Fibonacci and the Financial Revolution
William N. Goetzmann
Yale School of Management - International Center for Finance; National Bureau of Economic Research (NBER)
October 23, 2003
Yale ICF Working Paper No. 03-28
This paper examines the contribution of Leonardo of Pisa [Fibonacci] to the history of financial mathematics. Evidence in Leonardo's Liber Abaci (1202) suggests that he was the first to develop present value analysis for comparing the economic value of alternative contractual cash flows. He also developed a general method for expressing investment returns, and solved a wide range of complex interest rate problems. The paper argues that his advances in the mathematics of finance were stimulated by the commercial revolution in the Mediterranean during his lifetime, and in turn, his discoveries significantly influenced the evolution of capitalist enterprise and public finance in Europe in the centuries that followed. Fibonacci's discount rates were more culturally influential than his famous series.
Number of Pages in PDF File: 44working papers series
Date posted: October 27, 2003
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