IDEAS home Printed from https://ideas.repec.org/a/taf/rherxx/v51y2010i1p43-64.html
   My bibliography  Save this article

Pioneers of Financial Economics: Das Adam Smith Irrelevanzproblem?

Author

Listed:
  • Geoffrey Poitras
  • Franck Jovanovic

Abstract

This paper is a contribution to the debate surrounding the steady decline in importance of the history of economic thought within the economics curriculum. The relevance of the history of financial economics to this debate is examined and a ‘histories of economic thought’ strategy is suggested to improve the future prospects of the subject. In the process, Das Adam Smith Irrelevanzproblem is identified and discussed. Das Irrelevanzproblem is concerned with the question: why do Adam Smith and other classical political economists continue to play such a central role in traditional thought when the relevance of these thinkers to modern economics, particularly new additions such as financial economics, is so limited? This paper demonstrates that the history of financial economics commences at least a century prior to The Wealth of Nations and is largely independent of the traditional thought which commences with the role of Adam Smith as the leading Enlightenment thinker on issues relevant to political economy.

Suggested Citation

  • Geoffrey Poitras & Franck Jovanovic, 2010. "Pioneers of Financial Economics: Das Adam Smith Irrelevanzproblem?," History of Economics Review, Taylor & Francis Journals, vol. 51(1), pages 43-64, January.
    • Handle: RePEc:taf:rherxx:v:51:y:2010:i:1:p:43-64
    DOI: 10.1080/18386318.2010.11682155
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/18386318.2010.11682155
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/18386318.2010.11682155?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Arthur F. Burns, 1952. "Wesley Clair Mitchell: The Economic Scientist," NBER Books, National Bureau of Economic Research, Inc, number burn52-1, March.
    2. Rutherford,Malcolm, 1996. "Institutions in Economics," Cambridge Books, Cambridge University Press, number 9780521574471.
    3. William F. Sharpe, 1963. "A Simplified Model for Portfolio Analysis," Management Science, INFORMS, vol. 9(2), pages 277-293, January.
    4. Roger E. Backhouse, 2002. "The Future of the History of Economic Thought in Britain," History of Political Economy, Duke University Press, vol. 34(5), pages 79-97, Supplemen.
    5. Mark Rubinstein, 2002. "Markowitz's “Portfolio Selection”: A Fifty‐Year Retrospective," Journal of Finance, American Finance Association, vol. 57(3), pages 1041-1045, June.
    6. Geoffrey Poitras, 2010. "History of Equity Securities," World Scientific Book Chapters, in: Valuation Of Equity Securities History, Theory and Application, chapter 2, pages 97-249, World Scientific Publishing Co. Pte. Ltd..
    7. Robert C. Merton, 2005. "Theory of rational option pricing," World Scientific Book Chapters, in: Sudipto Bhattacharya & George M Constantinides (ed.), Theory Of Valuation, chapter 8, pages 229-288, World Scientific Publishing Co. Pte. Ltd..
    8. Frederick R. Macaulay, 1938. "Some Theoretical Problems Suggested by the Movements of Interest Rates, Bond Yields and Stock Prices in the United States since 1856," NBER Books, National Bureau of Economic Research, Inc, number maca38-1, March.
    9. Harry Sauvain, 1967. "The State Of The Finance Field: Comment," Journal of Finance, American Finance Association, vol. 22(4), pages 541-542, December.
    10. Franck Jovanovic, 2008. "The Construction of the Canonical History of Financial Economics," History of Political Economy, Duke University Press, vol. 40(2), pages 213-242, Summer.
    11. Montes, Leonidas, 2003. "Das Adam Smith Problem: Its Origins, the Stages of the Current Debate, and One Implication for Our Understanding of Sympathy," Journal of the History of Economic Thought, Cambridge University Press, vol. 25(1), pages 63-90, March.
