Fibonacci and the Financial Revolution
AbstractThis paper examines the contribution of Leonardo of Pisa [Fibonacci] to the history of financial mathematics. Evidence in Leonardo's Liber Abaci (1202) suggests that he was the first to develop present value analysis for comparing the economic value of alternative contractual cash flows. He also developed a general method for expressing investment returns, and solved a wide range of complex interest rate problems. The paper argues that his advances in the mathematics of finance were stimulated by the commercial revolution in the Mediterranean during his lifetime, and in turn, his discoveries significantly influenced the evolution of capitalist enterprise and public finance in Europe in the centuries that followed. Fibonacci's discount rates were more culturally influential than his famous series.
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Bibliographic InfoPaper provided by Yale School of Management in its series Yale School of Management Working Papers with number ysm19.
Date of creation: 05 Mar 2004
Date of revision:
Other versions of this item:
- William N. Goetzmann, 2004. "Fibonacci and the Financial Revolution," NBER Working Papers 10352, National Bureau of Economic Research, Inc.
- William Goetzmann, 2003. "Fibonacci and the Financial Revolution," Yale School of Management Working Papers ysm432, Yale School of Management, revised 01 Mar 2004.
- B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
- B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-03-22 (All new papers)
- NEP-DEV-2004-03-22 (Development)
- NEP-FIN-2004-03-22 (Finance)
- NEP-HIS-2004-03-22 (Business, Economic & Financial History)
- NEP-HPE-2004-03-22 (History & Philosophy of Economics)
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