Abstract

http://ssrn.com/abstract=1829062
 


 



Evading the Taint of Usury


Mark Koyama


George Mason University - Department of Economics; George Mason University - Mercatus Center

August 28, 2010

Explorations in Economic History, Vol. 47, No. 4, 2010

Abstract:     
The development of capital markets in medieval Europe was shaped for centuries by the religious ban on lending money at interest. This paper examines how this prohibition developed as the outcome of strategic behavior by religious, commercial and political elites. A model is developed to analyze this hypothesis and to examine how the usury prohibition developed over time. It suggests that an important reason for the persistence of the ban was that it created a barrier to entry that enabled secular rulers, the Church, and a small number of merchant-bankers to earn monopoly rents.

Number of Pages in PDF File: 55

Keywords: usury, transaction costs, regulatory capture, competition

JEL Classification: N23, G21

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Date posted: May 2, 2011  

Suggested Citation

Koyama, Mark, Evading the Taint of Usury (August 28, 2010). Explorations in Economic History, Vol. 47, No. 4, 2010. Available at SSRN: http://ssrn.com/abstract=1829062 or http://dx.doi.org/10.2139/ssrn.1829062

Contact Information

Mark Koyama (Contact Author)
George Mason University - Department of Economics ( email )
4400 University Drive
Fairfax, VA 22030
United States
HOME PAGE: http://mason.gmu.edu/~mkoyama2/About.html
George Mason University - Mercatus Center ( email )
3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States
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