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History, Geography, and the Markets for Mortgage Loans in 19th Century France

Hoffman, Philip T. and Postel-Vinay, Gilles and Rosenthal, Jean-Laurent (2011) History, Geography, and the Markets for Mortgage Loans in 19th Century France. In: Understanding Long-Run Economic Growth: Geography, Institutions, and the Knowledge Economy. National Bureau of Economic Research conference report. University of Chicago Press , Chicago, IL, pp. 155-176. ISBN 9780226116341. https://resolver.caltech.edu/CaltechAUTHORS:20160317-094817490

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Abstract

This articles examines the impact of two themes in Kenneth Sokoloff’s research on mid nineteenth-century French mortgage markets. In particular, the negative effects of inequality and the positive effects of large, competitive markets. We document negative externalities from inequality: when the distribution of wealth is too skewed, the middle class gets excluded from the market. The second externality is a positive one that is generated by the geographical density of markets. We further distinguish its effects in the credit market itself from possible spillovers from the comparable externality in product markets. We proceed in four steps. We begin by summarizing the sources of our data and our aggregate findings of our research on French credit markets. We then move to an analysis of local credit markets, which suggests that inequality had adverse effects on lending. The next step is to search for the positive externality by examining loans between inhabitants of different cities and towns. We show that there were indeed positive network externalities in credit markets, which are consistent with a queuing model. Although most loans were local, the credit network allowed for significant inter-market flows of resources.


Item Type:Book Section
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http://www.nber.org/chapters/c11998OrganizationArticle
Additional Information:© 2011 National Bureau of Economic Research. The authors would like to thank Macha Chichtchenkova, Alena Lapatiovna, and Asli Sumer for many a trip to local archives and for assistance in coding the data. The authors are grateful for the support of the National Science Foundation, the Russell Sage Foundation, the Dean of Social Sciences and the Department of Economics at UCLA, the Division of Humanities and Social Sciences at Caltech, and INRA.
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Russell Sage FoundationUNSPECIFIED
UCLAUNSPECIFIED
Caltech Division of Humanities and Social SciencesUNSPECIFIED
Institut national de la recherche agronomique (INRA)UNSPECIFIED
Series Name:National Bureau of Economic Research conference report
Record Number:CaltechAUTHORS:20160317-094817490
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20160317-094817490
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:65416
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:18 Mar 2016 22:44
Last Modified:03 Oct 2019 09:47

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