Debt policy under constraints between Philip II, the Cortes and Genoese bankers

Christophe Chamley
Authors registered in the RePEc Author Service: Carlos Álvarez-Nogal ()

IFCS - Working Papers in Economic History.WH from Universidad Carlos III de Madrid. Instituto Figuerola

Abstract: The large public debt was created in 16th century Castile. A new view of its fiscal system is presented. The main part of the debt was in perpetual redeemable annuities and its credibility was enhanced by decentralized funding through taxes administered by cities that represented the Realm in the Cortes. Accumulation of short-term debt would be refinanced by long-term debt. Short-term debt crises occurred when the service of the long-term debt reached the revenues of the taxes that funded the domestic long-term debt. They were resolved after protracted negotiations in the Cortes by tax increases and interest rate reductions

Keywords: Debt; funding; Sovereign; loan; defaults; Financial; crises; Parliaments (search for similar items in EconPapers)
JEL-codes: F34 H63 N23 N43 (search for similar items in EconPapers)
Date: 2011-06
New Economics Papers: this item is included in nep-his
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:cte:whrepe:wp11-06

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