Capital Markets and Grain Prices: Assessing the Storage Approach

Wolfgang Keller, Carol H. Shiue and Xin Wang

No 24388, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper evaluates a well-known approach from the economic history literature that uses grain prices to shed light on interest rates. Although this method has been applied in influential work starting with McCloskey and Nash (1984) and has potentially wide applicability in situations where interest rates are not available, this paper provides the first analysis of how well the storage cost approach captures actual capital market performance on a number of different dimensions. Using matched data on bank interest rates and grain prices for early 19th century U.S. regions, we find that the storage cost approach is useful for quantifying the performance of capital markets. The storage cost approach captures well regional differences in market performance, also in comparison to interest rate figures derived from the prices of bills of exchange. The paper also assesses the storage cost approach’s robustness to measurement error, incomplete information, outliers, and other factors.

JEL-codes: G12 G21 N2 N61 (search for similar items in EconPapers)
Date: 2018-03
Note: AP DAE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published as Wolfgang Keller & Carol H. Shiue & Xin Wang, 2020. "Capital markets and grain prices: assessing the storage cost approach," Cliometrica, vol 14(2), pages 367-396.

Downloads: (external link)
http://www.nber.org/papers/w24388.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:24388

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w24388

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().