Evading the 'Taint of Usury' Complex Contracts and Segmented Capital Markets

Mark Koyama

No 412, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: What were the economic consequences of the usury doctrine in the Middle Ages? We examine how merchants attempted to evade the prohibition on interest and the attempts of the Church to clamp down on evasion. Contrary to the views of many economists and historians, the usury prohibition imposed different transaction costs on medieval merchants: increasing the cost of using capital markets for some merchants more than for others. Since only a subsection of the merchant population were able to write licit contracts, the prohibition had the effect of segmenting markets in which formal credit was important.

Keywords: Usury; Transaction Costs; Contracts (search for similar items in EconPapers)
JEL-codes: G21 N23 (search for similar items in EconPapers)
Date: 2008-11-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ora.ox.ac.uk/objects/uuid:55119ca7-6fdc-4fbf-bfbb-c1d1d1b29d5b (text/html)

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:oxf:wpaper:412

Access Statistics for this paper

More papers in Economics Series Working Papers from University of Oxford, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Anne Pouliquen ( this e-mail address is bad, please contact ).