The economic history of commodity market development

Trade and division of labour have been a key source of economic growth throughout human history and they have been widely researched, within the constraints of the available data. This chapter surveys the twin literatures on trade (based on quantity data) and market integration (based on price data). The first section outlines the development of commodity markets in the very long run, as measured by growth of trade and convergence of prices. Then, it discusses the contribution of technical progress in transportation and of changes (downward but also upward) in barriers to trade to these changes. The last section reviews the literature on effects od the development of markets. Scholars have made good progress in estimating the static benefits on welfare but the work on the dynamic effects is just beginning.