Financial Development

Finance is defined as “the study of money and how it is invested”, but in reality finance is so much more complex (Change and Peterson 447). The creation of this discipline arose like any other academic field, because there was a need within society to understand and develop a practice for investing money. There is a pattern in the dates that major financial discoveries were made. Many of these discoveries happened during a period of economic turmoil or shortly after massive events in the U.S. Advances in technology also aided the “compilers” of finance in communication and publication of their work.

The 1980s, when Alfred Marshall discovered that money in the bank grows much faster with compound interest, were known for economic depression (Change and Peterson 448, Wikipedia). I feel that these hard times inspired Marshall as well as other pioneers of Finance to develop these methods to help the economy. The 1930s marked the beginning of the Great Depression (Wikipedia). During this time John Burr Williams applied these ideas to stock in 1930 (Change and Peterson 448). During this decade, new technologies such as intercontinental aviation and radio were also invented (Wikipedia). The combination of these events supports the idea that economic hard times inspire people to change the current circumstances.

In1959 after the Korean War and during the Cold War, Myron Gordon further developed notions of interest to the idea to dividends as well (Change and Peterson 448, Wikipedia). The late 1950s also marked the beginning steps and development of space exploration in the United States (Wikipedia). Another clue that technological growth and hard times lead to great discoveries. Another version of this idea is in 1976 right after the Vietnam War when the financial view of Brownian movement was developed. This occurred shortly after World War II as well by physicist (Change and Peterson 450).

In the face of tragedy and tough times, technology can aid and inspire change. It is my belief that all the disciplines involved in forming Finance may never have converged without having to face obstacles. Although struggles in the United States were hard for the people, great things arrived from their suffering.