Credit rationing and crowding out during the Industrial Revolution: Evidence from Hoare's Bank, 1702-1862

Peter Temin and Hans-Joachim Voth

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: Crowding-out during the British Industrial Revolution has long been one of the leading explanations for slow growth during the Industrial Revolution, but little empirical evidence exists to support it. We argue that examinations of interest rates are fundamentally misguided, and that the eighteenth- and early nineteenth-century private loan market balanced through quantity rationing. Using a unique set of observations on lending volume at a London goldsmith bank, Hoare’s, we document the impact of wartime financing on private credit markets. We conclude that there is considerable evidence that government borrowing, especially during wartime, crowded out private credit.

Keywords: Credit rationing; Napoleonic wars; Industrial Revolution; technological change; crowding out (search for similar items in EconPapers)
JEL-codes: E22 E43 E51 E65 N13 N23 (search for similar items in EconPapers)
Date: 2004-02, Revised 2005-01
New Economics Papers: this item is included in nep-fmk, nep-his and nep-mac
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Citations: View citations in EconPapers (22)

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Related works:
Journal Article: Credit rationing and crowding out during the industrial revolution: evidence from Hoare's Bank, 1702-1862 (2005)
Working Paper: Credit Rationing and Crowding out during the Industrial Revolution: Evidence from Hoare's Bank, 1702-1862 (2004)
Working Paper: Credit Rationing and Crowding-Out During the Industrial Revolution: Evidence from Hoare's Bank, 1702-1862 (2004)
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