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In this article, we propose an original analysis of advice given by financial analysts prior to WW1. Our article focuses on the writings of A. Neymarck, one of the most popular French analysts in the early 20th Century. The creation of portfolios from a new database composed of the monthly returns of all the security types listed on the official Paris Stock Exchange from 1903 to 1912 has provided results demonstrating that Neymarck correctly identified the risk in a number of sectors. The performances of these portfolios, which were built according to Neymarck’s guidelines, confirm Neymarck’s ranking in terms of both risk and return: the richer the investor, the riskier and the more profitable his portfolio was seen to be. Finally, the Modern Portfolio Theory enables us to pinpoint the few imperfections in Neymarck’s advice, which globally appears to be driven by reliable financial analysis.

Information on the performance of equities during the latter part of the globalized long nineteenth century is scarce, particularly for smaller European economies such as Ireland. Using a dataset of over 35,000 price-year observations from the Investor's Monthly Manual, this paper constructs new monthly Irish stock market price indices for the period 1864-1930, encompassing periods of significant economic and political turmoil in Irish history. In addition to a total market index covering all 118 equity securities issued by 94 companies, sector-specific indices are presented for railways, financial services companies, and miscellaneous industrial and retail companies. Weighted by market capitalization, nominal equity prices were largely static in the 1860s, before increasing by almost 60% in nominal terms between 1870 and 1878. Between 1878 and 1879, equity prices fell by one sixth in the space of a year, after which there was a secular rise in equity prices for two decades, with equity prices in 1899 twice what they had been in 1864. Between the turn of the century and the outbreak of the Great War, though, prices fell by 25%, a pattern that stands in stark contrast to returns on the London exchange, which were greater during 1894-1913 than during the preceding two decades. The period from 1914 until 1929 saw a number of boom-bust cycles, concurrent with war and other political events affecting Ireland, including its independence movement. Railway equities, which had trebled between the mid-1860s and the turn of the century, fell sharply during the 1910s and 1920s. In contrast, financial equity prices - which were just 20% higher in 1920 than in 1864 - rose strongly during the 1920s. Overall, the average annual gain in equity prices over the period was just 0.9%, well below levels associated with an equity premium puzzle.

What were the economic consequences of the usury doctrine in the Middle Ages? We examine how merchants attempted to evade the prohibition on interest and the attempts of the Church to clamp down on evasion. Contrary to the views of many economists and historians, the usury prohibition imposed different transaction costs on medieval merchants: increasing the cost of using capital markets for some merchants more than for others. Since only a subsection of the merchant population were able to write licit contracts, the prohibition had the effect of segmenting markets in which formal credit was important.

This paper studies discrimination in financial markets in the context of the “Dreyfus Affair” in 19th century France. We analyze the market performance of firms with Jewish board members during this historical episode. Building on empirical evidence and a model with antisemitic and unbiased agents, we show how investors betting on firms with Jewish connections earned higher returns during the media campaign organized to rehabilitate Dreyfus, the unfairly accused Jewish officer at the center of the Affair. Our paper provides novel evidence that discrimination can affect stock prices and create rents for some market participants. While these rents may attract betting against discriminators, the uncertainty surrounding discriminatory beliefs can limit the extent of arbitrage and allow discrimination to survive in the long run.

Research for this paper was supported by the Institute for New Economic Thinking (INET) Grant No. INO15-00025. We establish a causal role for banking access in the spread of the Industrial Revolution over the period 1817–1881 by exploiting unique employment data from 10,528 parishes across England and Wales and a novel instrument. We estimate that a one standard deviation increase in 1817 finance employment increases annualized industrial employment growth by 0.93 percentage points. We establish the role of structural transformation as an underlying growth mechanism and show that banking access: (i) increases the industrial employment share; (ii) stimulates urbanization; and (iii) fosters inter-industry transition to high TFP, intermediate and capital-intensive sub-sectors. Postprint

We analyze a consistent two-factor model for pricing temperature derivatives that incorporates the forward looking information available in the market by specifying a model for the dynamics of the complete meteorological forecast curve. The two-factor model is a generalization of the Nelson-Siegel curve model by allowing factors with mean-reversion to a stochastic mean for structural changes and seasonality for periodic patterns. Based on the outcomes of a statistical analysis of forecast data we conclude that the two-factor model captures well the stylized features of temperature forecast curves. In particular, a functional principal component analysis reveals that the model re ects reasonably well the dynamical structure of forecast curves by decomposing their shapes into a tilting and a bending factor. We continue by developing an estimation procedure for the model, before we derive explicit prices for temperature derivatives and calibrate the market price of risk (MPR) from temperature futures derivatives (CAT, HDD, CDD) traded at the Chicago Mercantile Exchange (CME). The factor model shows that the behavior of the implied MPR for futures traded in and out of the measurement period is more stable than other estimates obtained in the literature. This con rms that at least parts of the irregularity of the MPR is not due to irregular risk perception but rather due to information misspecification. Similar to temperature derivatives, this approach can be used for pricing other non-tradable assets.

