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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, volume 1, number 10177-2.
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    9. Patrick K O'Brien & Nuno Palma, 2020. "Danger to the Old Lady of Threadneedle Street? The Bank Restriction Act and the regime shift to paper money, 1797–1821," European Review of Economic History, European Historical Economics Society, vol. 24(2), pages 390-426.
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    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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