Great Moments in Financial Economics: I. Present Value

2004; RELX Group (Netherlands); Linguagem: Inglês

ISSN

1556-5068

Autores

Mark Rubinstein,

Tópico(s)

Stochastic processes and financial applications

Resumo

This is the first in a series of articles to appear in this Journal on the history of significant ideas in financial economics. Perhaps the most basic of these is the idea of present value. Early contributors include Johan de Witt (1671), the famous mathematician Abraham de Moivre (1725), and the famous scientist Edmund Halley (1761). But it was Irving Fisher who in 1930 laid the theoretical foundations behind the concept as a byproduct of the standard inter-temporal model of rational consumption choice. In 1938 John Burr Williams applied the model to the discounting of dividends and derived what later became known as the Gordon growth formula.

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