Chamley, Christophe - In: The Journal of Economic History 71 (2011) 03, pp. 555-589
In the 1730s and 1750s the English government proposed to refinance the redeemable debt by “lowering the interest rate.” In the ensuing coordination game among creditors, large investors like the Bank of England could block the policy change by demanding cash. Using 4 percent and 3 percent...