Feeding the British: Convergence and market efficiency in the 19th century grain trade

TY - JOUR

T1 - Feeding the British

T2 - Convergence and market efficiency in the 19th century grain trade

AU - Ejrnæs, Mette

AU - Persson, Karl Gunnar

AU - Rich, Søren

N1 - JEL classification: N51, N53, N7

PY - 2008

Y1 - 2008

N2 - This paper traces the evolution of the international market for wheat, from an emerging market structure after the repeal of the corn laws to a mature market characterized by efficient arbitrage after the introduction of the transatlantic telegraph and the growth of trade. Efficiency is documented using traditional price gap accounting as well as error correction modelling. Markets which traded directly with each other as well as markets which did not trade with each other were integrated. The traditional bilateral focus in market integration studies has been extended to a multivariate approach, which generates new insights into the pattern of diffusion of price shocks in the international economy. Shocks in the major importing nation, Britain, dominated in the emerging market phase, while shocks in the major exporting economy, the United States, dominated international price movements at the end of the nineteenth century.

AB - This paper traces the evolution of the international market for wheat, from an emerging market structure after the repeal of the corn laws to a mature market characterized by efficient arbitrage after the introduction of the transatlantic telegraph and the growth of trade. Efficiency is documented using traditional price gap accounting as well as error correction modelling. Markets which traded directly with each other as well as markets which did not trade with each other were integrated. The traditional bilateral focus in market integration studies has been extended to a multivariate approach, which generates new insights into the pattern of diffusion of price shocks in the international economy. Shocks in the major importing nation, Britain, dominated in the emerging market phase, while shocks in the major exporting economy, the United States, dominated international price movements at the end of the nineteenth century.

U2 - 10.1111/j.1468-0289.2007.00386.x

DO - 10.1111/j.1468-0289.2007.00386.x

M3 - Journal article

SN - 0013-0117

VL - 61

SP - 140

EP - 171

JO - Economic History Review

JF - Economic History Review

IS - 1

ER -