    12. Poitras, Geoffrey, 1998. "Robert Torrens and the Evolution of the Real Bills Doctrine," Journal of the History of Economic Thought, Cambridge University Press, vol. 20(4), pages 479-498, December.
    13. Merton H. Miller & Franco Modigliani, 1961. "Dividend Policy, Growth, and the Valuation of Shares," The Journal of Business, University of Chicago Press, vol. 34, pages 411-411.
    14. Fama, Eugene F, et al, 1969. "The Adjustment of Stock Prices to New Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 10(1), pages 1-21, February.
    15. Hands,D. Wade, 2001. "Reflection without Rules," Cambridge Books, Cambridge University Press, number 9780521797962.
    16. repec:ucp:bkecon:9780226199993 is not listed on IDEAS
    17. Edith Dudley Sylla, 2003. "Business Ethics, Commercial Mathematics, and the Origins of Mathematical Probability," History of Political Economy, Duke University Press, vol. 35(5), pages 309-337, Supplemen.
    18. David Durand, 1957. "Growth Stocks And The Petersburg Paradox," Journal of Finance, American Finance Association, vol. 12(3), pages 348-363, September.
    19. Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, March.
    20. John Lintner, 1965. "Security Prices, Risk, And Maximal Gains From Diversification," Journal of Finance, American Finance Association, vol. 20(4), pages 587-615, December.
    21. Philip A. Klein, 1983. "The Neglected Institutionalism of Wesley Clair Mitchell: The Theoretical Basis for Business Cycle Indicators," Journal of Economic Issues, Taylor & Francis Journals, vol. 17(4), pages 867-899, December.
    22. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
    23. Geoffrey Poitras, 2000. "The Early History of Financial Economics, 1478–1776," Books, Edward Elgar Publishing, number 2151.
    24. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
    25. Hausman,Daniel M., 1992. "The Inexact and Separate Science of Economics," Cambridge Books, Cambridge University Press, number 9780521415019, December.
    26. Merton, Robert C, 1987. "In Honor of Nobel Laureate, Franco Modigliani," Journal of Economic Perspectives, American Economic Association, vol. 1(2), pages 145-155, Fall.
    27. Hal Varian, 1993. "A Portfolio of Nobel Laureates: Markowitz, Miller and Sharpe," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 159-169, Winter.
    28. Cardoso, Jos Lu S, 2002. "Confusion de confusiones: ethics and options on seventeenth-century stock exchange markets," Financial History Review, Cambridge University Press, vol. 9(02), pages 109-123, October.
    29. Zimmermann, Heinz & Hafner, Wolfgang, 2007. "Amazing discovery: Vincenz Bronzin's option pricing models," Journal of Banking & Finance, Elsevier, vol. 31(2), pages 531-546, February.
    30. Hausman,Daniel M., 1992. "The Inexact and Separate Science of Economics," Cambridge Books, Cambridge University Press, number 9780521425230, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Turner, Grant, 2018. "Establishing a comprehensive census of undergraduate economics curricula:Foundational and special requirements for major programs in the U.S," MPRA Paper 103235, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jovanovic, Franck & Schinckus, Christophe, 2017. "Econophysics and Financial Economics: An Emerging Dialogue," OUP Catalogue, Oxford University Press, number 9780190205034.
    2. Fernando Rubio, 2005. "Eficiencia De Mercado, Administracion De Carteras De Fondos Y Behavioural Finance," Finance 0503028, University Library of Munich, Germany, revised 23 Jul 2005.
    3. Sonntag, Dominik, 2018. "Die Theorie der fairen geometrischen Rendite [The Theory of Fair Geometric Returns]," MPRA Paper 87082, University Library of Munich, Germany.
    4. Timothy Johnson, 2015. "Reciprocity as a Foundation of Financial Economics," Journal of Business Ethics, Springer, vol. 131(1), pages 43-67, September.