At the middle of the XIX century, the historical provinces of Moldavia and Wallachia had simultaneous and coordinated plans to establish two national banks, one for each province, as state-sanctioned, official, central banks. While the plan for the Wallachian central bank was thwarted by the ouster of Prince Barbu Dimitrie Stirbey in 1851, the plan for the National Bank of Moldavia was finally realized by Prince Grigore Alexandru Ghica, in 1856, when the international developments weakened the grip that the Russian Empire had over Moldavia. The first Romanian National Bank was, however, a short-lived initiative. In this paper, we will look at the way it was established.

In this paper we will analyze the failure of the National Bank of Moldavia, a bank that was chartered by the Principality of Moldavia in 1856, to act primarily as a privileged source of liquidity for its economy. Although the project of a state chartered, privileged bank was planned many years in advance by the princes of the Romanian Principalities, the National Bank of Moldavia suspended payments shortly after its establishment, in early 1858, and had its charter revoked. We will discuss, from the point of view of modern monetary thought, the ideas that were advanced in the justification of its creation, and in the rationalization of is failure. We will analyze the structure of the credits and other problems in its balance sheet. Also, we will study the role that the Crisis of 1857, and the already emerging European economic integration, had in its demise.

This paper employs a unique, hand-collected dataset of exchange rates for five major currencies (the lira of Barcelona, the pound sterling of England, the pond groot of Flanders, the florin of Florence and the livre tournois of France) to consider whether the law of one price and purchasing power parity held in Europe during the late fourteenth and early fifteenth centuries. Using single series and panel unit root and stationarity tests on ten real exchange rates between 1383 and 1411, we show that the parity relationship held for the pound sterling and some of the Florentine florin series individually and for almost all of the groups that we investigate. Our findings add to the weight of evidence that trading and arbitrage activities stopped currencies deviating permanently from fair values and that the medieval financial markets were well functioning. This supports the results reported in other recent studies which indicate that many elements of modern economic theories can be traced back over 700 years in Europe.

State building and state competition during the 16th century triggered a creative moment in the history of public finance. Recent scholarship has clearly identified the Papal States and their communities as active participants both in the state building process and the reorganization of public finance. Banking on a wealth of fiscal records, it is argued that Papal authority succeeded in forging a new fiscal pact – which lasted over two centuries - between central and local authorities. Blending conservatism and innovation the papacy promoted a contractual approach: local powers were granted a large degree of autonomy in selecting fiscal instruments, the types of wealth to be taxed and the means of collecting resources, while the Apostolic Chamber secured both the control of a growing portion of the provinces’ fiscal income as well as access to a pool of financial resources at a rapidly declining cost.

This paper discusses Gelderblom’s hypothesis that urban competition (including a large number of competing cities, footloose foreign traders and municipal autonomy) was central to the rise of inclusive trade institutions in Europe. The first part discusses the precise behaviour of traders, town authorities and sovereigns underlying Gelderblom’s explanatory framework. The second part presents some challenges to the generalisation of the book’s thesis to the history of Europe, including Italy and Britain. The last part advances a short econometric exercise to check this generalisation. Urban competition combined with starting institutional quality does not emerge as a positive factor for the growth of European cities in general: this is interpreted as a call for more research rather a decisive counter-argument. _________________________________ Cet article discute l’hypothèse de Gelerblom selon laquelle la compétition urbaine (incluant un grand nombre de villes concurrentes entre elles, des négociants se déplaçant facilement, et l’autonomie urbaine) a été centrale pour la généralisation d’institutions de commerce ouvertes à tous en Europe. La première partie examine le comportement précis des négociants, autorités municipales et souverains qui sont au coeur du schéma explicatif de Gelderblom. La deuxième partie présente quelques difficultés qui s’opposent à la généralisation de la thèse de l’ouvrage à l’ensemble de l’histoire européenne, notamment en Italie et en Grande-Bretagne. La dernière partie propose un petit exercice économétrique pour tester cette généralisation. La compétition urbaine combinée à des institutions de bonne qualité n’apparaît pas comme un facteur de croissance pour les villes urbaines dans leur ensemble : ce résultat est interprété plus comme un appel à plus de recherche qu’un contre-argument décisif.

England from 1200 to 1600 was a society caught in apparent technological stasis, typical of the pre-industrial world. Many believe this pre-industrial stagnation was the result of political and cultural constraints, such as those on the operation of markets. Indeed medieval English law outlawed many arbitrage activities in markets. The paper shows using information of grain yields and prices at 227 different locations that the most important of all markets, that for grain, was nevertheless both extensive and relatively efficient as early as 1209. Whatever the rhetoric of medieval law and social thought the real effect of constraints on the operation the grain market seems to have been minimal. England had an elaborate market economy at least 500 years before it had sustained economic growth.

L’analyse systematiquement dualiste des bulles speculatives ne permet pas d’identifier les differents comportements des investisseurs selon qu’ils operent sur le marche des actifs sous-jacents ou sur le marche des produits derives. L’etude de la Bulle des Mers du Sud est, a cet egard, eclairante. Dans cet article, nous montrons qu’en depit d’une evaluation rationnelle des produits derives financiers de la Compagnie des Mers du Sud (les titres de souscription) en tant qu’options d’achat, l’evaluation de l’actif sous-jacent (l’action cms) a souffert d’une confusion liee aux revenus futurs de l’activite de restructuration de la dette publique.

