DP5940 The Bell Jar: Commercial Interest Rates between Two Revolutions, 1688-1789
|Author(s):||Marc Flandreau, Christophe Galimard, Clemens Jobst, Pilar NOGUES-MARCO|
|Publication Date:||November 2006|
|Keyword(s):||early financial derivative products, financial development, financial integration, interest rates|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=5940|
This paper exploits arbitrage conditions for bills of exchange with different maturities to provide new evidence on commercial interest rates in Amsterdam, London, and Paris during the 18th century. The lesson that emerges is that commercial interest rates were very low in all three centers and did not differ much from one location to another. This suggests that a transnational capital market resulting from the Commercial Revolution pre-dated to the British 'Financial Revolution' of the 18th century.