Financial markets and financial crises: a historical approach
A.A. 2023/2024
Obiettivi formativi
The goal of the course is to give an overview of the evolution of financial markets from the Middle Ages to the 21st century, and to discuss the several financial crises that are as old as financial markets themselves. The primary aim is not to focus on facts, events, theories or figures but rather to see the big picture in an integrative framework in a long-run perspective. Special attention will pe paid then to the key interrelationship between financial innovation, government regulation and financial crises across three thousands years, showing through successes and failures the key factors that underpin any successful recovery and foster economic growth. Thusly, a series of workable solutions that will help both to preserve the gains we have already achieved and to mitigate the dangers of future crises will appear clear.
The students attending the course will be able to:
· understand the causes of past crises and to remodel a conceptual framework that ties common elements together and underscores critical differences
· develop a good command of the evolution of the timing, facts, and discontinuties of financial history from the Medieval Age up to modern times
· be familiar with the major influential changes in the financial markets since the 17th century
· be able to single out and discuss technological, cultural and institutional factors responsible for changes in financial markets
· appreciate historical developments that led to different trajectories of financial changes in different countries and in different periods
· appreciate the potential role of history in guiding current financial policies and debates
The students attending the course will be able to:
· understand the causes of past crises and to remodel a conceptual framework that ties common elements together and underscores critical differences
· develop a good command of the evolution of the timing, facts, and discontinuties of financial history from the Medieval Age up to modern times
· be familiar with the major influential changes in the financial markets since the 17th century
· be able to single out and discuss technological, cultural and institutional factors responsible for changes in financial markets
· appreciate historical developments that led to different trajectories of financial changes in different countries and in different periods
· appreciate the potential role of history in guiding current financial policies and debates
Risultati apprendimento attesi
At the end of the course students will
· develop a good command of the evolution of the timing, facts, and discontinuties of financial history from the Medieval Age up to modern times
· become familiar with the most influential financial paradigms since the 17th century;
· be able to single out and discuss cultural and institutional elements responsible for changes in financial history
· appreciate historical developments that led to different trajectories of financial change in different regions and in different periods
· appreciate the potential role of history in guiding current economic and financial policies and debates
· evaluate the trade-offs in financial policy
· able to articulate with confidence and data, personal views concerning significant social and financial issues in historical perspective.
· develop a good command of the evolution of the timing, facts, and discontinuties of financial history from the Medieval Age up to modern times
· become familiar with the most influential financial paradigms since the 17th century;
· be able to single out and discuss cultural and institutional elements responsible for changes in financial history
· appreciate historical developments that led to different trajectories of financial change in different regions and in different periods
· appreciate the potential role of history in guiding current economic and financial policies and debates
· evaluate the trade-offs in financial policy
· able to articulate with confidence and data, personal views concerning significant social and financial issues in historical perspective.
Periodo: Secondo trimestre
Modalità di valutazione: Esame
Giudizio di valutazione: voto verbalizzato in trentesimi
Corso singolo
Questo insegnamento può essere seguito come corso singolo.
Programma e organizzazione didattica
Edizione unica
Responsabile
Periodo
Secondo trimestre
Programma
First Section (3 cfu - 20 h) programme:
The Origins of Money
From Unit of Account to Means of Payment.
Anatomy and physiology of the financial systems between XIIth and XVIIth cc:
Bimetallic circulation, fairs, bourses and bills of exchange;
Early loan tools. The Italian cities trade and financial firsts;
The usury debate;
Public debt and private credit. Informal networks and formal institutions;
The proto-financial markets of government debts and the sovereign debt crises of Spain and France;
The Bisenzone fairs of exchange as international capital market in Italy during the XVIth and XVIIth centuries;
The emergence of Dutch financial primacy: The corporate finance of trade companies;
The first bubble: The Tulip Mania (1634-1637).
The Financial Revolution in XVIIth century-England: the Origins of (Modern) Public Finance:
The Development of Instruments of State Debt;
The question of credibility and the making of financial markets;
The First International Financial Crisis:
John Law and his experiment with France (1715-1726);
The South Sea Bubble in England (1720);
The consequences on the evolution of financial markets.
The Begininng of the Divergence Between Market-Oriented and Bank-Oriented System during the 19th century:
The Lender of Last Resort; Central versus Free Banking.
The Market-Oriented System:
The Railway Mania of 1847 and the new Corporate Finance;
The development of the financial market in England;
The development of the financial market in the USA: from Hamilton to Wall Street;
The Panic of 1907, and American high finance and the foundation of the Federal Reserve (1913).
Second Section (3 cfu - 20 h) programme:
The Bank-Oriented Systems:
- the Banking Revolution at the mid of XIX century: causes, dynamic and weakness.
-the France case: from Saint-Simonism to Pereire-Rotschild competition.
-the German Case.
-the Spanish Case.
Italian Financial (and Banking) system from Unification to WWII:
-German Banking in Italy: mixed banks and industrial take-off during the Belle Époque.
-the modernization of the Italian Stock Exchange: the Borsa Valori of Milan.
-the crisis of 1907 and the role of Bank of Italy.
- the Bank law of 1936 and the new frame of the financial system
Financial Markets in the Interwar Period:
-Golden Fetters: The Gold Standard and the Great Depression, 1919-1939.
-The Instability of the Monetary Systems.
The End of a New Era: the Crash of 1929 and its Aftermath:
-Anatomy and Interpretation of 1929 Crisis.
-Responses to the crisis.
Stock Market and Growth in Oriented-Market Countries (1950-71).
Banks and Firms in Bank-Oriented Countries (1950-1971).
The Failure of Bretton Woods System and Dominance of the New Liberal Order (1971-to present):
-Speculation in time of Cowboy Capitalism.
