- C/ Madrid 136. Desp 18.2.D.01
Getafe (Madrid)
Carlos Álvarez Nogal
Universidad Carlos III de Madrid, Social Sciences, Faculty Member
- Economic History, Early Modern History, Early Modern economic and social history, Early Modern economic history, History, Economic Growth, and 20 moreFiscal policy, Early modern Spain, Public Debt, Sovereign Debt, Public Finance, Early Modern Europe, Transportation Studies, Monetary history, Seventeenth Century, Institutions and Economic growth, Fiscal Policy and debt Management, Financial History (History), Spanish American History, Currency Manipulation, Taxes, Spanish Monarchy, Genoese History, 17th-Century Studies, Financial History, and Spain (History)edit
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In the fragmented geographical, fiscal, and financial state inherited by Philip II of Spain, while the public debt reached an unprecedented level (50-60 per cent of GDP), the critical refinancing of unfunded asientos into funded juros was... more
In the fragmented geographical, fiscal, and financial state inherited by Philip II of Spain, while the public debt reached an unprecedented level (50-60 per cent of GDP), the critical refinancing of unfunded asientos into funded juros was operated by merchant-bankers who signed the asientos. This process is illustrated, using abundant archival documentation, by an asiento with the Maluenda brothers in 1595, which provided the Crown with steady monthly cash payments for a year with options to sell juros for two-thirds of the credit, and a monthly rate of 1 per cent on the interim balance. Other examples are provided.
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Men of finance raised funds for loans, asientos, to Philip II by trading short-term financial instruments in credit markets and by selling long-term annuities, juros. These activities are illustrated by an asiento with the Maluenda... more
Men of finance raised funds for loans, asientos, to Philip II by trading short-term financial instruments in credit markets and by selling long-term annuities, juros. These activities are illustrated by an asiento with the Maluenda brothers (July 13, 1595), where short-term credit secured by the equity of the fleets from the Indies were, for more than one half, converted into funded life annuities that were sold by the Maluendas. The new analysis of this asiento relies on its dossier of more than 400 pages in the archives of Simancas, including the contract, the monitoring attachments, and the final audit.
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Under Philip II, Castile was the first country with a large nation-wide domestic public debt. A new view of that fiscal system is presented that is potentially relevant for other fiscal systems in Europe before 1800.The credibility of the... more
Under Philip II, Castile was the first country with a large nation-wide domestic public debt. A new view of that fiscal system is presented that is potentially relevant for other fiscal systems in Europe before 1800.The credibility of the debt, mostly in perpetual redeemable annuities, was enhanced by decentralized funding through taxes administered by cities making up the Realm in the Cortes.The accumulation of
short-term debt depended on refinancing through long-term debt. Financial crises in the short-term debt occurred when the service of the long-term debt reached the revenues of its servicing taxes. They were not caused by liquidity crises and were resolved after protracted negotiations in the Cortes by tax increases and interest rate reductions
short-term debt depended on refinancing through long-term debt. Financial crises in the short-term debt occurred when the service of the long-term debt reached the revenues of its servicing taxes. They were not caused by liquidity crises and were resolved after protracted negotiations in the Cortes by tax increases and interest rate reductions
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Two distinctive regimes are distinguished in Spain over half a millennium. The first one (1270s–1590s) corresponds to a high land–labour ratio frontier economy, which is pastoral, trade-oriented, and led by towns. Wages and food... more
Two distinctive regimes are distinguished in Spain over half a millennium. The first one (1270s–1590s) corresponds to a high land–labour ratio frontier economy, which is pastoral, trade-oriented, and led by towns. Wages and food consumption were
relatively high. Sustained per capita growth occurred from the end of the Reconquest (1264) to the Black Death (1340s) and resumed from the 1390s only broken by late fifteenth-century turmoil. A second regime (1600s–1810s) corresponds to a more
agricultural and densely populated low-wage economy which, although it grew at a pace similar to that of 1270–1600, remained at a lower level. Contrary to preindustrial western Europe, Spain achieved its highest living standards in the 1340s, not by mid-fifteenth century. Although its death toll was lower, the plague had a more damaging impact on Spain and, far from releasing non-existent demographic pressure, destroyed the equilibrium between scarce population and abundant resources.
Pre-1350 per capita income was reached by the late sixteenth century but only exceeded after 1820
relatively high. Sustained per capita growth occurred from the end of the Reconquest (1264) to the Black Death (1340s) and resumed from the 1390s only broken by late fifteenth-century turmoil. A second regime (1600s–1810s) corresponds to a more
agricultural and densely populated low-wage economy which, although it grew at a pace similar to that of 1270–1600, remained at a lower level. Contrary to preindustrial western Europe, Spain achieved its highest living standards in the 1340s, not by mid-fifteenth century. Although its death toll was lower, the plague had a more damaging impact on Spain and, far from releasing non-existent demographic pressure, destroyed the equilibrium between scarce population and abundant resources.
