Coates J., Gurnell M. & Rustichini A. (2009) Girls can’t trade

November 26, 2009

Coates, John M., Mark Gurnell and Aldo Rustichini (2009) Second-to-fourth digit ratio predicts success among high-frequency financial traders. Proceedings of the National Academy of Science, 106/2: 623-8.


What does traders’ success on the market floor depend on? Earlier studies have shown that one’s level of testosterone did affect one’s daily results. Since “prenatal androgens have organizing effects on the developing brain, increasing its later sensitivity to […] testosterone”, it would make sense that prenatal androgens also have a structural effect on a trader’s results on the long term. Read the rest of this entry »


Saad G. & Vongas J. (2009) What bling really does to you

November 25, 2009

Saad, Gad and John G. Vongas (2009) The effect of conspicuous consumption on men’s testosterone levels. Organizational Behavior and Human Decision Processes, 110/2: 80-92.

Introduction (longue one)

Thorstein Veblen coined the expression conspicuous consumption in 1899 to refer to goods which principal aim was to be displayed, advertise one’s wealth and impress one’s peers (p.80). In other words, it makes one’s fortune obvious by stressing one’s ability to waste. Read the rest of this entry »

DuPlessis R. & Howell M. (1982) Killing capitalism in its craddle (twice)

November 21, 2009

DuPlessis, Robert S. and Martha C. Howell (1982) Reconsidering the Early Modern Urban Economy : The Case of Leiden and Lille. Past and Present, 94/, 49-84.

In Marx’s view, capitalism had arisen in the late Middle Ages out of a production system dominated by lords and guilds. In this framework, urban economies can be regarded as the craddle of capitalism (p.44), the places where capital and labour were separated through the use of putting-out, or the hiring of a migrant or female workforce (p.45). However some cities, such as Leiden and Lille where artisans remained proprietors of their means of production, still managed to integrated the very competitive European textile market (p.46). Read the rest of this entry »

Murphy A. (2009) The smartest boys in the alley, early derivatives on the London stock market

October 24, 2009

Murphy, Anne L. (2009) Trading options before Black-Scholes: a study of the market in late seventeenth-century London. Economic History Review, 62/1: 8-30.

Picture 10

The ledger of the financial broker Charles Blunt contains the details of some 1,500 transactions realized between 1692 and 1695, about a third of which regard the then novel trade in equity options (p.9). The technique had arisen in the 1620s in the commodity market and was proving very useful in the decade following the Glorious Revolution, when some 100 joint-stock companies were floated in London  (p.10). During the boom of the early 1690s, it is likely that “several thousand derivatives were transacted each year”.

Read the rest of this entry »

Seurot F. (2002) Something rotten in the state of medieval banking

October 20, 2009

Seurot, François (2002) “Les crises bancaires en Italie au Moyen Age: un essai d’applicationn de la théorie de Minsky-Kindleberberger”, paper presented at the XIX Journée d’économie monétaire et bancaire, 21p.


This paper is available online (pdf).

Following a long tradition, Minsky and Kindleberger [1996] have based their analysis of financial crises in the early modern and modern periods on their vision of credit as intrinsically unstable and thus naturally prone to crashes. Their model is based on five steps:

  1. An exogenous shock modifies the incentive system the economy is based upon.
  2. These new incentive channel credit toward a given sector and produces a localized economic boom.
  3. Euphoria leads to the overestimation of the ROI and to overtrading.
  4. Fundamentals are reconsidered and credit dries up.
  5. Torschlusspanik, or bank rush (p.1). Read the rest of this entry »

A’Hearn B. (2005) The not-so-mighty finance

October 16, 2009

A’Hearn, Brian (2005) Finance-led divergence in the regions of Italy. Financial History Review, 12/1: 7-41.


After the unification, the Italian South did not catch up with the North, on the contrary they engaged on a divergent path as the per capita income gap increased from 15-25% to 55% in the first 50 years (p.7). This continuing disparity may be explained by the sore state of the southern banks which could have been unable to support and finance local development (finance-led growth argument; p.9). However, initial evidence seems not to support this hypothesis, as the share of the Mezzogiorno in the banking activity of the country was in line with the relative economic weight of the region (p.10). Read the rest of this entry »

Bochove C. van (2008) Outsourcing financial modernisation

October 11, 2009

Bochove, Christiaan van (2008) “Integration of Denmark-Norway in the Dutch capital market”, chapter 4 in The Economic Consequences of the Dutch. Economic integration around the North Sea, 1500-1800, Amsterdam: Aksant, 90-125.

Picture 8Picture 7Picture 9

The early modern markets for goods and labour were highly integrated. As the country’s Golden Age came to an end, by 1700, Dutch capital was increasingly finding investment opportunities abroad, chiefly in Great Britain but also in the Danish Kingdom (p.90). It had not always been the case. For instance around 1600, trade with Norway was conducted with cash rather than bills of exchange, a sure sign of poor integration. The concentration of trade in the hands of a local business elite (rather than scattered between small producers) made this modernization possible. By the mid century Norwegian merchants started drawing credit from Amsterdam (p.93). Read the rest of this entry »