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Payments and the Development of Finance in Pre-Industrial Europe

Dartmouth College Econ. Working Paper No. 01-15

25 Pages Posted: 23 Nov 2001  

Meir Kohn

Dartmouth College - Department of Economics

Date Written: November 2001

Abstract

The principal driving force in the development of the financial system of pre-industrial Europe was not lending per se, but payments. Trade among strangers required the development of methods of payment that did not require mutual acquaintance and trust. The two principal financial innovations of pre-industrial Europe - the deposit bank and the bill of exchange - evolved to address this need. Lending initially developed as an adjunct to the payments system and then expanded to fill other functions.

Keywords: Payments, deposit banks, bills of exchange, merchant banks, settlement, netting

JEL Classification: G10, G21, N23, O17

Suggested Citation

Kohn, Meir, Payments and the Development of Finance in Pre-Industrial Europe (November 2001). Dartmouth College Econ. Working Paper No. 01-15. Available at SSRN: https://ssrn.com/abstract=291208 or http://dx.doi.org/10.2139/ssrn.291208

Meir G. Kohn (Contact Author)

Dartmouth College - Department of Economics ( email )

Rockefeller Hall 6106
Hanover, NH 03755
United States
603-646-2648 (Phone)
603-643-2122 (Fax)

HOME PAGE: http://www.dartmouth.edu/~mkohn/

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