Working Paper #26

Financial Integration over Three Centuries


Abstract: What the paper shows is that integrated markets of have been the rule rather than exception over long span of years investigated here. This integration process, however, has been a discontinuous one. It was interrupted by major wars and by the severe economic shocks of the interwar years. Each time that happened, however, it began anew. It did so, moreover, quite spontaneously. In finance, as elsewhere, the prospect of gains from trade exerts a powerful force, one that in this instance was sufficient to keep the integration process going through the many adversities of these past three centuries.