Using a new dataset which contains monthly data on 1015 stocks traded on the London Stock Exchange between 1825 and 1870, we investigate the cross section of stock returns in this early capital market. Unique features of this market allow us to evaluate the veracity of several popular explanations of asset pricing behavior. Using portfolio analysis and Fama–MacBeth regressions, we find that stock characteristics such as beta, illiquidity, dividend yield, and past-year return performance are all positively correlated with stock returns. However, market capitalization and past-three-year return performance have no significant correlation with stock returns.

We investigate monthly returns of Belgian stocks listed on the Brussels stock exchange in the period 18382010. Our dataset is based on official quotation lists of the stock exchange, and it takes into account all common stocks that were ever listed on the stock exchange during the period considered. This allows us to investigate the performance of the market as a whole in a consistent way over the nineteenth and twentieth centuries. We find that stock returns strongly depend on dividend income. While real capital appreciation tends to be negative, the dividend yield is remarkably stable over time. Stocks were less risky in the nineteenth century than in the twentieth century. While the equity premium is overall positive, the reward for equity risk is very volatile over time. Even in the long-run equity investors frequently earned a negative return. There are no consistent differences between returns on small stocks and large stocks.

Building on recent work by Collins et al.. this paper aims to explain the failure of corporate and public initiatives to alleviate poverty before the twentieth century by unravelling the financial rationale behind the various combinations of private efforts, family and neighbourhood help, financial intermediation, and government intervention tried by poor households in the eighteenth and nineteenth century. There existed several financial institutions whose functioning was very similar to modern microfinance institutions, yet none of them were in a position to help the poor. We find that in the Netherlands the boundary of formal financial markets moved down not because of financial innovation, but because of economic growth pushing up wages. Until the last quarter of the 19th-century poor households simply lacked the money to use newly established mutual insurances, savings- and loan banks.

This paper is based on the difference between the formal introduction of a Weberian bureaucracy and its actual implementation through state officials. This difference between the formal institutional framework and its actual implementation could lead to failed reforms. On the other side, there were states which successfully introduced a Weberian bureaucracy like the German state of Baden in the nineteenth century. This paper argues that Civil Service reforms in Baden during the first two decades of the nineteenth century established an internal labor market with a hierarchy of pay levels and clearly defined rules of promotion. These rules of promotion made advancement in the hierarchy, and therefore, an increase in remuneration, inter alia dependent on the performance in regard to administrative processes and rules of professional conduct. This rule generated an incentive to implement the new formal institutional framework, because sticking to the rules led to a monetary reward. The paper tests this hypothesis empirically using a logit as well as a panel regression approach. In doing so, I find that a positive assessment about a district magistrate’s (Amtmann) performance in regard to formal administrative processes and rules of professional conduct increased his probability of promotion by 81 %. The paper also finds incentive mechanisms like a shirking wage. However, it seems that the sound working of these incentive mechanisms took ca. two decades.

On the temperature derivative market, modeling temperature volatility is an important issue for pricing and hedging. To apply the pricing tools of financial mathematics, one needs to isolate a Gaussian risk factor. A conventional model for temperature dynamics is a stochastic model with seasonality and intertemporal autocorrelation. Empirical work based on seasonality and autocorrelation correction reveals that the obtained residuals are heteroscedastic with a periodic pattern. The object of this research is to estimate this heteroscedastic function so that, after scale normalization, a pure standardized Gaussian variable appears. Earlier works investigated temperature risk in different locations and showed that neither parametric component functions nor a local linear smoother with constant smoothing parameter are flexible enough to generally describe the variance process well. Therefore, we consider a local adaptive modeling approach to find, at each time point, an optimal smoothing parameter to locally estimate the seasonality and volatility. Our approach provides a more flexible and accurate fitting procedure for localized temperature risk by achieving nearly normal risk factors. We also employ our model to forecast the temperaturein different cities and compare it to a model developed in 2005 by Campbell and Diebold. Supplementary materials for this article are available online.

Revisionist estimates of growth rates during the British industrial revolution, though largely successful in presenting a more modest picture of Britain's ‘take-off’ prior to the 1830s, have also posed fresh analytical difficulties for champions of the new economic history. If eighteenth-century Britain was witness to a diffuse explosion of ‘useful knowledge,’ why did aggregate growth rates or industrial output growth rates not more closely shadow the pace of technological change? In an effort to explain this paradox, Peter Temin and Hans-Joachim Voth have claimed that a few key institutional restrictions on financial markets – namely the Bubble Act, and the tightening of usury laws in 1714 – served to amplify the crowding-out impact of government borrowing. Against this vision, the present paper contends that the adverse impact of financial regulation and state borrowing in eighteenth-century Britain has been greatly overstated. To this end, the paper first briefly outlines the historical context in which the Bubble Act emerged, before turning to survey the existing diversity of perspectives on the Act's lasting impact. It is then argued that there is little evidence to support the view that the Bubble Act significantly restricted firms' access to capital. Following this, it is suggested that the ‘crowding-out’ model, theoretical shortcomings aside, is largely inapplicable to eighteenth-century Britain. The savings-constrained vision of British capital markets significantly downplays the extent to which the Bank of England, though founded as an institution to manage the public debt, provided the entire financial system with liquidity in the eighteenth century.

