Traditional historiography has overestimated
the significance of long-distance trade in the medieval economy.
However, it could be argued that, because of its dynamic nature,
long-distance trade played a more important role in economic development
than its relative size would suggest. The term commercial revolution
was introduced in the 1950s to refer to the rapid growth of European
trade from about the 10th century. Long-distance trade then expanded,
with the commercial integration of the two economic poles in the
Mediterranean and in Flanders and the contiguous areas. It has been
quantitatively shown that the integration of European markets began in
the late medieval period, with rapid advancement beginning in the 16th
century.

The expansion of medieval trade has been attributed to
advanced business techniques, such as the appearance of new forms of
partnerships and novel financial and insurance systems. Many economic
historians have also emphasized merchants’ relations, especially the
establishment of networks to organize trade. More recently, major
contributions to institutional economic history have focused on various
economic institutions that reduced the uncertainties inherent in
premodern economies.

The early reputation-based institutions
identified in the literature, such as the systems of the Maghribis in
the Mediterranean, Champagne fairs in France, and the Italian
city-states, were not optimal for changing conditions that accompanied
expansion of trade, as the number of merchants increased and the
relations among them became more anonymous, as generally happened during
the Middle Ages. An intercommunal conciliation mechanism evolved in
medieval northern Europe that supported trade among a large number of
distant communities. This institution encouraged merchants to travel to
distant towns and establish relations, even with persons they did not
already know.