Lending to the borrower from hell : debt, taxes, and default in the age of Philip II / Mauricio Drelichman, Hans-Joachim Voth.

Format:

Book

Author/Creator:

Drelichman, Mauricio, author.

Voth, Hans-Joachim, author.

Series:

Princeton economic history of the Western world.

The Princeton Economic History of the Western World ; 47

Language:

English

Subjects (All):

Philip II, King of Spain, 1527-1598.

Taxation--Spain--History--16th century.

Taxation.

Debts, Public--Spain--History--16th century.

Debts, Public.

Finance, Public--Spain--History--16th century.

Finance, Public.

Physical Description:

1 online resource (328 pages) : illustrations

Edition:

Course Book

Place of Publication:

Princeton, N.J. : Princeton University Press, [2014]

Language Note:

English

System Details:

Mode of access: World Wide Web.

Summary:

Why do lenders time and again loan money to sovereign borrowers who promptly go bankrupt? When can this type of lending work? As the United States and many European nations struggle with mountains of debt, historical precedents can offer valuable insights. Lending to the Borrower from Hell looks at one famous case--the debts and defaults of Philip II of Spain. Ruling over one of the largest and most powerful empires in history, King Philip defaulted four times. Yet he never lost access to capital markets and could borrow again within a year or two of each default. Exploring the shrewd reasoning of the lenders who continued to offer money, Mauricio Drelichman and Hans-Joachim Voth analyze the lessons from this important historical example. Using detailed new evidence collected from sixteenth-century archives, Drelichman and Voth examine the incentives and returns of lenders. They provide powerful evidence that in the right situations, lenders not only survive despite defaults--they thrive. Drelichman and Voth also demonstrate that debt markets cope well, despite massive fluctuations in expenditure and revenue, when lending functions like insurance. The authors unearth unique sixteenth-century loan contracts that offered highly effective risk sharing between the king and his lenders, with payment obligations reduced in bad times. A fascinating story of finance and empire, Lending to the Borrower from Hell offers an intelligent model for keeping economies safe in times of sovereign debt crises and defaults.

Contents:

Frontmatter

Contents

Acknowledgments

Prologue

Chapter 1. Lending to the Sound of Cannon

Chapter 2. Philip'S Empire

Chapter 3. Taxes, Debts, and Institutions

Chapter 4. The Sustainable Debts of Philip Ii

Chapter 5. Lending to the Borrower from Hell

Chapter 6. Serial Defaults, Serial Profits

Chapter 7. Risk Sharing With the Monarch

Chapter 8. Tax, Empire, and the Logic of Spanish Decline

Epilogue. Financial Folly and Spain'S Black Legend

References

Index

Backmatter

Notes:

Description based upon print version of record.

Includes bibliographical references (pages 281-295) and index.

Description based on online resource; title from PDF title page (publisher's Web site, viewed 23. Mai 2019)

ISBN:

9780691173771

069117377X

9781400848430

1400848431

OCLC:

869281817