Weather effects on European agricultural price inflation 1870–1913

This paper considers the non-linear agro-weather price relationship for Britain and Germany during the period 1870–1913. A comparison of Britain and Germany during this period is particularly interesting because of differences in economic structure and trade policy. The share of agriculture in the German economy was significantly larger than in Britain and agricultural protection in Germany contrasts with Britain's unilateral free trade stance. In these circumstances national specific weather shocks are found to have larger sectoral and macroeconomic effects on the German economy.