The debt of the Hôtel-Dieu de Paris from 1660 to 1690: a testbed for sovereign default

Pierre-Charles Pradier

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Abstract: It is generally accepted that there was no proper evaluation of life annuities in the seventeenth century, thus the bankruptcy of the Paris Hôtel-Dieu 1689 is commonly attributed to this mispricing. New sources show that the prices of annuities from 1668 on are compatible with Deparcieux's mortality table discounted at the legal rate of interest. The bankruptcy resulted from incorrect provisioning of life annuities liabilities rather than mispricing. That story would have been anecdotal if the French king had not decided to borrow using contingent annuities around the same time: the Crown's plan can be shown to be unsustainable.

Keywords: life annuities; financial revolution; early modern Europe; hospitality; rentes viagères; révolution financière; Europe moderne; hospitalité (search for similar items in EconPapers)
Date: 2016-08
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01382586
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Published in 2016

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Working Paper: The debt of the Hôtel-Dieu de Paris from 1660 to 1690: a testbed for sovereign default (2016)
Working Paper: The debt of the Hôtel-Dieu de Paris from 1660 to 1690: a testbed for sovereign default (2016)
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