February 1, 2021
11 am EST
“Was Modern Economic Growth Finance-Led?“
Richard Sylla, Professor Emeritus of Economics, New York University
Chair: Manuel A. Bautista González, Columbia University in the City of New York
Richard Sylla is a Professor Emeritus of Economics and the former Henry Kaufman Professor of the History of Financial Institutions and Markets at New York University Stern School of Business. At Stern, Professor Sylla taught courses in financial history, economic and business history of the United States, and comparative enterprise systems since 1990. His primary areas of research include historical studies of money, banking, and finance. He is the author of several books, including The American Capital Market, 1846-1914 (1975), A History of Interest Rates (last edited in 2005), Genealogy of American Finance (coauthored with Robert Wright, 2015), and most recently, Alexander Hamilton: The Illustrated Biography (2016). His writing has appeared in numerous publications, including the Journal of Economic History, Explorations in Economic History, Business History Review, and Enterprise & Society. He is also on the editorial board of many journals that include the Financial History Review, Enterprise and Society, and Economic and Financial History Abstracts. Professor Sylla has been the recipient of several awards and grants, including National Science Foundation grants, an Alfred P. Sloan Foundation grant, and the Citibank Award for Excellence in Teaching at the Stern School. He served as President of the Economic History Association and the Business History Conference. Professor Sylla is currently the Chairman of the Museum of American Finance. He is a Fellow of the Cliometric Society and the American Academy of Arts and Sciences.
A decent case can be made for the proposition that modern economic growth was finance-led by studying the histories of several high-achieving countries—the Dutch Republic after 1600, England after 1688, the USA after 1789, and Japan after 1868. Each arguably had a “financial revolution” before it became an economic leader. What is a financial revolution? I argue that it is the creation of a modern financial system in a relatively short period of time. What is a modern financial system? How might such a system unleash modern growth? There appear to be a number of channels. For better understanding how finance matters, we should also study negative cases in which attempts to have a financial revolution failed (e.g., France in 1720) or never really got off the ground in otherwise promising circumstances (Argentina after 1880). Future research on the finance-led growth hypothesis should expand the number of national case studies for more examples of success and failure. Where data are available, econometric analysis of the hypothesis is also warranted. An early start in both directions is P. L. Rousseau and R. Sylla, “Financial Systems, Economic Growth, and Globalization” (2003), which may serve as a background paper for this session.