This paper examines the integration process of the Japanese major rice markets (Tokyo and Osaka) from 1881 to 1932. Using a non-Bayesian time-varying vector error correction (VEC) model, we argue that the process strongly depended on the government's policy on the network system of  telegram and telephone; rice traders with an intention in using the modern communication tools were usually affected by the changes of the policy. We find that (i) the Japanese rice markets had been integrated in the 1910s; (ii) the increasing use of telegraphs had accelerated the rice market integration since the Meiji period in Japan;  (iii) the local phone , which reduced the urban users' time for sending and receiving telegrams, promoted the market integration.
This paper examines the integration process of the Japanese major rice markets (Tokyo and Osaka) from 1881 to 1932. Using a non-Bayesian time-varying vector error correction model, we argue that the process strongly depended on the government's policy on the network system of the telegram and telephone; rice traders with an intention to use modern communication tools were usually affected by the changes in policy. We find that (i) the Japanese rice markets had been integrated in the 1910s; (ii) increasing use of telegraphs had accelerated rice market integration from the Meiji period in Japan; and (iii) local telephone system , which reduced the time spent by urban users sending and receiving telegrams, promoted market integration.
D
(VEC)
A
the
R
in using the
to use
R
of the
in
D
the
D
the
R
since
from
A
and
R
the local phone
local telephone system
R
urban users' time for
time spent by urban users
D
the