The course will explore the history of finance and capital markets from antiquity to the modern times. It will focus on innovations in the technology of finance: from the Mesopotamian origins of financial instruments, to the mathematical development of compound interest calculations, the beginnings of paper money and related instruments, the appearance of bond markets in the Late Middle Ages, the origins of mutual funds in Northern Europe, the development of government bond markets, financial innovations associated with the American Revolution, the globalization of capital before World War 1 and the political consequences of unfettered capitalism.


Through the course the students will be introduced to mathematical methods and algorithms used historically to solve financial problems, from Mesopotamian mathematical tablets to Chinese problems to medieval calculations to the mathematical advances of the enlightenment. The course uses two methodologies: the analysis of documents, and the analysis of quantitative financial data.


The course will take advantage of Yale collections in financial history at the Yale Babylonian Collection and the Beinecke Rare Book Library. Students will have a chance to study documents in the newly formed SOM/Beinecke History of Finance Collection. Enrollment will be limited due to space constraints .


The structure of the course will closely follow the volume edited by Goetzmann and Rouwenhorst: The Origins of Value. Additional references by volume contributors will be added to the reading list, including journal articles.


Each meeting will focus on collection materials, reading and a discussion of student research. Requirements: Students will write two papers. The first is a study of a document or financial contract in their area of interest. The second is a brief statistical analysis of historical financial data on a question of their own design. Finally, a term paper analyzing some feature of capital market history in depth, using primary documentary or quantitative material. Students are encouraged to use primary data when available, including market databases. Two students will be asked to prepare a document or dataset for discussion in each of the classes.


Pre-requisites: Preference is given to students with reading knowledge in another language, as many of the primary sources are not in English. These languages include Latin, Ancient Greek, Literary Chinese, Dutch, French and Italian. Some facility with mathematics is desirable. Previous course experience in economics and/or finance is desirable. EPE majors are given priority.


Class meetings: The course will meet Monday, 1:30 PM in the Beinecke, or in another Yale collection.