Wednesday, December 05, 2012

Speed as Lower Transactions Cost

The speed of ships and shipping productivity in the age of sail

Klas Rönnbäck
European Review of Economic History, November 2012, Pages 469-489

A sample of vessels from the transatlantic slave trade is used as source for a quantitative analysis of the transit speed of ocean-going ships during the early modern period. In contrast to influential previous studies, the results show that the speed of ships in my sample increased significantly during this period, potentially contributing to increasing productivity of ocean shipping. The pattern is homogeneous geographically. This might have been one of the factors behind falling freight rates in the transatlantic trade, which in turn contributed to a process of market integration already during the early modern period.

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