Explaining Monetary and Financial Innovation: A Historical Analysis (Financial and Monetary Policy Studies, 39)

This book discusses theories of monetary and financial innovation and applies them to key monetary and financial innovations in history – starting with the use of silver bars in Mesopotamia and ending with the emergence of the Eurodollar market in London. The key monetary innovations are coinage (Asia minor, China, India), the payment of interest on loans, the bill of exchange and deposit banking (Venice, Antwerp, Amsterdam, London). The main financial innovation is the emergence of bond markets (also starting in Venice). Episodes of innovation are contrasted with relatively stagnant environments (the Persian Empire, the Roman Empire, the Spanish Empire). The comparisons suggest that small, open and competing jurisdictions have been more innovative than large empires – as has been suggested by David Hume in 1742.

Peter Bernholz is Assistant Professor at University of Frankfurt 1964 - 66 and was Ordinarius (Full Professor) at the Technische Universitaet Berlin from 1966 to 1971. 1971-1997 Ordinarius for Economics, especially for Economic Policy and for Monetary and International Economics, and Institute Director at University of Basel, Switzerland. Dean of the Faculty of Philosophy and History 1982 - 83. Several offers of chairs from the universities of Mannheim, Bonn and Kiel. Since retirement asked to offer several courses on the European Monetary and Economic Union at the Institute for European Global Studies, Basel, until 2008. Guest professorships at Massachusetts Institute of Technology 1969, Virginia Polytechnic Institute 1974 and 1978, Institute for Advanced Studies, Vienna, 1980, Stanford University 1981, University of California Los Angeles 1986/87, Australian National University, Canberra, 1993, University of California Irvine 1998, Universita degli Studi di Roma “La Sapienza” 2000, Universitaet Innsbruck 2002. Research Fellow of the Center for Study of Public Choice, George Mason University, Fairfax, Virginia.

Roland Vaubel is Professor of Economics at the University of Mannheim, Germany. He has received a B.A. in Philosophy, Politics and Economics from the University of Oxford, an M.A. from Columbia University, New York, and a doctorate from the University of Kiel, Germany. He has been Professor of Economics at Erasmus University Rotterdam and Visiting Professor of International Economics at the University of Chicago (Graduate School of Business). He is a member of the Advisory Council to the German Federal Ministry of Economics and Technology. He is associate editor of the Review of International Organizations and a member of the editorial boards of the European Journal of Political Economy, Constitutional Political Economy and Cato Journal. He is also a member of the Academic Advisory Council of the Institute of EconomicAffairs, London.