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Crowding in During the Seven Years' War

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  • Nuno Palma
  • Carolyn Sissoko

Abstract

We present a financial history of the Seven Years’ War (1756–1763) using a new dataset derived from the Bank of England minutes. We argue that the war and the associated actions of the Bank of England led to a transformation of the financial system. Additionally, while there was short-term crowding out of private investment when interest rates rose due to the issue of war-related government debt, in the long-run there was crowding in: government spending led to an increase in private sector investment.

Suggested Citation

  • Nuno Palma & Carolyn Sissoko, 2022. "Crowding in During the Seven Years' War," Economics Discussion Paper Series 2211, Economics, The University of Manchester, revised Jun 2024.
    • Handle: RePEc:man:sespap:2211
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    References listed on IDEAS

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    1. Charles W. Calomiris & Stephen H. Haber, 2015. "Fragile by Design: The Political Origins of Banking Crises and Scarce Credit," Economics Books, Princeton University Press, edition 1, number 10177-2.
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    More about this item

    Keywords

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    JEL classification:

    • 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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