The 13th century witnessed a substantial increase in inequality in the distribution of peasant landholdings relative to the distribution of the late 11th century. Innovations in property rights over land in 12th century England induced peasants to include the trading of small parcels of land as part of their risk coping strategy. We argue that these events are related. Recent theoretical work in development economics has explored the relationship between inequality and asset markets. When agents are able to trade productive assets to manage risk, the resulting dynamics may generate increasing inequality over time. We employ a simulation strategy to analyze the impact of land markets in generating inequality in 13th century landholdings. We find that the dominant factor contributing to the unequal distribution of land was the interaction between emerging land markets and population growth driven by high fertility rates in households with large landholdings.

Scholars historically believed that the market price data reported for Amsterdam markets were spot prices prior to 1747. Neal (The rise of financial capitalism: international capital markets in the Age of Reason. Cambridge University Press, Cambridge, 1990) provided econometric evidence that the prices were time. A newly constructed dataset, containing a much higher frequency of observations from Amsterdam markets, allows us to resolve this dispute. We provide conclusive evidence that the prices report were actually spot, as originally believed.

Numerous archival documents show how the suspension of payments by Philip II, in September 1575, on the contracts with Genoese bankers (asientos) induced a freeze of the domestic credit market in Castile through the bankers’ intermediation for asientos and the credit interconnections. Commercial fairs stopped, banks failed and trade suffered while the king granted legal protection to the Genoese bankers. The evidence strikingly confirms that by his strategy, Philip II was able to remove the de facto ceiling on the domestic debt (juros) imposed by the fixed revenue commitment of the Castilian cities in the Cortes. The agreement with the bankers was signed in December 1577 immediately after the cities had agreed to the doubling of their commitment. La documentación archivística muestra que el decreto de suspensión de consignaciones de 1575-77 paralizó el mercado de crédito de Castilla por la estrecha relación que había entre los asientos de los banqueros del rey y el crédito local. Durante esos años, las ferias dejaron de celebrarse, muchos bancos locales quebraron y el comercio sufrió una grave parálisis, pero el rey no dudó en proteger a sus banqueros de sus acreedores castellanos. La documentación confirma que gracias a esta estrategia, Felipe II logró romper el techo de su deuda pública (juros) que dependía de la contribución fiscal de las ciudades reunidas en las Cortes de Castilla. El acuerdo con los banqueros no se firmó hasta Diciembre de 1577, sólo inmediatamente después de que las ciudades hubiesen aceptado duplicar su contribución. Financial support was received from the Ministry of Economy and Competitiveness (Spain) Project ECO2012-38028, Project HAR2012- 39034-C03-02. Chamley gratefully acknowledges the support of the Banco Santander through a Chair of Excellence at the University Carlos III.

French stock market volatility observed over the last 150 years presents a huge instability. From a very low level before the First World War, it shows a continuous increase during the inter-war period. Despite peace and economic stability, volatility has never converged to levels seen pre-1914. The level of stock market volatility seems to be linked to the monetary instability and the magnitude of public deficits. Classification JEL : G1, G12, N23, N24.

A tanulmány a Déltengeri Társasággal foglalkozó tanulmány folytatása (Madarász [2011]). A 18. századi brit államadósság szerepéről és kezeléséről szóló modern gazdaságtörténeti értékelések áttekintése után a tanulmány részletesen bemutatja Davenant, Defoe, Bolingbroke, Hume, Wallace, Pinto, Steuart és Smith érvelését a "közhitel" lehetséges és szükségszerű gazdasági és politikai hatásairól, a háborús kiadások fedezésének módjairól. Részletesebben tárgyalja Hume és Smith álláspontját a papírpénz és a bankok szerepéről, a pénzmennyiség változásának következményeiről és a skóciai "szabad" bankrendszer jellemzőiről. A vita egyik oldalán a közhitelt szükséges, ám veszélyes eszköznek tekintették, amely válságba sodorhatja az országot, és aláássa a politikai szabadságot, a másik vélemény szerint a kereskedő állam adóssága szükséges és előnyös, ösztönzi a gazdaság fejlődését, és kifejezi a polgárok bizalmát a kormányzat iránt. Journal of Economic Literature (JEL) kód: B11, B12, B29, H63, H74, H81, N23., The study, following on from the author s previous work on the history of South Sea Company, focuses on the issue of public debt in 18th-century British economic writings. The first part reviews recent debates among economic historians: how to explain the growing credibility of British governments after 1689. The next details the arguments of some important protagonists in the early modern age - Davenant, Defoe, Bolingbroke, Hume, Wallace, Pinto, Steuart and Smith - on the expected economic and political consequences of an increasing public debt and on the methods of financing wars. This is followed by discussion of the monetary theories of Hume and Smith, notably their views on banks, credit, paper money, the effects of increasing money supply, and the features of free" Scottish banking system. Two main lines of argument were advanced in the controversies on public debt. Several writers regarded it as a necessary but dangerous instrument that undermines political liberty and can lead the state into financial bankruptcy. Others described it as not only necessary, but advantageous to a commercial nation, by stimulating trade and development and symbolizing the public s confidence in their government.

