Elective Course - 3nd Semester (Autumn 2nd year) | Course ID: Τ227 | E-Class
According to the curriculum, students must choose two elective courses during the third semester

Lecturers

Nikos Stravelakis

Nicholas Theocarakis

Language of instruction

Greek

Course contents

• Introduction and Course Outline
• The Origin of the Theory of Finance - From Aristotle to John Law and the Mississippi Company
• Finance in Classical Political Economy - The stock market crashes, bankruptcies and the new institutions of the 19th century
• The transition to neoclassical economics - The Monetary Dimension - The interest rate as a rate of profit, the "natural rate of interest" - Capital as a factor of production, -The Keynesian challenge
• The Transition to Neoclassical Economics - The Finance Dimension - From Partial to General Equilibrium - The Emergence of Modern Finance Theory
• Neoclassical Equilibrium and Finance (Continued) - The Risk-Aversion Models CAPM and APT
• The Efficient Markets Hypothesis
• Critique and Decomposition of Modern Investment Theory
• Crises and Finance in Orthodox and Keynesian Economics - The Current Debate (2 lectures)
• Finance in the Heterodox and Marxist Tradition in the 20th Century and Contemporary Theories of Financialization
• Towards a Classical Theory of Finance - - The Mechanisms of Manifestation, the Role of Financial Turbulence, and the Theory of Crises (2 lectures)

Bibliography

Indicative Syllabus

Essential readings are marked with *

1. Introduction & Course Outline

Introductory lecture that will set the course outline based on the preceding introductory text.

