Uncertainty: Staple Credit and the Measurement of Later Medieval “Business Confidence”

Business confidence is a measure of optimism or pessimism that managers feel about the commercial prospects for their organizations. This paper uses later medieval high-value English credit data as a proxy gauge of merchants’ business confidence or uncertainty. It discusses whether mercantile restriction of credit during the fifteenth-century recession reflects uncertainty, whereby merchants became increasingly risk-averse and so reduced the amount of credit they extended to their customers. It discusses the chronological trends in English lending between 1353 and 1532. This paper examines medieval debt restructuring and argues that this might similarly reflect merchants’ commercial confidence or uncertainty. In contrasting two sample years (1375 and 1433), the paper seeks to identify the motivations and influences that lay behind medieval merchants’ business decisions more fully. It argues that merchants’ investment behavior was guided more by local commercial circumstances than it was by profound economic shocks, such as plague and bullion famine.