Financial Markets and Cliometrics

The study of financial markets is a growing part of cliometrics for at least three reasons. First, appreciation of the role financial markets played in the rise and spread of capitalism has grown, along with concerns about financial crises. Second, accessibility to the immense amount of data generated by financial markets keeps improving thanks to continued advances in digital communications technology. Third, analytical techniques for determining the behavioral patterns of time series have advanced. While typically only price data for financial assets are available without the corresponding volume of the assets being traded, the consequences of sharp, or sustained, changes in the price of financial assets can be detected in other economic data. Interesting insights on fundamental historical issues are also possible by applying economic and political theory to cliometric studies of financial markets.