2. The Origin of the Theory of Finance - From Aristotle to John Law and the Mississippi Company

Α) Classical texts

• *Aristotle (384-322 BCE)  Politics: Thales and monopoly (1259^α) EnglishAncient Greek. “Risk-return tradeoff” «διαφέρει δὲ τούτων ἕτερα ἑτέρων τῷ τὰ μὲν ἀσφαλέστερα εἶναι, τὰ δὲ πλείω πορίζειν τὴν ἐπικαρπίαν» (1258^β) English  Ancient GreekΧρηματιστική and theory of money. English 1256^β  1257^α Ancient Greek 1256^β  1257^αNicomachean Ethics: Value and money 1133^αEnglish  Ancient Greek. Aristotle in 23 Volumes, Vol. 19 (Nicomachean Ethics) Vol. 21 (Politics), translated by H. Rackham. Cambridge, MA, Harvard University Press; London, William Heinemann, 1944.
• Gregory of Nyssa (335-395), «κατὰ τῶν τοκιζόντων», Patrologia graeca Vol. 46.3 coll. 433-452 (Mediaeval Greek and Latin). English “Against Those Who Practice Usury”
• *Aquinas, St. Thomas (1225-1274) Summa Theologiae Secunda secundae (II^a-II^ae),
• Question 77. Cheating, which is committed in buying and selling
• Question 78. The sin of usury
• Latin: Corpus thomisticumQuaestio 77 & Quaestio 78.  Editio leoninaQuaestio 77 & Quaestio 78
• Nicole Oresme (c. 1320 – 1382), M.L. Wolowski (ed.) (1864). Traictie de la première invention des monnoies, (Paris: Guillaumin) (Latin and French). English translation Charles Johnson (ed.) (1956). The De Moneta of Nicholas Oresme and English Mint Documents (London [and elsewhere]: Thomas Nelson).
• *Petty, William (1662) A Treatise on Taxes and Contributions(1682) Quantulumcunque concerning Money. As in C.H. Hull (ed.) (1899). The Economic Writings of Sir William Petty, (Cambridge: University Press) Vol. I, Vol. II
• de La Vega, Joseph (1688). Confusión de confusiones. Diálogos curiosos entre un Philosopho agudo, un Mercader discreto, y un Accionista erudito, descriviendo el negocio de las accionis, su origen, su ethimologia, su realidad, su juego, y su enredo, compuesto por Don Josseph de La Vega. [Confusion of confusions. Curious dialogues between an acute Philosopher, a prudent Merchant, and a learned Shareholder, describing the business of shares, their origin, their etymology, their reality, their play, and their entanglement, composed by Don Josseph de La Vega.] Amsterdam: [s.n.]. In Spanish. The first book that describes the operation of the stock market and the role of speculation.
• *Locke, John (1692) Some Considerations of the Consequences of the Lowering of Interest and the Raising the Value of Money.  Marxists.org [html]. Archive.org: Original edition 1692 (London: Awnsham and John Churchill).  1823 edition, The Works of John Locke in Ten Volumes, Vol. V (London [and elsewhere]: Thomas Tegg [et al.])
• Law, John (1750), Money and Trade Considered: With a proposal for supplying the nation with money. First published at Edinburgh mmdccv [1705]. Glasgow: Printed and sold by R. & A. Foulis. On Law’s Mississippi Scheme See Charles Mackay (1852). Memoirs of Extraordinary Popular Delusions and the Madness of Crowds, London: Office of the National Illustrated Library. See also the excellent book by Antoin E. Murphy (1997) John Law: Economic Theorist and Policy-Maker. Oxford: Oxford University Press.
• * Newton, Isaac (1717) Report of the Master of the Royal Mint to the Lords Commissioners of His Majesty’s Treasury. “Representation Third to the Right Honourable the Lords Commissioners of His Majesty's  Revenue”. As in J. R. McCulloch (ed.) (1856). A Select Collection of Scarce and Valuable Tracts on Money, from the Originals of Vaughan, Cotton, Petty, Lowndes, Newton, Prior, Harris, and Others. (London: Printed for the Political Economy Club)
• *Bernoulli, Daniel (1738). “Specimen theoriae novae mensura sortis”, Commentarii Academiae Scientiarum Imperialis Petropolitanae, Tomus V, (In Classe Mathematica), pp. 175-192 Diagramme. English translation as “Exposition of a New Theory on the Measurement of Risk”, Econometrica, 22(1): 23-36 (1954). https://doi.org/10.2307/1909829JSTOR
• *Hume, David(1752)Political Discourses2^nd edition. (Edinburgh: Printed by R. Fleming, for A. Kincaid and A. Donaldson).Recommended edition: Eugene F Miller (ed.) (1987). Essays Moral Political and Literary. Indianapolis: LibertyClassics.
• Pinto, Isaac (1774). An Essay on Circulation and Credit, In Four Parts; And A Letter on The Jealousy of Commerce, London: J. Ridley.  Original French edition: Traité de la circulation et du crédit, Amsterdam: Marc Michel Rey, 1771.

Textbook: Poitras, Geoffrey. 2000. The Early History of Financial Economics 1478-1776: From Commercial Arithmetic to Life Annuities and Joint Stocks. Cheltenham UK: Edward Elgar

Β) Monographs, comments on the texts and essays on economic history

• Andreades, Andreas M. (1933). A History of Greek Public Finance, transl. Carroll N. Brown, Cambridge, MA: Harvard University Press, Revised and enlarged edition. First Greek edition, 1928. Reprint 1992.
• Hull, C. H. (1900). “Petty's Place in the History of Economic Theory”, Quarterly Journal of Economics, 14 (3): 307-340.
• Mcgee, R. W. (1990). “Thomas Aquinas a Pioneer in Law and Economics”, Western State University Law Review, 18(1): 471-483.
• *Weber, Ernst Juerg (2008). A Short History of Derivative Security Markets. Available at SSRN.
• *Rousseas, Stephen (1998) Post Keynesian Monetary Economics3^rd editionLondon: Palgrave  Macmillan, [Chapter 2 on the Peculiarity of Money]
• *Schumpeter, Joseph A. (1954) History of Economic Analysis. Abingdon: Routledge, (1994 edition) [Part II chapters 1,2,3,6]

3. Finance in Classical Political Economy - The stock market crashes, bankruptcies and the new institutions of the 19th century.

