IDEAS home Printed from https://ideas.repec.org/p/cdl/ucsbec/qt11s61814.html
   My bibliography  Save this paper

The Origin of the Bank of England: A Credible Commitment to Sovereign Debt

Author

Listed:
  • Yang, Der-Yuan

Abstract

In economic development, institutions and organizations are critical elements which can be looked upon as rules and players of a game, respectively. Investigating how institutions evolve and why certain organizations emerge may help us better understand economic development, especially when the situation requires an efficient solution. The problem of sovereign financing shares the features of one-sided Prisoner’ s Dilemma (PD). Sovereign default had been a common phenomenon in England since the medieval period; however, the establishment of the Bank of England altered the sovereign’ s incentives and helped build mutual trust between the crown and Parliament. In this paper, we analyze the emergence of the Bank by viewing it as a commitment device which makes the king’ s promise to pay trustworthy.

Suggested Citation

  • Yang, Der-Yuan, 1997. "The Origin of the Bank of England: A Credible Commitment to Sovereign Debt," University of California at Santa Barbara, Economics Working Paper Series qt11s61814, Department of Economics, UC Santa Barbara.
  • Handle: RePEc:cdl:ucsbec:qt11s61814
    as

    Download full text from publisher

    File URL: http://www.escholarship.org/uc/item/11s61814.pdf;origin=repeccitec
    Download Restriction: no

    References listed on IDEAS

    as
    1. repec:cdl:ucsbec:13-97 is not listed on IDEAS
    2. Hicks, J. R., 1969. "A Theory of Economic History," OUP Catalogue, Oxford University Press, number 9780198811633.
    Full references (including those not matched with items on IDEAS)

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:ucsbec:qt11s61814. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff). General contact details of provider: http://edirc.repec.org/data/educsus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.