Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123224
Authors: 
Bernhofen, Daniel M.
Eberhardt, Markus
Li, Jianan
Morgan, Stephen
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5580
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.
Subjects: 
comparison of Chinese and western European market integration
price convergence
common factor model
cross-section dependence
JEL: 
F15
N75
L11
C23
O10
Document Type: 
Working Paper

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