Α) Classical texts

• *Smith, Adam (1776). An Inquiry into the Nature and Causes of the Wealth of Nations. Original edition (London: Printed for W. Strahan and T. Cadell, in the Strand, 1776) vol. 1, vol. 2. Cannan edition. An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith, edited with an Introduction, Notes, Marginal Summary and an Enlarged Index by Edwin Cannan (London: Methuen, 1904). 2 vols. Glasgow edition: General editors: R.H. Campbell and A.S. Skinner, Textual editor: W.B. Todd], 2volumes. Oxford: Oxford University Press (Clarendon). Volumes 2a & 2b, The Glasgow Edition of the Works and Correspondence of Adam Smith, 1976. (Book II Ch. II and IV)
• *Ricardo, David. (1951). On the Principles of Political Economy and Taxation, The Works and Correspondence of David Ricardo, edited by Piero Sraffa with the collaboration of M.H. Dobb, Vol. 1, Cambridge, UK: Cambridge University Press for the Royal Economic Society. 1^st edition London: John Murray, 1817 (2^nd edition, 1819, 3^rd edition1821). (Chapter VI On Profits, Chapter XXVII On Currency and Banks)
• Ramsay, George (1836). An Essay on the Distribution of Wealth, Edinburgh: Adam and Charles Black and London: Longman, Rees, Orme, Brown, Green and Longman.
• Tooke, Thomas (1844). An Inquiry into the Currency Principle; The Connection of the Currency with Prices and the Expediency of a Separation of Issue from Banking, London: Longman, Brown, Green and Longmans. [Through the reference of Marx]
• Fullarton, John: On the Regulation of Currencies, being an examination of the principles, on which it is proposed to restrict, within certain fixed limits, the future issues on credit of the Bank of England, and of the other banking establishments throughout the country. 2^nd edition with corrections and additions. London 1845. [Through the reference of Marx]
• *Marx, Karl (1850). The Class Struggles in France, 1848 and 1850, Selected Works, Vol. 1, Moscow: International Publishers, 1969. Originally published in the Neue Rheinische Zeitung, Politisch-ökonomische Revue in 1850 in 6 parts. Published together with an Introduction by Friedrich Engels as Die Klassenkämpfe in Frankreich 1848 bis 1850, Berlin: Vorwärts, 1895. MECW 10: 45-145, MEW 7: 9-107 (Part I The Defeat of June 1848)
• *Marx, Karl (1859). A Contribution to the Critique of Political Economy. Moscow: Progress Publishers, 1977. (Part C pp. 157-188).German edition: Zur Kritik der Politischen Ökonomie. Berlin: Franz Duncker. MEW 13: 3-160.
• *Marx, Karl (1867). Capital: A Critique of Political Economy, Volume One. [Introduced by Ernest Mandel, translated by Ben Fowkes], Harmondsworth, Middlesex, England: Penguin Books in association with New Left Review, 1973. Marx Engels Collected Works (MECW), vol. 35. German Edition: Das Kapital. Kritik der politischen Ökonomie. Von Karl Marx. Erster Band. Buch I: Der Produktionsprozeß des Kapitals, Marx Engels Werke, Band 23, Berlin (DDR): Dietz, 1962. Original German edition 1867. 4^th German Edition, Vierte, durchgesehene Auflage; Herausgegeben von Friedrich Engels, 1890. (Hamburg: Otto Meissner) (Chapter 3: Money, or the Circulation of Commodities, at p. 188)
• *Marx, Karl (1894). Capital: A Critique of Political Economy, Volume Three: [The Process of Capitalist Production as a Whole]. [Edited by Friedrich Engels], [Introduced by Ernest Mandel, translated by David Fernbach], Harmondsworth, Middlesex, England: Penguin Books in association with New Left Review, 1981. Other edition [html] [print] Institute of Marxism-Leninism, USSR, Moscow: Progress Publishers. 1959. MECW 37, German Edition: 1^st edition. Das Kapital. Kritik der politischen Oekonomie. Von Karl Marx. Dritter Band, erster Theil. Buch III: Der Gesammtprocess der kapitalistischen Produktion. Kapitel I bis XXVIII. Herausgegeben von Friedrich Engels. (Hamburg: Otto Meissner, 1894). MEW25(Ch. 19, Ch. 21-29).
• *Mill, John Stuart (1874). Essays on Some Unsettled Questions of Political Economy. London: Longmans, Green, Reader, and Dyer, 2^nd edition (1st edition 1844). (Essay IV On Profits and Interest)
• Gibson, A.H. (1923). “The Future Course of High-Class Investment Values”, Bankers’ [Insurance Managers’ and Agents’] Magazine, 115 (January):15–34. [Through the reference of Keynes]. On the “Gibson’s paradox” see Alejandro Fiorito (2015). “Gibson’s paradox” in Louis-Philippe Rochon and Sergio Rossi (eds). The Encyclopedia of Central Banking. Cheltenham: Edward Elgar.

