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The Early History of Financial Economics, 1478–1776

From Commercial Arithmetic to Life Annuities and Joint Stocks Geoffrey Poitras, Professor of Finance, Simon Fraser University, Canada
By the time The Wealth of Nations had appeared, financial economics featured a well developed body of scientific knowledge, covering subjects such as fixed income evaluation, life insurance and derivative securities. From beginnings which are traced back to the commercial arithmetic of the Renaissance reckoning schools, by the latter part of the 18th century financial economics had witnessed contributions by the likes of Abraham de Moivre, Edmond Halley and Simon Stevin. This book chronicles the development of early financial economics, from the appearance of the first printed commercial arithmetic in 1478 to the publication of The Wealth of Nations in 1776.
Extent: 544 pp
Hardback Price: $221.00 Web: $198.90
Publication Date: 2000
ISBN: 978 1 84064 455 5
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  • Economics and Finance
  • Economic History
  • Financial Economics and Regulation
  • History of Economic Thought
Despite being an integral part of modern economic science, the subject of financial economics has deep historical roots. Geoffrey Poitras provides an exhaustive account of the early development of the subject and, in so doing, provides a sound basis for the study of modern financial economics.

By the time The Wealth of Nations had appeared, financial economics featured a well developed body of scientific knowledge, covering subjects such as fixed income evaluation, life insurance and derivative securities. From beginnings which are traced back to the commercial arithmetic of the Renaissance reckoning schools, by the latter part of the 18th century financial economics had witnessed contributions by the likes of Abraham de Moivre, Edmond Halley and Simon Stevin. This book chronicles the development of early financial economics, from the appearance of the first printed commercial arithmetic in 1478 to the publication of The Wealth of Nations in 1776.

This book will prove invaluable to scholars of financial economics and the history of economic thought.
‘The Early History of Financial Economics is a book that should be read by everybody interested in man’s relationship with his economic environment, being on environment of growing complexity and change. The message from the book is clear: There is nothing new under the sun.’
– P.J. Nieuwenhuizen, The South African Journal of Economic History

‘Beginning with the nature of Scholastic and "Mercantilistic" economic thought, the text takes us through the institutional changes and the conceptual developments they fostered over the next four centuries. The
expository plan is easy to follow, since it follows the historical timeline and stops to describe various institutional changes brought on by the growth of the European economies. This book should have a ready market. . . . The easy exposition and the portrayal of the historical developments make this useful supplementary reading; with a text of original writings, it could serve as a good introductory text in the history of finance. The reproductions of several pages of original text provide the text with an authentic flavor. In most places, the book has much "fun" stuff to read.’
– Salim Rashid, EH.Net

‘Poitras ably combines an intellectual history of financial economics with a history of financial markets and instruments. His history of the development of financial markets offers new insights into their economic function and operations and, while financial economics had always had an applied interest that has often been lacking in mainstream economics, he shows that significant early contributions were made by such distinguished mathematicians as Halley, de Moivre and Bachelier. This book will be valuable to financial economists with an interest in the intellectual and institutional antecedents of their field.’
– Michael J. Brennan, University of California, Los Angeles, US
Contents: 1. Introduction 2. History of Commerce and Finance 3. The Scholastic Analysis of Usury and Other Subjects 4. The Evolution of Commercial Arithmetic 5. Simple Interest and Compound Interest 6. The Valuation of Life Annuities 7. Foreign Exchange and the Bill Market 8. The Analysis of Joint Stocks 9. Development of Derivative Securities 10. Manias, Manipulations and Institutional Failures 11. English Debates over Interest Rates and Public Credit 12. Maritime Insurance, Life Insurance and Other Subjects 13. Some Speculative Conclusions References Index