The Antebellum Transportation Revolution and Factor-Price Convergence / Matthew J. Slaughter.

Format:

Book

Author/Creator:

Slaughter, Matthew J.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5303.

NBER working paper series no. w5303

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1995.

Summary:

In antebellum America an extensive network of canals and railroads was constructed which slashed transportation costs across regions. This 'transportation revolution' presents an interesting case study of the factor-price convergence (FPC) theorem. In this paper I look for integration of regional labor markets driven by FPC by studying the extent to which commodity prices and factor prices converged across regions between 1820 and 1860. My primary result is that I find very little evidence of antebellum FPC across regions. I do find that commodity prices equalized quite markedly. But I also find that nominal labor prices equalized very little, if at all. Given this result, I go on to discuss two aspects of the antebellum economy which very likely helped prevent FPC: differences across regions in endowments and technology. This finding underscores that the FPC theorem does not have unambiguous empirical predictions. How commodity prices feed into factor prices depends crucially on parameters such as endowments and technology.

Notes:

Print version record

October 1995.