The French Revolution of 1789 had a momentous impact on neighboring countries. The French Revolutionary armies during the 1790s and later under Napoleon invaded and controlled large parts of Europe. Together with invasion came various radical institutional changes. French invasion removed the legal and economic barriers that had protected the nobility, clergy, guilds, and urban oligarchies and established the principle of equality before the law. The evidence suggests that areas that were occupied by the French and that underwent radical institutional reform experienced more rapid urbanization and economic growth, especially after 1850. There is no evidence of a negative effect of French invasion. Our interpretation is that the Revolution destroyed (the institutional underpinnings of) the power of oligarchies and elites opposed to economic change; combined with the arrival of new economic and industrial opportunities in the second half of the 19th century, this helped pave the way for future economic growth. The evidence does not provide any support for several other views, most notably, that evolved institutions are inherently superior to those 'designed'; that institutions must be 'appropriate' and cannot be 'transplanted'; and that the civil code and other French institutions have adverse economic effects.

A cikk a tulipánmániával foglalkozó tanulmány folytatása (Madarász [2009]). A Déltengeri Társaság 1720-as fellendülése és kipukkadása mindmáig egyike a pénzügyi történelem leghíresebb és leggyakrabban emlegetett buborékainak. A közgazdaságtanban a buborék sokáig nem volt fontos téma, de az utóbbi időben ismét divatba jött. A tanulmány először a buborékmetafora néhány irodalmi példáját mutatja be, majd összefoglalja az angol államadósság kialakulását, a korai modern fiskális-militarista állam létrejöttét és a pénzügyi forradalom különböző interpretációit. A Déltengeri Társaság történetének, az adósság-részvény csere lebonyolításának és a korabeli vélemények spektrumának ismertetése után áttekintést ad arról, milyen módon és céllal használták fel az 1720-as eseményeket közgazdászok és történészek saját magyarázataikban. Ezek skálája a tudatos csalástól a befektetők irracionális mániáján át a racionális buborék kialakulásáig terjed. Journal of Economic Literature (JEL) kód: B11, B19, B29, E65, G01, N01, N13, N23., The first part of the study (published here in 2009) was devoted to tulip-mania\\\\\\\". This article continues the account of early bubbles and crises with the 1720 boom and bust of the South Sea Company, which remains to this day one of the best known and most cited examples in history. For several decades, bubbles were not seen as an important issue in economic and financial theory, but recent events have focused attention on them again. The author introduces some historical examples of the bubble metaphor in literature, before describing the emergence of British public debt and the fiscal/military state, and summarizing various interpretations of the financial revolution. An account of the South Sea Bubble, a detailed description of the debt-equity swap, and citations from some contemporary investors and observers are followed by an overview of how the events of 1720 were used subsequently by various economists and historians in their theorizing and explanations. Such interpretations range from deliberate fraud, through irrational investment mania, to the emergence of a rational bubble.

A cikk a tulipánmániával foglalkozó tanulmány folytatása (Madarász [2009]). A Déltengeri Társaság 1720-as fellendülése és kipukkadása mindmáig egyike a pénzügyi történelem leghíresebb és leggyakrabban emlegetett buborékainak. A közgazdaságtanban a buborék sokáig nem volt fontos téma, de az utóbbi időben ismét divatba jött. A tanulmány először a buborékmetafora néhány irodalmi példáját mutatja be, majd összefoglalja az angol államadósság kialakulását, a korai modern fiskális-militarista állam létrejöttét és a pénzügyi forradalom különböző interpretációit. A Déltengeri Társaság történetének, az adósság-részvény csere lebonyolításának és a korabeli vélemények spektrumának ismertetése után áttekintést ad arról, milyen módon és céllal használták fel az 1720-as eseményeket közgazdászok és történészek saját magyarázataikban. Ezek skálája a tudatos csalástól a befektetők irracionális mániáján át a racionális buborék kialakulásáig terjed. Journal of Economic Literature (JEL) kód: B11, B19, B29, E65, G01, N01, N13, N23., The first part of the study (published here in 2009) was devoted to tulipmania\". This article continues the account of early bubbles and crises with the 1720 boom and bust of the South Sea Company, which is to this day one of the best known and most cited examples in history. For several decades, bubbles were not seen as an important issue in economic and financial theory, but recent events have focused attention on them again. The author introduces some historical examples of the bubble metaphor in literature, before giving an account of the emergence of British public debt and the fiscal-military state, and summarizing various interpretations of the financial revolution. An account of the South Sea Bubble, a detailed description of the debt-equity swap, and citations from some contemporary investors and observers are followed by an overview of the way the events of 1720 were used subsequently by various economists and historians in their own theorizing and explanations. The interpretations placed on it range from deliberate fraud, through irrational investment mania, to the emergence of a rational bubble.

During the early 1620's, England went through a period of intense economic disorders which sparked the interest of many in economic reasoning. The decade witnessed the emergence of the most relevant pieces of economic literature of the early Stuart era, but the debate was not restricted to the abstract confrontation of economic writers. The fundamental issue at stake in the controversies between Malynes, Misselden, and Mun - the integration of money and international trade in a coherent explanation of economic phenomena - was also the subject of much care in the public sphere at large. The parliamentary session of 1621, in particular, put in evidence not only the fundamental relevance of the matter for understanding England's economic maladies, but also the great difficulties involved in its investigation. By bringing all these elements together, this paper seeks to articulate a more dense and meaningful portrait of the prevailing state of economic ideas in early 17th century England.