    5. Turner, John D., 2014. "Financial history and financial economics," QUCEH Working Paper Series 14-03, Queen's University Belfast, Queen's University Centre for Economic History.
    6. Gérard Charreaux, 2008. "La recherche en finance d’entreprise:quel positionnement méthodologique ?," Revue Finance Contrôle Stratégie, revues.org, vol. 11(Special), pages 237-290, June.
    7. Gantenbein,, 2016. "Unternehmerisches Finanzmanagement – Meilensteine der Entwicklung," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 70(4), pages 387-406.
    8. Frankfurter, George M., 2006. "The Theory of Fair Markets (TFM) toward a new finance paradigm," International Review of Financial Analysis, Elsevier, vol. 15(2), pages 130-144.
    9. Fuinhas, José Alberto & Marques, António Cardoso & Nogueira, David Coito, 2014. "Análise VAR dos índices bolsistas SP500, FTSE100, PSI20, HSI e IBOVESPA [Integration of the indexes SP500, FTSE100, PSI20, HSI and IBOVESPA: A VAR approach]," MPRA Paper 62092, University Library of Munich, Germany, revised 10 Feb 2015.
    10. Bao, Te & Diks, Cees & Li, Hao, 2018. "A generalized CAPM model with asymmetric power distributed errors with an application to portfolio construction," Economic Modelling, Elsevier, vol. 68(C), pages 611-621.
    11. Saggese, Pietro & Belmonte, Alessandro & Dimitri, Nicola & Facchini, Angelo & Böhme, Rainer, 2023. "Arbitrageurs in the Bitcoin ecosystem: Evidence from user-level trading patterns in the Mt. Gox exchange platform," Journal of Economic Behavior & Organization, Elsevier, vol. 213(C), pages 251-270.
    12. Adam Zaremba & Jacob Koby Shemer, 2018. "Price-Based Investment Strategies," Springer Books, Springer, number 978-3-319-91530-2, December.
    13. Kerstens, Kristiaan & Mounir, Amine & de Woestyne, Ignace Van, 2011. "Non-parametric frontier estimates of mutual fund performance using C- and L-moments: Some specification tests," Journal of Banking & Finance, Elsevier, vol. 35(5), pages 1190-1201, May.
    14. Bas Peeters & Cees L. Dert & André Lucas, 2003. "Black Scholes for Portfolios of Options in Discrete Time: the Price is Right, the Hedge is wrong," Tinbergen Institute Discussion Papers 03-090/2, Tinbergen Institute.
    15. Lu Zhang, 2017. "The Investment CAPM," European Financial Management, European Financial Management Association, vol. 23(4), pages 545-603, September.
    16. Vasileiou Evangelos, 2017. "Why do we examine calendar anomalies only in financial markets? Month effect evidence from the Greek banking industry," Operational Research, Springer, vol. 17(1), pages 99-114, April.
    17. Ahmad H. Juma’h & Yazan Alnsour, 2018. "Using Social Media Analytics: The Effect of President Trump’s Tweets On Companies’ Performance," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 17(1), pages 100-121, March.
    18. Frankfurter, George M. & Phillips, Herbert E., 1996. "Normative implications of equilibrium models: Homogeneous expectations and other artificialities," Journal of Economic Behavior & Organization, Elsevier, vol. 31(1), pages 67-83, October.
    19. Morten Balling & Ernest Gnan, 2013. "The development of financial markets and financial theory: 50 years of interaction," SUERF 50th Anniversary Volume Chapters, in: Morten Balling & Ernest Gnan (ed.), 50 Years of Money and Finance: Lessons and Challenges, chapter 5, pages 157-194, SUERF - The European Money and Finance Forum.
    20. Majeed, Raseena & Masih, Mansur, 2016. "Impact of macroeconomic variables on shariah stock markets: evidence from Malaysia based on ARDL approach," MPRA Paper 106118, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • B0 - Schools of Economic Thought and Methodology - - General
    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • B3 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals
    • G0 - Financial Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rherxx:v:51:y:2010:i:1:p:43-64. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rher .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.