Integration of global commodity markets in the early modern era

Abstract

In this article, I test whether there is any evidence of price convergence on intercontinental commodity markets prior to the nineteenth century. I gather price data on eleven commodity markets important to early modern intercontinental trade. The main conclusion is that many of the commodity markets do show signs of price convergence even prior to the nineteenth century. The question of an early globalisation can thus not be dismissed as easily as has often been done so far.

Globalization in the Early Modern Era: New Evidence from the Dutch-Asiatic Trade, c. 1600–1800

“…As shown in Table 1, mark-ups for some commodities were remarkably high and some price trends were diverging. These results are in line with the studies by Rönnbäck (2009) and Rafael Dobado-Gonzales, Alfredo Garcia-Hiernaux, and David E. Guerrero (2012). Indeed, price gaps generally showed convergence when weighted by total volumes, invoice value, or gross margins.…”

“…Although Douglass North (1958) and Russell Menard (1991) query whether shipping productivity increased before the nineteenth century, more recent work argues that the increased speed of ships and a higher frequency of voyages due to improvements in shipbuilding and navigation improved the productivity of ocean shipping (Rönnbäck 2013;Solar 2013;Solar and Hens 2013;Kelly and Ó Gráda 2014;Solar and Rönnbäck 2015). The price convergence observed in my data could have been driven by a decline in any one of these.…”

“…The Dutch East India Company (Verenigde Oost-Indische Compagnie, or VOC) was by far the largest trading company active in the Euro-Asian trade between 1600 and 1800; 49 percent of all ships sailing to Asia in the seventeenth and eighteenth centuries were Dutch (Gaastra and Bruijn 1993). Nonetheless, the data on Dutch-Asiatic trade that have been used in the debate on globalization's origins have been sparse, comprising decadal average prices for only three products: cloves, coffee, and pepper (O'Rourke and Williamson 2002;Rönnbäck 2009). Nonetheless, the data on Dutch-Asiatic trade that have been used in the debate on globalization's origins have been sparse, comprising decadal average prices for only three products: cloves, coffee, and pepper (O'Rourke and Williamson 2002;Rönnbäck 2009).…”

The Integration of Grain Markets in the Eighteenth Century: Early Rise of Globalization in the West

“…6 See i.e. Ejrnaes and Persson (2000), Llopis and Jerez (2001), Jacks (2004Jacks ( , 2005Jacks ( , 2006, Dobado and Marrero (2005), Llopis and Sotoca (2005), Challú (2006), Bateman (2007), Shiue and Keller (2007), Özmucur, S. and Pamuk (2007), Federico and Persson (2007), Federico (2008), Studer (2008 and Rönnbäck (2009). 7 See e.g., Findlay and O'Rourke (2007), O'Rourke, Prados and , Daudin, Morys and O'Rourke (2008).…”

Review of periodical literature published in 2009

“…The notion that prices of pepper were falling in the fifteenth century is robustly challenged, breathing new life into the old suggestion that difficulties in the supply of spice arising out of the growth of Ottoman power were contributing factors to the late fifteenth‐century global exploration. Rönnbäck also considers market integration, finding evidence for secular global price convergence in colonial commodities well before the nineteenth century, and most obviously in the period c .1650–1750. This was not simultaneous across all commodities, and it was interrupted frequently by external shocks, most importantly wars, and especially the French Revolutionary and Napoleonic conflicts.…”