Lending to the Borrower from Hell: Debt, Taxes and Default in the Age of Philip II


Mauricio Drelichman

Historiador Económico interesado en historia española moderna. 

11 de diciembre de 2013 - 17:00 a 19:00 hs


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, the authors 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 sharking 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. 

Universidad Torcuato Di Tella

  • Juan Pablo Sáenz Valiente 1010
  • Ciudad Autónoma de Buenos Aires
  • Argentina


historia económica, historia


Aún no hay comentarios en este evento

Octubre 2017


El tamaño óptimo del estado

Resulta que los economistas tienen muchas teorías sobre el gasto público óptimo y la carga tributaria óptima. Esto no es lo mismo que decir que tienen respuestas confiables y consistentes. Como e...
Lea Más

Escribiendo el futuro

ADDIS ABABA – ¿Qué le depara el futuro a la economía global? ¿Seguirán elevándose los estándares de vida en todo el mundo a medida que los países pobres de hoy den el salto tecnológico par...
Lea Más