- "Long-Term War Loans and Market Expectations in England, 1743-50" in Government Debts and Financial Markets in Europe, Ed. F. P. Caselli, 2008. (proofs) [First and perhaps softer version of some sections of the next paper].
- “Interest Reductions in the Politico-Financial Nexus of 18th Century England,” The Journal of Economic History, Vol. 71, 555-589.
In 1730s and 1750s the English government proposed to refinance the redeemable debt by "lowering the interest rate". In the ensuing coordination game among creditors, large investors like the Bank of England could block the policy change by demanding cash. Using 4% and 3% annuities prices to analyze market expectations this article studies two refinancing episodes with very different fates. Barnard failed in 1737 because his terms were too strict and financial agents induced a temporary market crash. Pelham succeeded in 1750 because his better terms fit market prices, and interest rates had fallen much faster than expected.
- For fun, in Bloomberg, a comparison
- 2011 (near) deadlock between the US executive and legislative branches about the ceiling of the public debt.
- 1575 (actual) deadlock between the Castilian executive and legislative branches about the ceiling of the public debt.
There are some (small) factual errors because of the very short deadlines for publication but the core of the argument is valid. The article is based on the paper "Debt policy under constraints...". Philip II put a payment stop on the short-term debt that was supposed to be converted into long-term debt when his parliament (theCortes) refused to increase the taxes that serviced the long-term debt. Because the funds for the short-term debt were raised in the domestic commercial credit market, through Genoese bankers, the commerical credit market froze and commercial fairs (the main one at Medina del Campo) were canceled. The negative impact on economic activity forced the Cortes to relent, after two years.