The rise of Western Europe after 1500 is due largely to growth in countries with access to the Atlantic Ocean and with substantial trade with the New World, Africa, and Asia via the Atlantic. This trade and the associatedcolonialism affected Europe not only directly, but also indirectly by inducing institutional change. Where "initial" political institutions (those established before 1500) placed significant checks on the monarchy, the growth of Atlantic trade strengthened merchant groups by constraining the power of the monarchy, and helped merchants obtain changes in institutions to protect property rights. These changes were central to subsequent economic growth.

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The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth

The Sinews of power: war, money and the english state, 1688–1783

A drawback of the Handbook’s emphasis on introducing disparate groups of researchers to one another is that these groups sometimes seem to be talking past each other. The editors do not attempt to develop an overarching framework that would “make sense” of the work and family field by locating different topics and perspectives within a coherent whole. The reader is left to puzzle out how research on the determinants of government policies relates to work on the intra-psychic processes generating individual stress, how cultural interpretation of employers’ use of family metaphors fits with investigation of quantitative variation in work schedules over the life course, and how rigorous positivist methodologies mesh with a clear normative commitment to increasing work-family integration for both men and women. But perhaps it is too early in the game to ask for this kind of coherence. By the time of the next edition of the Handbook, the work-family field may have matured sufficiently to allow a clearer mapping of the terrain. In the meantime, the Handbook represents a rich and valuable collection that will be important for any scholar whose research and teaching focuses on work, family, or the links between the two.

Institutions and the Path to the Modern Economy: Lessons from Medieval TradeInstitutions and the Path to the Modern Economy: Lessons from Medieval Trade, by GreifAvner. Cambridge, UK: Cambridge University Press, 2006. 526 pp. $34.99 paper. ISBN: 0521671345.

How does cooperation emerge in a condition of international anarchy? Michael Tomz sheds new light on this fundamental question through a study of international debt across three centuries. Tomz develops a reputational theory of cooperation between sovereign governments and foreign investors. He explains how governments acquire reputations in the eyes of investors, and argues that concerns about reputation sustain international lending and repayment. Tomz's theory generates novel predictions about the dynamics of cooperation: how investors treat first-time borrowers, how access to credit evolves as debtors become more seasoned, and how countries ascend and descend the reputational ladder by acting contrary to investors' expectations. Tomz systematically tests his theory and the leading alternatives across three centuries of financial history. His remarkable data, gathered from archives in nine countries, cover all sovereign borrowers. He deftly combines statistical methods, case studies, and content analysis to scrutinize theories from as many angles as possible. Tomz finds strong support for his reputational theory while challenging prevailing views about sovereign debt. His pathbreaking study shows that, across the centuries, reputations have guided lending and repayment in consistent ways. Moreover, Tomz uncovers surprisingly little evidence of punitive enforcement strategies. Creditors have not compelled borrowers to repay by threatening military retaliation, imposing trade sanctions, or colluding to deprive defaulters of future loans. He concludes by highlighting the implications of his reputational logic for areas beyond sovereign debt, further advancing our understanding of the puzzle of cooperation under anarchy.

The Puzzle of Cooperation in International Debt, from Reputation and International Cooperation: Sovereign Debt across Three Centuries

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Institutions and the Path to the Modern Economy: Lessons from Medieval Trade / Avner Greif.

http://papers.economics.ubc.ca/legacypapers/dp0311.pdf

The curse of Moctezuma: American silver and the Dutch disease

ACKNOWLEDGEMENTS ix PROLOGUE 1 CHAPTER 1 Lending to the Sound of Cannon 9 CHAPTER 2 Philip's Empire 45 CHAPTER 3 Taxes, Debts, and Institutions 74 CHAPTER 4 The Sustainable Debts of Philip II 105 CHAPTER 5 Lending to the Borrower from Hell 132 CHAPTER 6 Serial Defaults, Serial Profits 173 CHAPTER 7 Risk Sharing with the Monarch 211 CHAPTER 8 Tax, Empire, and the Logic of Spanish Decline 243 EPILOGUE Financial Folly and Spain's Black Legend 271 REFERENCES 281 INDEX 297

Lending to the Borrower from Hell: Debt, Taxes, and Default in the Age of Philip II: Debt, Taxes, and Default in the Age of Philip II

This study formalizes and empirically tests the conjecture that the discovery of large silver reserves in its American colonies triggered in Spain a phenomenon known as the Dutch disease,diverting factors of production to non-traded goods industries and undermining the Spanishcomparative advantages in the Early Modern Age. I develop an open-economy model to mimic the economic conditions in Spain in the wake of the silver discoveries, which predicts anincrease in the relative price of non-traded goods following a positive wealth shock. I thenconstruct price indexes for traded and non-traded goods using Earl Hamilton's price series and new consumption baskets. Using a Markov- switching regression model, I identify a strong andpersistent increase in the relative price of non-traded goods coinciding with the silverdiscoveries, lasting for almost three decades and reversing itself only after the 1575 and 1579 crown bankruptcies. These findings largely support the Dutch Disease hypothesis.

The Curse of Moctezuma: American Silver and the Dutch Disease, 1501-1650

Lending to the Borrower from Hell: Debt, Taxes, and Default in the Age of Philip II

Philip II of Spain accumulated debts equivalent to 60% of GDP. He also failed to honor them four times. We ask what allowed the sovereign to borrow much while defaulting often. Earlier work emphasized either banker irrationality or the importance of sanctions. Using new archival data, we show that neither interpretation is supported by the evidence. What sustained lending was the ability of bankers to cut off Philip II's access to smoothing services. We analyze the incentive structure that supported the cohesion of this bankers' coalition. Lending moratoria were sustained through a "cheat the cheater" mechanism (Kletzer and Wright, 2000).

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Mauricio Drelichman

Papers

The curse of Moctezuma: American silver and the Dutch disease

Lending to the Borrower from Hell: Debt, Taxes, and Default in the Age of Philip II: Debt, Taxes, and Default in the Age of Philip II

The Curse of Moctezuma: American Silver and the Dutch Disease, 1501-1650

Lending to the Borrower from Hell: Debt, Taxes, and Default in the Age of Philip II

Lending to the borrower from hell: Debt and default in the age of Philip II, 1556-1598