Lending to the Borrower from Hell: Debt and Default in the Age of Philip II, 1556-1598
Economic Journal 121, pp. 1205-1227 (2011)
Abstract
What sustained borrowing without third-party enforcement in the early days of sovereign lending? Philip II of Spain accumulated towering debts while stopping all payments to his lenders four times. How could the sovereign borrow much and default often?
Mauricio Drelichman, Hans-Joachim Voth (2011). “Lending to the Borrower from Hell: Debt and Default in the Age of Philip II, 1556-1598.” Economic Journal.