Roscher’s Victorian views on financial development

Focuses on Roscher′s generalities in the financial realm. Roscher postulated a secular decline in interest rates and an evolution of credit towards increasingly productive applications. Although Roscher′s theories were plausible, questions whether he got his causes and effects right. If not, of what use was his historical methodology as a predictive quasi‐science? Points out that Roscher, like his contemporaries, failed to anticipate the proliferation of war debt and other public debt, consumer debt, corporate takeover financing and other non‐productive uses of credit. Concludes by comparing Roscher′s ideas with those of his contemporaries, and analysing the reasons why plausible economic forecasts failed to anticipate the experience of the twentieth century.