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Amsterdam and London as financial centers in the eighteenth century

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  • Carlos, Ann M.
  • Neal, Larry

Abstract

In the seventeenth century, Amsterdam and London developed distinctive innovations in finance through both banks and markets that facilitated the growth of trade in each city. In the eighteenth century, a symbiotic relation developed that led to bank-oriented finance in Amsterdam cooperating with market-oriented finance in London. The relationship that emerged allowed each to rise to unprecedented dominance in Europe, while the respective financial innovations in each city provided the means for the continued expansion of European trade, both within Europe and with the rest of the world. The increasing strains of war finance for the competing European powers over the course of the eighteenth century stimulated fresh financial innovations in each city that initially reinforced the symbiosis of the two centers. The external shocks arising from revolutionary movements in America and France, however, interrupted the relationship long enough to leave London as the supreme financial center.

Suggested Citation

  • Carlos, Ann M. & Neal, Larry, 2011. "Amsterdam and London as financial centers in the eighteenth century," Financial History Review, Cambridge University Press, vol. 18(01), pages 21-46, April.
  • Handle: RePEc:cup:fihrev:v:18:y:2011:i:01:p:21-46_00
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    Cited by:

    1. Oscar Gelderblom & Joost Jonker, 2013. "Early Capitalism in the Low Countries," Working Papers 0041, Utrecht University, Centre for Global Economic History.
    2. Gary S. Shea, 2011. "A Social Network for Trade and Inventories of Stock during the South Sea Bubble," CDMA Working Paper Series 201110, Centre for Dynamic Macroeconomic Analysis.
    3. Andrew Mays & Gary S. Shea, 2011. "East India Company and Bank of England Shareholders during the South Sea Bubble: Partitions, Components and Connectivity in a Dynamic Trading Network," CDMA Working Paper Series 201109, Centre for Dynamic Macroeconomic Analysis.
    4. Stephen F. Quinn & William Roberds, 2012. "The Bank of Amsterdam through the lens of monetary competition," FRB Atlanta Working Paper 2012-14, Federal Reserve Bank of Atlanta.
    5. Stephen Quinn & William Roberds, 2016. "Death of a Reserve Currency," International Journal of Central Banking, International Journal of Central Banking, vol. 12(4), pages 63-103, December.
    6. Carlos, Ann M. & Fletcher, Erin & Neal, Larry, 2012. "Share Portfolios and Risk Management in the Early Years of Financial Capitalism: London 1690-1730," CEI Working Paper Series 2012-12, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    7. Quinn, Stephen F. & Roberds, William, 2017. "An Early Experiment with "Permazero"," FRB Atlanta Working Paper 2017-5, Federal Reserve Bank of Atlanta.
    8. David Le Bris & William N. Goetzmann & S├ębastien Pouget, 2015. "The Development of Corporate Governance in Toulouse: 1372-1946," NBER Working Papers 21335, National Bureau of Economic Research, Inc.
    9. van Bochove, Christiaan & Boerner, Lars & Quint, Daniel, 2012. "Anglo-Dutch premium auctions in eighteenth-century Amsterdam," Discussion Papers 2012/3, Free University Berlin, School of Business & Economics.

    More about this item

    JEL classification:

    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913

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