Law of one price: evidence from the Spanish wheat market

摘要

In the analysis of market development, the issue of integration among regions is of central importance. In an integrated market, the so-called Law of One Price should hold, and transport costs are an important factor in this respect. In this paper, we present an alternative method to analyse this question based on the spectral decomposition. We apply this methodology to agricultural integration which is a controversial issue in Spanish economic history as long as it is an indicator of the market maturity. The evidence is in favour of a progressive regional integration pattern.