David S. Jacks

Commodity Price Volatility and World Market Integration Since 1700

Poor countries are more volatile than rich countries, and this volatility impedes their growth. Furthermore, commodity prices are a key source of that volatility. This paper explores price volatility since 1700 to offer three stylized facts: commodity price volatility has not increased over time, commodities have always shown greater price volatility than manufactures, and world market integration breeds less commodity price volatility. Thus, economic isolation is associated with much greater commodity price volatility, while world market integration is associated with less.

Real Inequality in Europe since 1500

Introducing a concept of real, as opposed to nominal, inequality of income or wealth suggests some historical reinterpretations, buttressed by a closer look at consumption by the rich. The purchasing powers of different income classes depend on how relative prices move. Relative prices affected real inequality more strongly in earlier centuries than in the twentieth. Between 1500 and about 1800, staple food and fuels became dearer, while luxury goods, especially servants, became cheaper, greatly widening the inequality of lifestyles. Peace, industrialization, and globalization reversed this inegalitarian price effect in the nineteenth century, at least for England.

Coal and the Industrial Revolution, 1700 1869

How important was coal to the Industrial Revolution? Despite the huge growth of output, and the grip of coal and steam on the popular image of the Industrial Revolution, recent cliometric accounts have assumed coal mining mattered little to the Industrial Revolution. In contrast both E. A. Wrigley and Kenneth Pomeranz have made coal central to the story. This paper constructs new series on coal rents, the price of coal at pithead and at market, and the price of firewood, and uses them to examine this issue. We conclude coal output expanded in the Industrial Revolution mainly as a result of increased demand rather than technological innovations in mining. But that expansion could have occurred at any time before 1760. Further our coal rents series suggests that English possession of coal reserves made a negligible contribution to Industrial Revolution incomes.

Filling the Eastern European gap in millennium-long temperature reconstructions.

Tree ring–based temperature reconstructions form the scientific backbone of the current global change debate. Although some European records extend into medieval times, high-resolution, long-term, regional-scale paleoclimatic evidence is missing for the eastern part of the continent. Here we compile 545 samples of living trees and historical timbers from the greater Tatra region to reconstruct interannual to centennial-long variations in Eastern European May–June temperature back to 1040 AD. Recent anthropogenic warming exceeds the range of past natural climate variability. Increased plague outbreaks and political conflicts, as well as decreased settlement activities, coincided with temperature depressions. The Black Death in the mid-14th century, the Thirty Years War in the early 17th century, and the French Invasion of Russia in the early 19th century all occurred during the coldest episodes of the last millennium. A comparison with summer temperature reconstructions from Scandinavia, the Alps, and the Pyrenees emphasizes the seasonal and spatial specificity of our results, questioning those large-scale reconstructions that simply average individual sites.

New results on the tariff—growth paradox

This article investigates the question of how openness affected the growth of income in the late nineteenth-century Atlantic economy. More specifically, is the tariff-growth correlation identified by ORourke (2000) driven by European offshoots? Is the correlation perhaps explained by the concurrent integration of intranational markets before 1914? And what can other measures of openness tell us about the growth process in the nineteenth century? This note offers some answers. The results can be summarised as follows: ORourkes primary finding is not altered by changes in the sample; incorporating measures of inter- and intranational market integration into the analysis again supports ORourkes findings, but apparently leaves no role for intranational market integration; and evidence from trade-flow data suggests that there may been a pro-growth role for tariffs in a non-reciprocal trade environment.

Stuck on Gold: Real Exchange Rate Volatility and the Rise and Fall of the Gold Standard, 1870-1939

Did adoption of the gold standard exacerbate or diminish macroeconomic volatility? Supporters thought so, critics thought not, and theory offers ambiguous messages. A hard exchange-rate regime such as the gold standard might limit monetary shocks if it ties the hands of policy-makers. But any decision to forsake exchange-rate flexibility might compromise shock absorption in a world of real shocks and nominal stickiness. A simple model shows how a lack of flexibility can be discerned in the transmission of terms of trade shocks. Evidence on the relationship between real exchange rate volatility and terms of trade volatility from the late nineteenth and early twentieth century exposes a dramatic change. The classical gold standard did absorb shocks, but the interwar gold standard did not, and this historical pattern suggests that the interwar gold standard was a poor regime choice.

Foreign wars, domestic markets: England, 1793–1815

This paper explores the means by which warfare influences domestic commodity markets. It is argued that England during the French Wars provides an ideal testing ground. Four categories of explanatory variables are taken as likely sources of documented changes in English commodity price dis-integration during this period: weather, trade, policy, and wartime events. Empirically, increases in price dispersion are related to all of the above categories. However, the primary means identified by which warfare influenced domestic commodity market integration was through international trade linkages and the arrival of news regarding wartime events.

