Assessing Market (Dis)Integration in Early Modern China and Europe

29 Pages Posted: 10 Nov 2015

See all articles by Daniel M. Bernhofen

Daniel M. Bernhofen

American University - School of International Service; American University; American University - School of International Service

Markus Eberhardt

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP)

Jianan Li

Xiamen University - School of Economics

Stephen L. Morgan

University of Nottingham - Nottingham University Business School; University of Nottingham Ningbo China, Faculty of Social Sciences

Multiple version iconThere are 3 versions of this paper

Date Written: November 9, 2015

Abstract

This paper challenges established claims of comparable degrees of market integration in Europe and China on the eve of industrialization. Our empirical strategy focuses on the dynamics of price convergence and accounts for general equilibrium effects arising from common shocks and network effects. Using monthly grain prices for 1740-1820 our analysis uncovers a secular process of market disintegration in 221 prefectures of Qing China. Comparing our results with those for grain price panels from Western Europe we conclude that in terms of market integration the Great Divergence was well under way decades before the start of the 19th century.

Keywords: Comparison of Chinese and western European market integration, price convergence, common factor model, cross-dependence

JEL Classification: F15, N75, L11, C23, O10

Suggested Citation

Bernhofen, Daniel M. and Eberhardt, Markus and Li, Jianan and Morgan, Stephen Lloyd, Assessing Market (Dis)Integration in Early Modern China and Europe (November 9, 2015). School of International Service Research Paper No. 2015-9, Available at SSRN: https://ssrn.com/abstract=2688318 or http://dx.doi.org/10.2139/ssrn.2688318

Daniel M. Bernhofen (Contact Author)

American University - School of International Service ( email )

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American University - School of International Service ( email )

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United States
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Markus Eberhardt

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP) ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Jianan Li

Xiamen University - School of Economics ( email )

China

Stephen Lloyd Morgan

University of Nottingham - Nottingham University Business School ( email )

Business School South
University of Nottingham
Nottingham, NG8 1BB
United Kingdom
+44 115 82 32116 (Phone)

HOME PAGE: http://www.nottingham.ac.uk/Chinese/people/s.morgan

University of Nottingham Ningbo China, Faculty of Social Sciences ( email )

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