Abstract: Was monetary policy crucial for early sovereign debt sustainability? This paper analyses whether the availability of gold and silver drove Venetian government debt servicing costs in the late medieval period. We use an error correction model to describe changes in yields on perpetual bonds issued by the Venetian state. We document that the ability of the Venetian Republic to service its sovereign borrowing can be partially attributed to the supply of precious metals. We show that the substantial increase in debt servicing costs during the 15th century can be associated with an abrupt halt in the supply of gold and silver from mines in Serbia and Bosnia-primarily a consequence of the Ottoman expansion to the west. We control for other explanatory factors, such as mean reversion of nominal yield, real GDP growth and military conflicts Project: This research was financially supported by the Ministry of Education, Science and Technological Development of the Republic of Serbia. https://phaidrabg.bg.ac.rs/o:28257 doi:10.2298/PAN2202333B info:eu-repo/semantics/article Božović, Miloš eng Keywords: Venetian prestiti, Sovereign debt, Gold and silver, Late medieval mines, Ottoman-Venetian conflict Panoeconomicus 69(2) 2022 application/pdf 673292 bytes Interaction of Monetary and Fiscal Policy from a Historical Perspective : Precious Metals and Venetian Government Debt http://creativecommons.org/licenses/by/4.0/legalcode