art I: The benefits of free financial markets -- Does finance benefit only the rich? -- Shylock transformed -- The financial revolution and individual economic freedom -- The dark side of finance -- The bottom line on financial development -- Part II: When do financial markets emerge? -- The...

We show that the development of the financial sector does not change monotonically over time. In particular, we find that by most measures, countries were more financially developed in 1913 than in 1980 and only recently have they surpassed their 1913 levels. This pattern is inconsistent with...

We attempt to identify and explain the broad patterns of financial development in developed countries over the twentieth century. We find that, contrary to the predictions of most existing theories, indicators of financial development do not seem monotonic over time. In particular, we find that...