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

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  • Federico, Giovanni
  • Schulze, Max Stephan
  • Volckart, Oliver
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.

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  • Federico, Giovanni & Schulze, Max Stephan & Volckart, Oliver, 2021. "European goods market integration in the very long run: from the Black Death to the First World War," LSE Research Online Documents on Economics 108553, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:108553
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    Cited by:

    1. Chilosi, David & Schulze, Max-Stephan & Volckart, Oliver, 2018. "Benefits of Empire? Capital Market Integration North and South of the Alps, 1350–1800," The Journal of Economic History, Cambridge University Press, vol. 78(3), pages 637-672, September.
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    3. Daniel Cassidy & Nick Hanley, 2022. "Union, border effects, and market integration in Britain," Working Papers 0228, European Historical Economics Society (EHES).
    4. Stef Espeel, 2024. "Driven by crises: Price integration on the grain market in late medieval Flanders," Economic History Review, Economic History Society, vol. 77(3), pages 849-872, August.
    5. Claridge, Jordan & Delabastita, Vincent & Gibbs, Spike, 2023. "Wages and labour relations in the Middle Ages: it's not (all) about the money," Economic History Working Papers 120307, London School of Economics and Political Science, Department of Economic History.
    6. Albers, Hakon & Pfister, Ulrich, 2023. "State formation and market integration: Germany, 1780–1830," Journal of Comparative Economics, Elsevier, vol. 51(2), pages 403-421.
    7. Greif, Gavin, 2022. "Merchants, proto-firms, and the German industrialization: the commercial determinants of nineteenth century town growth," LSE Research Online Documents on Economics 113346, London School of Economics and Political Science, LSE Library.
    8. Broadberry, Stephen & Gardner, Leigh, 2016. "Economic Development In Africa And Europe: Reciprocal Comparisons," Revista de Historia Económica / Journal of Iberian and Latin American Economic History, Cambridge University Press, vol. 34(1), pages 11-37, March.
    9. Matthias Morys, 2022. "Has Eastern Europe Always Lagged Behind the West? Historical Evidence from Pre‐1870," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(S1), pages 3-21, April.
    10. John E. Murray & Javier Silvestre, 2020. "Integration in European coal markets, 1833–1913," Economic History Review, Economic History Society, vol. 73(3), pages 668-702, August.
    11. Volckart, Oliver, 2022. "How successful was Germany's first common currency? A new look at the imperial monetary union of 1559," Economic History Working Papers 115007, London School of Economics and Political Science, Department of Economic History.
    12. Laura Panza, 2024. "From a common empire to colonial rule: Commodity market disintegration in the Near East," Economic History Review, Economic History Society, vol. 77(2), pages 584-611, May.
    13. Harrison, James M., 2023. "Exploring 200 years of U.S. commodity market integration: A structural time series model approach," Explorations in Economic History, Elsevier, vol. 88(C).
    14. David Chilosi & Carlo Ciccarelli, 2022. "Evolving gaps: Occupational structure in southern and northern Italy, 1400–1861," Economic History Review, Economic History Society, vol. 75(4), pages 1349-1378, November.
    15. Claridge, Jordan & Delabastita, Vincent & Gibbs, Spike, 2024. "(In-kind) wages and labour relations in the Middle Ages: it’s not (all) about the money," LSE Research Online Documents on Economics 125597, London School of Economics and Political Science, LSE Library.
    16. Yao Chen & Nuno Palma & Felix Ward, 2022. "Goldilocks: American precious metals and the Rise of the West," Tinbergen Institute Discussion Papers 22-063/VI, Tinbergen Institute, revised 01 Jul 2024.
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    18. Tiia‐Maria Pasanen & Miikka Voutilainen & Jouni Helske & Harri Högmander, 2022. "A Bayesian spatio‐temporal analysis of markets during the Finnish 1860s famine," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 71(5), pages 1282-1302, November.
    19. Volckart, Oliver, 2023. "How well-integrated was the sixteenth-century Holy Roman Empire?," Economic History Working Papers 118264, London School of Economics and Political Science, Department of Economic History.
    20. Daniel Cassidy & Nick Hanley, 2020. "Regional market integration and the emergence of a Scottish national grain market," Working Papers 0200, European Historical Economics Society (EHES).
    21. Kouli, Yaman & König, Jörg, 2021. "Measuring European economic integration 1880 - 1913: A new approach," DICE Discussion Papers 374, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).

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    JEL classification:

    • N53 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: Pre-1913
    • N54 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: 1913-

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