IDEAS home Printed from https://ideas.repec.org/a/ucp/jpolec/doi10.1086-694288.html
   My bibliography  Save this article

The Design of Debt-Clearing Markets: Clearinghouse Mechanisms in Preindustrial Europe

Author

Listed:
  • Lars Börner
  • John William Hatfield

Abstract

We examine the evolution of the decentralized clearinghouse mechanisms that were in use throughout Europe from the thirteenth century to the eighteenth century; in particular, we explore the clearing of nontradable or limited-tradable debts such as bills of exchange. We construct a theoretical model of these clearinghouse mechanisms and show that the specific decentralized multilateral clearing algorithms known as rescontre, skontrieren, or virement des parties, used by merchants in this period, were efficient in specific historical contexts. Our analysis contributes to the understanding of these mechanisms during late medieval and early modern fairs and their robustness during the seventeenth and eighteenth centuries.

Suggested Citation

  • Lars Börner & John William Hatfield, 2017. "The Design of Debt-Clearing Markets: Clearinghouse Mechanisms in Preindustrial Europe," Journal of Political Economy, University of Chicago Press, vol. 125(6), pages 1991-2037.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/694288
    DOI: 10.1086/694288
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/694288
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/694288
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/694288?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bindseil, Ulrich & Pantelopoulos, George, 2022. "A brief history of payment netting and settlement," IBF Paper Series 02-22, IBF – Institut für Bank- und Finanzgeschichte / Institute for Banking and Financial History, Frankfurt am Main.
    2. Monnet, Eric & Velde, François R., 2020. "Money, Banking, and Old-School Historical Economics," CEPR Discussion Papers 15348, C.E.P.R. Discussion Papers.
    3. TANAKA Mari & NARITA Yusuke & MORIGUCHI Chiaki, 2020. "Meritocracy and Its Discontent: Long-run Effects of Repeated School Admission Reforms," Discussion papers 20002, Research Institute of Economy, Trade and Industry (RIETI).
    4. Vuillemey, Guillaume, 2018. "Completing Markets with Contracts: Evidence from the First Central Clearing Counterparty," CEPR Discussion Papers 13230, C.E.P.R. Discussion Papers.
    5. Masciandaro, Donato & Goodhart, Charles & Ugolini, Stefano, 2021. "Pandemic recession and helicopter money: Venice, 1629–1631," Financial History Review, Cambridge University Press, vol. 28(3), pages 300-318, December.
    6. Lars Boerner & Daniel Quint, 2023. "Medieval Matching Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(1), pages 23-56, February.
    7. Michael D. Bordo & William Roberds, 2022. "Central Bank Digital Currencies: An Old Tale with a New Chapter," FRB Atlanta Working Paper 2022-18, Federal Reserve Bank of Atlanta.
    8. Michael D. Bordo & William Roberds, 2024. "Central Bank Digital Currencies: An Old Tale with a New Chapter," Working Papers 323, Princeton University, Department of Economics, Center for Economic Policy Studies..
    9. Tomaž Fleischman & Paolo Dini, 2021. "Mathematical Foundations for Balancing the Payment System in the Trade Credit Market," JRFM, MDPI, vol. 14(9), pages 1-25, September.
    10. Fleischman, Tomaž & Dini, Paolo, 2021. "Mathematical foundations for balancing the payment system in the trade credit market," LSE Research Online Documents on Economics 112151, London School of Economics and Political Science, LSE Library.
    11. Matringe, Nadia & Power, Michael, 2024. "Memories lost: A history of accounting records as forms of projection," Accounting, Organizations and Society, Elsevier, vol. 112(C).
    12. Matringe, Nadia & Power, Michael, 2024. "Memories lost: a history of accounting records as forms of projection," LSE Research Online Documents on Economics 120410, London School of Economics and Political Science, LSE Library.
    13. In'acio B'o & Li Chen, 2021. "Designing Heaven's Will: The job assignment in the Chinese imperial civil service," Papers 2105.02457, arXiv.org, revised Sep 2021.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jpolec:doi:10.1086/694288. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JPE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.