Lending to the Borrower from Hell
Debt and Default in the Age of Philip II
Bibliographic Data
| ID | 9715249 |
|---|---|
| Authors | Mauricio Drelichman (0000-0002-1457-3235, The University of British Columbia and CIFAR), Hans-Joachim Voth (0000-0003-4518-3149, Union Bank of Switzerland), Hans‐joachim Voth (ICREA/Universitat Pompeu Fabra and CREI) |
| Year | 2011 |
| Volume | 121 |
| Issue | 557 |
| Pages | 1205-1227 |
| Publication date | 2011-12-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2011.02442.x |
| OpenAlex | W1697238131 |
| Language | EN |
| Citations received | 14 |
| References cited | 35 |
Philip II of Spain accumulated debts equivalent to 60% of GDP. He also failed to honor them four times. We ask what allowed the sovereign to borrow much while defaulting often. Earlier work emphasized either banker irrationality or the importance of sanctions. Using new archival data, we show that neither interpretation is supported by the evidence. What sustained lending was the ability of bankers to cut off Philip II’s access to smoothing services. We analyze the incentive structure that supported the cohesion of this bankers' coalition. Lending moratoria were sustained through a "cheat the cheater" mechanism (Kletzer and Wright, 2000)
Debt · Debt restructuring · Default · Economics · Financial system · Monetary economics · Political science · Sanctions · Sovereign debt · Sovereignty · Wright · Finance · Fiscal Policies and Political Economy · Historical Economic and Social Studies · History · Islamic Finance and Banking Studies · Law
The mechanics of finance private
Risk sharing with the monarch
From Mercantilism to Free Trade
Contemporary perceptions of the First World War reflected in the capital markets
Public Finance and Economic Growth
War, Moral Hazard, and Ministerial Responsibility
Response to ‘Duplications’ by Drelichman and Voth
Materializing the Global
Tax farming and the origins of state capacity in England and France
War, International Finance, and Fiscal Capacity in the Long Run
External debt and commitment mechanisms
Duplication without constraints
Loans of the revolution
The credit relationship betweenHenryIIIand merchants ofDouai andYpres, 1247-70
The grand strategy of Philip II
The cash nexus
This Time Is Different
Debt with Potential Repudiation
The Rise of Europe
The Mediterranean and the Mediterranean world in the age of Philip II
Institutions, Institutional Change and Economic Performance
Institutions and the Path to the Modern Economy
Fiscal Crises, Liberty, and Representative Government, 1450-1789
One reason countries pay their debts
A Constant Recontracting Model of Sovereign Debt
Equilibrium Default Cycles
The Theory of Sovering Debt and Spain under Philip II
The Ties that Divide
The curse of Moctezuma
The Castilian Bankruptcy of 1575
The General Settlement of 1577
This Time is Different
Default Risk and Income Fluctuations in Emerging Economies
Bonds and Brands
The Sustainable Debts of Philip II
Lettres marchandes d'Anvers
La Hacienda Real de Castilla en el reinado de Felipe II
| Unique citing works | 14 |
|---|---|
| Citations per year | 0,93 |
| Citation span | 2011 - 2025 (15) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 14 |