IDEAS home Printed from https://ideas.repec.org/p/zbw/fubsbe/200421.html
   My bibliography  Save this paper

Estimating medieval market integration: Evidence from exchange rates

Author

Listed:
  • Volckart, Oliver
  • Wolf, Nikolaus

Abstract

In this paper we present a new method for estimating market integration under a commodity money system such as that which existed in Europe until the demise of the gold standard. The approach is based on the analysis of deviations between exchange rates and parity, which under conditions of a perfectly functioning and fully integrated market should not exceed the bullion points. Consequently the time needed for adjustment, following a violation of the bullion points, can be used as an indicator of market imperfections and as a measure of integration. We apply this approach to trade between late medieval Flanders, Lübeck and Prussia, our results showing that Flanders-Lübeck constituted a much better-integrated market than Flanders-Prussia. Moreover, the results indicate that the degree of market integration increased between the early fourteenth and the middle of the fifteenth century.

Suggested Citation

  • Volckart, Oliver & Wolf, Nikolaus, 2004. "Estimating medieval market integration: Evidence from exchange rates," Discussion Papers 2004/21, Free University Berlin, School of Business & Economics.
  • Handle: RePEc:zbw:fubsbe:200421
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/49911/1/668838655.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Riese, Hajo, 2004. "Arbeitsmarktpolitik und ökonomische Theorie - zur Degenerierung einer Forschungspraxis. III: Die markttheoretischen Aspekte des Theoriedefizits," Discussion Papers 2004/11, Free University Berlin, School of Business & Economics.
    2. Bitzer, Jurgen & Schrettl, Wolfram & Schroder, Philipp J.H., 2007. "Intrinsic motivation in open source software development," Journal of Comparative Economics, Elsevier, vol. 35(1), pages 160-169, March.
    3. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    4. Jan‐Egbert Sturm & Helge Berger & Jakob De Haan, 2005. "Which Variables Explain Decisions On Imf Credit? An Extreme Bounds Analysis," Economics and Politics, Wiley Blackwell, vol. 17(2), pages 177-213, July.
    5. Eugene Canjels & Gauri Prakash-Canjels & Alan M. Taylor, 2004. "Measuring Market Integration: Foreign Exchange Arbitrage and the Gold Standard, 1879-1913," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 868-882, November.
    6. Nitsch, Volker, 2005. "Zipf zipped," Journal of Urban Economics, Elsevier, vol. 57(1), pages 86-100, January.
    7. Lo, Ming Chien & Zivot, Eric, 2001. "Threshold Cointegration And Nonlinear Adjustment To The Law Of One Price," Macroeconomic Dynamics, Cambridge University Press, vol. 5(4), pages 533-576, September.
    8. S. R. Epstein, 1994. "Regional fairs, institutional innovation, and economic growth in late medieval Europe," Economic History Review, Economic History Society, vol. 47(3), pages 459-482, August.
    9. Weber, Ernst Juerg, 1996. ""Imaginary" or "Real" Moneys of Account in Medieval Europe? An Econometric Analysis of the Basle Pound, 1365-1429," Explorations in Economic History, Elsevier, vol. 33(4), pages 479-495, October.
    10. Venezia, Itzhak & Shapira, Zur, 2004. "Do professional investors behave differently than amateurs after the weekend?," Discussion Papers 2004/14, Free University Berlin, School of Business & Economics.
    11. Officer,Lawrence H., 2007. "Between the Dollar-Sterling Gold Points," Cambridge Books, Cambridge University Press, number 9780521038218, January.
    12. Berger, Helge & Hefeker, Carsten, 2005. "One Country, One Vote? Labor Market Structure and Voting Rights in the ECB," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 672-687.
    13. N. J. Mayhew, 1974. "Numismatic Evidence and Falling Prices in the Fourteenth Century," Economic History Review, Economic History Society, vol. 27(1), pages 1-15, February.
    14. Miskimin, Harry A., 1964. "Monetary Movements and Market Structure—Forces for Contraction in Fourteenth-and Fifteenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 24(4), pages 470-490, December.
    15. Muchlinski, Elke, 2004. "Kontroversen in der internationalen Währungspolitik: Retrospektive zu Keynes-White-Boughton & IMF," Discussion Papers 2004/1, Free University Berlin, School of Business & Economics.
    16. Thadewald, Thorsten & Büning, Herbert, 2004. "Jarque-Bera test and its competitors for testing normality: A power comparison," Discussion Papers 2004/9, Free University Berlin, School of Business & Economics.
    17. Bar-Yosef, Sasson & Venezia, Itzhak, 2004. "Experimental study of implications of SFAS 131: The effects of the new standard on the informativeness of segment reporting," Discussion Papers 2004/13, Free University Berlin, School of Business & Economics.