Nominal Rigidities and Retail Price Dispersion in Canada Over the Twentieth Century

We introduce a new data set on over 23,8000 monthly prices for 10 goods in 50 Canadian cities over the 42-year period from 1910 to 1953 This information, coupled with previously published price information from the late twentieth century, allows us to present one of the first comprehensive views of nominal rigidities and retail price dispersion over the past 100 years. We find that nominal rigidities have been conditioned upon prevailing rates of inflation with a greater frequency of price changes occurring in the 1920s and the 1970s. Additionally, the process of retail market integration has followed a U‐shaped trajectory with many domestic markets being better integrated - as measured by the average dispersion of retail prices - at mid-century than in the 1990s. We also consider the linkages between nominal rigidities and price dispersion, finding results consistent with present-day data. On utilise des donnees inedites de 238000 prix mensuels pour 10 produits dans 50 villes canadiennes au cours de la periode de quarante ans qui va de 1910 a 1953 Ces donnees, ajoutees aux renseignements deja publies anterieurement sur les prix dans la derniere portion du vingtieme siecle, permettent de presenter l’un des premiers portraits comprehensifs des rigidites nominales et de la dispersion des prix de detail au cours des derniers 100 ans. On decouvre que les rigidites nominales ont ete influencees par les taux d’inflation qui ont prevalu, avec pour consequence une plus grande frequence de changements de prix dans les annees 1920s et 1970s. De plus, chose surprenante, le processus d’integration du marche de detail a suivi une trajectoire en U: plusieurs marches domestiques etant davantage integres – en prenant comme mesure la dispersion moyenne des prix de detail – au milieu du siecle que dans les annees 1990s. On examine aussi les liens entre rigidites nominales et dispersion des prix, et les resultats concordent avec ce que revelent les donnees recentes.

Nominal Rigidities and Retail Price Dispersion in Canada Over the Twentieth Century (Rigidités Nominales et Dispersion des Prix de Détail au Canada au Cours du Vingtième Siècle)

We introduce a new data set on over 23,8000 monthly prices for 10 goods in 50 Canadian cities over the 42-year period from 1910 to 1953 This information, coupled with previously published price information from the late twentieth century, allows us to present one of the first comprehensive views of nominal rigidities and retail price dispersion over the past 100 years. We find that nominal rigidities have been conditioned upon prevailing rates of inflation with a greater frequency of price changes occurring in the 1920s and the 1970s. Additionally, the process of retail market integration has followed a U‐shaped trajectory with many domestic markets being better integrated - as measured by the average dispersion of retail prices - at mid-century than in the 1990s. We also consider the linkages between nominal rigidities and price dispersion, finding results consistent with present-day data. On utilise des donnees inedites de 238000 prix mensuels pour 10 produits dans 50 villes canadiennes au cours de la periode de quarante ans qui va de 1910 a 1953 Ces donnees, ajoutees aux renseignements deja publies anterieurement sur les prix dans la derniere portion du vingtieme siecle, permettent de presenter l’un des premiers portraits comprehensifs des rigidites nominales et de la dispersion des prix de detail au cours des derniers 100 ans. On decouvre que les rigidites nominales ont ete influencees par les taux d’inflation qui ont prevalu, avec pour consequence une plus grande frequence de changements de prix dans les annees 1920s et 1970s. De plus, chose surprenante, le processus d’integration du marche de detail a suivi une trajectoire en U: plusieurs marches domestiques etant davantage integres – en prenant comme mesure la dispersion moyenne des prix de detail – au milieu du siecle que dans les annees 1990s. On examine aussi les liens entre rigidites nominales et dispersion des prix, et les resultats concordent avec ce que revelent les donnees recentes.

Trade and Immigration, 1870-2010

In this chapter, we describe long-run trends in global merchandise trade and immigration from 1870 to 2010. We revisit the reasons why these two forces moved largely in parallel in the decades leading up to World War I, collapsed during the interwar period, and then rebounded (but with much more pronounced growth in trade than in immigration). More substantively, we also document a large redistribution in the regional sources of goods and people with a shift from the former industrialized core countries—especially Europe—to those in the former periphery—especially Asia—as well as a very striking change in the composition of merchandise trade towards manufactured goods precisely dating from 1950. Finally, using a triple differences framework in combination with a dramatic change in US immigration policy, we find evidence that immigration and trade potentially acted as substitutes, at least for the United States in the interwar period. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.