Frontier farmers and the Atlantic economy: another look at the causes of the American grain invasion of Britainin the nineteenth century

Karl Gunnar Persson and Paul Sharp
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Karl Gunnar Persson: University of Copenhagen

No 9020, Working Papers from Economic History Society

Abstract: "The usual explanation for the American grain invasion of Britain in the last decades of the nineteenth century is that falling transportation costs caused the price gap between the US and the UK to fall, causing US prices to rise, UK prices to fall, and thus causing US supply and UK demand to increase. This paper documents that this was not the case. Falling per mile transportation costs simply permitted an expansion of frontier farming in the US, while the total cost of transporting wheat from the US production areas to the UK, and the price received by the average farmer, remained constant. What this process did allow, however, was a massive increase in US output, which was then available to supply the booming demand in the UK. The grain invasion was therefore not a response to increasing prices by American farmers, who in reality offered a perfectly elastic supply at the going price as practically unlimited supplies of land in the west were populated by immigrants."

Keywords: "Grain invasion; wheat; globalization" (search for similar items in EconPapers)
JEL-codes: C5 F1 N7 (search for similar items in EconPapers)
Date: 2009-04
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