Pre-1350 per capita income was reached by the late sixteenth century but only exceeded after 1820
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Castile created in the 16th century the large nation-wide domestic public debt in Europe. Given historical and institutional constraints, the feasibility of the debt depended on the funding through taxes administered by the towns.... more
Castile created in the 16th century the large nation-wide domestic public debt in Europe. Given historical and institutional constraints, the feasibility of the debt depended on the funding through taxes administered by the towns. Short-term debt depended on the intermediation of commercial paper through Genoese bankers who managed international transfers. Philip II`s financial crises were caused by protracted negotiations about domestic taxation in the Cortes. During the most important one, 1573-1577, the king suspended the payments to the bankers, inducing the towns to accept higher taxes.
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This article attempts to quantify the decline of Spain over the period 1500–1850. In contrast to earlier estimates that focus almost exclusively on Castilian agriculture, we look at trends in urbanisation and construct new measures of... more
This article attempts to quantify the decline of Spain over the period 1500–1850. In contrast to earlier estimates that focus almost exclusively on Castilian agriculture, we look at trends in urbanisation and construct new measures of agricultural and aggregate output at both regional and national levels. A distinctive long-run behaviour is found across Spanish regions that rejects the identification between Castile and Spain. Per capita income grew in the sixteenth and early nineteenth centuries, while contraction and stagnation occurred in the seventeenth and eighteenth centuries. In the long run, output per head did not improve until the early nineteenth century. At the time of its imperial expansion Spain was a relatively affluent nation and, by 1590, was only behind the Low Countries and Italy in terms of per capita income. Spain’s decline has its roots in the
seventeenth century while its backwardness deepened in the first half of the nineteenth century.
seventeenth century while its backwardness deepened in the first half of the nineteenth century.
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During the 16th and 17th Centuries Genoese Bankers provided financial services all around Europe. Their success can be explained by the organization of their companies and the large numbers of agents they had distributed in different... more
During the 16th and 17th Centuries Genoese Bankers provided financial services all around Europe. Their success can be explained by the organization of their companies and the large numbers of agents they had distributed in different European commercial towns. This research studies the network of Gregorio and Bartolomeo Spinola. Apart from many different commercial activities, this family played a critical role financing the Spanish Monarchy between 1610 and 1656. Their companies resulted an excellent mechanism to process and manage financial information. They used two different networks: the first one to obtain credit in Europe, and the other to settle their accounts in Spain and transfer precious metals to different creditors in other countries. Each network managed a distinct type of information.
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Tradicionalmente se ha venido considerando que la venta de tierras "baldías" llevada a cabo por la Corona a finales del siglo XVI fue una de las principales causas de la decadencia de Castilla. La razón es que ese proceso de ventas... more
Tradicionalmente se ha venido considerando que la venta de tierras "baldías" llevada a cabo por la Corona a finales del siglo XVI fue una de las principales causas de la decadencia de Castilla. La razón es que ese proceso de ventas endeudó a muchos campesinos o les expulsó de la actividad agraria. Este trabajo plantea el problema desde una perspectiva distinta. El origen de la crisis pudo no estar en la venta de los "baldíos", sino la existencia de este tipo de tierras al comenzar la expansión agraria. Los baldíos incentivaron el aumento de la producción sobre tierras marginales porque, aunque la Corona era su dueña, no ejerció sus derechos de propiedad sobre ellas hasta la década de 1570. Durante décadas, el uso de baldíos apenas tuvo un coste para los campesinos. Los baldíos fueron un poderoso incentivo para aumentar el uso del factor tierra, en detrimento de otros factores; o para primar un crecimiento extensivo en lugar de mejorar la productividad.
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Las monedas de plata eran un excelente instrumento de pago en la España del siglo XVII y también en el resto de Europa, pero dado su elevado peso y valor, su uso y transporte tenía riesgos y costes. ¿Se puede hacer una estimación de los... more
Las monedas de plata eran un excelente instrumento de pago en la España del siglo XVII y también en el resto de Europa, pero dado su elevado peso y valor, su uso y transporte tenía riesgos y costes. ¿Se puede hacer una estimación de los mismos? Hasta ahora sabemos lo que la Corona pagaba a los banqueros por realizar este servicio, pero ¿cuánto pagaban los banqueros? ¿Y los particulares? ¿Qué era más barato: utilizar letras de cambio o moneda en metálico? ¿Cómo funcionaba en España la exportación de metal precioso?
