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| Tekijä: | Temin, P. Voth, H-J. |
| Otsikko: | Interest rate restrictions in a natural experiment: loan allocation and the change in the usury laws 1714 |
| Lehti: | Economic Journal
2008 : APR, VOL. 118:528, p. 743-758 |
| Asiasana: | interest rates loans restrictive practices United Kingdom |
| Kieli: | eng |
| Tiivistelmä: | The effect of interest rate restrictions on loan allocation is studied here. The UK government tightened the usury laws in 1714, reducing the maximum permissible interest rate from 6% to 3%. It is revealed by a sample of individual loan transactions that average loan size and minimum loan size increased strongly, while access to credit worsened for those with little "social capital". The findings suggest that the usury laws distorted credit markets significantly, evidence is found that they offered a form of Pareto-improving social insurance. |
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