El mercado de trigo en Castilla y León, 1691-1788: arbitraje espacial e intervención

This article analyzes the integration of wheat markets in Castilla y León during the 18th century and examines public intervention in this market to assess its impact on inter-spatial and inter-temporal arbitrage. We discuss the degree of market integration building on a statistical study of fifteen time series of average price of the wheat sold by ecclesiastical institutions. The analysis concentrates of two indicators of market integration, the co-integration between prices observed in different villages and towns and a high correlation between its corresponding lag rates. Two main conclusions emerge: 1. in the 18th century, wheat markets in Castile and Lean, an area close to 100,000 km2 were more integrated than reported by previous literature; 2. despite the fact that the authorities in Castilla had powerful instruments to regulate the grain markets (maximum general prices and public granaries) the rigidity of the maximum price policy and the scarce resources of public granaries determined that the success of public intervention was only similar to that of other continental European countries with weaker regulatory instruments.