    18. Sussman, Nathan, 1998. "The Late Medieval Bullion Famine Reconsidered," The Journal of Economic History, Cambridge University Press, vol. 58(1), pages 126-154, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Boom, Anette, 2004. ""Download for Free": When do providers of digital goods offer free samples?," Discussion Papers 2004/28, Free University Berlin, School of Business & Economics.
    2. Robert Cromley & Dean Hanink, 2008. "Population growth and the development of a central place system," Journal of Geographical Systems, Springer, vol. 10(4), pages 383-405, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Boom, Anette, 2004. ""Download for Free" - When Do Providers of Digital Goods Offer Free Samples?," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 70, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    2. Bitzer, Jurgen & Schrettl, Wolfram & Schroder, Philipp J.H., 2007. "Intrinsic motivation in open source software development," Journal of Comparative Economics, Elsevier, vol. 35(1), pages 160-169, March.
    3. repec:hum:wpaper:sfb649dp2007-007 is not listed on IDEAS
    4. Federico, Giovanni, 2007. "Market integration and market efficiency: The case of 19th century Italy," Explorations in Economic History, Elsevier, vol. 44(2), pages 293-316, April.
    5. Volckart, Oliver, 2007. "Rules, discretion or reputation? Monetary policies and the efficiency of financial markets in Germany, 14th to 16th centuries," SFB 649 Discussion Papers 2007-007, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    6. 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.
    7. John H. Munro, 2009. "Coinage and Monetary Policies in Burgundian Flanders during the late-medieval 'Bullion Famines',. 1384 - 1482," Working Papers tecipa-361, University of Toronto, Department of Economics.
    8. Volckart, Oliver, 2006. "The influence of information costs on the integration of financial markets: Northern Europe, 1350-1560," SFB 649 Discussion Papers 2006-049, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    9. Boerner, Lars & Volckart, Oliver, 2011. "The utility of a common coinage: Currency unions and the integration of money markets in late Medieval Central Europe," Explorations in Economic History, Elsevier, vol. 48(1), pages 53-65, January.
    10. Stephen Norman, 2016. "Attractor misspecification and threshold estimation bias," Economics Bulletin, AccessEcon, vol. 36(4), pages 1911-1921.
    11. repec:hum:wpaper:sfb649dp2006-049 is not listed on IDEAS
    12. Peter Kugler, 2011. "Financial Market Integration in Late Medieval Europe: Results from a Threshold Error Correction Model for the Rhinegulden and Basle Pound 1365-1429," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(III), pages 337-352, September.
    13. Ma, Debin & Zhao, Liuyan, 2019. "A Silver Transformation: Chinese Monetary Integration in Times of Political Disintegration during 1898-1933," CEPR Discussion Papers 13501, C.E.P.R. Discussion Papers.
    14. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    15. Frans P. Vries & Nick Hanley, 2016. "Incentive-Based Policy Design for Pollution Control and Biodiversity Conservation: A Review," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(4), pages 687-702, April.
    16. George Tridimas & Stanley L. Winer, 2018. "On the Definition and Nature of Fiscal Coercion," Carleton Economic Papers 18-09, Carleton University, Department of Economics.
    17. Engelhardt, Sebastian v. & Freytag, Andreas, 2013. "Institutions, culture, and open source," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 90-110.
    18. Mario Jametti & Thomas von Ungern-Sternberg, 2005. "Assessing the Efficiency of an Insurance Provider—A Measurement Error Approach," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 30(1), pages 15-34, June.
    19. Stefan Ambec & Yann Kervinio, 2016. "Cooperative decision-making for the provision of a locally undesirable facility," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(1), pages 119-155, January.
    20. Kurtis Swope & Ryan Wielgus & Pamela Schmitt & John Cadigan, 2011. "Contracts, Behavior, and the Land-assembly Problem: An Experimental Study," Research in Experimental Economics, in: Experiments on Energy, the Environment, and Sustainability, pages 151-180, Emerald Group Publishing Limited.
    21. Ralph E. Townsend, 2010. "Transactions costs as an obstacle to fisheries self-governance in New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(3), pages 301-320, July.
    22. Simon Levin & Anastasios Xepapadeas, 2021. "On the Coevolution of Economic and Ecological Systems," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 355-377, October.

    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:fubsbe:200421. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/fwfubde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.