How to implement a mass production when you are a car manufacturer at the beginning of the 20th century? The article illustrates the case of Peugeot, a French car manufacturer, who had to raise new financings between 1919 and 1939 because of the very carefulness of banks. Even if nothing came out of the business relationships established with the Rosengart and Oustric financing houses, they provided nevertheless the basis of the strengthening of the family relationships and of the setting up of a holding company, key to a self-financing strategy. Classification JEL: N23, N64, L62.

Banks and Industry in France and Britain from the 1880s to the Second World War. Most of the comparative studies about the relationships between banking and industry on the long term have been focused on the comparison between Britain and Germany. The discussion concerning the relative efficiency of each financial system vis-à-vis the growth of industry in those countries has often been stated and is relatively well known. To propose another comparison could enlarge the problematic. I propose here a comparative study about the relationships between banking and industry in France and in Britain from the last third of the nineteenth century until World War 2. The reasons of this choice are the following. Firstly the two countries are the first that began to develop industrialization. Secondly, during that long period, their financial systems have known some important alterations. Finally, in going away from a comparison Britain/Germany, often based on a frontal opposition between market-based and bank-based financial systems, I hope to help to lead to a more comprehensive and nuanced appreciation of the realities of the financing of industry and of its problems. Classification JEL : N20, N23., La plupart des études comparatives des rapports entre les banques et l’industrie sur le long terme se sont centrées sur la comparaison entre l’Angleterre et l’Allemagne. La discussion sur l’efficacité relative des systèmes financiers pour la croissance de l’industrie dans ces deux pays a été souvent exposée et est relativement bien documentée. Faire intervenir une autre comparaison peut permettre d’enrichir la problématique. Nous proposons ici une étude comparative sur les relations entre banques et industrie en France et en Angleterre depuis le dernier tiers du XIXe siècle jusqu’à la Seconde Guerre mondiale. Les raisons de ce choix résident dans le fait qu’il s’agit des deux premières puissances à avoir développé leur industrie, ainsi que dans l’existence d’importantes modifications de leurs systèmes financiers dans le temps. Enfin, en s’écartant d’une comparaison Angleterre/ Allemagne souvent basée sur une opposition frontale entre systèmes fondés sur les marchés et systèmes fondés sur les banques, on espère amener à une vision plus nuancée des réalités du financement industriel et de ses problèmes. Classification JEL : N20, N23., Straus André. Banques et industrie en France et en Angleterre : des années 1880 à la Seconde Guerre mondiale. In: Revue d'économie financière, n°104, 2011. Les relations capital et industrie - Capital humain et finance. pp. 35-49.

Government, public finance, and public debt framed the historical background for exceptional financial business opportunities for Henry Burnay as a private banker and a network with Baring Brothers, Comptoir National d’Escompte, Banque de Paris et des Pays Bas, Neuflize et Cie., Credit Lyonnais, Societe Generale, Deutsche Bank, Bank fur Handel & Industrie, Dresdner Bank, M. Jacob H. S. Stern and the Deutsche Effecten & Wechsel Bank from Frankfurt. Nineteenth-century financial markets and public debt emerge as the main players in the game. Credibility and honesty were important values for earning confidence and trust in international financial business, while bilateral-monopoly market situations required a lot of bargaining for joint profit maximization.

Les krachs boursiers sont decisifs, car ils representent une part importante de la valeur finale d’un indice boursier. Mais une variation d’un pourcentage identique n’a pas le meme impact dans un environnement financier prealablement stable ou hautement volatile. Pour apprehender les krachs a travers le temps malgre ces changements dans le regime de volatilite, une nouvelle methode est proposee. Chaque variation mensuelle est mesuree en nombre d’ecarts types de la periode precedente. Les pires variations ainsi ajustees designent les krachs. Les resultats obtenus sont plus coherents avec l’histoire financiere. Par exemple, la Premiere Guerre mondiale provoque d’importantes variations de cours ajustees malgre un faible niveau de volatilite anterieure et de faibles variations en pourcentage. La periode recente est plus caracterisee par un niveau eleve de volatilite qu’une epoque de frequents krachs.

In this article, we study Europe's monetary geography on the eve of the Industrial Revolution. Our unit of analysis is the city and we explore inter-city linkages. Important findings include a considerable degree of integration and multilateralism with monetary centres having already emerged as vehicles for international settlements, before the Industrial Revolution. Copyright 2009, Oxford University Press.

A 2007 óta kibontakozó válság újból divatba hozta a korai buborékok és válságok témáját. A jelenlegi válság nyomán újraéledtek a makroökónómiai viták, kétségessé vált a "nagy mérséklődés" és az újklasszikus szintézis érvényessége. Az 1634-1637 közötti holland tulipánmánia - mint az első buborék - sokféle értelmezése ismeretes: a tömeghisztéria kitörésétől a hatékony pénzügyi piacok korai példáján át a kulturális sokkig. Áttekintve ezeket, a cikk visszavezeti a tulipánmánia közismert anekdotikus leírásait az eredeti forrásokig, és megmutatja, milyen módon és céllal használták fel ezeket a közgazdászok és történészek saját elemzéseikben. Journal of Economic Literature (JEL) kód: B11, B19, E65, E66, N01, N23., The accounts of early bubbles and crises are becoming fashionable again in economic dis-course during the recent downturn. The article, having looked at the revival of macroeco-nomic debate provoked by the failure of current theory, sums up various interpretations of the Dutch tulip mania of 1634-7. These range from an outburst of popular madness, through an early example of an efficient financial market, to an instance of culture shock. Some well-known anecdotes about tulip mania are traced back to their original sources, and the article explores the various patterns and intentions in the use economists and his-torians have made of them.

