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The Interest Rate Effect of Dutch Money in Eighteenth-Century Britain

Published online by Cambridge University Press:  03 March 2009

Stefan E. Oppers
Stefan E. Oppers
Affiliation:
Ph.D. candidate in the Department of Economic, Harvard University, Cambridge, MA 02138.
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Abstract

It is generally recognized that the Dutch played a major part in financing British government deficits from the 1720s to the late 1770s. This article argues that even though the Dutch continued to hold large amounts of British debt after 1780, they stopped supplying new capital to the British and started a modest repatriation of some of their previous investments. A comparative econometric study of 3 percent consol yields during the two deficit-inducing wars Britain fought between 1750 and 1795 shows that as a result British interest rates became much more sensitive to increases in government borrowing.

Type
Articles
Information
The Journal of Economic History , Volume 53 , Issue 1 , March 1993 , pp. 25 - 43
Copyright
Copyright © The Economic History Association 1993

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