Eras of rapid change are much more likely to give rise to financial bubbles than stagnant periods. The former are far more prone to excessive enthusiasm, the expansion of credit, and the accumulation and mis-investment of surpluses than the latter. In the 1860s, the American Civil War abruptly cut off one of the world’s…
There have been numerous instances in history where several different currencies circulated in the same place simultaneously. Forms of this come up in several settings. One is the variation where there is no clear money-issuing institution. The result is often the importation of foreign monies. Another variation is where there are numerous money-issuing entities,…
This is the last in a three-part series on insurance in China. The first introduced the arrival of insurance in Hong Kong and the second the adoption of insurance in mainland China. While the industry was more well-developed in terms of the number of firms and customer adoption by the 1930s than many might…
This is the second in a three-part series on the history of insurance in China. The first introduced the arrival of insurance in Hong Kong and the 19th century development of the insurance industry there. While the city’s mimicking of British company law and the growing volume of trade transiting through it stimulated insurance in…
Insuring property predates insurance on lives and within property insurance, ships were among the earliest things to be insured. They are large valuable assets subject to many risks and, when damaged at sea, are often lost in their entirety. The incentive to insure ships, and their cargoes, is very high. In Europe and in Asia,…
Central banks have an array of responsibilities, the exact composition and the relative importance of which often depends on the country’s level of development. Some are tasked with ensuring a favorable market for government borrowing, others with maintaining a fixed exchange rate; some are mandated to ensure stable prices and others target low unemployment…
Market demand for tea in Europe may have appeared overnight but import volumes did not grow to large proportions nearly so instantaneously. Imports of tea from China grew over the course of the 18th century and even spaced out over many decades, the steadily rising demand strained the capacity of Chinese merchants to supply the…
The second half of the 20th century has seen a lot of change in the world’s monetary arrangements. In the years after the Second World War was brought to an end, the Bretton Woods system tried to restore monetary order, reviving some elements of the interwar years’ gold standard and combining this with some…
While certain risks are easy to insure against in a cost-effective manner, others are more difficult. Some risks are nearly impossible to insure against because they are too costly or the risk is either very difficult to measure or very high. In these cases, insurance may become completely unavailable if not offered with some…
When gold and silver from the Americas was exported abroad, the effects on the rest of the world were tremendous. In Europe, and in Spain especially, the imports of these precious metals caused lasting inflation. In China, foreign supply overcame a previous scarcity of silver, transforming the composition of the local money supply. In…
