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When did European markets integrate?

Published online by Cambridge University Press:  16 September 2010

GIOVANNI FEDERICO
GIOVANNI FEDERICO*
Affiliation:
Robert Schumann Center, European University Institute, Via Badia de' Roccettini 9, 50144 Fiesole, Italy, Giovanni.Federico@eui.eu
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Abstract

This article argues that market integration should be measured as σ-convergence over the largest possible sample of markets. Its focus is the European market for wheat, rye and candles from the middle of the eighteenth century to the eve of the first globalization. Price dispersion for cereals remained constant until the outbreak of the French Wars, then it increased abruptly. It began to decline after the end of the wars, and the process continued steadily until an all-time low was reached in the 1860s. Domestic and international integration contributed in roughly the same proportions to integration in the long run, but the latter was much more important in accounting for medium-term changes. These results suggest that the level of integration was determined for most of the period by war and political events, with a substantial contribution from a fall in transport costs in the second quarter of the nineteenth century. By contrast, there is very little evidence of integration in the market for candles.

Type
Research Article
Information
European Review of Economic History , Volume 15 , Issue 1 , April 2011 , pp. 93 - 126
Copyright
Copyright © European Historical Economics Society 2010

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