L10 N13 N73 R40 (search for similar items in EconPapers)
Date: 2017-11
New Economics Papers: this item is included in nep-his, nep-ict, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Journal Article: The Making of a National Currency: Spatial Transaction Costs and Money Market Integration in Spain (1825–1874) (2019)
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