Lending to the Borrower from Hell

Debt, Taxes, and Default in the Age of Philip II

Nonfiction, History, Spain & Portugal, Business & Finance, Economics, Economic History
Cover of the book Lending to the Borrower from Hell by Mauricio Drelichman, Hans-Joachim Voth, Princeton University Press
View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart
Author: Mauricio Drelichman, Hans-Joachim Voth ISBN: 9781400848430
Publisher: Princeton University Press Publication: January 19, 2014
Imprint: Princeton University Press Language: English
Author: Mauricio Drelichman, Hans-Joachim Voth
ISBN: 9781400848430
Publisher: Princeton University Press
Publication: January 19, 2014
Imprint: Princeton University Press
Language: English

Why do lenders time and again loan money to sovereign borrowers who promptly go bankrupt? When can this type of lending work? As the United States and many European nations struggle with mountains of debt, historical precedents can offer valuable insights. Lending to the Borrower from Hell looks at one famous case--the debts and defaults of Philip II of Spain. Ruling over one of the largest and most powerful empires in history, King Philip defaulted four times. Yet he never lost access to capital markets and could borrow again within a year or two of each default. Exploring the shrewd reasoning of the lenders who continued to offer money, Mauricio Drelichman and Hans-Joachim Voth analyze the lessons from this important historical example.

Using detailed new evidence collected from sixteenth-century archives, Drelichman and Voth examine the incentives and returns of lenders. They provide powerful evidence that in the right situations, lenders not only survive despite defaults--they thrive. Drelichman and Voth also demonstrate that debt markets cope well, despite massive fluctuations in expenditure and revenue, when lending functions like insurance. The authors unearth unique sixteenth-century loan contracts that offered highly effective risk sharing between the king and his lenders, with payment obligations reduced in bad times.

A fascinating story of finance and empire, Lending to the Borrower from Hell offers an intelligent model for keeping economies safe in times of sovereign debt crises and defaults.

View on Amazon View on AbeBooks View on Kobo View on B.Depository View on eBay View on Walmart

Why do lenders time and again loan money to sovereign borrowers who promptly go bankrupt? When can this type of lending work? As the United States and many European nations struggle with mountains of debt, historical precedents can offer valuable insights. Lending to the Borrower from Hell looks at one famous case--the debts and defaults of Philip II of Spain. Ruling over one of the largest and most powerful empires in history, King Philip defaulted four times. Yet he never lost access to capital markets and could borrow again within a year or two of each default. Exploring the shrewd reasoning of the lenders who continued to offer money, Mauricio Drelichman and Hans-Joachim Voth analyze the lessons from this important historical example.

Using detailed new evidence collected from sixteenth-century archives, Drelichman and Voth examine the incentives and returns of lenders. They provide powerful evidence that in the right situations, lenders not only survive despite defaults--they thrive. Drelichman and Voth also demonstrate that debt markets cope well, despite massive fluctuations in expenditure and revenue, when lending functions like insurance. The authors unearth unique sixteenth-century loan contracts that offered highly effective risk sharing between the king and his lenders, with payment obligations reduced in bad times.

A fascinating story of finance and empire, Lending to the Borrower from Hell offers an intelligent model for keeping economies safe in times of sovereign debt crises and defaults.

More books from Princeton University Press

Cover of the book Aesopic Conversations by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book Metacommunity Ecology, Volume 59 by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book Ancient Religions, Modern Politics by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book The Emperor Nero by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book The Neuroscience of Emotion by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book Against Democracy by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book Little Rock by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book All the News That's Fit to Sell by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book The Traveling Salesman Problem by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book The New Dynamic Public Finance by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book The First Modern Jew by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book The Rhetorical Presidency by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book Foreign Relations by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book The Ultimate Book of Saturday Science by Mauricio Drelichman, Hans-Joachim Voth
Cover of the book Reinventing Discovery by Mauricio Drelichman, Hans-Joachim Voth
We use our own "cookies" and third party cookies to improve services and to see statistical information. By using this website, you agree to our Privacy Policy