The local public authorities are based on an economic-financial mechanism which functions on the principle of financial and administrative local autonomy. In order to observe the way of its operation it is necessary to present the concept of autonomy in the structure of the economic-financial mechanism at the level of local public authorities. It is necessary to do this in order to eliminate any speculative ideas regarding the non existence or the limited existence of autonomy in Romania

The crash of the French stock market in 1882 presented the Paris Bourse with its worst crisis of the nineteenth century. Its structure was similar in key respects to today’s futures markets, with a dominant forward market leading the Bourse to adopt a common fund to guarantee transactions and liquidity. While this mutualization of risk protects clients and brokers from idiosyncratic shocks, it is generally assumed that it also provides considerable protection against systemic shocks, as no twentieth century exchange has been forced to shut down. Using new archival data, this paper shows how a stock market crash overwhelmed the Bourse’s common fund. Only an emergency loan from the Bank of France, intermediated by the largest banks, prevented a closure of the Bourse.

We gather the most comprehensive database of government bonds for the first globalisation era to date to conduct the first historically informed study of the importance of liquidity for colonial and sovereign yield spreads. Considering both liquidity and credit shows that the two markets were segmented: credit was the most important factor in the pricing of sovereign debt, but liquidity predominated in the colonial market, explaining 10% to 39% of colonial yield spreads. This reflected both different market microstructures and bond clienteles, themselves influenced by heterogeneous political, institutional and financial arrangements. The flows from the colonies to British ‘ordinary’ investors in the form of illiquidity premia should be taken into account in future studies of the political economy of empire.

We add a historical and regional dimension to the debate on the Greek debt crisis. Analysing the 1841-1939 exchange-rate experience of Greece, Bulgaria, Romania and Serbia/Yugoslavia, we find surprising parallels to the present: repeated cycles of entry to and exit from gold, government debt build-up and default, and financial supervision by West European countries. Periods of stable exchange-rates were more short-lived than in any other part of Europe as a result of 'fiscal dominance', i.e., a monetary policy subjugated to the treasury’s needs. Granger causality tests show that patterns of fiscal dominance were only broken under financial supervision, when strict conditionality scaled back the influence of treasury; only then were central banks able to pursue a rule-bound monetary policy and, in turn, stabilize their exchange-rates. Fiscal institutions have remained weak in the case of Greece and are at the heart of the current crisis. A lesson for today might be that the EU-IMF programmes – with their focus on improving fiscal capacity and made effective by conditionality similar to the earlier South-East European experience – remain the best guarantor of continued Greek EMU membership. Understandable public resentment against 'foreign intrusion' needs to be weighed against their potential to secure the long-term political and economic objective of exchange-rate stabilisation.

Why did the country that borrowed the most industrialize first? Earlier research has viewed the explosion of debt in 18th century Britain as either detrimental, or as neutral for economic growth. In this paper, we argue instead that Britain’s borrowing boom was beneficial. The massive issuance of liquidly traded bonds allowed the nobility to switch out of low-return investments such as agricultural improvements. This switch lowered factor demand by old sectors and increased profits in new, rising ones such as textiles and iron. Because external financing contributed little to the Industrial Revolution, this boost in profits in new industries accelerated structural change, making Britain more industrial more quickly. The absence of an effective transfer of financial resources from old to new sectors also helps to explain why the Industrial Revolution led to massive social change – because the rich nobility did not lend to or invest in the revolutionizing industries, it failed to capture the high returns to capital in these sectors, leading to relative economic decline.

Men of finance raised funds for loans, asientos, to Philip II by trading short-term financial instruments in credit markets and by selling long-term annuities, juros. These activities are illustrated by an asiento with the Maluenda brothers (July 13, 1595), where short-term credit secured by the equity of the fleets from the Indies were, for more than one half, converted into funded life annuities that were sold by the Maluendas. The new analysis of this asiento relies on its dossier of more than 400 pages in the archives of Simancas, including the contract, the monitoring attachments, and the final audit.

