What my credit can do in (medieval) Venice

January 2, 2013

Mueller, Reinhold C. (1987) I banchi locali a Venezia nel Tardo Medioevo. Studi Storici, 28/1: 145-55.

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There is a lot to be admired in Austrian economists, their resilience, their attachment to simple elegant ideas and their sound understanding of the long-term factors that give the economy its cyclical nature. But one must admit that their Ludite-like hatred for finance is to the very least puzzling. They claim to trust nothing but gold and they would like to see the activity of banks restricted to little more than a locker service. Their trust in free market and in the adaptive nature of human ingenuity ends at the door of their local branch of HSBC. Read the rest of this entry »


A’Hearn B. (2005) The not-so-mighty finance

October 16, 2009

A’Hearn, Brian (2005) Finance-led divergence in the regions of Italy. Financial History Review, 12/1: 7-41.

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After the unification, the Italian South did not catch up with the North, on the contrary they engaged on a divergent path as the per capita income gap increased from 15-25% to 55% in the first 50 years (p.7). This continuing disparity may be explained by the sore state of the southern banks which could have been unable to support and finance local development (finance-led growth argument; p.9). However, initial evidence seems not to support this hypothesis, as the share of the Mezzogiorno in the banking activity of the country was in line with the relative economic weight of the region (p.10). Read the rest of this entry »


Fontaine L. (2008) When relief is worth more than a treasure

October 8, 2009

Fontaine, Laurence (2008) “Entre banque et assistance: la création des monts-de-piété”, chapter 6 in L’Economie morale. Pauvreté, crédit et confiance dans l’Europe préindustrielle. Paris : Gallimard, p.164-189.

Picture 2fontaine02FileMonte di pietà dei pilli, before 1880

The first Monti di Pietà (or mounts) were created in 15th-century Italy by Recollet monks to shield the less-fortunate from the scourge of usury. It was not so much intended to pool the poor out of misery as to provide the struggling middle dwellers with a last safety net before falling into poverty (p.164). In the peninsula, the capital hoarded in the safes of the mounts was often diverted from its original aim to be loaned to the rich. It prevented the Italian mounts from becoming really successful. However their model spread over Europe. Read the rest of this entry »


Sessions of the Second Latin American Economic History Congress

September 21, 2009

Wordle: CLADHE-II: List of sessions

Here is the list of preapproved sessions  of the Second Latin American Economic History Congress (CLADHE-II), to be held in Mexico City on February 3-5, 2010. To submit a paper to any of the sessions, you have to go here.

Wordle: CLADHE-II: Lista de simposios


More on Lehman Brothers (1850-2008)

September 21, 2009
Before arcane CDOs imploded...

Before arcane CDOs imploded...

The Wall Street Journal presents a neat infographic on the new jobs of Lehman’s executives after its bankruptcy in September 2009.

Found via Chart Porn.


Velde F. (2009) Eighteenth-century France’s one-man-bubble

August 21, 2009

Velde, François R. (2009) “Was John Law’s System a bubble? The Mississipi Bubble revisited” in The Origin and Development of Financial Markets and Institutions. From the Seventeenth Century to the Present, eds. Jeremy Atack and Larry Neal, Cambridge: Cambridge University Press, 99-120.

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A slightly different version of this paper is available online.

The shares of the Compagnie des Indes created by John Law to manage the colonization of Louisiana, public finances and monopolies went from 250 Livres in July 1718 when the initial offering closed to just under 10,000 L days before Christmas 1719 and finally to 50 L in March 1721 (p.108). Can this jump followed by an even more impressive collapse in under 3 years be described as a bubble? (p.109) Read the rest of this entry »


Quinn S. and Roberds W. (2006) When financial innovation’s good for the economy

August 18, 2009

Quinn, Stephen and Willam Roberds (2006) “An Economic Explanation of the Early Bank of Amsterdam, Debasement, Bills of Exchange and the Emergence of the First Central Bank”, Federal Bank of Atlanta. Working Papers Series, 13: 50p.*

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This paper is available online.

Introduction

The United Provinces suffered from what Adam Smith termed the “small state” problem: it was awash in foreign coin and had little control over their quality, thus suffered from their constant debasement (p.1). Debtors always have an incentive to pay their due with debased coins. But this practice is only viable if the seigniorage he pays to the mint is lower than the amount of silver he saves in the operation. De facto, there is collusion between the mint and the debtor against the creditor (p.4). Read the rest of this entry »