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Fragmentation of long-term credit markets in early modern Spain? Composite monarchies and their jurisdictions

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  • Cyril Milhaud

    (EHESS - École des hautes études en sciences sociales, 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)

Abstract

This paper studies the effect of jurisdictional barriers on the integration of long-term credit markets in early modern Spain. Overlapping jurisdictions were behind many jurisdictional disputes, which obstructed market development. Using a gravity model with a newly constructed dataset on long-term capital flows, I show that belonging to the same jurisdiction increased expected long-term capital flows almost tenfold. This result is similar to the observations of today's international trade. Even large interest rate differentials across jurisdictions do not reverse this pattern.

Suggested Citation

  • Cyril Milhaud, 2018. "Fragmentation of long-term credit markets in early modern Spain? Composite monarchies and their jurisdictions," Working Papers hal-01365882, HAL.
    • Handle: RePEc:hal:wpaper:hal-01365882
    Note: View the original document on HAL open archive server: https://hal.science/hal-01365882v2
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    References listed on IDEAS

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    Keywords

    composite monarchies; Spain; Capital markets; Market integration; early modern;
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