Fragmentation of long-term credit markets in early modern Spain? Composite monarchies and their jurisdictions

Cyril Milhaud (1, 2)

1 EHESS - École des hautes études en sciences sociales
2 PSE - Paris School of Economics

This paper studies the effect of jurisdictional barriers on the integration of long-term credit markets in early modern Spain. Overlapping jurisdictions were behind many jurisdictional disputes, which obstructed market development. Using a gravity model with a newly constructed dataset on long-term capital flows, I show that belonging to the same jurisdiction increased expected long-term capital flows almost tenfold. This result is similar to the observations of today’s international trade. Even large interest rate differentials across jurisdictions do not reverse this pattern.

Mots clés: composite monarchies; Spain; Capital markets; Market integration; early modern

Domaines: Economies et finances; Histoire

Cyril Milhaud. Fragmentation of long-term credit markets in early modern Spain? Composite monarchies and their jurisdictions. 2018. ⟨hal-01365882v2⟩