-From the 1987 one to dotcom Bubble.
-From Securitization, Subprime Bubble and the Great Recession (2008-present)
Lessons from History. Financial Crisis: a Hardy Perennial?
The Origins of Money
From Unit of Account to Means of Payment.
Anatomy and physiology of the financial systems between XIIth and XVIIth cc:
Bimetallic circulation, fairs, bourses and bills of exchange;
Early loan tools. The Italian cities trade and financial firsts;
The usury debate;
Public debt and private credit. Informal networks and formal institutions;
The proto-financial markets of government debts and the sovereign debt crises of Spain and France;
The Bisenzone fairs of exchange as international capital market in Italy during the XVIth and XVIIth centuries;
The emergence of Dutch financial primacy: The corporate finance of trade companies;
The first bubble: The Tulip Mania (1634-1637).
The Financial Revolution in XVIIth century-England: the Origins of (Modern) Public Finance:
The Development of Instruments of State Debt;
The question of credibility and the making of financial markets;
The First International Financial Crisis:
John Law and his experiment with France (1715-1726);
The South Sea Bubble in England (1720);
The consequences on the evolution of financial markets.
The Begininng of the Divergence Between Market-Oriented and Bank-Oriented System during the 19th century:
The Lender of Last Resort; Central versus Free Banking.
The Market-Oriented System:
The Railway Mania of 1847 and the new Corporate Finance;
The development of the financial market in England;
The development of the financial market in the USA: from Hamilton to Wall Street;
The Panic of 1907, and American high finance and the foundation of the Federal Reserve (1913).
Second Section (3 cfu - 20 h) programme:
The Bank-Oriented Systems:
- the Banking Revolution at the mid of XIX century: causes, dynamic and weakness.
-the France case: from Saint-Simonism to Pereire-Rotschild competition.
-the German Case.
-the Spanish Case.
Italian Financial (and Banking) system from Unification to WWII:
-German Banking in Italy: mixed banks and industrial take-off during the Belle Époque.
-the modernization of the Italian Stock Exchange: the Borsa Valori of Milan.
-the crisis of 1907 and the role of Bank of Italy.
- the Bank law of 1936 and the new frame of the financial system
Financial Markets in the Interwar Period:
-Golden Fetters: The Gold Standard and the Great Depression, 1919-1939.
-The Instability of the Monetary Systems.
The End of a New Era: the Crash of 1929 and its Aftermath:
-Anatomy and Interpretation of 1929 Crisis.
-Responses to the crisis.
Stock Market and Growth in Oriented-Market Countries (1950-71).
Banks and Firms in Bank-Oriented Countries (1950-1971).
The Failure of Bretton Woods System and Dominance of the New Liberal Order (1971-to present):
-Speculation in time of Cowboy Capitalism.
-From the 1987 one to dotcom Bubble.
-From Securitization, Subprime Bubble and the Great Recession (2008-present)
Lessons from History. Financial Crisis: a Hardy Perennial?
Prerequisiti
No prerequisite.
Metodi didattici
Lectures, flipped classroom, and interactive presentations.
Students are expected to actively partecipate preparing the required readings before each class.
Students are expected to actively partecipate preparing the required readings before each class.
Materiale di riferimento
Required readings for non attending students:
- Neal, L. A Concise History of International Finance. From Babylon to Bernanke, Cambridge, Cambridge University Press, 2016, chapters: 1, 2, 3, 4, 5, 7, 9, 10, 12, 13, 14;
and
- Vogel, H., Financial Market Bubbles and Crashes, Cambridge University Press, 2009, chapters: 1, 2, 4, 5, 7, 9, 10, 11;
Attending students must study class notes and other teaching material assigned during the course.
- Neal, L. A Concise History of International Finance. From Babylon to Bernanke, Cambridge, Cambridge University Press, 2016, chapters: 1, 2, 3, 4, 5, 7, 9, 10, 12, 13, 14;
and
- Vogel, H., Financial Market Bubbles and Crashes, Cambridge University Press, 2009, chapters: 1, 2, 4, 5, 7, 9, 10, 11;
Attending students must study class notes and other teaching material assigned during the course.
Modalità di verifica dell’apprendimento e criteri di valutazione
For attending students, the assessment is composed: 40% by class activities (class discussions and class presentations) and 60% by a written final exam based on the teaching materials and notes used during lectures.
While the class partecipation is intended to verify the learnig outcomes of the course (critical thinking, probelm solving, ability to communicate), the written exatm is addressed to ascertain the command of the ideas, events, dates, political dynamics related to the themes of the course.
For non-attending students, the assessment is based on a written final exam, composed of multiple choice and open ended questions. While the multiple choice section is aimed at verifying the learning outcomes of the course (critical thinking, problem solving, ability to communicate), the open ended questions are intended to ascertain the command of the ideas, events, dates, political dynamics related to the themes of the course.
While the class partecipation is intended to verify the learnig outcomes of the course (critical thinking, probelm solving, ability to communicate), the written exatm is addressed to ascertain the command of the ideas, events, dates, political dynamics related to the themes of the course.
For non-attending students, the assessment is based on a written final exam, composed of multiple choice and open ended questions. While the multiple choice section is aimed at verifying the learning outcomes of the course (critical thinking, problem solving, ability to communicate), the open ended questions are intended to ascertain the command of the ideas, events, dates, political dynamics related to the themes of the course.
Docente/i
Ricevimento:
Il ricevimento si tiene il giovedì dalle 10:30 alle 13:30 in presenza o modalità a distanza, chiamando il numero 3468725488 o contattando per mail la docente.
via Conservatorio, 7 - Studio 8, II piano, edificio 3 (palazzina nuova)