Real Effects of Information Frictions: When the States and the Kingdom Became United
利用1866年跨大西洋电报的建立作为自然实验，研究发现电报降低了棉花价格差异的平均值和波动性，增加了贸易流量及其波动性，估计效率提升相当于出口价值的8%。
This paper exploits a unique historical experiment to estimate how information frictions distort international trade: the establishment of the transatlantic telegraph in 1866. I use newly collected data on cotton prices, trade, and information flows from historical newspapers and find that the average and volatility of the transatlantic price difference fell after the telegraph, while average trade flows increased and became more volatile. Using a trade model in which exporters use the latest news about a foreign market to forecast expected prices, I estimate the efficiency gains of the telegraph to be equivalent to 8 percent of export value.