The alchemy of gold : interest rates, money stock, and credit in eighteenth-century Lisbon
Autor(a) principal: | |
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Data de Publicação: | 2018 |
Outros Autores: | , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.5/26881 |
Resumo: | This article addresses the partial equilibrium functioning of the short-term credit market in eighteenth-century Lisbon and its response to massive gold inflows from Brazil. Gold inflows were a colonial rent, and thus a source of income and a financial asset that increased the liquidity supply in a credit market populated by both (direct) participants and non-participants in the colonial trade or in mining. As a source of income it would induce a positive upward pressure on interest rates, while as a financial asset it would lead to the opposite. A method is developed to extract interest rates from notarized personal credit, unbundling the aggregate and the idiosyncratic components of risk pricing. The results show that interest rates in Lisbon did not differ critically from those observed in other cities at the core of the premodern European economy, which were spared from devastation by the earthquake that struck Lisbon in 1755. A simple model relating the market interest rate series to gold stock variations finds that the liquidity channel dominated over the endowment channel, which explains the downward trend in interest rates up until 1757 when the interest rates were freely settled. Mild credit rationing may have been introduced by a 5 per cent ceiling on interest rates that was imposed after 1757. |
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The alchemy of gold : interest rates, money stock, and credit in eighteenth-century LisbonEconomic HistoryCredit MarketEighteenth-centuryLisbon Earthquake (1755)Gold InflowsColonial TradePortugalBrazilThis article addresses the partial equilibrium functioning of the short-term credit market in eighteenth-century Lisbon and its response to massive gold inflows from Brazil. Gold inflows were a colonial rent, and thus a source of income and a financial asset that increased the liquidity supply in a credit market populated by both (direct) participants and non-participants in the colonial trade or in mining. As a source of income it would induce a positive upward pressure on interest rates, while as a financial asset it would lead to the opposite. A method is developed to extract interest rates from notarized personal credit, unbundling the aggregate and the idiosyncratic components of risk pricing. The results show that interest rates in Lisbon did not differ critically from those observed in other cities at the core of the premodern European economy, which were spared from devastation by the earthquake that struck Lisbon in 1755. A simple model relating the market interest rate series to gold stock variations finds that the liquidity channel dominated over the endowment channel, which explains the downward trend in interest rates up until 1757 when the interest rates were freely settled. Mild credit rationing may have been introduced by a 5 per cent ceiling on interest rates that was imposed after 1757.John Wiley & Sons Ltd.Repositório da Universidade de LisboaCosta, Leonor FreireRocha, Maria ManuelaBrito, Paulo2023-01-16T11:23:04Z20182018-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/26881engCosta, Leonor Freire, Maria Manuela Rocha and Paulo Brito .(2018). “The alchemy of gold : interest rates, money stock, and credit in eighteenth-century Lisbon”. Economic History Review, Vol. 71, No. 4: pp. 1147–1172 (Search PDF in 2023).info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-03-06T14:56:18Zoai:www.repository.utl.pt:10400.5/26881Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:10:26.574970Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
The alchemy of gold : interest rates, money stock, and credit in eighteenth-century Lisbon |
title |
The alchemy of gold : interest rates, money stock, and credit in eighteenth-century Lisbon |
spellingShingle |
The alchemy of gold : interest rates, money stock, and credit in eighteenth-century Lisbon Costa, Leonor Freire Economic History Credit Market Eighteenth-century Lisbon Earthquake (1755) Gold Inflows Colonial Trade Portugal Brazil |
title_short |
The alchemy of gold : interest rates, money stock, and credit in eighteenth-century Lisbon |
title_full |
The alchemy of gold : interest rates, money stock, and credit in eighteenth-century Lisbon |
title_fullStr |
The alchemy of gold : interest rates, money stock, and credit in eighteenth-century Lisbon |
title_full_unstemmed |
The alchemy of gold : interest rates, money stock, and credit in eighteenth-century Lisbon |
title_sort |
The alchemy of gold : interest rates, money stock, and credit in eighteenth-century Lisbon |
author |
Costa, Leonor Freire |
author_facet |
Costa, Leonor Freire Rocha, Maria Manuela Brito, Paulo |
author_role |
author |
author2 |
Rocha, Maria Manuela Brito, Paulo |
author2_role |
author author |
dc.contributor.none.fl_str_mv |
Repositório da Universidade de Lisboa |
dc.contributor.author.fl_str_mv |
Costa, Leonor Freire Rocha, Maria Manuela Brito, Paulo |
dc.subject.por.fl_str_mv |
Economic History Credit Market Eighteenth-century Lisbon Earthquake (1755) Gold Inflows Colonial Trade Portugal Brazil |
topic |
Economic History Credit Market Eighteenth-century Lisbon Earthquake (1755) Gold Inflows Colonial Trade Portugal Brazil |
description |
This article addresses the partial equilibrium functioning of the short-term credit market in eighteenth-century Lisbon and its response to massive gold inflows from Brazil. Gold inflows were a colonial rent, and thus a source of income and a financial asset that increased the liquidity supply in a credit market populated by both (direct) participants and non-participants in the colonial trade or in mining. As a source of income it would induce a positive upward pressure on interest rates, while as a financial asset it would lead to the opposite. A method is developed to extract interest rates from notarized personal credit, unbundling the aggregate and the idiosyncratic components of risk pricing. The results show that interest rates in Lisbon did not differ critically from those observed in other cities at the core of the premodern European economy, which were spared from devastation by the earthquake that struck Lisbon in 1755. A simple model relating the market interest rate series to gold stock variations finds that the liquidity channel dominated over the endowment channel, which explains the downward trend in interest rates up until 1757 when the interest rates were freely settled. Mild credit rationing may have been introduced by a 5 per cent ceiling on interest rates that was imposed after 1757. |
publishDate |
2018 |
dc.date.none.fl_str_mv |
2018 2018-01-01T00:00:00Z 2023-01-16T11:23:04Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.5/26881 |
url |
http://hdl.handle.net/10400.5/26881 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Costa, Leonor Freire, Maria Manuela Rocha and Paulo Brito .(2018). “The alchemy of gold : interest rates, money stock, and credit in eighteenth-century Lisbon”. Economic History Review, Vol. 71, No. 4: pp. 1147–1172 (Search PDF in 2023). |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
John Wiley & Sons Ltd. |
publisher.none.fl_str_mv |
John Wiley & Sons Ltd. |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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1799131201329430528 |