Β) Attempts to explain the classical texts – The financial environment in the 19^th c.

• *Bagehot, Walter (1873). Lombard Street: A Description of the Money Market,London: Henry S. King and Co. 7^th edition London: C. Kegan Paul.1878 (Chapter 1)
• *Itoh, Makoto, and Costas Lapavitsas (1999). Political Economy of Money and Finance,Basingstoke: Palgrave Macmillan. (Chapters 2 and 3)
• *Panico, Carlo (1988). Interest and Profit in the Theories of Value and Distribution,London: Palgrave Macmillan. (Chapters 1,2,3)
• *Rosdolsky, Roman (1977). The Making of Marx's ‘Capital’ Volume 1, London: Pluto Press. Original German Edition: Zur Entstehungsgeschichte des Marxschen ‚Kapital‘, Frankfurt am Main: Europäische Verlagsanstalt (EVA), 1968. (Chapter 2)
• *Shaikh, Anwar (2016). Capitalism: Competition, Conflict and Crises, New York, NY: Oxford University Press. (Ch 10. paragraphs 2, 3)

4. The transition to neoclassical economics - The Monetary Dimension - The interest rate as a rate of profit, the "natural rate of interest" - Capital as a factor of production, -The Keynesian challenge

• *Böhm-Bawerk, Eugen von (1890). Capital and Interest: A Critical History of Economical Theory. Translated by William Smart, London: Macmillan. 1^st German edition: Kapital und Kapitalzins. Erste Abtheilung: Geschichte und Kritik der Kapitalzins-Theorien, Innsbruck: Wagner, 1884(Book II Chapters I and II)
• *Friedman, Milton (1956) “The Quantity Theory of Money a Restatement”. In M. Friedman (ed.), Studies in the Quantity Theory of Money Chicago University Press, pp. 3-21. Reprint in Kurt R. Leube (ed.) (1987). The Essence of Friedman. Stanford, CA: Hoover Institution Press. Ch. 16
• Humphrey, Thomas M. (1974) “The Quantity Theory of Money: Its Historical Evolution and its role in Policy Debates”, FRB Richmond Economic Review, 60, May/June 1974, pp. 2-19
• *Keynes, John Maynard (1930) A Treatise on Money: Vol. II. The Applied Theory of Money. London: Macmillan. In TheCollected Writingsof John Maynard Keynes Cambridge: Cambridge University Press for The Royal Economic Society, Vol. 6(Book VI, Ch. 27-31)
• Keynes, John Maynard (1978). The Collected Writings of John Maynard Keynes. Volume 13, The General Theory and After: Part I. Preparation. Edited by Elizabeth Johnson and Donald Moggridge. London: Macmillan for the Royal Economic Society. [Now electronically available from Cambridge University Press]. (pp. 442-456)
• *Roemer, David (2012) Advanced Macroeconomics 4^th Edition Mc Graw Hill, Irwin (Chapters 9 and 11).
• *Wicksell, Knut (1936). Interest and Prices (Geldzins und Güterpreise): A Study of the Causes Regulating the Value of Money. [Translated from the German by R. F. Kahn with an Introduction by Professor Bertil Ohlin], London: Macmillan on behalf of the Royal Economic Society. Original German Edition: Geldzins und Güterpreise: Eine Studie über die den Tauschwert des Geldes bestimmenden Ursachen, Jena: Gustav Fischer, 1898. (Chapters 5-8)
• *Tobin, James (1958). “Liquidity Preference as Behavior Towards Risk”, Review of Economic Studies, 25(2): 65-86.

