A Pound of Flesh for the King

Daniel Garcia

MPRA Paper from University Library of Munich, Germany

Abstract: This paper provides a simple model of banking in the shadow of expropriation, which sheds light on the credit markets of XIIIth Century England and the economic reforms introduced by the Angevin Kings. We argue that the fear of expropriation induced bankers to liquidate loans early and reduced the volume of trade in the credit market. To solve this commitment problem, the nobility imposed a restriction on the ability of the king to profit from the loans that fell into his hands. The subsequent demise of these reforms was likely to contribute to the decay of Jewish bankers under Henry III and their eventual expulsion in 1290.

Keywords: Magna Carta; Jewish History; Banking (search for similar items in EconPapers)
JEL-codes: G2 G21 K1 K11 N23 (search for similar items in EconPapers)
Date: 2016-08-22
New Economics Papers: this item is included in nep-his and nep-hpe
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