Demand Matters: German Wheat Market Integration 1806-1855 in a European Context
No 1110, CQE Working Papers from Center for Quantitative Economics (CQE), University of Muenster
This study analyzes annual wheat prices in 13 German cities in the years 1806 to 1855, together with wheat price series from 44 other European and American cities. The method used is a dynamic factor model, which allows for distinguishing common price uctuations on international and national levels. I find a significant increase of price synchronization between German cities and international markets, between the first and the second quarter of the 19th Century. This is probably mainly due to the increased demand for food imports in Britain and the disappearance of political barriers, as well as economies of scale and gradual improvements to existing transportation technology. Within Germany, I find increasing common price uctuations in Mannheim and Munich, which arguably refl ects a customs union effect. Tree ring records as indicators of general plant growth conditions indicate that comovement was not driven by exogenous shocks.
Keywords: market integration; 19th Century; dynamic factor analysis; wheat prices; Germany (search for similar items in EconPapers)
JEL-codes: N70 N71 N73 C32 F15 E32 (search for similar items in EconPapers)
Pages: 22 pages
New Economics Papers: this item is included in nep-agr and nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:cqe:wpaper:1110
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