5. The Transition to Neoclassical Economics - The Finance Dimension - From Partial to General Equilibrium - The Emergence of Modern Finance Theory

• *Bachelier, Louis (1900). « Théorie de la spéculation », Annales Scientifiques de l'École Normale Supérieure, 3(17): 21–86. In book form: Théorie de la spéculation, Paris: Gauthier-Villars, 1900. English translation as Louis Bachelier's Theory of Speculation: The Origins of Modern Finance. Translated and with commentary by Mark Davis and Alison Etheridge, Foreword by Paul A. Samuelson, Princeton, NJ: Princeton University Press, 2006. (Introduction by Paul Samuelson, Book Chapter 1 and the dissertation chapters on Options and Probability (last chapter)) 
• *Black, Fischer, and Myron Scholes (1973). “The Pricing of Options and Corporate Liabilities”, Journal of Political Economy, 81(3): 637–654.
• Cowles, Alfred, 3rd (1933). “Can Stock Market Forecasters Forecast?”, Econometrica, 1(3): 309-324.
• Graham, Benjamin, and David L. Dodd (1934). Security Analysis, New York, NY: Whittlesey House, McGraw-Hill Book Co.
• *Mandelbrot, Benoît B. (1966). “Forecasts of Future Prices, Unbiased Markets, and ‘Martingale’ Models”, Journal of Business, 39(1), Part 2: Supplement on Security Prices: 242-255
• *Markowitz, Harry M. (1952). “Portfolio Selection”, Journal of Finance, 7(1): 77–91.
• Markowitz, Harry M. (2015). A Special Interview with Dr. Harry Markowitz, Nobel Laureate in Economics, Part 2: The Revolution of Behavioral Finance, Skyview Investment Advisors LLC
• *Roberts, Harry V. (1959). “Stock-Market ‘Patterns’ and Financial Analysis: Methodological Suggestions”, Journal of Finance, 14(1): 1-10.
• *Ross, Stephen A. (2005). Neoclassical Finance, Princeton, NJ: Princeton University Press (pp. 1-21)
• *Samuelson, Paul A. (1965). “Proof that Properly Anticipated Prices Fluctuate Randomly”, Industrial Management Review, 6: 41-49.
• Samuelson, Paul A. (1973). “Proof That Properly Discounted Present Values of
• Assets Vibrate Randomly”, Bell Journal of Economics, 4(2): 369‑374.
• Williams, John Burr (1938). The Theory of Investment Value, Cambridge, MA: Harvard
• University Press.
• Working, Holbrook (1934). “A Random-Difference Series for Use in the Analysis of Time Series”, Journal of the American Statistical Association, 29(185): 11–24.

6. Neoclassical Equilibrium and Finance (Continued) – Risk-Aversion Models CAPM και APT –The Efficient Market Hypothesis

• *Arrow, Kenneth J., (1971). “Insurance, Risk and Resource Allocation”, in Essays in the Theory of Risk-Bearing, Amsterdam: North-Holland: 134-143. Reprinted in Georges Dionne and Scott E. Harrington (eds), Foundations of Insurance Economics: Readings in Economics and Finance. Dordrecht: Springer, 1992: 220-229. [Huebner International Series on Risk, Insurance and Economic Security, 14]
• *Fama, Eugene F., and Kenneth R. French (1992). “The Cross-Section of Expected Stock Returns”, Journal of Finance, 47(2): 427–465.
• *Fama, Eugene F., and Kenneth R. French (2004). “The Capital Asset Pricing Model: Theory and Evidence”, Journal of Economic Perspectives, 18(3): 25–46.
• *Fama, Eugene F. (1970). “Efficient Capital Markets: A Review of Theory and Empirical Work”, Journal of Finance, 25(2): 383–417.
• Fama, Eugene F. (1976a). “Multiperiod Consumption-Investment Decisions: A Correction”, American Economic Review, 66(4): 723-724.
• Fama, Eugene F. (1976b). “Inflation Uncertainty and Expected Returns on Treasury Bills”, Journal of Political Economy, 84(3): 427-448.
• *Fama, Eugene F. (1991). “Efficient Capital Markets: II”, Journal of Finance, 46(5): 1575–1617.
• Haugen, Robert A. (2001). Modern Investment Theory, London: Prentice-Hall International, 5th edition. (Chapters 7,8,9)
• Roll, Richard (1977). “A Critique of the Asset Pricing Theory’s Tests Part I: On Past and Potential Testability of the Theory”, Journal of Financial Economics, 4(2): 129–176.
• *Roll, Richard, and Stephen A. Ross (1980). “An Empirical Investigation of the Arbitrage Pricing Theory”, Journal of Finance, 35(5): 1073–1103.
• *Ross, Stephen A. (1976). “The Arbitrage Theory of Capital Asset Pricing”, Journal of Economic Theory, 13(3): 341–360.
• *Sharpe, William F. (1964). “Capital Asset Prices: A Theory of Market Equilibrium
• under Conditions of Risk”, Journal of Finance, 19 (3): 425–442.  
• *Tobin, James (1983). “Liquidity Preference, Separation and Asset Pricing” Zeitschrift für Betriebswirtschaft (now Journal for Business Economics), 53(3): 236-238.

