EXERCISE 8.6PRICES, SHOCKS, AND REVOLUTIONS

Historians usually attribute the wave of revolutions in Europe in 1848 to long-term socioeconomic factors and a surge of radical ideas. But a poor wheat harvest in 1845 lead to food shortages and sharp price rises, which may have contributed to these sudden changes.6

Helge Berger and Mark Spoerer. 2001. 'Economic Crises and the European Revolutions of 1848.'The Journal of Economic History61 (2): 293-326.

The table shows the average and peak prices of wheat from 1838 to 1845, relative to silver. There are three groups of countries: those where violent revolutions took place, those where constitutional change took place without widespread violence, and those where no revolution occurred.

1. Explain, using supply and demand curves, how a poor wheat harvest could lead to price rises and food shortages.
2. Find a way to present the data to show that the size of the price shock, rather than the price level, is associated with the likelihood of revolution.
3. Do you think this is a plausible explanation for the revolutions that occurred?
4. A journalist suggests that similar factors played a part in theArab Spring in 2010. Read the post. What do you think of this hypothesis?