EH326 - Innovation and Finance in the 19th and 20th Centuries

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Optional 3rd year course for BSc Economic History, BSc Economic History with Economics, BSc Economics, BSC Economics and Economic History, BSc Economics with Economic History and BSc Management. In exceptional circumstances, other students (with a previous course in economic history) may be admitted with the consent of the course teacher.  This course is not normally available to General Course students.

Core Syllabus

The course explores the relationship between finance and innovation in the nineteenth and twentieth centuries, the impact on economic growth and how policy makers managed (or failed) to encourage investment and technology adoption


Technological change and organizational innovation are critical determinants of the pace of economic growth.  This course looks at the specific ways in which innovation transformed economies around the world in the modern era. The course has a global reach though it will concentrate on countries in Northern Europe and the United States. Particular attention focuses on links between finance and innovation: finance is a fundamental input for almost every type of productive activity.

The course will explore issues such as the links between financial development and growth; the relationship between market size and structure and technological progress; the extent to which innovation caused stock market booms and busts; how firms developed the capabilities to profit from new technologies; and how policy makers attempted to nurture institutions to stimulate investment and technology adoption.  The course will therefore cover themes such as anti-trust policy, corporate governance, organisational change, incentives, intellectual property rights and the regulation of finance and technology more broadly.


22 weekly 2-hour seminars in MT, LT and ST.

Written work

All students are expected to write three essays or equivalent pieces of written work.

Reading List

A full reading list/course outline is distributed at the beginning of the course. The following readings provide some indication of the scope and nature of materials used in the course.

Naomi  Lamoreaux and Ken Sokoloff

Financing Innovation in the United States, 1870 to the present (MIT Press, 2007)

Joel Mokyr

The Gifts of Athena: Historical Origins of the Knowledge Economy, (Princeton University Press, 2002)

Raghuram Rajan, and Luigi Zingales 

'Financial Dependence and Growth', American Economic Review, 1998.  vol. 88, pp. 559-586. 

Nathan Rosenberg

Inside the Black Box: Technology and Economics, Cambridge University Press (1982)

Joseph A. Schumpeter

"Can Capitalism survive?" in his Capitalism, Socialism and Democracy (Routledge reprint, 1942, 2000)

Benn Steil, David G. Victor and Richard R. Nelson eds.,

Technological Innovation and Economic Performance (Princeton University Press, 2002)

John Sutton

Technology and Market Structure: Theory and History (MIT Press, 1998)

James M. Utterback

Mastering the Dynamics of Innovation (Harvard Business School Press, 1996)


A three hour written examination in the Summer Term.