Frontier Finance

Moonlight towers are lighting structures designed to illuminate areas of a city at night, popular in the late 19th century in cities across the United States and Europe. Representing the progress of the rapid urban economic development, moonlights symbolise the sphere of production, distribution and consumption. Detroit had a particularly extensive system of towers from 1882 into the 1910s, with 122 towers illuminating 21 square miles of the city. The lighting infrastructure in Detroit was regarded as the future of street lighting, and stood as an ex ample for the rest of the US. Detroit was the only large city in the US (and in the world) lighted wholly and exclusively by the tower system. Increasingly, luminosity (measures of night-time lights visible from space) is entering economic analysis as method of approximating the spatial development of economic activity, providing high-resolution proxies of measures of output (gross domestic product).

"It is curious to reflect that if these speculations should prove to have any validity, we get back to something which might be mistaken for the astrology of the middle ages. Professor Balfour Stewart has show much reason for believing that the sun-spot period is connected with the configuration of the planets.
Now, if the planets govern the sun, and the sun governs the vintages and harvests, and thus the prices of food and raw materials and the state of the money market, it follows that the configuration of the plants may prove to be the remote causes of the greatest commercial disasters.
It is a curious fact, not sufficiently known, that the electric telegraph was a favourite dream of the physicists and romanticists of the sixteenth and seventeenth centuries. It would be equally curious if the pseudo-science of astrology should, in like manner, foreshadow the triums which precise and methodical investigations may yet disclose, as to the obscure periodic causes affecting our welfare when we are least aware of it"

"I have been reportedly told by men who have good opportunities of hearing current opinions, that they who theorize about the relation of sun-spots, rainfall, famines, and commercial crises are supposed to be jesting, or at the best romancing. I am, of course, responsible only for a small part of what has been put forth on this subject, but so far as I am concerned in the matter, I beg leave to affirm that I never was more in earnest, and that after some further careful inquiry, I am perfectly convinced that these decennial crises do depend of meteorological variations, which again depend, in all probability, upon cosmical variations of which we have evidence in the frequency of sun-spots, auroras, and magnetic perturbation. I believe that I have, in fact, found the missing link required to complete the first outline of the evidence."

In the orthodoxy of modern economics, the term sunspots refers to an event that does not directly affect economic fundamentals (such as endowments, preferences, or technology) that but can affect economic outcomes. In business cycle theory, sunspot equilibria are instances of “excess volatility”.

From the “Free Banking” period of the 1830s to the recent subprime crisis, Michigan has been the theatre where a pivotal act in the dramatic unfolding of the history of U.S. financial innovation and credit intermediation has taken center stage. At various key moments over the last three centuries, institutional finance has continually opened up new frontiers in Michigan – both literally and figuratively speaking, creating a unique set of spatial conditions in its process. In focusing on the spatial linkages between mortgage credit flows and urban spatial structure, this research traces how the institutional transformation of the market-based financial system since the mid-1830s has continuously changed the nature of financial intermediation. Most recently, we highlight that “shadow banks” – financial intermediaries that conduct maturity, credit, and liquidity transformation without explicit access to central bank liquidity or public sector credit guarantees – have served a critical role in the process of risk allocation, both spatially and financially.