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Este trabajo analiza los efectos de la regulación del tipo de cambio vellón-plata en la contratación del crédito a corto plazo por parte la Corona española durante el siglo XVII. Compara los tipos de cambio máximos aprobados oficialmente... more
Este trabajo analiza los efectos de la regulación del tipo de cambio vellón-plata en la contratación del crédito a corto plazo por parte la Corona española durante el siglo XVII. Compara los tipos de cambio máximos aprobados oficialmente con aquellos que se fijaron en los contratos de los banqueros del rey. La teoría de regulación de precios y los estudios que analizan los mercados negros ayudan a entender por qué la regulación no sirvió para abaratar el valor del metal precioso como pretendía la Corona. Al contrario, incrementó los costes de negociación del crédito que solicitaba a corto plazo, y modificó la estrategia adoptada por los agentes financieros en los mercados
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"Este trabajo muestra la estrategia de la Corona y de los agentes financieros en la negociación del crédito en un marco de gran incertidumbre sobre el valor real de los medios de pago. Dicha incertidumbre estuvo causada por la existencia... more
"Este trabajo muestra la estrategia de la Corona y de los agentes financieros en la negociación del crédito en un marco de gran incertidumbre sobre el valor real de los medios de pago. Dicha incertidumbre estuvo causada por la existencia de una moneda de cobre continuamente alterada por la Monarquía. A la inestabilidad derivada de la moneda fiduciaria se le unió el empeño de la Monarquía en mantener un precio máximo en el
cambio vellón-plata completamente alejado de su precio real de mercado.
La moneda de vellón fue utilizada por la Monarquía para incrementar sus recursos en el siglo XVII de cara a la negociación del crédito, pero en cuanto perdió su reputación
como instrumento de cambio, se convirtió en un serio obstáculo al negociar con los banqueros. Sin embargo, como a pesar de las grandes incertidumbres que generaba la moneda, ambas partes estaban muy interesadas en mantener una estrecha relación en
torno al crédito, tanto la Corona como sus banqueros adoptaron diferentes estrategias que les permitieron continuar sus negociaciones."
cambio vellón-plata completamente alejado de su precio real de mercado.
La moneda de vellón fue utilizada por la Monarquía para incrementar sus recursos en el siglo XVII de cara a la negociación del crédito, pero en cuanto perdió su reputación
como instrumento de cambio, se convirtió en un serio obstáculo al negociar con los banqueros. Sin embargo, como a pesar de las grandes incertidumbres que generaba la moneda, ambas partes estaban muy interesadas en mantener una estrecha relación en
torno al crédito, tanto la Corona como sus banqueros adoptaron diferentes estrategias que les permitieron continuar sus negociaciones."
The Spanish Monarchy borrowed foreign credit during more than 150 years despite repudiating its agreements from time to time.According to the extant literature on sovereign debt, lenders should not have lent any money to the Spanish... more
The Spanish Monarchy borrowed foreign credit during more than 150 years despite repudiating its agreements from time to time.According to the extant literature on sovereign debt, lenders should not have lent any money to the Spanish Monarchy, especially because they were not organized as a cartel. Sovereign debt theory asserts that the principal constraint on sovereign behavior is the penalty that lenders or an external organization can impose on the borrower. When the sovereign decides whether to honor the loan agreement, his main consideration lies on the size of the penalty he will suffer in the event of a default. The inability to punish the sovereign does not lead to indiscriminate reneging, but to an absence of credit. Thus, the extant theory cannot explain the borrowing that took place in Castile during a large part of the Habsburg dynasty (1516-1665). This paper explains why, in the absence of penalties and having experiences of defaults, bankers kept lending. The mechanism ...
The traditional literature about the Castilian agriculture has interpreted the sale of baldíos as one of the main causes of the decline of Castile during the seventeenth century. The sale obligated the peasant to buy the land if he wanted... more
The traditional literature about the Castilian agriculture has interpreted the sale of baldíos as one of the main causes of the decline of Castile during the seventeenth century. The sale obligated the peasant to buy the land if he wanted to continue working on it. Many of these lands were marginal and poor soils, so the growth of production cost would have led many farmers to the ruin and poverty. Many of them had to migrate to other regions, causing a deep fall of agriculture production, the main production activity of Castile’s economy at that period of time. This paper shows that Castile entered in decadence not because the baldíos were sold but because the reasons inviting people to use more land and to increase production during the first half of the sixteenth century disappeared around 1590. Instead of seeing exclusively the new costs faced by the farmer after the sale, this paper explores what happened with revenues from plowing more land. Baldíos was an institution that hel...
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ABSTRACT This research studies the influence of the costs of acquiring and transmitting information in the organization of a 17th century trading and financial company. The study is based on the entrepreneurial activities of a Genoese... more
ABSTRACT This research studies the influence of the costs of acquiring and transmitting information in the organization of a 17th century trading and financial company. The study is based on the entrepreneurial activities of a Genoese banker, Bartolomé Spinola, who, very early on, settled in Madrid and served the Spanish Crown as Factor General del Rey. The services carried out by the company demanded the coordination of numerous agents and businessmen in different places throughout Spain and Europe. Each person had the information necessary for the success of a financial operation. The relationship between Bartolomé Spinola and his colleagues depended on his capacity to obtain and handle the information. The organisational structure of his banking activities were mainly conditioned by these costs.
