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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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  • Rubin, Jared, 2010. "Bills of exchange, interest bans, and impersonal exchange in Islam and Christianity," Explorations in Economic History, Elsevier, vol. 47(2), pages 213-227, April.
    • Handle: RePEc:eee:exehis:v:47:y:2010:i:2:p:213-227
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    3. Nogues-Marco, Pilar, 2017. "Money Markets and Exchange Rates in Pre-Industrial Europe," Working Papers unige:100808, University of Geneva, Paul Bairoch Institute of Economic History.
    4. Nikolay Nenovsky & Pencho Penchev, 2016. "Money without a State: Currencies of the Orthodox Christians in the Balkan Provinces of the Ottoman Empire (17th –19th centuries)," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 29(1), pages 33-51, March.
    5. Javier Mejia, 2018. "Social Networks and Entrepreneurship. Evidence from a Historical Episode of Industrialization," Documentos CEDE 16380, Universidad de los Andes, Facultad de Economía, CEDE.
    6. Graham Brownlow, 2015. "Back to the failure: an analytic narrative of the De Lorean debacle," Business History, Taylor & Francis Journals, vol. 57(1), pages 156-181, January.
    7. Joshua Hendrickson, 2025. "Usury enforcement as an alternative to capital taxation in pre-modern states," Public Choice, Springer, vol. 203(3), pages 397-422, June.
    8. Raffaele Danna, 2019. "Figuring out: the spread of Hindu-Arabic numerals in the European tradition of practical mathematics (13th-16th centuries)," Working Papers 35, Department of Economic and Social History at the University of Cambridge, revised 03 Aug 2019.
    9. Zegarra, Luis Felipe, 2017. "Usury laws and private credit in Lima, Peru. Evidence from notarized records," Explorations in Economic History, Elsevier, vol. 65(C), pages 68-93.
    10. Theresa Finley & Mark Koyama, 2018. "Plague, Politics, and Pogroms: The Black Death, the Rule of Law, and the Persecution of Jews in the Holy Roman Empire," Journal of Law and Economics, University of Chicago Press, vol. 61(2), pages 253-277.
    11. 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.
    12. Chaudhary, Latika & Rubin, Jared, 2016. "Religious identity and the provision of public goods: Evidence from the Indian Princely States," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 461-483.

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