7. Critique and Decomposition of Modern Investment Theory

• *LeRoy, Stephen F. (1989). “Efficient Capital Markets and Martingales”, Journal of Economic Literature, 27(4): 1583-1621.
• LeRoy, Stephen F., and Richard D. Porter (1981). “The Present-Value Relation: Tests Based on Implied Variance Bounds”, Econometrica, 49(3): 555–574.
• *Lucas, Robert E., Jr. (1978): “Asset Prices in an Exchange Economy”, Econometrica, 46(6):1429-1445.
• Mankiw, N. Gregory, David Romer and Matthew D. Shapiro (1985). “An Unbiased Reexamination of Stock Market Volatility”, Journal of Finance, 40(3): 677-687
• *Mehra, Rajnish, and Edward C. Prescott (1985). “The Equity Premium: A Puzzle”, Journal of Monetary Economics, 15(2): 145–161
• *Ohlson, James A. (1977). “Risk-Aversion and the Martingale Property of Stock Prices: Comments”, International Economic Review, 18(1): 229-234.
• *Shiller, Robert J. (1981). “Do Stock Prices Move Too Much to be Justified by Subsequent Changes in Dividends?”, American Economic Review, 71(3): 421–436.
• Shiller, Robert J. (1989). “Comovements in Stock Prices and Comovements in Dividends”, Journal of Finance, 44(3): 719–729.
• *Tirole, Jean (2017). Economics for the Common Good, Princeton, NJ: Princeton University Press.  (pp. 307-321)    

