GEP Workshop - Markus Eberhardt

Assessing market (dis)integration in pre-modern China (with Daniel Bernhofen, Jianan Li and Stephen Morgan)

Abstract: Our study contributes to the debate over China’s level of market integration on the eve of (Western) industrialisation. Exploiting rich historical data on monthly grain prices in 211 prefectures during the ‘High Qing’ period (1740 to 1820), we explore the evolution of market integration across space and time. We find that rice markets in the South of the empire were more integrated than wheat markets in the North, while the whole empire experienced a prolonged process of market disintegration. Our empirical strategy emphasizes the importance of cross-section dependence arising from common shocks and the network effect of trade and price behaviour. We conclude by examining some historical explanations for the observed phenomena.