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Matias Vernengo: Crowding out and the Industrial Revolution July 2013 | NAKED KEYNESIANISM
Charts from Dickson re interest rates on UK bonds through 18thC and the interest rates spikes during War of Spanish Succession -- links to classic studies (JSTOR) estimating slower growth during 18thC and speculating on crowding out. Link to McColloch paper disputing that Bubble Act reduced industrial investment in 18thC. Vernengo doesn't mention either usury controls or, more important for his speculation that finance for investment grew only as demand grew, that Britain was most heavily taxed and relied increasingly on consumption taxes that would have an impact on growth of demand. Temin and Voth theory that focuses on banking, and less on capital markets (do they think Bubble Act was important? ), other than relations between banking system and sovereign debt market. Vernengo cites papers (including from 1950s) that see Bank of England providing liquidity to the whole system especially in 2nd half of 18thC through the expansion of the revenue collection and government spending process -- new country banks also collecting taxes and the government was spending large amounts on war. Vernengo mentions that in earlier post on same topic and McColloch paper. JSTOR papers are downloaded to Note
paper  article  jstor  links  political_economy  economic_history  18thC  Britain  public_finance  sovereign_debt  fiscal-military_state  fiscal_policy  taxes  interest_rates  Bubble_Act  Bank_of_England  economic_growth  investment  financial_regulation  banking  War_of_Spanish_Succession  Industrial_Revolution  crowding_out  financial_repression  EF-add 
september 2013 by dunnettreader

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