Benefits of Empire? Capital Market Integration North and South of the Alps, 1350–1800

Abstract

This paper addresses two questions. First, when and to what extent did capital markets integrate north and south of the Alps? Second, how mobile was capital? Analysing a unique new dataset on pre-modern urban annuities, we find that northern markets were consistently better integrated than Italian markets. Long-term integration was driven by initially peripheral places in the Netherlands and Upper Germany integrating with the rest of the Holy Roman Empire where the distance and volume of inter-urban investments grew primarily in the sixteenth century. The institutions of the Empire contributed to stronger market integration north of the Alps.

Economic Consequences of State Failure—Legal Capacity, Regulatory Activity, and Market Integration in Poland, 1505–1772

“…This signified a relative increase in centralisation. The impact of the Empire on market integration has been recently analysed by Chilosi, Schulze, and Volckart (2018). Equation (2) features three types of differences: (a) the difference in rye price gaps between pairs of either strictly Imperial or Polish cities, (b) the difference in rye price gaps before and after the 1660s, that is, the introduction of the liberum veto in 1669 and the beginning of Reichstag's supremacy in 1663, and (c) the difference-in-difference.…”

“…Various studies measured the extent of market integration in preindustrial Europe (e.g., Bateman 2011;Chilosi et al 2013;Chilosi, Schulze, and Volckart 2018;Frederico 2012;Malinowski 2016a;Shiue and Keller 2007). The results yield that, after a period of medieval disintegration, markets only became effectively integrated in the nineteenth century.…”

“…The negative effects of tax predation and political fragmentation were identified by Mark Dincecco (2010). Conversely, David Chilosi, Max Schulze, and Oliver Volckart (2018) demonstrated that the semicentralised Holy Roman Empire promoted capital market integration better than more fragmented Italian polities.…”

“…According to Timothy Besley and Torsten Persson (2011), a state can promote prosperity only if it possesses (1) legal capacity denoting the authority and infrastructure to create and enforce the law and (2) fiscal capacity representing the means to finance its operations. With this study, I contribute to the growing literature on the role of centralisation and state capacity in promoting economic growth and market development before 1800 (Bonney 1995;O'Brien 2011;Chilosi, Schulze, and Volckart 2018;Dincecco and Katz 2016;Dimitruk 2018;Epstein 2001;Johnson and Koyama 2017). I complement the earlier studies that predominantly focused on fiscal capacity with an original study of the impact of legal capacity.…”

Power politics and princely debts: why Germany's common currency failed, 1549–56†

“…Chilosi and Volckart, ‘Money’, pp. 783–4; Chilosi, Schulze, and Volckart, ‘Benefits of empire?’, pp. 28–30; see also Spruyt, Sovereign state , esp.…”