Bonds and Brands: Lessons from the 1820s

Marc Flandreau, Juan Flores Zendejas and Norbert Gaillard

No 6420, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: How does sovereign debt emerge and become sustainable? This paper provides a new answer to this unsolved puzzle. Focusing on the early 19th century, we argue that intermediaries' market power served to overcome information asymmetries and sustained the development of sovereign debt. Relying on insights from corporate finance, we argue that capitalists turned to intermediaries' reputations to guide their investment strategies. The outcome was a two-tier global bond market, which was sustained by hierarchical relations among intermediaries. This novel theoretical perspective is backed by new archival evidence and empirical data that have never been gathered so far.

Keywords: Contagion; Intermediaries; Ipo (search for similar items in EconPapers)
JEL-codes: G15 G23 N23 N26 (search for similar items in EconPapers)
Date: 2007-08
New Economics Papers: this item is included in nep-his
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://cepr.org/publications/DP6420 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:6420

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP6420

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().