Analyzing 474 cases of firms going public in the German capital between 1892 and 1913, we show that innovative firms could rely on the Berlin stock market as a source of financing. Our data also reveal that initial public offerings (IPO) of innovative firms were characterized by particularly low underpricing, comparatively high first trading prices, and no long-run underperformance. We interpret these empirical results as evidence for the surprising fact that in the period of the Second Industrial Revolution the Berlin stock exchange was already a well-functioning market for new technology. (JEL G14, N23)

It seems that life insurance companies under evaluate an implicit risk occurring whenever contracts with large size differences in life-annuities are present in their portfolio. If, in the case of equal amounts, one might admit that “early” and “late” deaths could compensate one another, this is not really so in the case of, lets say, an early death of a “small” life-annuity and a late “very large” one. In order to put into light this “size effect” on real data one needs first to have at hand a life-insurance portfolio. This was given to us by an original package of the 18th century, the 1743 “tontine-lottery” case, which awarded 5 000 life-annuities (on 30264 tickets). A large simulation of the distribution of winning tickets and of the path of death occurrences shows that this “size risk” does exist. The implication is that the companies should take this risk into account when pricing life-annuities. Classification JEL : G22, N23, C15

Ongoing discussions between Russia and the EU on the formation of a Common European Economic Space bring back to mind Alexander Gerschenkron's classic essay on economic backwardness in historical perspective. This paper argues that the institutions that once produced a specific kind of catch-up economics in Czarist Russia still remain largely the same. Unless negotiations between Moscow and Brussels take into consideration such fundamental institutional incompatibility, attempts at harmonization, expressed by Brussels as an attempt tp spread Western values, will be doomed to fail. A cynical conlusion views potential convergence as adaptation by Brussels to traditional Russian institutional patterns of rule evasion, rather than a Westernization of Russia

This paper presents a case study of a well-informed investor in the South Sea bubble. We argue that Hoare's Bank, a fledgling West End London bank, knew that a bubble was in progress and nonetheless invested in the stock: it was profitable to “ride the bubble.” Using a unique dataset on daily trades, we show that this sophisticated investor was not constrained by such institutional factors as restrictions on short sales or agency problems. Instead, this study demonstrates that predictable investor sentiment can prevent attacks on a bubble; rational investors may attack only when some coordinating event promotes joint action.

The fundamental objective of this paper is to show the evolution of the agricultural credit co-operative movement in Spain during the first third of the XX century, when this finance alternative emerged and took shape, based on producer association. With this motive, we analyse aspects such as: establishment of the different organisational models of this type of entity and its promoting agents; the problems faced by this type of co-operative movement in achieving sustainability; its territorial introduction over these years; the functioning of different co-operatives –microanalysis-; the finance sources of these co-operatives. Lastly we explore the role of the state in promoting these financial services. The results of this paper show the limited development and difficulties experienced by this type of cooperativism in establishing itself. Only a fraction of the entities operating at this time managed to survive, thanks to their range of specialised financial products, their pricing policy; management based on microcredit technology and the backing of the associated farmers.

This paper will show how the relatively voluminous surviving records about exchange rates in the middle ages can help to illuminate the much murkier question of medieval interest rates. We will first explain how the medieval FX market operated and its links to the money market. Next, we will set out the sources of our data on medieval exchange rates, the methodology for calculating interest rates from these exchange rates and provide our results for some key financial centres. These will be used to answer two fundamental questions: first, did the relationship between exchange rates include an element of interest and could FX transactions therefore be used to circumvent the usury prohibition? Second, what were the levels of interest charged on commercial loans in the Middle Ages and how did these compare to rates on government debt and consumer credit? We will also explore some distinctive seasonal patterns in these interest rates at different financial centres and show how these relate to wider trade flows. Finally, we will consider the significance of our findings for the current debate over whether there was a long-term halving of the risk-free interest rate after c.1350.

This paper argues that the relatively voluminous surviving records about foreign exchange (FX) rates in the Middle Ages can help to illuminate the much murkier question of medieval interest rates. We first explain how the medieval FX market operated and its links to the money market. Next, we set out the sources of our data on medieval exchange rates and the methodology for calculating implicit interest rates from the spreads between these exchange rates as quoted at seven different financial centres. Our results demonstrate that the FX rates did include an element of interest and that FX transactions could have been used to circumvent the usury prohibition. Further, these implicit interest rates are comparable to those charged on government debt and consumer credit. We also show that there were distinctive seasonal patterns in these interest rates at different financial centres related to their particular economic and trading patterns. Finally, our results provide further evidence of a long-term reduction in the risk-free rate of interest after c.1350.

In the last 15 years of the nineteenth century c.300 British brewers incorporated and floated securities on the stock market. Subsequently, in the 1900s, the industry suffered a long-lived hangover. In this article, we establish the stylised facts of this transformation and estimate the gains enjoyed by brewery investors during the boom as well as the losses suffered by investors during the bust of the 1900s. However, not all brewery equity shares suffered alike. We find that post-1900 performance correlates positively with capital-market discipline and good corporate governance and negatively with family control, but does not correlate with indebtedness.

This essay discusses trends in new banking history scholarship. It does so by conducting bibliometric content analysis of the entire literature involving the history of banks, bankers and banking published in all major academic journals since the year 2000. It places this recent scholarship in its historiographical context, and speculates on the future of the field.

Using a new weekly blue-chip index, this paper investigates the causes of stock price movements on the London market between 1823 and 1870. We find that economic fundamentals explain about 15 per cent of weekly and 34 per cent of monthly variation in share prices. Contemporary press reporting from the London Stock Exchange is used to ascertain what market participants thought were causing the largest movements on the market. The vast majority of large movements were attributed by the press to geopolitical, monetary, railway-sector, and financial-crisis news. Investigating the stock price changes on an independent list of events reaffirms these findings, suggesting that the most important specific events which moved markets were wars involving European powers.