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Commodity market integration 1850–1913: Evidence from Britain and Germany

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  • KLOVLAND, JAN TORE

Abstract

In a sample that contains annual prices of 39 selected commodities in Britain and Germany in the period 1850 to 1913, substantial evidence of well integrated commodity markets is found. The degree of integration is not universal across markets and varies over time, however. Absolute price variability was in general decreasing over the period, indicating more closely integrated markets. But the reintroduction of tariffs in Germany beginning in 1879 implied that this trend was broken for a number of agricultural commodities. With the exception of animal foodstuffs, which were affected by non-tariff barriers, most price series are cointegrated. The speed of adjustments of prices, measured by estimates of the half-life of Law of One Price (LOP) deviations, is often in the range of 1 to 1.5 years, which is lower than that found in many other studies of market integration.

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  • Klovland, Jan Tore, 2005. "Commodity market integration 1850–1913: Evidence from Britain and Germany," European Review of Economic History, Cambridge University Press, vol. 9(2), pages 163-197, August.
    • Handle: RePEc:cup:ereveh:v:9:y:2005:i:02:p:163-197_00
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    Cited by:

    1. Gerlach, Stefan & Stuart, Rebecca, 2021. "International Co-movements of Inflation, 1851-1913," CEPR Discussion Papers 15914, C.E.P.R. Discussion Papers.
    2. Stuermer, Martin, 2018. "150 Years Of Boom And Bust: What Drives Mineral Commodity Prices?," Macroeconomic Dynamics, Cambridge University Press, vol. 22(3), pages 702-717, April.
    3. Mario J. Crucini & Gregor W. Smith, 2016. "Distance And Time Effects In Swedish Commodity Prices, 1732-1914," Working Paper 1357, Economics Department, Queen's University.
    4. Velkar, Aashish, 2010. "‘Deep’ integration of 19th century grain markets: coordination and standardisation in a global value chain," Economic History Working Papers 28988, London School of Economics and Political Science, Department of Economic History.
    5. Stuermer, Martin, 2017. "Industrialization and the demand for mineral commodities," Journal of International Money and Finance, Elsevier, vol. 76(C), pages 16-27.
    6. Mario J. Crucini & Gregor W. Smith, 2014. "Geographic Barriers to Commodity Price Integration: Evidence from US Cities and Swedish Towns, 1732 - 1860," CAMA Working Papers 2014-75, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    7. Chilosi, David & Murphy, Tommy E. & Studer, Roman & Tunçer, A. Coşkun, 2013. "Europe's many integrations: Geography and grain markets, 1620–1913," Explorations in Economic History, Elsevier, vol. 50(1), pages 46-68.
    8. Jonathan A. Batten & Peter G. Szilagyi & Wagner, 2015. "Should emerging market investors buy commodities?," Applied Economics, Taylor & Francis Journals, vol. 47(39), pages 4228-4246, August.
    9. Rausser, Gordon & Stuermer, Martin, 2020. "A Dynamic Analysis of Collusive Action: The Case of the World Copper Market, 1882-2016," MPRA Paper 104708, University Library of Munich, Germany.
    10. William Hynes & David S. Jacks & Kevin H. O'rourke, 2012. "Commodity market disintegration in the interwar period," European Review of Economic History, European Historical Economics Society, vol. 16(2), pages 119-143, May.
    11. Chilosi, David & Volckart, Oliver, 2009. "Money, states and empire: financial integration cycles and institutional change in Central Europe, 1400-1520," Economic History Working Papers 27884, London School of Economics and Political Science, Department of Economic History.
    12. Neil Rollings, 2007. "British business history: A review of the periodical literature for 2005," Business History, Taylor & Francis Journals, vol. 49(3), pages 271-292.
    13. Stefan Gerlach & Rebecca Stuart, 2021. "Commodity Prices and Global Inflation, 1851-1913," IRENE Working Papers 21-07, IRENE Institute of Economic Research.

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