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Philip II against the Cortes and the credit freeze of 1575-1577

Author

Listed:
  • Christophe Chamley

    (PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, Department of Economics - BU - Boston University [Boston], PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Carlos Álvarez-Nogal

    (Departamento de Economía - UC3M - Universidad Carlos III de Madrid = University of Carlos III of Madrid)

Abstract

Numerous archival documents show how the suspension of payments by Philip II, in September 1575, on the contracts with Genoese bankers (asientos) induced a freeze of the domestic credit market in Castile through the bankers' intermediation for asientos and the credit interconnections. Commercial fairs stopped, banks failed and trade suffered while the king granted legal protection to the Genoese bankers. The evidence strikingly confirms that by his strategy, Philip II was able to remove the de facto ceiling on the domestic debt (juros) imposed by the fixed revenue commitment of the Castilian cities in the Cortes. The agreement with the bankers was signed in December 1577 immediately after the cities had agreed to the doubling of their commitment.

Suggested Citation

  • Christophe Chamley & Carlos Álvarez-Nogal, 2016. "Philip II against the Cortes and the credit freeze of 1575-1577," PSE-Ecole d'économie de Paris (Postprint) halshs-01509637, HAL.
    • Handle: RePEc:hal:pseptp:halshs-01509637
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    Cited by:

    1. Pamfili Antipa & Vincent Bignon, 2018. "Whither Economic History? Between Narratives and Quantification," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(3), pages 17-36.
    2. Mitchener, Kris & Trebesch, Christoph, 2021. "Sovereign Debt in the 21st Century: Looking Backward, Looking Forward," CEPR Discussion Papers 15935, C.E.P.R. Discussion Papers.
    3. Carlos Álvarez-Nogal & Leandro Prados de la Escosura, 2025. "Subjective well-being and inequality in Spain’s decline," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 19(1), pages 1-27, January.
    4. repec:spo:wpecon:info:hdl:2441/3333juqsbl8k6qn6kl3c2nkjtt is not listed on IDEAS
    5. repec:spo:wpmain:info:hdl:2441/3333juqsbl8k6qn6kl3c2nkjtt is not listed on IDEAS
    6. Oliver Brufal, 2025. "Resisting reform in the public sector: theory and historical evidence from the UK," Working Papers 0288, European Historical Economics Society (EHES).
    7. repec:spo:wpmain:info:hdl:2441/4ithmorhr18kq90pu8cm6fv3ad is not listed on IDEAS
    8. De Magalhaes, Leandro & Giovannoni, Francesco, 2022. "War and the rise of parliaments," European Economic Review, Elsevier, vol. 148(C).
    9. Carlos Álvarez-Nogal & Leandro Prados De La Escosura & Carlos Santiago-Caballero, 2016. "Spanish agriculture in the little divergence1,2," European Review of Economic History, European Historical Economics Society, vol. 20(4), pages 452-477.
    10. Carlos álvarez-Nogal & Leandro Prados de la Escosura & Carlos Santiago-Caballero, 2015. "Agriculture in Europe's Little Divergence: The Case of Spain," Working Papers 0080, European Historical Economics Society (EHES).
    11. Álvarez Nogal, Carlos & Prados de la Escosura, Leandro, 2025. "State Capacity and Subjective Well-Being in Early Modern Spain," IFCS - Working Papers in Economic History.WH 48535, Universidad Carlos III de Madrid. Instituto Figuerola.
    12. Kris James Mitchener & Christoph Trebesch, 2021. "Sovereign Debt in the 21st Century," NBER Working Papers 28598, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

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    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • 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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