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Waterloo: a Godsend for French Public Finances?

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  • Kim Oosterlinck

    (Université Libre de Bruxelles)

  • Loredana Ureche-Rangau

    (Université de Picardie Jules Verne)

  • Jacques-Marie Vaslin

    (Université de Picardie Jules Verne)

Abstract

Following Waterloo, managing French public finances represented a daunting task. Defeated France had lost a substantial part of its population and territory. The country was partially occupied and France was to pay huge amounts as reparations to the victors. Furthermore, France’s reputation had been tarnished by several defaults on its debt in the preceding decades. Despite all these elements, in the ten years between 1815 and 1825, not only did France manage to place a huge amount of debt on the market (resulting in a threefold increase) but it did so with a spread, compared to the British consol, falling from more than 400 basis points to a meagre 100 basis point. Based on an econometric analysis of the yields of the French rentes, we show that the military threat of the Allied coupled to a significant improvement in French institutions explain the dramatic decrease in yields.

Suggested Citation

  • Kim Oosterlinck & Loredana Ureche-Rangau & Jacques-Marie Vaslin, 2013. "Waterloo: a Godsend for French Public Finances?," Working Papers 0041, European Historical Economics Society (EHES).
  • Handle: RePEc:hes:wpaper:0041
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    2. P.Antipa, 2014. "How Fiscal Policy Affects the Price Level: Britain’s First Experience with Paper Money," Working papers 525, Banque de France.
    3. Antipa, P., 2013. "Fiscal Sustainability and the Value of Money: Lessons from the British Paper Pound, 1797-1821," Working papers 466, Banque de France.

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    More about this item

    Keywords

    Sovereign debt; bond pricing; France; default; financial history; Waterloo;
    All these keywords.

    JEL classification:

    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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