This paper explores the role of agriculture in Spain’s contribution to the little divergence in Europe. On the basis of tithes, long-run trends in agricultural output are drawn. After a long period of relative stability, output suffered a... more
This paper explores the role of agriculture in Spain’s contribution to the little divergence in Europe. On the basis of tithes, long-run trends in agricultural output are drawn. After a long period of relative stability, output suffered a severe contraction during 1570-1620, followed by stagnation to 1650, and steady expansion thereafter. Output per head shifted from a relatively high to a low path that persisted until the nineteenth century. The decline in agricultural output per head and per worker from a relatively high level contributed to Spain falling behind and, hence, to the Little Divergence in Europe. Output per worker moved along labour force in agriculture over the long run, supporting the depiction of Spain as a frontier economy. Institutional factors, in a context of financial and monetary instability and war, along climatic anomalies, provide explanatory hypotheses that deserve further research.
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The large public debt was created in 16th century Castile. A new view of its fiscal system is presented. The main part of the debt was in perpetual redeemable annuities and its credibility was enhanced by decentralized funding through... more
The large public debt was created in 16th century Castile. A new view of its fiscal system is presented. The main part of the debt was in perpetual redeemable annuities and its credibility was enhanced by decentralized funding through taxes administered by cities that represented the Realm in the Cortes. Accumulation of short-term debt would be refinanced by long-term debt. Short-term debt crises occurred when the service of the long-term debt reached the revenues of the taxes that funded the domestic long-term debt. They were resolved after protracted negotiations in the Cortes by tax increases and interest rate reductions.
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Two distinctive regimes are distinguished in Spain over half-a-millennium. A first one (1270s-1590s) corresponds to a high land-labour ratio frontier economy, pastoral, trade-oriented, and led by towns. Wages and food consumption were... more
Two distinctive regimes are distinguished in Spain over half-a-millennium. A first one (1270s-1590s) corresponds to a high land-labour ratio frontier economy, pastoral, trade-oriented, and led by towns. Wages and food consumption were relatively high. Sustained per capita growth occurred from the Reconquest’s end (1264) to the Black Death (1340s) and resumed from the 1390s only broken by late-15th century turmoil. A second regime (1600s-1810s) corresponds to a more agricultural and densely populated low-wage economy which grew along a lower path. Contrary to preindustrial Western Europe, Spain achieved her highest living standards in the 1340s, not by mid-15th century. Although its population toll was lower, the Plague had a more
damaging impact on Spain and, far from releasing non-existent demographic pressure, destroyed the equilibrium between scarce population and abundant resources. Pre-1350 per capita income was reached by the late 16th century but only overcome after 1820.
damaging impact on Spain and, far from releasing non-existent demographic pressure, destroyed the equilibrium between scarce population and abundant resources. Pre-1350 per capita income was reached by the late 16th century but only overcome after 1820.
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It is well known that the Spanish Monarchy found out some problems in its monetary system. So far, almost all the studies have been concentrated in the billon problem and inflation. However, small and large silver coins had also problems... more
It is well known that the Spanish Monarchy found out some problems in its monetary system. So far, almost all the studies have been concentrated in the billon problem and inflation. However, small and large silver coins had also problems to circulate together in Castile. Without small change, among other consequences, it was more difficult to carry out small transactions and without large denominations the credit borrowed by the king to foreign bankers was more expensive. These problems were endogenous to the Castilian monetary
system based on precious metals. Those problems were aggravated with the inflation of copper currency and the new war scenario in Flanders during the seventeenth century. The Monarchy took decisions against the market in order to avoid those problems. These measures did not solve the problems, but they affected the fineness of the currency, the price of transactions and the relationship between the Council of Finance and its foreign bankers. Theory helps to explain why those problems were intrinsically related to the Castilian monetary system. New historical evidence shows that the outcomes of the Crown’s solutions to control the number of small coins and to eliminate any premium on large coins are in line with predictions of new developments in monetary theory.
system based on precious metals. Those problems were aggravated with the inflation of copper currency and the new war scenario in Flanders during the seventeenth century. The Monarchy took decisions against the market in order to avoid those problems. These measures did not solve the problems, but they affected the fineness of the currency, the price of transactions and the relationship between the Council of Finance and its foreign bankers. Theory helps to explain why those problems were intrinsically related to the Castilian monetary system. New historical evidence shows that the outcomes of the Crown’s solutions to control the number of small coins and to eliminate any premium on large coins are in line with predictions of new developments in monetary theory.