Carles Manera, Jose Perez-Montiel, Oguzhan Ozcelebi and Andreu Seguí
This study aims to analyze whether the Barcelona markets integrated with Europe during the 17th and 18th centuries.
Abstract
Purpose
This study aims to analyze whether the Barcelona markets integrated with Europe during the 17th and 18th centuries.
Design/methodology/approach
This study uses the unit root tests with multiple structural breaks under both the null and alternative hypotheses proposed by Carrion-i-Silvestre et al. (2009) and Harvey et al. (2013). These tests are robust to multiple unknown breaks in the series.
Findings
The results suggest that the Barcelona wheat markets integrated with some European cities during the 18th century.
Originality/value
The results are important because they highlight the importance of considering nonlinearities and structural breaks in the series to study market integration with historical perspective. Contrary to the results obtained using conventional unit root tests, when this study applies unit root tests robust to structural breaks in the series, it finds that the law of one price holds in some cases.