MEHR Seminar: Martin Uebele, University of Münster, 'American Agriculture and the Creation and Strange Disintegration of a National Market'
Abstract: We study US state average prices of 13 agricultural products, 1870-2000, by estimating annual price comovement and dispersion. We find that national markets for all products integrated during the 19th century, but that markets for some products such as wheat and potatoes disintegrated after World War 2. Reasons for the latter may include increasing transport costs due to deficiencies of public infrastructure maintainance, changes in the production structure of the agricultural sector as well as changing regulation. For the interwar period, we find increasing deviations from the LOP compared to the 19th century, but high degrees of comovement. This points at the parallel occurrence of large symmetric price shocks and market disintegration.