Private Borrowing during the Financial Revolution: Hoare's Bank and its Customers, 1702-24

24 Pages Posted: 14 Jul 2008

See all articles by Peter Temin

Peter Temin

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Hans-Joachim Voth

University of Zurich - UBS International Center of Economics in Society; Centre for Economic Policy Research (CEPR)

Abstract

The financial revolution improved the British government's ability to borrow, and thus its ability to wage war. North and Weingast argued that it also permitted private parties to borrow more cheaply and widely. We test these inferences with evidence from a London bank. We confirm that private bank credit was cheap in the early eighteenth century, but we argue that it was not available widely. Importantly, the government reduced the usury rate in 1714, sharply reducing the circle of private clients that could be served profitably.

Suggested Citation

Temin, Peter and Voth, Hans-Joachim, Private Borrowing during the Financial Revolution: Hoare's Bank and its Customers, 1702-24. The Economic History Review, Vol. 61, No. 3, pp. 541-564, August 2008. Available at SSRN: https://ssrn.com/abstract=1158697 or http://dx.doi.org/10.1111/j.1468-0289.2007.00420.x

Peter Temin (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Hans-Joachim Voth

University of Zurich - UBS International Center of Economics in Society ( email )

Raemistrasse 71
Zuerich, 8006
Switzerland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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