European goods market integration in the very long run: from the Black Death to the First World War

Giovanni Federico, Max Stephan Schulze and Oliver Volckart

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper examines price convergence and changes in the efficiency of wheat markets, covering the period from the mid-fourteenth to the early twentieth century and most of Europe. The analysis is based on a new data set of prices from almost 600 markets. Unlike previous research, we find that convergence was a predominantly pre-modern phenomenon. It started in the late fifteenth century, advanced rapidly until the beginning of the seventeenth century when it temporarily stalled, resumed after the Thirty Years' War, and accelerated after the Napoleonic Wars in response to trade liberalization. From the late 1840s, convergence petered out and turned into divergence after 1875 as policy decisions dominated technological change. Our results point to the 'Little Divergence' between North-Western Europe and the rest of the continent as starting about 1600. Long-term improvements in market efficiency began in the early sixteenth century, with advances over time being as uneven as in price convergence. We trace this to differential institutional change and the non-synchronous spread of modern media and systems of information transmission that affected the ability of merchants to react to news.

JEL-codes: N53 N54 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2021-03-01
New Economics Papers: this item is included in nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Published in Journal of Economic History, 1, March, 2021, 81(1), pp. 276 - 308. ISSN: 0022-0507

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Related works:
Journal Article: European Goods Market Integration in the Very Long Run: From the Black Death to the First World War (2021)
Working Paper: European goods market integration in the very long run: from the Black Death to the First World War (2018)
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