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European Goods Market Integration in the Very Long Run: From the Black Death to the First World War

Published online by Cambridge University Press:  13 January 2021

Giovanni Federico ,
Max-Stephan Schulze  and
Oliver Volckart
Giovanni Federico
Affiliation:
Professor, New York University Abu Dhabi, Division of Social Sciences, NYU Campus Saadiyat Island Abu Dhabi (UAE). E-mail: gf63@nyu.edu.
Max-Stephan Schulze
Affiliation:
Professor, London School of Economics, Department of Economic History–Economic History Department, Houghton Street, London WC2A 2AE, United Kingdom of Great Britain and Northern Ireland. E-mail: m.s.schulze@lse.ac.uk.
Oliver Volckart
Affiliation:
Professor, London School of Economics and Political Science–Economic History Department, Houghton Street, London WC2A 2AE, United Kingdom of Great Britain and Northern Ireland. E-mail: o.j.volckart@lse.ac.uk.
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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.

Type
Article
Information
The Journal of Economic History , Volume 81 , Issue 1 , March 2021 , pp. 276 - 308
Copyright
© The Economic History Association 2021

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Footnotes

Generous research support by the European Research Council (ERC-grant 230484) is gratefully acknowledged. The authors also thank David Chilosi, Sara Pecchioli, and Coskun Tuncer, for excellent research assistance, and Walter Bauernfeind, who has shared with us the Nuremberg price series, one of the longest in the data set. Earlier versions of this paper were presented at Berlin (Humboldt University); Bologna, Copenhagen, Dublin, and Madrid (Carlos III and CUNEF); and Prato (Istituto Datini). We thank the participants for helpful comments and suggestions.

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