Markets, Productivity, and Happiness in a Historical Perspective

Price Spread, Arbitrage and Information in Early Financial Economics Holbrook Working and Futures Markets

Delcey Thomas, Duke University

Where does financial economics come from? This paper studies the origins of foundational ideas for financial economics: the price spread, the arbitrage, and the interpretation of price as reflecting information. Based on his publications, and on archival and interview materials, I analyze Holbrook Working's intellectual journey between the 1920s and 1960s. Working was a leading North American agricultural economist. His pioneering analyzes of futures agricultural markets strongly influenced early financial economists, such as Paul Samuelson, Paul Cootner, Hendrick Houthakker, and Lester G. Telser. Working sheds light on a North American view of speculation that contrasted with the British and dominant one.

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Keywords: Origins of Financial Economics, Arbitrage, Information, Futures Markets, Interwar Agricultural Economics, Holbrook Working

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