Eighteenth-Century Irish Interest Rates – Market Failure in a Booming Economy

Interest rates are a key economic indicator and to date no academic study has attempted to track Irish rates over the course of the eighteenth century. The purpose of this paper is thus to provide a time series of interest rates for the Irish mortgage market for that century. This examination of how they moved and compared to those elsewhere provides insights into the Irish economy and how it reacted to external events such as the South Sea Bubble or the wars with France, as well as local banking failures and a booming land market. Interest rates are ‘an important index of the quality of the institutional framework’ and this paper shows how they were influenced by institutional pressures including the usury and penal laws. The paper therefore seeks to address two important questions. How did Irish interest rates compare with English rates and did interest rates influence the development of the Irish economy?