8. Crises and Finance in Orthodox and Keynesian Economics - The Current Debate

• *Akerlof, George A. (1970). “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism”, Quarterly Journal of Economics, 84(3): 488-500.
• *Bernanke, Ben S. (2010). “Causes of the Recent Financial and Economic Crisis”, Testimony Before the Financial Crisis Inquiry Commission, Washington, D.C., 2 September.
• *Diamond, Douglas W., and Philip H. Dybvig (1983). “Bank Runs, Deposit Insurance, and Liquidity”, Journal of Political Economy, 91(3): 401–419.
• Gertler, Mark, Nobuhiro Kiyotaki and Andrea Prestipino (2016). “Wholesale Banking and Bank Runs in Macroeconomic Modeling of Financial Crises”, in John B. Taylor and Harald Uhlig (eds.), Handbook of Macroeconomics, Amsterdam: North-Holland, Volume 2B: 1345–1425. Working paper link
• *Grossman, Sanford J., and Joseph E. Stiglitz (1980). “On the Impossibility of Informationally Efficient Markets”, American Economic Review, 70(3): 393-408.
• *Grossman, Sanford J., and Oliver D. Hart (1983). “An Analysis of the Principal Agent Problem”, Econometrica, 51(1): 7-46.
• Buffet, Warren (2002). Berkshire Hathaway Inc. 2002 Annual Report
• *Farhi, Emmanuel, and Jean Tirole (2012). “Collective Moral Hazard, Maturity Mismatch and Systemic Bailouts”, American Economic Review, 102(1): 60–93. NBER Working Paper
• *Keynes, John Maynard (1936). The General Theory of Employment, Interest and Money. London: Macmillan, CWJMK 7. (Chapter 12, Chapter 22)
• Lewis, Michael (2010). The Big Short: Inside the Doomsday Machine, New York, NY: W.W. Norton. Film: The Big Short by Adam McKay, 2015. (The film References)
• Matthews, R.C.O (1984). “Animal spirits” [Keynes Lecture in Economics], Proceedings of the British Academy, 70: 209-229.
• *Minsky, Hyman P. (1982). “The Financial Instability Hypothesis”, The Jerome Levy Economics Institute of Bard College, Working Paper, No. 74, (May) See also Hyman P. Minsky, (1982). “The Financial Instability Hypothesis: Capitalist Processes and the Behavior of the Economy”, in C.P. Kindleberger and J.-P. Laffargue (eds), Financial Crises: Theory, History and Policy, Cambridge: Cambridge University Press. 15-47
• Philippon, Thomas (2015). “Has the US Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation”, American Economic Review, 105(4): 1408-38. NBER WP
• *Shiller Robert (2003). “From Efficient Markets Theory to Behavioral Finance”, Journal of Economic Perspectives, 17(1): 83-104.
• Shiller, Robert J. (2008). The Subprime Solution: How Today's Global Financial Crisis Happened and What to Do About It, Princeton, NJ: Princeton University Press. (Ch.3)     
• Shiller, Robert J. (2009). Irrational Exuberance, New York, NY: Broadway Books, 2nd   edition, revised and updated (1st edition 2000). (Ch. 9,10,11)
• *Stiglitz, Joseph E., and Andrew Weiss (1981). “Credit Rationing in Markets with Imperfect Information”, American Economic Review, 71(3): 393-410.
• *Tirole, Jean (1985). “Asset Bubbles and Overlapping Generations”, Econometrica, 53(6): 1499-1528.

