The Sustainable Debts of Philip II: A Reconstruction of Castile's Fiscal Position, 1566-1596
Mauricio Drelichman and
Economics working papers from Vancouver School of Economics
The defaults of Philip II have attained mythical status as the origin of sovereign debt crises. We reassess the fiscal position of Habsburg Castile, deriving comprehensive estimates of revenue, debt, and expenditure from new archival data. The kingâ€™s debts were sustainable. Primary surpluses were large and rising. Debt/revenue ratios were broadly unchanged across Philipâ€™s reign. Castilian finances in the sixteenth century compare favorably with those of other early modern fiscal states at the height of their imperial ambitions, including Britain. The defaults of Philip II therefore reflected short-term liquidity crises, and were not a sign of unsustainable debts.
Keywords: debt sustainability; serial defaults; early modern state finances (search for similar items in EconPapers)
JEL-codes: H62 H63 F34 N24 N44 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2007-11-06, Revised 2010-04-08
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Working Paper: The sustainable debts of Philip II: A reconstruction of Castile's fiscal position, 1566-1596 (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:bricol:drelichman-07-11-06-09-33-37
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