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The first European grain invasion: a study in the integration of the European market 1750-1870
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1725-6720
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EUI HEC; 2008/01
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FEDERICO, Giovanni, The first European grain invasion: a study in the integration of the European market 1750-1870, EUI HEC, 2008/01 - https://hdl.handle.net/1814/9247
Abstract
This paper argues that market integration should be measured as σ-convergence over
the largest possible sample of markets. It test this claim with an empirical analysis of the
European market for wheat, rye and candles from the middle of the 18th century to the
eve of the first globalization with a new data-base of more than 450 price series. Price
dispersion remained constant until the outbreak of French wars, then it increased
abruptly. It started to decline after the end of the war, and the process continued steadily
until an all-time low in the 1860s. Domestic and international integration contributed in
roughly the same proportion to integration in the long-run, but the latter were much
more important to account for medium-term changes. The fall in cost of maritime
transportation accounted for a substantial share of the price convergence in the second
quarter of the 19th century. These results suggest that the level of integration was
determined for most of the period by war and political events