Market Integration in the North and Baltic Seas, 1500-1800

Ever since the time of Adam Smith, the attribution to foreign trade of the abilityto affect the wholesale transformation of the productive powers of an economy hasremained a very powerful concept in both economics and economic history. At theheart of this interpretation is the observation that improvements in productivity aregenerated by the expansion of trade through the spreading of fixed costs and anincreasing international division of labour.More recently, this so-called Smithian growth process has fallen under therubric of market integration, the conversion of discrete and autonomous markets intoan interdependent and unified whole. This concept of market integration is particularlyrelevant to the early modern era in Europe, in that the role of technological innovationin the growth process was severely circumscribed, leaving the expansion andintensification of trade as the only route to sustained productivity and output growth.[...]