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The Making of a National Currency: Spatial Transaction Costs and Money Market Integration in Spain (1825–1874)

Published online by Cambridge University Press:  20 September 2019

Pilar Nogues-Marco Open the ORCID record for Pilar Nogues-Marco [Opens in a new window] ,
Alfonso Herranz-Loncán Open the ORCID record for Alfonso Herranz-Loncán [Opens in a new window]  and
Nektarios Aslanidis
Pilar Nogues-Marco
Affiliation:
Associate Professor, Paul Bairoch Institute of Economic History, University of Geneva, 40 db du Pont-d’Arve, 1211, Geneva, Switzerland and CEPR. E-mail: pilar.noguesmarco@unige.ch.
Alfonso Herranz-Loncán
Affiliation:
Full Professor, Department of Economic History and Centre d’Estudis Antoni de Capmany, University of Barcelona, Diagonal, 690, 08034 Barcelona, Spain. E-mail: alfonso.herranz@ub.edu.
Nektarios Aslanidis
Affiliation:
Associate Professor, Department of Economics, Universitat Rovira i Virgili, CREIP, FEE, Avinguda Universitat 1, 43204 Reus, Spain. E-mail: nektarios.aslanidis@urv.cat.
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Abstract

This article analyzes the integration of the Spanish money market in the nineteenth century. We use a Band-Threshold Autoregression model of prices of bills-of-exchange in ten cities to measure market convergence and efficiency in 1825–1875. While price gaps generally decreased during the period, progress in efficiency was limited to a small group of cities. We suggest that convergence was associated to the reduction in transaction costs, which started well before the railways through improvements in roads and postal services. By contrast, the heterogeneous behavior of efficiency might be associated to economic geography changes and their effects on monetary leadership.

Type
Article
Information
The Journal of Economic History , Volume 79 , Issue 4 , December 2019 , pp. 1094 - 1128
Copyright
© The Economic History Association 2019 

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Footnotes

Pilar Nogues-Marco thanks Fundación Ramón Areces for financial support, and Alfonso Herranz-Loncán and Nektarios Aslanidis acknowledge the Spanish government support through the projects ECO2015-65049-C2-2-P (MINECO/FEDER, UE) and ECO2016-75410-P. We thank Alberto Gamboa, Rodrigo Pérez Antolín, David del Val, and Miguel Blanco for their meticulous work as research assistants, and the Servicio de Documentación of the Boletín Oficial del Estado, the Madrid Hemeroteca, the Library of the Madrid Stock Exchange, the Library of the Universidad Complutense de Madrid, the Archive of the Spanish Ministry of Finance, and the Historical Archive of the Bank of Spain for giving us access to primary sources. We also thank participants at the AEHE Conference (Madrid, September 2014), MacroHist Workshop (Geneva, November 2014), PHARE Seminar (Paris, February and October 2015), Iberometrics VII (Porto, May 2015), XVII WEHC (Kyoto, August 2015), 11th EHES Conference (Pisa, September 2015), EHS Conference (Keele University, April 2018), and seminars at Warwick University (November 2014), ANU (Canberra, March 2015), UNSW (Sydney, March 2015), IHEPB (Geneva, November 2015), Universidad de la Republica (Montevideo, August 2016), Groningen University (January 2017), University of Barcelona (February 2017), and University of Zaragoza (January 2019) for useful comments and suggestions.

References

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