Informational Efficiency under the Shogunate Governance: Concentration and Integration of the Rice Market in Tokugawa Japan


In the Tokugawa period, the market transaction explosively grew, and the local markets of all Japan were effectively integrated as a national market. This is the common view shared among the historians. Then, an important question is how these markets performed. To evaluate the performance, this paper focusses on the co-movement of rice prices between Osaka and Otsu. Applying the Granger causality test, it is shown that the Otsu market had reflected the rice prices in Osaka within two days in the early 19th century, and within a day in the mid-19th century. This change had stemmed from the development of the communication technology. The rice merchants' appetite for the information had made the co-movement of the rice prices so fast that the Otsu market did not need even one trading day to reflect the rice prices in Osaka.


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