Stuart Henderson, my PhD student, has a great blog post at the NEP-HIS Blog, which reviews a paper by Roland Benabou, Davide Ticchi and Andrea Vindigni entitled Religion and Innovation. In this paper, the authors argue that greater religiosity is almost uniformly and very significantly associated to less favourable views of innovation. However, Stuart rightly points out that there may be difference across denominations - some religions may positively effect innovation. Indeed, the economic historian in me would point out that many of the founding fathers of modern science had a theistic worldview which underpinned their science - e.g., Kepler, Pascal, Boyle, Newton, Faraday, Lister, Maxwell, Kelvin, Pasteur etc. In other words, these pioneers believed that there is a God who has created all things in an orderly manner and that there are laws of science which can be discovered through human investigation. Without this presupposition, one has to ask would modern science exist? Now there is an interesting counterfactual!
My colleague and former PhD student Gareth Campbell has created a website about the British Railway Mania - click here . This episode has been described by the Economist as probably the greatest bubble in human history. Gareth's website provides background on the Mania and posits some explanations for the 'bubble'. In his explanation of why the bubble happened, Gareth places a lot of emphasis on investor myopia regarding future dividends and uncalled capital. His study of investors during the episode does not support the view that this episode was fuelled by naive and irrational investors.