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The debt of the Hôtel-Dieu de Paris from 1660 to 1690: a testbed for sovereign default

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  • Pierre-Charles Pradier

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

It is generally accepted that there was no proper evaluation of life annuities in the seventeenth century, thus the bankruptcy of the Paris Hôtel-Dieu 1689 is commonly attributed to this mispricing. New sources show that the prices of annuities from 1668 on are compatible with Deparcieux's mortality table discounted at the legal rate of interest. The bankruptcy resulted from incorrect provisioning of life annuities liabilities rather than mispricing. That story would have been anecdotal if the French king had not decided to borrow using contingent annuities around the same time: the Crown's plan can be shown to be unsustainable.

Suggested Citation

  • Pierre-Charles Pradier, 2016. "The debt of the Hôtel-Dieu de Paris from 1660 to 1690: a testbed for sovereign default," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01382586, HAL.
    • Handle: RePEc:hal:cesptp:halshs-01382586
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01382586
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    References listed on IDEAS

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    1. François R. Velde, 2007. "John Law's System," American Economic Review, American Economic Association, vol. 97(2), pages 276-279, May.
    2. Pierre-Charles Pradier, 2011. "(Petite) histoire de la discrimination (dans les assurances)," Working Papers hal-00623909, HAL.
    3. Pierre-Charles Pradier & Katia Béguin, 2016. "Les vies à l’aune du roi et de l’Église. La valeur vénale des rentes viagères au XVIIe siècle," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01314634, HAL.
    4. Munro, John H., 2002. "The medieval origins of the 'Financial Revolution': usury, rentes, and negotiablity," MPRA Paper 10925, University Library of Munich, Germany, revised Sep 2002.
    5. Geoffrey Poitras, 2000. "The Early History of Financial Economics, 1478–1776," Books, Edward Elgar Publishing, number 2151.
    6. J. Berthon & Georges Gallais-Hamonno, 2008. "Les emprunts tontiniers de l'Ancien Régime, un exemple d'ingéniérie financière au XVIIIème siècle," Post-Print halshs-00280039, HAL.
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    Cited by:

    1. Antonio José Heras Martínez & David Teira & Pierre-Charles Pradier, 2016. "What was fair in acturial fairness?," Post-Print halshs-01400213, HAL.

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    More about this item

    Keywords

    life annuities; financial revolution; early modern Europe; hospitality; rentes viagères; révolution financière; Europe moderne; hospitalité;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913

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