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Bills of exchange, interest bans, and impersonal exchange in Islam and Christianity

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  • Rubin, Jared

Abstract

A vast economic history literature suggests that medieval institutions supporting contract enforcement were necessary for impersonal exchange to emerge. Yet this literature cannot account for the bill of exchange, an important financial instrument that had positive legal standing in both the medieval Islamic and Christian worlds but remained relegated to personal networks only in the former. This paper suggests that a seemingly innocuous difference - the involvement of currency exchange in European but not Middle Eastern bills, a difference resulting from the secular legalization of interest in Europe - encouraged divergent endogenous processes resulting in these distinct institutional arrangements.

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Bibliographic Info

Article provided by Elsevier in its journal Explorations in Economic History.

Volume (Year): 47 (2010)
Issue (Month): 2 (April)
Pages: 213-227

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Handle: RePEc:eee:exehis:v:47:y:2010:i:2:p:213-227

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Web page: http://www.elsevier.com/locate/inca/622830

Related research

Keywords: Bills of exchange Impersonal exchange Interest Usury Suftaja Islam Christianity Exchange Credit Financial institutions;

References

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Cited by:
  1. Koyama, Mark, 2010. "Evading the 'Taint of Usury': The usury prohibition as a barrier to entry," Explorations in Economic History, Elsevier, vol. 47(4), pages 420-442, October.
  2. Mark Koyama, 2008. "Evading the 'Taint of Usury' Complex Contracts and Segmented Capital Markets," Economics Series Working Papers 412, University of Oxford, Department of Economics.

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