Small is beautiful. On the efficiency of credit markets in late medieval Holland
In this paper we analyse the functioning of private capital markets in Holland in the late medieval period. We argue that in the absence of banks and state agencies involved with the supply of credit, entrepreneurs access to credit was determined by two interrelated factors. The first was the quality of property rights protection and the extent to which property could be used as collateral. The second was the level of interest in borrowing money at the time, as well as such borrowing compared with the interest rates on risk-free investments. For our case study, the small town of Edam, and its hinterland, De Zeevang, in the fifteenth and sixteenthcentury, we demonstrate that properties were used as collateral on a large scale, and that interest rates on both small and large loans were relatively low (about six per cent). As a result, many households (whether headed by men or women) owned financial assets and/or debts, and the degree of financial sophistication was relatively high.
|Date of creation:||Jul 2011|
|Date of revision:|
|Contact details of provider:|| Postal: University of Utrecht, Drift 10, The Netherlands|
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- Jaco Zuijderduijn & Tine De Moor, 2011.
"Spending, saving, or investing? Risk management in sixteenth-century Dutch households,"
0008, Utrecht University, Centre for Global Economic History.
- Jaco Zuijderduijn & Tine De Moor, 2013. "Spending, saving, or investing? Risk management in sixteenth-century Dutch households," Economic History Review, Economic History Society, vol. 66(1), pages 38-56, 02.
- Sylla, Richard, 2002. "Financial Systems And Economic Modernization," The Journal of Economic History, Cambridge University Press, vol. 62(02), pages 277-292, June.
- Van Zanden, Jan Luiten & Prak, Maarten, 2006. "Towards an economic interpretation of citizenship: The Dutch Republic between medieval communes and modern nation-states," European Review of Economic History, Cambridge University Press, vol. 10(02), pages 111-145, August.
- Hoffman, Philip T. & Postel-Vinay, Gilles & Rosenthal, Jean-Laurent, 2001. "Priceless Markets," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226348018.
- Fratianni, Michele & Spinelli, Franco, 2006. "Italian city-states and financial evolution," European Review of Economic History, Cambridge University Press, vol. 10(03), pages 257-278, December.
- Munro, John H., 2002. "The medieval origins of the 'Financial Revolution': usury, rentes, and negotiablity," MPRA Paper 10925, University Library of Munich, Germany, revised Sep 2002.
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