NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Geographic Barriers to Commodity Price Integration: Evidence from US Cities and Swedish Towns, 1732-1860

Mario J. Crucini, Gregor W. Smith

NBER Working Paper No. 20247
Issued in June 2014
NBER Program(s):Program on the Development of the American Economy, International Finance and Macroeconomics Program, International Trade and Investment Program

We study the role of distance and time in statistically explaining price dispersion for 14 commodities from 1732 to 1860. The prices are reported for US cities and Swedish market towns, so we can compare international and intranational dispersion. Distance and commodity-specific fixed effects explain a large share--roughly 60%--of the variability in a panel of more than 230,000 relative prices over these 128 years. There was a negative "ocean effect": international dispersion was less than would be predicted using distance, narrowing the effective ocean by more than 3000 km. The absolute effect of distance declined over time beginning in the 18th century. This process of convergence was broad- based, across commodities and locations (both national and international). But there was a major interruption in convergence in the late 18th and early 19th centuries, at the time of the Napoleonic Wars, stopping the process by two or three decades on average.

download in pdf format
   (412 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w20247

Users who downloaded this paper also downloaded* these:
Redding and Turner w20235 Transportation Costs and the Spatial Organization of Economic Activity
Alquist, Bhattarai, and Coibion w20003 Commodity-Price Comovement and Global Economic Activity
Patel, Wang, and Wei w20236 Global Value Chains and Effective Exchange Rates at the Country-Sector Level
Crucini and Yilmazkuday w18811 Understanding Long-run Price Dispersion
Bonfatti and O'Rourke w20326 Growth, Import Dependence and War
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us