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Author Drelichman, Mauricio
Title Lending to the borrower from hell : debt, taxes, and default in the age of Philip II / Mauricio Drelichman and Hans-Joachim Voth
Imprint Princeton ; Oxford : Princeton University Press, [2014]
book jacket
 Fu Ssu-Nien WTN LANG BK  HJ1242 D772 2014    AVAILABLE    30530001184209
Descript xiii, 310 pages ; 24 cm
text rdacontent
unmediated rdamedia
volume rdacarrier
Series The Princeton economic history of the western world
Princeton economic history of the western world
Note "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"-- Provided by publisher
Includes bibliographical references (pages 281-295) and index
Subject Finance, Public -- Spain -- History -- 16th century
Debts, Public -- Spain -- History -- 16th century
Taxation -- Spain -- History -- 16th century
Philip II, King of Spain, 1527-1598
BUSINESS & ECONOMICS / Economic History. bisacsh
HISTORY / Europe / Spain & Portugal. bisacsh
HISTORY / Modern / 16th Century. bisacsh
Alt Author Voth, Hans-Joachim
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