9. Finance in the Heterodox and Marxist Tradition in the 20th Century and Contemporary Theories of Financialization

• *Epstein, Gerald A. (2005). “Introduction: financialization and the world economy”, in Epstein (ed.), Financialization and the World Economy, Cheltenham: Elgar. 3-16.
• Hilferding, Rudolf (1981). Finance Capital: A Study of the Latest Phase of Capitalist Development, London: Routledge & Kegan Paul. [Introduction by Tom Bottomore, translated by Morris Watnick and Sam Gordon]. 1st German edition: Das Finanzkapital. Eine Studie über die jüngste Entwicklung des Kapitalismus, Vienna: Wiener Volksbuchhandlung Ignaz Brand & Co., 1910. [Marx-Studien, 3]
• *Fine, Ben (1985/1986). “Banking Capital and the Theory of Interest”, Science & Society,49(4):387-413.
• *Fine, Ben (2011). «Πέραν της Χρηματιστικοποίησης» [Beyond Financialization], In A. Vlachou et al. (eds), Οικονομική Κρίση και Ελλάδα [Economic Crisis and Greece], Athens: Gutenberg]: 13-30.
• * Grossman, Henryk (1929). The Law of Accumulation and the Breakdown of the Capitalist System, being also a Theory of Crises, [Translated and abridged by Jairus Banaji], London: Pluto Press. [PDF]. Original German Edition: Das Akkumulations- und Zusammenbruchsgesetz des kapitalistischen Systems (Zugleich eine Krisentheorie), Leipzig: C.L. Hirschfeld, 1929. (Ch.1, from Ch2 the paragraph Crises and the Theory of Underconsumption)
• Kotz, David (2008): “The financial and economic crisis of 2008: A systemic crisis of neoliberal capitalism”. Review of Radical Political Economics, 41(3), 305-317.
• *Lapavitsas, Costas (1997). “Two Approaches to the Concept of Interest-Bearing Capital”, International Journal of Political Economy, 27(1): 85-106.
• *Lapavitsas, Costas (2009a). “Financialised Capitalism: Crisis and Financial Expropriation”, Historical Materialism, 17: 114–148.
• Lapavitsas, Costas (2009b). “Financialisation, or the search for profits in the sphere of circulation”, Ekonomiaz 72 (3): 98-117.
• *Magdoff, Fred; and John Bellamy Foster (2014). “Stagnation and Financialization: The Nature of the Contradiction”, Monthly Review, 66 (1): 1-24.
• *Palley, Thomas I. (2007). “Financialization: what it is and why it matters”, Also in T.I. Palley, (2013). Financialization: The Economics of Finance Capital Domination, London: Palgrave Macmillan. 17-40.
• *Sweezy, Paul. 1980. “The Crisis of American Capitalism”, Monthly Review 32 (5): 1–13.
• *Stravelakis, Nikos (2021) From Luxemburg to Sweezy: Notes on the Intellectual Influence of Hilferding’s Finance Capital In: Rudolf Hilferding What Do We Still Have to Learn from His Legacy? Freider Wolf and Judith Delheim (eds.) Rosa Luxemburg Institute Series in Political Economy, Palgrave Macmillan, London  
• *Tomé, Juan Pablo Mateo (2011). “Financialization as a Theory of Crisis in a Historical Perspective: Nothing New under the Sun”, Working Paper Series, No. 262, Political Economy Research Institute (PERI), University of Massachusetts at Amherst, (July).
• *Varoufakis, Yanis (2009). “Pristine equations, Tainted Economics and the Postwar Order”, presented on 10th April 2009 at Columbia University and included in the Proceedings of the Cold War Politics and Social Science Workshop, Heyman Centre for the Humanities, Columbia University.
• Weber, Max (1894). “Stock and Commodity Exchanges [Die Börse (1894)]”, Theory and Society, 29 (3) (June 2000): 305-338. German edition: Die Börse - I. Zweck und äußere Organisation. Göttingen: Vandenhoeck und Ruprecht [Göttinger Arbeiterbibliothek, 1. Band, 2. u 3. Heft]

10. Towards a Classical Theory of Finance - - The Mechanisms of Manifestation, the Role of Financial Turbulence and the Theory of Crises

• *Bossomaier, Terry, Lionel Barnett, Michael Harré and Joseph T. Lizier (2016). An Introduction to Transfer Entropy Information Flow in Complex Systems, Cham, Switzerland: Springer International Publishing. (Chapter 3)
• *Shaikh, Anwar (1997). “The Stock Market and the Corporate Sector: A Profit-Based Approach”, in Malcolm Sawyer, Philip Arestis and Gabriel Palma (eds.), Markets, Unemployment and Economic Policy: Essays in Honour of Geoff Harcourt, Volume Two, London: Routledge:389–404.
• *Shaikh, Anwar (2010). “Reflexivity, Path-Dependence and Disequilibrium Dynamics”, Journal of Post Keynesian Economics, 33(1): 3-16. Errata.
• Shaikh, Anwar (2011). “The First Great Depression of the 21st Century”, Socialist Register, 47: 44-63. [Volume 47 edited by Leo Panitch, Gregory Albo and Vivek Chibber].
• *Shaikh, Anwar (2016). Capitalism: Competition, Conflict and Crises, New York, NY: Oxford University Press.  (Ch2 Section IV “Prices Inflation and the Golden Wave” Ch. 10)
• *Stravelakis Nikos (2021)A Reconciliation of Marx’s Theory of Interest and the Equity Risk Premium Puzzle Conference Paper: IIPPE digital conference 2021
• Tsoulfidis, Lefteris (2011). Classical vs. Neoclassical Conceptions of Competition. Discussion Paper No. 11 Department of Economics University of Macedonia.
• *Tsoulfidis, Lefteris, and Dimitris Paitarides. 2018. “Capital Intensity, Unproductive Activities, and the Great Recession in the US”. CambridgeJournalofEconomics, 1–25.

Assessment

Three grades 1) minor take-home assignment 5%, 2) major take-home assignment (Christmas vacation) 15%, 3) seminar paper or written exam 80%.